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Tag: Sales

  • Is Nike golf equipment journey ending?

    Is Nike golf equipment journey ending?

    Nike is phasing out its golf equipment business to focus on shoes and apparel.

    The company has announced it is accelerating its footwear and apparel business and will transition out of Nike golf equipment range – including clubs, balls and bags.

    “We’re committed to being the undisputed leader in golf footwear and apparel,” says Trevor Edwards, president, Nike Brand. “We will achieve this by investing in performance innovation for athletes and delivering sustainable profitable growth for Nike Golf.”

    The global giant said it will continue to partner with more of the world’s best golfers as part of its changed golfing segment strategy.

    “Athletes like Tiger, Rory and Michelle drive tremendous energy for the game and inspire consumers worldwide,” says Daric Ashford, president of Nike Golf.nike golf

    “Over the past year the MM Fly Blade Polo, the Flyknit Chukka and Air Zoom 90 have all connected strongly with golfers. We’ll continue to ignite excitement with our athletes and deliver the best of Nike for the game.”

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  • Burgers and beers lead Hong Kong restaurant industry growth

    Burgers and beers lead Hong Kong restaurant industry growth

    Restaurant industry analysts remain sceptical about the sector’s growth prospects despite promising year-on-year figures.

    Census and Statistics Department figures show restaurant receipts in Hong Kong increased 3.1 per cent year on year, at the end of the second quarter 2016.

    Fast food and bars did the best while Chinese restaurants saw fewer diners and lower spending, according to the figures.

    Fast food receipts increased 6.4 per cent year on year, bar sales increased 4.3 per cent, other drinking venues’ sales increased 3.9 per cent and Chinese restaurants increased 1.7 per cent.

    But the upwards trend for the local restaurant industry could be short lived, according to Simon Wong Ka Wo from the Federation of Restaurant and Related trades.

    There will be a 2 to 3 per cent “slight decrease” in the restaurant sector in terms of its overall performance for the whole year, Wong forecast. He warned that some Hong Kong restaurants might have to “suffer a little bit” over coming months, but the industry will bounce back in the fourth quarter.

    “The increase seems a little bit surprising to me as the performance of the economy for the past six months does not seem so promising,” Wong said.

    “The major reason is people tend to spend more on some middle to low-end restaurants like McDonald’s instead of high-end ones due to the stagnant economy, contributing to the increase in overall value of total receipts.”

    The optimistic figures come against a backdrop of slowing retail trade, which registered an 8.9 per cent decrease year on year.

    Professor Terence Chong Tai-Leung from the Chinese University of Hong Kong said rising incomes could help the city rebound from the retail slump.

    “As you can see from the low unemployment rate and the increased average income figure recently, Hong Kong people still have large purchasing power,” he reasoned.

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  • Apple China’s quarter sales slump

    Apple China’s quarter sales slump

    Apple China’s sales fell 30 per cent in what one retail analyst described as “another fairly rotten quarter” for the tech giant globally.

    Apple’s international decline has accelerated with total sales revenue sliding by 14.6 per cent and operating income by 28.2 per cent.

    “That the numbers are down come as no real surprise given that Apple has launched very few significant products or initiatives since the last reporting period. However, that they are sequentially worse than last quarter is a cause for some concern, especially so as all geographies, bar Japan, are now in strong decline,” observed Neil Saunders, CEO of Conlumino.

    But Apple’s current problems are a lot more worrying for the company than a couple of bad sets of  quarterly figures, even though the company remains highly profitable and cash-rich. At the core of Apple’s challenge is the long period of sustained innovation and ingenuity seems to have dried up.

    The same day as Apple announced its latest results, one of the most reliable Apple leak sources, Evan Blass, revealed the next iPhone scheduled for release on September 16 will now be called the iPhone 6SE, because there are insufficient upgrades to warrant a new generation 7 model number. The iPhone – once the mainstay of Apple’s stellar rise – used to be the most-coveted smartphone handset on the market. But Samsung’s Galaxy Edge has well and truly evolved into the most beautiful handset on the market, and a raft of brands around Asia are producing phones with features and specifications equal to or better than the iPhone 6, usually at prices substantially lower.

    That partly explains why iPhone sales fell 23 per cent in revenue terms in the latest quarter: it’s just not as sexy as it once was; customers have a wider choice now, and owning an Edge has as much street cred as owning an Apple in many parts of the world.

    Laptop sales are weak globally as more and more consumers who do not need computers for work purposes find Phablets and tablets are more portable and just as convenient for social networking, email and watching videos. Mac sales fell 13 per cent last quarter – and again Apple has offered little reason to upgrade in recent years, save the high-resolution retina screens. New models are slated for later this year, but expect this to be another round of higher spec for a reduced price as Apple tries to hold its own against the likes of Samsung and arguably the biggest innovator in Windows-platform computers, Lenovo.

    Sales of other Apple physical products fell by 16 per cent.

    The only ‘innovation’ from Apple in the last two years is the Apple Watch, which, as Saunders observes, was supposed to be “the next best thing”.

    “However, its performance has been disappointing [because] it doesn’t really do very much.

    “In most cases it simply replicates what can be done on a phone, albeit less effectively. As such, other than as a status symbol, most consumers do not see the value in spending hundreds of dollars simply to remove the effort of having to lift up their phones. This is a great example of Apple’s genius in producing what remains a technically impressive and aesthetically pleasing device, while missing the bigger picture of how that device fits into people’s lives.”

    Ouch. But he is right: The Apple Watch is a solution searching for a problem. It is not a ‘must-have’, life-changing product, merely a gimmick; an expensive, flashy replacement for a pedometer which, wait, you can download onto your iPhone for free on iTunes…

    “All of this is characteristic of a company that, while still highly successful, has simply lost the edge that once persuaded consumers to continually upgrade and buy into more expensive pieces of kit.  Apple has become too obsessed with the technical minutiae of products rather than developing radically new devices which capture the imagination, and cash, of consumers,” says Saunders.

    Services a bright spot

    Saunders says the one bright spot in an otherwise gloomy set of Apple figures comes from the services segment. Here revenue grew by 19 per cent, thanks to more Apple Music subscribers and the strong performance of the App Store. “However, the ground gained here is nowhere near enough to make up for the decline in product revenue, which is where Apple takes the bulk of its sales and makes most of its profit.”

    Just what Apple is working on behind the scenes as it seeks its next life-changing product is uncertain. There have been long-running reports it is developing a motor vehicle, for example, a huge investment which the company certainly has the cash reserves to fund. But reinventing the motor vehicle is a hard concept to conceive. Elsewhere it seems to be searching for acquisitions which could aid its growth – among the recent rumours is a bid for Formula 1, one of the world’s most-watched televised sports which could bring access to technical innovation, and most importantly content for a planned TV concept and its existing devices. Neither F1 or Apple has denied those rumours.

    Saunders argues that if the company is to return to its once stellar growth, it needs either a radical step change in its existing product line-up or needs to come up with a completely new device that creates a whole new market.

    “This is easier said than done, but there are emerging areas of technology – like virtual reality – where Apple should be at the forefront of developments.”

    Saunders also praises Apple’s latest incarnation of its retail store.

    “Apple’s latest store format is impressive and provides just the type of experience that modern consumers enjoy and will engage with. However, without great products this new format will not deliver very much. As such, Apple needs to put the same sort of forward thinking into its kit as it has done its new shops.”

    He concludes: “As much as this may all sound harsh and critical, it is simply because Apple set such a high benchmark to begin with. It remains a very impressive business and retailer, but it is one that is in desperate need of that magical ‘one last thing’ to transform its trend of declining sales.”

  • ‘Pokemon Go’ catapults c-store sales in Korea

    ‘Pokemon Go’ catapults c-store sales in Korea

    Convenience stores in some areas in South Korea are enjoying a boom in sales brought by the latest mobile game craze ‘Pokemon Go’.

    ‘Pokémon Go’, an augmented reality app developed by Niantic, requires players to walk around and catch creatures called Pokémon using one’s smartphone.

    The hit game is not yet available in the country but a technical glitch made it accessible in a few locations such as Sokcho, Ulsan, and Busan driving people to flock to these areas, according to The Korea Herald.

    Top South Korean c-store operator CU reported that its outlets in Sokcho saw a jump in sales notably in battery charging services which rose by 388 percent and mobile accessories such as portable batteries and earphones by 82.4 percent.

    A rise in demand for ice cream and cold beverages due to summer heat has also been seen so the Sokcho branch of retail chain E-mart offers free ice water, as part of its marketing campaign, to ‘Pokémon Go’ players who can catch Pokémon creatures on its premises.

    Travel agencies, hotels, and retailers selling Pokémon merchandise are also cashing in on the game phenomenon.

  • Shilla Duty Free downtown and off-shore stores contradiction performance

    Shilla Duty Free downtown and off-shore stores contradiction performance

    The Shilla Duty Free posted a +29.0% year-on-year rise in second-quarter revenues for its Korean downtown duty free operations, reflecting a strong rebound from the MERS-ravaged corresponding period last year.

    Downtown store revenue climbed to KW538.2 billion (US$473.6 million) for the quarter, with growth outstripping the +23.5% increase in the total Korean duty free market (see Mirae Asset Daewoo chart below) for the period – encouraging news for Shilla given the increase in competitors following last year’s government licence additions.

    However, Korean airport sales fell -19.2% to KW198 billion (US$174.2 million), driven by a downturn in Incheon International Airport revenues caused by reduced floor space in the wake of last year’s tender results.

    Overseas duty free revenues (principally Singapore Changi Airport and Macau International Airport) rose by +16.3% year-on-year to KW121.3 billion (US$106.7 million). More pertinently, however, Shilla posted a KW12.3 billion (US$10.8 million) operating loss on those operations, reflecting in particular the high cost of entry at Changi.

    The offshore losses put a big dent in The Shilla Duty Free’s overall operating profits, which fell -51.4% to KW15.4 billion (US$13.6 million). Even profits on the more lucrative Korean downtown business fell sharply, down -39.0% to KW27.7 billion (US$24.4 million).

    A key factor in that decline has been, as we reported recently, the rocketing costs of commissions to Chinese travel retail agents – up from between 7% and 100% to around 23% since the advent of new duty free retailers last year. As one leading luxury brand executive told The Moodie Davitt Report recently, “The real winner in Korean duty free is the Chinese travel agent.” These numbers bear out that view.

    shilla July 2016 2

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    shilla July 2016 6The Shilla Duty Free is the key revenue and profits contributor to parent Hotel Shilla, whose consolidated revenues rose +13% year-on-year to KW954.1 billion (US$839.6 million), while operating profits tumbled -36.04% to KW18.7 billion (US$16.5 million).

    Group operating profit margin was 2.0%; with travel retail overall at 1.8%, Korean travel retail at 3.8% (6.1% downtown) and offshore duty free operations -10.1%.

    shilla_changi_opening_10feb2015_shilla5

    The Shilla Duty Free’s overseas airport operations once more posted heavy losses. The major problem lay with the heavy concession fees at Singapore Changi Airport (above). Pictured below is Shilla’s smaller operation at Macau International Airport, a joint venture with Hong Kong’s Sky Connection.

    NWS_Holdings_shop_0216_600_2MIXED REACTION FROM ANALYSTS

    MIRAE ASSET DAEWOO : Regina Hahm, Equity Analyst (Cosmetics, Hotels & Leisure, Fashion) at Mirae Asset Daewoo Research Center, said: “2Q earnings were way weaker than the market estimates.

    “However, I do think that it is positive that Shilla has further strengthened its existence in the market. It seems pretty apparent that group tourists have been absorbed by the Jangchung store [Shilla’s flagship Seoul shop -Ed], especially since the absence of Lotte World and WalkerHill.”

    In a review of Hotel Shilla’s results, Ms Hahm noted: “The domestic duty free business, which was hurt by the impact of MERS, resumed robust growth. Revenue from the downtown duty-free operation [of Shilla] climbed +29.0% YoY to KW538.2 billion during the quarter, meeting our expectation (+27.7% YoY). In the corresponding period, the overall duty free market saw revenue growth of 23.5% YoY, even as new entrants began full-fledged operations.

    “We think this shows the performance gap between major duty free players and less competitive, new players is widening further, which is natural given the importance of scale effects, the quality of sourced products, as well as experience in the duty free industry.

    Looking forward to Q3, typically a peak season for both inbound and outbound tourism demand, Ms Hahm foresees strong growth potential in Shilla’s duty free business, particularly given the low base line from the MERS-hit comparative quarter in 2016.

    She commented: “Airport revenue is likely to turn around in 3Q16, aided by the dissipation of high base effects.”

    Commenting on the group share price, she concluded: “Hotel Shilla shares have long been weighed down by a series of negatives, such as controversies over domestic duty free industry policies, the loss of licences by a few major players, and MERS.

    “In 2H, with the performance gap between new entrants and major existing players widening further, we expect Hotel Shilla to solidify its position as a leading player. Also, in our view, the stock could see a re-rating, given peak-season effects and strengthened market dominance.”

    Accordingly, Mirae Asset Daewoo maintained its ‘Buy’ rating on Hotel Shilla with a target price of KW110,000 (currently US$96.80), the stock brokerage and investment bank company’s top pick in tourism. By mid-afternoon today (26 July) it was trading at KW61,700, off by -0.80%.

    NOMURA: Analysts Cara Song and Jiun Im took a very different view, downgrading the stock from a buy to a reduce, and cutting their target price from KRW100,000 a share to just KRW47,000.

    In comments quoted by Barron’s Asia, they noted: “Operating profit margins at the domestic downtown duty free stores (Hotel Shilla’s sole profitable business) declined sharply to 6.1% in 2Q16 (vs. 8.8% in 1Q16, 10.3% in FY15). The company attributed this to a bigger contribution from lower-margin group tourists (from 70% in FY15 to 85% in 2Q16).

    “Considering that it is easier to attract group tourists than individual travellers by: 1) paying higher sales incentives to travel agencies; 2) more aggressive price promotions, Hotel Shilla’s customer mix has deteriorated, in our view.”

    HDC_Shilla_600_004 (1)

    Shilla IPark duty free is a stunning addition to Korea’s travel retail landscape. But Shilla’s overall reliance on group tourists, as opposed to higher-spending FIT customers, concerns Nomura.

    The analysts were particularly alarmed by the airport losses in Singapore, commenting: “Contrary to company guidance, Changi Airport DFS continued to struggle, with persistent losses in 2Q16. With the [Korean] government’s plan to issue additional DFS licences in 4Q16F, the DFS business environment could be dampened further.

    “Reflecting this, we cut our net profit estimate by 49.5%/36.5% respectively for FY16F/17F. Our FY16F/ 17F net profit estimates are c.33% lower than Street expectations (Fig.11).”

    Nomura also suggested there could be an added hit to earnings if Hotel Shilla’s planned part-acquisition of Miami-based DFASS Group in the third quarter falls through. The Moodie Davitt Report understands that constructive dialogue continues on that deal, though it is still some way from closing.

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  • Chinese beauty retail market predicted to reach $50bn

    Chinese beauty retail market predicted to reach $50bn

    Despite less frequent purchases, the high demand for skincare products will see the Chinese beauty retail market continue strong growth to reach 338 billion yuan (US$50 billion) in value by 2020, says a new report.

    Research by Mintel shows that 65 per cent of consumers spent more on facial skincare last year than in 2014, despite consumers buying beauty products less often.

    Purchase rates for all beauty and personal-care categories surveyed by Mintel slowed during the three months to October last year. The categories most affected are hair beauty products, beauty supplements and fragrances, falling 32 per cent, 28 per cent and 26 per cent respectively.

    Total retail sales of cosmetics in China grew 12.3 per cent to reach 204.9 billion yuan last year.

    “The beauty retailing market seems resistant to decline, and this is mainly because the dynamic development of the facial skincare market,” says Mintel senior beauty and personal care analyst Chen Wenwen.

    “To leverage their passion and spending power, it is essential for both retailers and manufacturers to engage consumers via mobile platforms.”

    As many as 44 per cent of consumers used a mobile device to pay for beauty/personal care products online in the three months to October – double the number since 2014.

  • Store roll-out boosts Starbucks Asia

    Store roll-out boosts Starbucks Asia

    A massive Starbucks Asia store roll-out has boosted the global coffee company’s third quarter results.

    Across China and the Asia-Pacific region, Starbucks opened 888 new stores in the first nine months of the current financial year. That helped lift revenues by 18 per cent in the region.

    However, underlying same-store sales were a far more modest 3 per cent up on the same quarter last year.

    “The concern is that some of this is related to a general slowdown in China which, if part of a longer term trend, could harm company earnings,’ observed retail analyst Neil Saunders, CEO of Conlumino.

    The company’s Channel Development division – which encompasses the sale of Starbucks branded products in grocers and other stores- also posted positive numbers, with revenues rising 9 per cent. This was aided by strong sales of single-serve Starbucks products following a new agreement with Keurig Green Mountain to push branded K-Cups into more channels. A new partnership with Nespresso to launch Starbucks-branded pods should provided a further uplift to this division in the quarters ahead.

    “Unfortunately, the stronger performances in Asia and in the Channel Development Segment were not enough to offset the weakness in the Americas, which remains larger than all other divisions combined,” said Saunders.

    “And therein lies the forward issue for Starbucks: it has to increase momentum in this part of its business if it is to get back into high growth territory and if it is to avoid a future squeeze on profits.”

    Globally, Starbucks seemed to lose momentum in the third quarter, with overall growth slowing to 7 per cent and global same-store growth moderating to 4 per cent – both below forecast.

    “Worryingly, the slowdown took hold across all regions with even the Americas division, which usually puts in a fairly robust performance, posting a lacklustre same-store increase of 4 per cent. The fact that the company appears to have run out of steam somewhat overshadows its nonetheless impressive achievement of breaking the $1 billion operating income barrier for the first time in a non-holiday quarter.”

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  • Sales fall 19pc for L’Occitane International

    Sales fall 19pc for L’Occitane International

    A 19.8 per cent drop in sales in Hong Kong and Macau has been recorded by French skincare retailer L’Occitane International for its first fiscal quarter.

    This amounts to €22.8 million (MOP175.3 million/US$21.9 million), according to its filing with the Hong Kong Stock Exchange.

    Its same-store sales in the two regions for the three months ended June 30 dropped by 11.7 per cent year-on-year. The company had 33 stores in Hong Kong and three in Macau at the end of June.

    Total net sales reached €268.5 million for the period, down 2.2 per cent. Of the total, sell-out sales brought in €200.4 million.

    L’Occitane says the soft performance was because of “lower sales to travel retail operations in the Asia region” as well as the global economic downturn and overall unfavourable foreign exchange impact.

    Meanwhile, the company’s sales on the mainland decreased 5.3 per cent during the quarter to €24 million. Same-store sales, however, eased by only 0.4 per cent year-on-year.
    The company had 195 stores on the mainland at the end of June, eight more than at the same time last year.

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  • H&M sales rise, profit falls

    H&M sales rise, profit falls

    H&M sales rose 7 per cent in local currencies during the first six months of the financial year. But profit failed to follow suit.

    Converted into Swedish kronor, H&M sales rose by 5 per cent to SEK 104.9 billion, (US$12.176 billion).

    Karl-Johan Persson, CEO, said the sales increase in March and April was significantly below plan, negatively affected by cold spring weather in many markets. In May, sales were much better with an increase of 9 per cent.

    After tax profit was SEK 5.357 billion, (US$621.4 million) down 17 per cent year-on-year.

    “Profits in the second quarter have been affected by a continued negative US dollar effect, but also by increased markdowns and the costs of our long-term investments. The fact that the sales increase in the quarter was below plan, naturally also had an impact on profits,” he said.

    “It has been a challenging half-year for fashion retail in many markets, but we have great confidence going forward and are continuing to develop our offering further within all our brands.”

    H&M has opened nine new online markets so far this year – in Slovenia, Croatia, Estonia, Latvia, Lithuania, Luxembourg, Ireland, Japan and Greece. Canada and South Korea will follow later this year.

    The fashion retailer has more than 4000 physical stores in 62 markets with plans to add 425 more this year. New markets this year are Puerto Rico, New Zealand and Cyprus, while Colombia will be one of four or five new destinations next year.

  • ‘Dire’ Hong Kong market cripples Burberry sales

    ‘Dire’ Hong Kong market cripples Burberry sales

    A “dire” Hong Kong market has damaged Burberry sales for the latest quarter.

    Retail revenue remained unchanged at £423 million, but like-for-like sales fell 3 per cent.

    “Whilst sales declined across all three regions (Asia Pacific, EMEIA and the Americas), a dire performance in Hong Kong and Macau stood out as a particularly stubborn thorn in the side of the luxury player,” observed Andrew Hall, an analyst with Verdict Retail.”

    Burberry has appointed a new CEO, Marco Gobbetti, who inherits sales weakness across all regions from Christopher Bailey, who remains on as president and chief creative officer.   Gobbetti’s appointment is seen as a direct response to growing frustration with Bailey’s inability to turn Burberry’s poor performance around.

    “One of Gobbetti’s priorities must be examining operations in these far eastern markets and considering new avenues for growth especially given there has been a renewed crackdown on gift giving in China, accompanied by the growing popularity of ‘Daigous’ – overseas shoppers who buy luxury goods and ship them to China for clients,” said Hall.

    Britain’s exit from the EU is likely to benefit Burberry in the short term, as international tourists to the UK rush to capitalise on the weakened pound. However, long term,  Burberry’s UK operations may well suffer from a reduced flow of wealthy tourists as travel to the UK becomes more regulated, making it imperative Burberry finds a way of turning this evolving geopolitical drama to its advantage.

    “While Gobbetti faces a number of challenges as he attempts to revive flagging retail sales, his experience at Celine will stand him in good stead,” said Hall.

    “Burberry’s strength in digital and the continuing appeal of its brand are good foundations to work with and the clear segmentation of leadership between Bailey and Gobetti will benefit Burberry’s strategic direction.”

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  • Primark sales flourish on new store openings

    Primark sales flourish on new store openings

    Despite third quarter like-for-like sales being hit by unseasonal weather, especially in April, UK-based discount apparel chain Primark has posted a solid 40-week performance – with a strong third quarter boosting overall growth.

    Primark sales benefitted from the weakness of the pound towards the end of the quarter, and from the 800,000 sqft in selling space added since the beginning of the financial year.

    The company ended the period with 310 stores and 12 million sqft of selling space. Primark is continuing its march throughout Europe and the US, and opened 11 stores in the quarter, including three in the UK, its third in the US and its first in Arese, northwest of Milan in Italy.

    Early trading in these new stores has been promising, especially in its recent US and Italian ventures – while new stores in France continue to impress, highlighting the appetite for the brand in the country. Having previously been overly cautious with its store expansion strategy, Primark’s recent bold attitude is set to continue with plans to add a net 300,000 sqft of space in the fourth quarter – including two more stores in the US, and also doubling its Creteil store in Paris.

    Despite the uncertainty brought on by the UK’s EU referendum result, Primark remains optimistic and will forge ahead with its expansion plans. Given its strong value proposition and the clear demand for its offer, Primark is well placed to benefit as shoppers’ discretionary spend comes under further pressure – though retaining its competitive pricing will be crucial.

    Consumers now place far more importance on quality and value for money – ensuring Primark cannot scrimp on fabric, quality or fit. While Primark continues to shun the online channel, it must invest in its in-store experience, with focus needed on reducing queuing times at fitting rooms and at the till, as well as customer service.

  • Hong Kong jewellers to feel Brexit hit the most

    Hong Kong jewellers to feel Brexit hit the most

    The retail sector in Hong Kong is finding it difficult to keep their boat afloat amidst the decline in mainland tourists since a year ago. Now, the Britain’s vote to leave the EU is likely to make matters from bad to worse for the Hong Kong’s retail sector, says reports.

    A recently released Hong Kong government report showed retail sales slipping to 12.5 per cent Y-O-Y in the first quarter to HK$115.2 billion, from HK$131.6 billion in the same period last year. The total number of retail establishments also dropped sharply to 64,498, fewer by 1,400 from the first quarter last year. And there have been 10,000 retail sector job losses in the past year, with the number of employees also down to 320,400 by the end of first quarter.

    Apart from the decreasing number of tourists, outbound travel is expected to grow on the back of a stronger US dollar and weaker Chinese yuan, resulting in less spending in Hong Kong, say industry experts.

    Industry analysts have predicted for a much worst conditions for the upcoming future, after Brexit triggered global uncertainty. The situation is expected to push higher the value of U.S. dollar. Also, the experts have forecasted for an outright recession in Hong Kong this year.

    Hong Kong being financial hub and its currency peg, their economy is expected to be hit the hardest in Asia, say experts. The Hong Kong dollar, meanwhile, which is pegged to the greenback, is expected to appreciate significantly after the Brexit, say reports.

    In its latest note, the Morgan Stanley analysts say demand, too, for commercial property is likely to be impacted by weaker Hong Kong economic growth and the sluggish labour market, says reports.

    The experts further predict that the only the only bright spots in the overall retail market gloom, however, were recommendations from Bank of America Merrill Lynch and China International Capital Corp to invest in Hong Kong jewellery makers, which they said should benefit from the rising price of gold, amid global risk aversion fuelled by the Brexit.

    As per the reports, both maintained ‘buy’ ratings recently for Luk Fook Holdings, a Hong Kong gold-jewellery retailer. “Luk Fook would be the biggest beneficiary from the recent upward trend in the gold price due to its smallest hedging ratio of 15 per cent to 20 per cent,” BoA Merrill Lynch analysts said as per reports.

  • Xiaomi taps China Unicom to boost offline sales

    Xiaomi taps China Unicom to boost offline sales

    Chinese smartphone maker Xiaomi has teamed up with the country’s second largest mobile carrier, China Unicom, to expand its sales through offline retailing channels.

    The partnership with Unicom signals a move to a more conventional sales operation for Xiaomi, whose sales have been heavily relied on internet channels.

    Xiaomi launched a new customized 4G smartphone Redmi 3X for Unicom, as part of a strategic alliance the pair announced last Wednesday.

    The Redmi 3X smartphone, powered by 1.1GHz octa-core Qualcomm Snapdragon 430 processor and a 4100mAh non removable battery, will go on sale for 899 yuan ($136) through Unicom’s 30,000 own retail stores and more than 230,000 retailing partners.

    Xiaomi CEO and founder Lei Jun said so far more than two-thirds of the company’s smartphones have been sold through e-commerce platforms and the company’s official website.

    “The proportion of online sales is too big,” Lei said. “To maintain the rapid growth we have seen in the past four years, expanding offline retailing channels becomes the key.”

    Xiaomi said earlier this year it will open 200 to 300 of its own retail stores to bolster sales.

    Xiaomi and Unicom will also expand their cooperation beyond handsets to a wide range of products, such as Xiaomi TV, routers, wearable devices and air purifiers.

    China Unicom deputy general manager Xiong Yu said all of these Xiaomi products will be available at the operator’s offline retail stores across the country.

    The move fits into the operator’s broad efforts to transform its abundant bricks-and-mortar assets into a big retailing platform of various electronic products, Xiong added.

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  • Strong growth for Mulberry

    Strong growth for Mulberry

    British fashion retailer Mulberry has reported a strong set of results as it takes more direct control of its Asian distribution.

    With 2015/16 being the first full year with CEO Thierry Andretta and Creative Director Johnny Coca in charge, the results are a crucial indicator of the efficacy of their strategy. Thankfully, they did not disappoint, as the brand unveiled strong sales growth across both its UK and international divisions – though UK results are inflated due to weak comparatives. Retail sales led the way, with UK retail sales up 9 per cent to £97.4 million and international retail sales up 3 per cent to £21.3 million. Wholesale sales were down 4.1 per cent as Mulberry takes action to rationalise its wholesale distribution network in Asia – a positive step towards taking better control of its brand in the region.

    Digital sales were strong, boosted by a newly-upgraded website and improved fulfilment operations, following investment in its UK factories, but there is much more potential for growth especially as Mulberry plans to extend its digital offer into key international markets through local language websites and local fulfilment over the next few years.

    The brand’s overall strategy of limited but well-considered store openings and a strong focus on refining its multichannel experience is a wise one, and will allow the brand to better engage with its core customers and grow international sales.

    Mulberry reiterated its promise of sticking to its core £500-£995 price bracket in handbags, and alongside Johnny Coca’s continued efforts to modernise the brand while respecting its heritage, Mulberry is on its way to regaining its trademark ‘classic but cool’ credentials – essential for recruiting new shoppers as well as retaining loyalty among core customers.

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  • Astra doubts car sales would increase

    Astra doubts car sales would increase

    The country’s largest car manufacturer, PT Astra Internasional, expresses doubt that sales of automotive products would increase in 2016.

    Car and motorcycle sales would not increase under the economic slowdown, Astra’s investor relation officer, Ira Ardianti, said here on Monday night.

    Sales of both two and four wheeled motor vehicles have been flat in the past five months, she cited. The people’s purchasing power is still weak and have no fund to spare for luxury, she said.

    Sales of motorcycles dropped in the regions mainly because of the commodity price fall such as palm oil and rubber prices, Ardianti said.

    In the first quarter of 2016, Astra’s car sales dropped to 127,000 units from 137,000 units in the same period last year. In April and May, Astra’s sales of cars totaled 31,000 units and 33,000 units respectively.

    Its sales of motorcycles also shrank to 1.1 million units in the first quarter of 2016. In April and May sales were recorded at 348,000 units and 338,000 units respectively.

    “We could not make prediction , but hopefully the economy would improve and the people’s purchasing power would be stronger,” she said.

    The Indonesian Automotive Industry Association (Gaikindo), however, said car sales in Indonesia (from factories to dealers) surged 11 percent to 87,919 units in May 2016, the second straight month of rising car sales year-on-year.

    Gaikindo chairman Jongkie Sugiarto attributed the increase mainly to delivery of new models ahead of Idul Fitri holiday.

    In April car sales in Indonesia grew 4.6 percent to 84,703 units from 81,000 units in the same month last year.

    This is encouraging after being on the decline for 16 straight months previously.

    Stakeholders in the automotive industry hope that this is the start of a rebound, in line with accelerating economic growth.

    In the first quarter of 2016 Indonesias economic growth accelerated to a growth pace of 4.92 percent yoy), higher than the 4.73 percent GDP growth pace in the same quarter last year.

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