Retail News CRM

Tag: Retailers

  • VF Corporation posts first results after Kontoor spinoff

    VF Corporation posts first results after Kontoor spinoff

    Apparel giant VF Corporation has reported a 9 percent increase in same-store sales on a currency-neutral basis in the June quarter, to US$2.3 billion.

    VF Corporation owns a portfolio of outdoor and activity-based lifestyle and workwear brands, including Vans, The North Face, Timberland and Dickies. In May it spun off its denim business, which includes Lee and Wrangler labels, in a new company called Kontoor Brands.

    The company said its gross margin increased by 140 basis points to 54.4 percent, driven by favorable mix and timing of foreign-currency transaction hedge gains.

    Operating income was $133 million.

    “Our first quarter represents a new chapter for VF following the spin-off of Kontoor Brands and our relocation to Denver, Colorado,” said Steve Rendle, chairman, president and CEO.

    “Our first-quarter results demonstrate the power of VF’s evolved portfolio and our progress along our journey to become a purpose-led, performance-driven, value-creating enterprise anchored in our commitment to be more consumer-minded and retail-centric in everything we do.”

    VF Corporation recorded an after-tax net loss from discontinued operations was of $48 million in the first quarter of fiscal 2020, which reflects the operating results of the jeans business, including $59.5 million of separation costs related to the spin-off.

    Figures in the quarterly results above are compared with comparable trading period last year, after the removal of the discontinued (spun-off) business.

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  • Mainland China retail sales surge in June

    Mainland China retail sales surge in June

    Motor vehicles and the 6.18 shopping festival spurred a healthy increase in Mainland China retail sales in June.

    Official government figures show a 9.8 per cent year-on-year increase for the month, higher than the 8.6 per cent of May and 8.4 per cent for the first half year.

    Summer Wang, an equity analyst at Jefferies, said auto sales surged due to deep discounts on older models ahead of stricter State VI emission standards which took effect on July 1, and the 6.18 Shopping Festival  which drove cosmetics, jewellery and appliance sales. Small-ticket items like food and daily goods also outperformed.

    Urban Mainland China retail sales grew 9.8 per cent, ahead of the 8.3 per cent year-to-date figure, reaching RMB2.896 trillion (US$421 billion) in June, while rural retail sales grew by 10.1 per cent, ahead of 9.1 per cent for the half year.

    Cosmetics sales grew by 22.5 per cent, cars by 17.2 per cent and daily goods by 12.3 per cent.

    “We believe the beauty category is continuing to benefit from functional premiumisation, as consumers – both women and metrosexual men – are willing to pay a premium for a tangible improvement in appearance,” said Wang.

    “Most discretionary categories saw improvement as well, including gold and jewellery (up 7.8 per cent), home appliances (up 7.7 per cent) and apparel and footwear (up 5.2 per cent).”

    By channel, online retail goods sales kept momentum with a robust 21.6 per cent year-on-year growth during the first half of the year, accounting for 19.6 per cent of Mainland China retail sales.

  • Indian fashion house Ritu Kumar looks to raise $20 million

    Indian fashion house Ritu Kumar looks to raise $20 million

    Indian apparel label Ritu Kumar is seeking a cash injection of up to US$20 million.

    The firm will branch into new retail segments such as home furnishings and accessories.

    “We are in the market this year looking for another injection, a larger injection than last time,” said Ritu Kumar MD Amrish Kumar. “Also, [private equity firm] Everstone is coming to the end of their cycle, so they will be looking for an exit sometime soon.”

    Everstone invested $14.5 million in Ritu Kumar five years ago. The firm currently operates 90 outlets under three designer labels.

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  • Positive outlook for Singapore retail leasing sector

    Positive outlook for Singapore retail leasing sector

    Ongoing investment-sale activity for malls suggests a positive outlook for the Singapore retail leasing sector, reports Edmund Tie & Company – especially for properties well connected to public transport and offering experiential and activity-based retail options.

    In a report Q2 2019 Real Estate Times for the Singapore market, the property company projects islandwide rental growth will be mixed, ranging from a 2 per cent decline to a 2 per cent increase this year. The low supply pipeline from next year onwards is likely to provide some underlying support to occupancy rates and rental levels.

    Investment market 

    For the second consecutive quarter, investment transaction value (of properties valued above S$100 million) jumped more than 52 per cent quarter on quarter with two transactions totalling $961 million. The largest sale was Chinatown Point for $520 million to a foreign institutional investor.

    The net supply of space fell by about 78 per cent as fewer projects were completed. As such, islandwide occupancy declined slightly by 0.4 percentage points to 90.1 per cent in the first quarter, however, the opening of Funan mall with 325,000sqft net lettable area – with 95 per cent of space pre-leased – is not expected to significantly impact occupancy rates in the second quarter.

    Rental rates 

    Singapore retail leasing rates across the different market segments remained largely flat, as occupancy rates remained high for malls located in prime positions. Upper-storey retail in the Orchard Road/Scotts Road area likely fell slightly due to weakened tourist spending, while the prime malls in the suburban areas continue to attract major brand retailers and new-to-market brands.

    The net demand and supply for retail spaces in suburban areas slowed in the first quarter, with the occupancy rate down marginally.  Prime-located malls with easy transportation access and a diverse and well-managed tenant mix continued to perform relatively well.

    New openings included Cafe Amazon outlets at Jewel Changi and Jurong Point Shopping Centre, and Xing Fu Tang (a Taiwanese bubble tea chain) opened a permanent store at Century Square in the second quarter.

    New space supply pipeline 

    From the third quarter of this year through to 2022, some 1.1 million sqft of retail space is expected to come onstream, with the majority of that to be completed in the second half of this year. The largest will be the Paya Lebar Quarter mall of about 313,000sqft.

    The average annual pipeline of known projects from next year through to 2022 is less than 150,000sqft, which is substantially below the three- and five-year average.

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  • SMCP launches Sandro on Farfetch

    SMCP launches Sandro on Farfetch

    Fashion group SMCP is to launch its Sandro brand on Farfetch.

    The Chinese-controlled, French-based affordable luxury retailer says the 13 million-plus clients per month around the world that Farfetch attracts will be an ideal partner to enable Sandro to address a wider, premium customer base.

    “We are delighted with this new partnership with one of the major digital players of the luxury sector,” said Sandro CEO Isabelle Allouch.  “We are convinced that having our products on Farfetch will contribute to Sandro’s digital expansion across the globe, positioning it as a high-end luxury brand and enhancing its worldwide visibility and awareness.”

    She said the partnership marks a key milestone in the global roll-out of SMCP’s digital strategy, bringing together online and offline shopping.

    “It perfectly complements the group’s growing digital presence alongside the successful global deployment of our own websites, and further diversifies its digital sales channels, enabling the group to reach more than 190 countries across the world.”

    The partnership comes just three months after the announcement of a landmark partnership with JD.

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  • China boosts Uniqlo parent

    China boosts Uniqlo parent

    Uniqlo owner Fast Retailing’s healthy online sales and strong performance in overseas markets, particularly in China, have helped boost its third quarter results.

    The Japanese retailer said its online sales saw a 16.1 per cent year-on-year increase in the three months to May 31 to ¥19.0 billion (US$176.1 million), increasing their proportion of total sales from 7.8 per cent to 9.1 per cent.

    For the three months from March to May 2019, Uniqlo’s international segment reported strong results, with revenue expanding 15.3 per cent year-on-year and operating profit expanding 14.9 per cent year-on-year over that period.

    Uniqlo continued to achieve significant year-on-year growth in both revenue and profit in Mainland China, and achieved double-digit growth in both revenue and profit in Southeast Asia and Oceania on the back of strong sales of its summer range.

    But Fast Retailing’s less-than-stellar domestic sales have overshadowed the company’s strong performance in its e-commerce and international segments, indicating that Japan’s market still has a huge influence on the retailer’s results.

    The company’s domestic sales saw a 0.5 per cent decline brought about by shifting a sales event to June.

    On the profit front, the retailer’s operating profit declined by 7.5 per cent year-on-year on the back of a higher selling, general and administrative expense ratio, and a lower gross profit margin, which was dampened by its decision to bring forward discounting of leftover Spring Summer inventory.

    China continues to be one of the main engines driving overseas expansion, with sales in the country rising in the double digits.

    The retailer said Uniqlo so far hasn’t been hurt by the trade war between the US and China, and sales there were strong even in the face of a weaker yuan.

    Uniqlo Europe reported a decline in profit caused by unseasonal weather patterns and political uncertainty. However, within that region, Russia continued to perform strongly and report expanding revenue and profit.

    In terms of new-store activity, Uniqlo opened its first store in the Netherlands in Amsterdam in September 2018, as well as its biggest Southeast Asian global flagship store in Manila, Philippines in October 2018, and its first store in Denmark in Copenhagen in April 2019.

    Fast Retailing said it is planning to focus its efforts on expanding its global e-commerce operation and its Uniqlo international and GU casual fashion brands to meet its medium-term vision to become the world’s number one apparel retailer.

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  • Tenants leaving Thomson Plaza due to renovation works

    Tenants leaving Thomson Plaza due to renovation works

    Tenants are upset over Thomson Plaza renovation works, with at least 20 retailers leaving.

    The renovation started this month and will last until the second quarter of next year. Parts of the first and third storeys are being renovated by one of its landlords, Mercatus Co-operative.

    “The renovation will provide shoppers with a holistic and comfortable shopping experience, in preparation for the improved connectivity from the upcoming MRT station at Upper Thomson,”

    Retailers say business has fallen since the renovation began.

    “They didn’t give us enough time, and we just renovated. Business has been so bad since the renovation started, we earned only $200 on some days,” said Siva Crakash, branch manager of Home-Fix, which has been there for 15 years.

    Twenty tenants out of 180, will not be returning, including Royal Sporting House and Wine Connection.

    Shoe shop NTS Marketing on the third floor has moved to the second and its owner is also unhappy with the revamp.

    “Regulars don’t know where we moved to and we have a smaller unit now, so we have to serve fewer people at one time,” the owner said.

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  • Bonjour Holdings warns of loss ahead

    Bonjour Holdings warns of loss ahead

    Bonjour Holdings says it expects a loss in the half year to June as protests took their toll on the city’s retail sector.

    Last year, Bonjour Holdings reported a profit of HK$7.4 million in the six month period.

    In a stock-exchange filing, the company did not release an estimate of the level of loss it anticipates, with the preparation of final results still incomplete.

    Chairman and executive director Wilson Ip Chun Heng said the board believes the reversal of fortune is mainly attributable to the weak sales performance brought about by both local and global factors, including the US-China trade war, the depreciation of RMB, and the demonstrations and social unrest in Hong Kong which occurred in June.

    “Moreover, the implementation of the e-commerce law in China at the beginning of the year has severely hit the mainland “Daigou” (surrogate shopping) which has, to a certain extent, adversely affected our group’s turnover in the short-term.”

  • Saigon Co.op takes over Auchan Vietnam

    Saigon Co.op takes over Auchan Vietnam

    Local retail group Saigon Co.op has acquired the Auchan Vietnam business.

    Auchan will transfer its 15 closed store spaces and the three remaining stores still trading in Ho Chi Minh City’s Districts 7 and 1, along with its e-commerce and supply-chain retail system to Saigon Co.op.

    According to the arrangement, Saigon Co.op will renovate the closed stores and restore operations under their own brands which include Co.opMart, Finelife and Co.opXtra.

    The three stores still trading will maintain their Auchan branding until next Lunar New Year.

    In May, Auchan decided to pull out of Vietnam after consistent losses.

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  • South Korean retail sales up as summer season arrives

    South Korean retail sales up as summer season arrives

    South Korean retail sales increased by 3.4 percent year on year in May.

    Online sales reportedly surged by 18.1 percent in May, far faster than offline sales, which increased buy just 1.9 percent.

    A government spokesperson said the increase in sales for the month was driven by growing demand for seasonal products such as air conditioners, as summer arrived.

    There was also strong demand for electronics and gifts for Parents’ Day and Children’s Day.

    May’s 3.4 percent rise in South Korean retail sales was below the mean average monthly rate of 3.9 percent recorded from 1996 until this year.

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  • Hong Kong retail sales declined again in May

    Hong Kong retail sales declined again in May

    Hong Kong retail sales fell again in May, but the rate of decline was significantly less than in April.

    According to the Census and Statistics Department the value of retail sales in May, provisionally estimated at HK$40 billion (US$5.1 billion), decreased by 1.3 percent year on year, well below April’s 4.5 percent decline.

    For the first five months of this year, Hong Kong retail sales were down 1.8 per cent compared with the same period last year. After netting out the effect of price changes over the same period, sales for the five months were down 2.2 per cent.

    For the three months to May, sales fell by 0.8 per cent.

    For once, the jewelry, watches and valuable gifts category – which traditionally has the greatest effect on overall retail sales fluctuations – registered one of the lowest falls in May, down 2.7 percent.  Apparel sales fell 4.6 per cent, electrical goods by 14.8 per cent, optical shops by 11.3 per cent, furniture by 1.3 per cent and supermarket sales by 0.8 per cent.

    In contrast, sales of medicines and cosmetics rose 1 per cent, of food, drinks, alcohol and tobacco by 3.1 per cent, footwear and accessories by 1.6 per cent, Chinese medicines by 0.7 per cent and books, newspapers, stationery, and gifts by 0.1 per cent.

    A government spokesman said narrower decline of Hong Kong retail sales in May was partly due to the late timing of the Labour Day holidays in Mainland China this year, which had led to a visibly larger year-on-year rise in visitor arrivals during the month.

    “Overall, the performance of retail sales remained subdued in recent months.”

    Retailers will be waiting for the June figures, the month when the protests over the extradition bill stepped up, disrupting access to stores on Hong Kong Island at certain times and possibly dissuading overseas visitors.

    The spokesman said that in the near term, the outlook for retail sales will likely be clouded by the still-cautious consumption sentiment amid an uncertain global economic environment. “Nevertheless, the sustained expansion in inbound tourism and the largely stable local labor market should continue to provide some support.”

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  • Bleak reaching for Hong Kong luxury goods market

    Bleak reaching for Hong Kong luxury goods market

    Analysts are warning of challenging times ahead for the Hong Kong luxury goods market.

    In a research note, Kathryn Parker and Flavio Cereda, equity analysts at Jefferies, say sentiment within Hong Kong has almost unanimously worsened since March due to the lingering effects of the trade war reducing high-quality tourism traffic into the territory, the rebalancing of prices after Mainland China’s VAT cut, ongoing Hong Kong protests and closer monitoring of the daigou by the central government.

    “We are concerned that there is an elevated reliance on mainland Chinese consumers within luxury stores in Hong Kong,” the pair said.

    Luxury-goods stores in Hong Kong commonly receive as much as 60 percent of their sales from mainland visitors – yet more and more mainlanders are choosing to shop at home where tax cuts have seen prices ease.

    “We were concerned to see further investment such as the opening of the new K11 Musea mall [in Kowloon], rather than a contraction of the retail footprint,” the analysts said.

    “Discussions with mainland Chinese consumers, particularly those in Shanghai, showed continued optimism in terms of both sales data and wider sentiment, which is despite the record-breaking first half.

    “An abundance of new malls within Hong Kong, Shanghai and Beijing means rents are not going up, but it is imperative that brands keep their store footprints dynamic and have a presence in the lux malls with the most traffic,” said Parker and Cereda.

    “All malls are increasing the proportion of food and beverage and experiences, such as cinemas and wellness, to drive footfall so there is relatively less space for retail.”

    While the Hong Kong luxury goods market suffered a downturn in the second half of last year, official retail sales figures for the first five months of this year show a modest 1.8 per cent decline against a higher base last year. But the latest figures are from May, prior to the acceleration of street protests in June and reflecting the later timing of the Mainland China Labour Day holiday period.

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  • Indian mall space to grow by 65 million sqft by 2022

    Indian mall space to grow by 65 million sqft by 2022

    India will take on more than 65 million sqft of new mall space by the end of 2022, according to a new report from real estate services firm Anarock.

    The report shows the region’s top seven cities will account for 72 percent of the new mall space, while tier 2 and tier 3 cities will see 18.2 million sqft of new supply. Nearly two-thirds of the planned space (40 million sqft) will hit the market by next year.

    “This new supply is also driven by the increasing interest of institutional investors – including private-equity players – who invested almost US$1.9 billion into Indian retail between 2015 and the first quarter of this year,” said Anarock Retail MD & CEO Anuj Kejriwal. “In fact, more than 60 percent of this investment was infused in the last two years alone, making these the best years for the Indian mall sector in recent times.

    Notwithstanding the decline in deal activity in the second half of last year following the liquidity crisis, the retail segment attracted investments of almost $115 million in just the first quarter of this year.”

    The report also maintains that real estate investment trusts (REITs) can be a viable tool for mall developers to raise funds, but this fund-raising instrument still needs to mature sufficiently. Also, the retail REIT structure and performance may not be directly comparable with the commercial office sector.

    The report also showed the Indian retail industry has moved from long-term leasing to short-term leasing tenures (three to five years) to enable constant updating of the brand mix within the mall. Globally, the standard lease term is still above five years.

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  • Nike grows profit, pulls product in China

    Nike grows profit, pulls product in China

    Sportswear brand Nike has revealed its net profit increased to US$4 billion during the 2019 financial year, compared to the previous year, which saw Nike earn US$1.9 billion.

    The large disparity is attributed to the enactment of the Tax Act last year, which raised Nike’s effective tax rate to 55.3 percent – causing a 54 percent drop in profits. In FY19, Nike’s tax rate returned to a more normalized level of 16.1 percent.

    The positive results come at a turbulent time for the sportswear giant, which recently faced a social media backlash in China after Undercover, a Japanese streetwear label it collaborated with on a line of sneakers, shared an Instagram Story with the caption, “No Extradition to China,” and “Go Hong Kong”.

    Nike subsequently pulled the sneakers from its offering in China, according to media reports.

    Nike president, chairman, and chief executive Mark Parker told investors the business is committed to the China market “for decades to come”.

    “We are and remain a brand of China and for China,” Parker told analysts, according to the Financial Times.

    “We’re confident that we’ll continue to grow sport and our business in China for decades to come.”

    On Thursday, Parker told investors FY19 was a pivotal year for the retailer.

    “Our distinctive innovation and digital advantage led to accelerated growth across our complete portfolio, while our brand fuelled deeper relationships with consumers around the globe,” he said in a statement.

    Revenue grew 7 per cent to US$39.1 billion, driven by sportswear, Jordan, and running, as well as strategic investments in innovation and digital led by Nike Direct.

    The Converse brand saw revenue grow 3 per cent to US$1.9 billion, which was mainly driven by double-digit growth in Asia and digital.

    Nike and Retail Prodigy Group have been contacted for comment.

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  • Suning.com ranked China’s most-valuable retail brand

    Suning.com ranked China’s most-valuable retail brand

    Suning Holdings’ retail subsidiary Suning.com has been ranked China’s most valuable retail brand, finishing 13th on World Brand Lab’s 16th “China’s 500 Most Valuable Brands” list.

    This was the second consecutive year Suning finished in 13th place with its brand value totaling RMB269.198 billion (US$39.093 billion), an increase of 17 percent compared to last year. Its listed brand value has increased by a factor of six since 2009.

    In the past year, Suning.com announced operational revenue of RMB244.96 billion ($36.479 billion), up 30.35 percent year on year; and a sales volume of RMB336 billion ($50.16 billion), an increase of 38.39 percent.

    By the end of March this year, the company owned 12,329 offline brick-and-mortar stores in Mainland China, Hong Kong, Macao and Japan, covering diversified consumption scenarios that include Suning Retail Cloud Franchise Stores, SuFresh (fresh food supermarkets), Suning Xiaodian (providing neighbourhood products and services) and Redbaby (maternal and child supplies stores).

    Last February, the company announced the acquisition of 37 Wanda department stores nationwide and in June, it acquired 80 percent of Carrefour China to improve its full-scenarios ecosystem and expand its all-categories merchandise retailing by reinforcing its market competitiveness in fast-moving consumer goods operations.

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