WGSN News

Coach drives to impressive Q2 as North America and China sales flourish

2012-01-25T11:38:00.003Z

Strong North America sales helped high end accessories producer and retailer Coach to better-than-expected Q2 results, boosted by demand for its handbags during the Holiday period.

"We were especially pleased with our ongoing strength in North America during the Holiday season," CEO Lew Frankfort confirmed.

“Our performance reflected the strength of our franchise, our broad and diversified product platform and our multichannel, international distribution model.”

For the quarter ended December 31, profits rose 15% to $347.5m/$1.18 a share, three cents ahead of analyst forecasts, from $303.4m/$1 a share, a year ago.

Total sales jumped 15% to $1.45bn, ahead of analysts’ $1.43bn.

Retail sales increased 17% to $1.28bn as same-store sales rose 8.8% in North America.

China, Coach’s “largest geographic growth opportunity”, saw double-digit same-store sales growth with Frankfort noting the country continues to post “excellent gains” and remains on track to generate at least $300m in sales this year.

Meanwhile Japan sales, on a constant-currency basis, remained flat.

Indirect sales were flat at $166m, hurt by the timing of international shipments.

Gross margin slipped to 72.2% from 72.4%.

Frankfort also singled out its fast-growing men’s business, which is on track to double in fiscal 2012, to over $400m globally, he said.

For the six months, net sales climbed 15% to $2.5bn as net income totaled $562m, up 14% from $492m a year ago, while EPS rose 17% to $1.90.

Acne, Smith and Lanvin go their own way as Paris menswear turns formal

2012-01-23T11:59:00.002Z

Paris menswear closed Sunday and set the seal on a season that is securely focused on the formal. But brands also trod their own path some taking a more relaxed approach to autumn/winter 2012/13 and others reworking formal to make a powerful fashion statement.

Acne maintained its signature grungy style and enlivened it with cropped lengths, bright colourways and novelty heart prints, while shark tooth and jelly fish prints added a fun, novelty factor to the collection at Paul Smith and Lanvin played with new shapes.

At Acne, classic tailoring styles came in new oversized silhouettes and designer Jonny Johansson proved that synthetic fabrics can still look luxe by using leatherette, vinyl, polyester and faux fur throughout.

The silhouette was layered and elongated or short and cropped. The former was seen in formal overcoats worn atop leather-look fur collar shirts and matching trousers creating a grunge vibe, or faux fur coats that were oversized and boxy.

Silhouettes became short and cropped with trousers sitting above the ankle and short sleeved wool tees layered over quilted nylon shirts. SB blazers were mis-matched with different coloured trousers for a quirky finish while luxe mohair knits had a laidback relaxed feel.

Paul Smith, meanwhile, introduced a new twist on nautical styling for autumn in a sophisticated palette of sea blues with those fun prints adding an unexpected twist to the season.

Outerwear and knits came to the fore with fitted peacoats with hi-shine panels of leather or nylon on the shoulders, while chunky marl knits were worn over fluorescent yellow T-shirts for a two-tone finish.

Tailoring took a back seat but was presented in slim fit silhouettes with mismatched jackets and trousers with DB blazers and cropped trousers.

Over at Lanvin, the look was modernist with a silhouette that saw rounded exaggerated shoulderlines balancing a defined high-set waist

Jackets were defined by that new shoulderline, while SB blazers – often with an internal strap fastening rather than buttons – had their waists subtly ratcheted up a notch to give the illusion of an elongated silhouette. That look was also mirrored in the high waist and long rise of the collection’s fluid flared pant shapes.

There was a nod to ensemble dressing too, with short coats and matching tailored suits, teamed with this season’s ubiquitous fine-gauge polo-neck knit. Outerwear was cocooning and protective, from the curly lambskin throw-on silhouettes to rounded puffas layered over formal tailcoats. That tailcoat detail appeared elsewhere, most notably adding contrasting back interest on a peaked lapel cropped military-style jacket.

Yamamoto takes it easy for fall as Jones goes travelling in second season at Vuitton

2012-01-20T11:32:00.000Z

Yohji Yamamoto’s latest menswear collection ticked the box for several of winter’s key menswear trends in Paris yesterday. Not that his signature style was missing - those military-inspired looks with laid-back styling and romantic historical twists also put in an appearance.

The silhouette was easy and oversized with key items including the military reefer and greatcoat alongside Victoriana-styled DB waistcoats, stock-tied neck shirts and tweed field jackets.

Pant shapes were relaxed and pleated, while roomy cardigans featured tonal colour blocking and zipped-through details. Also on the detail front, there was a sequence of easy SBs and soft serape throws edged with homespun blanket stitch detailing.

Meanwhile, Kim Jones won rave reviews for his Louis Vuitton collection as he mixed European and Japanese influences, all wrapped up in a traveller theme. This was seen very clearly in the accessories that included belts trimmed with the words Paris or Tokyo.

But beneath the headline-grabbing themes, this collection was all about wearable luxury with louche tie-belt coats, functional contrast-trimmed ski jackets, Barbour-type jackets and coats, kimono-wrap cotton shirt jackets, and 2SB jackets with contrast sleeves.

The classic palette shaded from clerical greys through to inky marine blues, via tobacco browns, shades of camel and deep merlot.

Back with those accessories, there were shoppers, weekend bags, and document cases all with a strong sense of structure – there was nothing casual about them, especially when they came in broadtail, crocodile or Vuitton’s Epi leather with contrast colour flaps, edging and handles. Also strong were the military-style berets, giant knit scarves and decorative pins with feather trim.

Upbeat eBay sees Holiday sales glow as profits triple on Skype sale

2012-01-19T12:00:00.001Z

Online auction and retail giant eBay posted better-than-expected Holiday earnings as retail sales leapt and the sale of online telecommunications firm Skype boosted its bottom line yet further. Despite a Q1 outlook falling short of analysts’ expectations, its shares still rose 2.4% to $31.01 in after-hours trading.

Q4 net income jumped to $1.98bn/$1.51 a share from $559m/42 cents a year ago, On an adjusted basis, eBay said earnings were 60 cents a share, topping analysts’ view by three cents a share.

eBay said its profit leap was primarily due to the sale of its remaining interest in Skype, reporting roughly $2.3bn in proceeds from the sale for the quarter. Skype was purchased by Microsoft Corp last year for $8.5bn.

Revenue leapt 35%, its biggest increase in six years, to $3.38bn from $2.5bn a year ago. Analysts had been expecting $3.3nn in revenue.

eBay's core marketplaces business saw revenue rise 16% to $1.8bn in Q4 as, gross merchandise volume, or the total value of goods sold, was up 10%, excluding vehicles.

Its fast-growing PayPal division also saw revenue rise 28% on-year to $1.2bn and ended the quarter with 106.3m active registered accounts, a 13% gain.

The company's GSI business, which provides services to online retailers, also contributed $363.6m in revenue during the quarter.

"We are operating with discipline and clarity," eBay chief executive John Donahoe said.

EBay's results come a little more than two weeks after the company lost the head of PayPal payments unit, Scott Thompson, to head Yahoo.

Donahoe, who has also been overseeing PayPal, said during the conference call the company "will not skip a beat" as it transitions PayPal away from Thompson's leadership. "The PayPal leadership team has never been stronger," he said.

The company's current marketing campaign started last year is designed to reinforce the new image, and "position eBay as a destination with a great selection of new merchandise," Donahoe said during the call, adding that he's pleased with the effort.

eBay had been expected to provide a downbeat outlook, based on a strengthening dollar and turmoil in European markets.

The company said it expects adjusted earnings for the current Q1to range 50-51 cents a share, and revenue of $3.05bn-$3.15bn. Analysts, however, had been looking for 54 cents a share, and $3.16bn revenue.

In an interview with Dow Jones Newswires, Donahoe said the company is confident in its operations both in the US and in more troubled European markets.

"E-commerce has remained real strong across Europe over the last couple of years," as shoppers turn to the internet in order to "make their euros stretch.

"We're as well-positioned as anyone in a segment that has been growing strongly," he said, adding that budget-conscious consumers in all markets are seeking better prices online.

South Korea's retail sales rebound in December as winter weather boosts apparel sales

2012-01-18T11:23:00.003Z

Sales at South Korea's major department and discount stores rebounded in December as unusually cold weather drove strong seasonal goods sales, a government report showed Wednesday.

Combined sales at department stores Lotte, Shinsegae and Hyundai jumped 11% last month, a turnaround from a 0.5% on-year decline in November, according to the Ministry of Knowledge Economy.

Sporting goods sales leapt 24.5% with sales of women's casualwear and menswear growing 15.49% and 11%, respectively.

Luxury goods sales also expanded 10.5%, maintaining its run of double-digit growth.

Meanwhile total sales at discount chains E-Mart, Lotte Mart and Homeplus expanded 3.7% in December compared to a 0.5% dip in November.

Sales of clothes and sports goods grew 5.5% and 7%, respectively, as consumers bought winter clothes and winter sports-related goods amid low temperatures.

Sales of daily household goods and miscellaneous products advanced 5.8% and 0.5%, respectively, over the period, but sales of home appliances shrank 2.4% last month.

The number of purchases gained 4.3% for department stores and 2.9% for discounters. Additionally, price per purchase rose 6.4% and 0.7%, respectively, at KRW92,156 ($80.60) and KRW43,422, respectively.

Asia-Pacific and tourists boost Burberry’s impressive Q3 although US casts shadow

2012-01-17T11:26:00.000Z

UK luxury house Burberry posted a 21% rise in Q3 sales Tuesday as demand from its high-spending consumers, particularly Asian tourists, maintained its position as one of the stars of fashion retail.

The only cloud was a sharp slowdown in US sales growth as Burberry chose to cut supplies for department stores to sell through its discount outlets, denting its share price. At 09:15 GMT, its stock was down 1.9% at 1,275 pence.

Total sales topped £574m ($880m) in the three months to December 31, outstripping analysts’ expectations of £569m. Same-store sales climbed 13%, just ahead of a 12% forecast. For H1, total sales grew nearly 30%.

Retail sales, accounting for 70% of total, jumped 23% to £417m in the quarter, as the group said wholesale revenues grew 15% to £130m, boosted by a shift of deliveries to Q3 from Q4, a move that will weaken its outlook, which was a slight concern for some analysts.

Core outerwear and large leather goods again drove growth with knitwear, men's accessories and tailoring, fragrance and watches also growing strongly. Licensing revenue rose 12% to £27m, driven by the success of its Burberry Body fragrance launch.

Q3 sales in the Asia-Pacific region jumped 39% to £210m, accounting for the largest proportion of the total, while strong demand from tourists drove sales in London, Paris and Hong Kong, which all outperformed expectations, Burberry said.

Sales in Europe climbed 21% to £160m; the Americas grew a more modest 4% to £148m while the Rest of the World increased 30% to £29m.

The fashion house also noted it extended its luxury leadership position in social media, with over 10m Facebook fans and 10m views on YouTube.

CEO Angela Ahrendts said: "Our investment in flagship markets and digital technology has enabled our global teams to continue to drive customer engagement, enhance retail disciplines and improve operational effectiveness, further strengthening brand momentum.”

She added that while remaining aware of the difficult economic backdrop, Burberry was pressing ahead with its expansion plans, although it now expects retail selling space to rise 13-14% in H2 compared with 15% previously.

NRF Retail’s Big Show opens with economic uncertainty key focus

2012-01-16T23:02:00.000Z

The annual NRF Retail’s Big Show kicked off in New York Sunday focusing on the key theme of internationalisation and the uncertainty of the economic situation facing retailers trading overseas.

Dr Ira Kalish, global director of Deloitte Research, laid out the brutal facts of trading in the eurozone during the current monetary crisis, saying the most likely scenario is that Europe would “have a recession this year and in the longer term fairly slow growth”.

He predicted more consolidation this year in non-food retail in Europe as this offers the only growth option left to retailers looking to increase market share.

However, Kalish warned that ‘Armageddon’ could happen in Europe so retailers trading in the region should plan for the worst-case scenario – the eurozone crashing - which would mean disentangling old euro-based agreements and renegotiating all contracts.

For US retailers, China’s growth still offers a more positive outlook but he warned that in 2012 the market could see its slowest growth in 10 years, perhaps falling below double digits. And he warned of further challenges in the long term.

He said: “Here the US economy has been growing but not as fast as we would like. There’s been a pretty decent consumer spending growth over the last couple of months although real incomes are not growing and that’s an issue.”

“Over the past three years US consumers have paid down their debts, taking consumer debt levels to their lowest since 1993, so they are willing to spend but that won’t go for ever unless real incentives rise.”

He added the housing market continues to decline and a quarter of US homeowners are in negative equity which restricts their ability to move where jobs are available.

Kalish forecasts the continuing bifurcation of retail based on the fact that the US has a high number of uneducated and unskilled workers. Meanwhile, the educated, skilled and high-earning consumers will continue to spend on luxury and brands but the middle market will remain the worst place to be as a retailer.

Golden Globes is all about Hollywood glamour as big names play it safe

2012-01-16T21:28:00.000Z

The Golden Globes kicked off the awards season on Sunday evening and for the stars on the red carpet it was all about pure Hollywood glamour. There was none of the understated, “this isn’t quite the Oscars” approach for the big names, who instead opted for va-va-voom sexiness with a couture edge.

Angelina Jolie and Brad Pitt, as Hollywood’s reigning power couple, epitomised the look – she in a white one-shoulder Atelier Versace gown of silk cadis with a folded red detail at the shoulder, he in a classic tuxedo and bow tie by Ferragamo.

Nicole Kidman and Keith Urban also went ultra-traditional as her silver Versace gown covered in gold studs was body-hugging and sexy, and was allowed to shine against his lower-key one button peak lapel tuxedo (also by Versace).

Clare Danes made an impact in black and white J Mendel with a bare back, as did Kate Winslet in black and white Jenny Packham. Both gowns had a feel of 1930s Chanel about them. Understated but still glamorous.

Meanwhile Natalie Portman wore fuchsia strapless Lanvin with a flash of red that also channelled Old Hollywood.

Fishtail made an impact. Reese Witherspoon wore a crimson strapless heavy silk Zac Posen gown while Sofia Vergara chose the take the silhouette to extremes in deep blue Vera Wang. Paula Patton worked the look in brilliant yellow Monique Lhuillier and Evan Rachel Wood did fishtail-with-feathers in a peacock green halter-neck gown by Gucci premiere. Jessica Alba’s pale pink Gucci grown didn’t quite fit the fishtail theme but did make her “look like a mermaid”, according to the star’s daughter.

Shimmer and sparkle was high on the agenda for maximum red carpet impact with some gowns being nothing but sequins or beads. Nicole Richie wore a totally beaded silver halterneck column by Julien Macdonald, while Salma Hayek’s black and gold Gucci gown was all about contrasting sparkle. Zooey Deschanel’s Prada halterneck also put the focus on glimmer with green and black beading all over the bodice.

Many stars chose to live dangerously with gowns that revealed plenty of flesh but always stayed on the acceptable side of modesty for prime time TV viewers.

Lea Michele’s silver Marchesa gown was heavily sequinned with the sparkle morphing from hips upwards and sequins used more sparingly atop a bodystocking bodice. Rooney Mara in black Nina Ricci had her bodice plunging at the front but held in place by a series of straps, while Charlize Theron wore Dior couture with a plunging front, slashed skirt and layers of silk bow falling from the waist.

Emma Stone’s almost-Grecian Lanvin gown in red and burgundy also plunged at the front and looked as if the whole thing was held in place by a belt. Mila Kunis’s Dior gown had a bodice that looked see-through but in fact was made of chiffon over a flesh-toned underlay. Jessica Biel’s pale lace Elie Saab gown added a hint of daring by giving the illusion of see-through, coming complete with a thigh split.

Two strong contenders for best dressed that were less traditional were Dianna Agron, who trod boldly in a brilliant red Giles gown with swan motifs achieved by laser-cutting, and Michelle Williams in inky purple velvet devoré by Jason Wu.

Hair and beauty was mainly high on glamour to match the gowns but some experimented with a more modern edge. Reese Witherspoon teamed her Old Hollywood Zac Posen gown with decidedly untraditional, tousled hair, while hairbands were an important trend – worked well by both Michelle Williams and Charlize Theron.

Richemont expects bumper end to year on impressive Holiday gains

2012-01-16T12:28:00.003Z

Richemont lit up in December with Holiday sales leaping an expectations-beating 21% with the Swiss luxury goods group saying it now expects full-year operating profit to be "significantly higher than last year”.

Sales for the three months to December 31 rose 24% to €2.62bn from €2.11bn a year ago, beating analysts’ €2.58bn view. Retail sales for the period grew 28% with its wholesale ops up 19%.

Quarterly sales by region showed Europe up 15%, benefitting from purchases made by travellers; Asia-Pacific leaping 36%, reflecting “very strong” demand in Hong Kong and mainland China in particular; the Americas jumping 24%, resulting from growing demand for jewellery and watches as well as its online fashion portal Net-a- Porter; and Japan up a still-struggling 10%.

Jewellery sales grew 25%; the Maisons Specialist division sales lifted 27 %; watchmaker Montblanc inched up just 1%, primarily due to the downsizing of wholesale distribution and weak domestic demand in developed markets; and the Maison Other unit topped 29%.

Executive chairman Johann Rupert said in a statement: "The group's overall performance remains solid. The growth in sales reflects growing demand in Asia-Pacific, our Maisons' creativity and the lasting appeal of our products.

"As expected, the slowdown in sales growth relative to the first six months of the current financial year reflects a combination of more demanding comparative figures as well as the volatile and challenging economic environment."

He said the group's activities over the past nine months allowed him to reconfirm expectations that operating profit for the full year will "be significantly higher than last year."

Ted Baker delivers "excellent" Christmas performance,

2012-01-13T11:23:00.004Z

UK-based fashion retailer Ted Baker performed strongly over the Holiday period adding it would meet pre-tax profit forecasts for year to January 28.

Founder and chief executive Ray Kelvin CBE said: “The group has delivered an excellent result over the Christmas trading period. In a challenging trading environment, this performance is a testament to the strength of the Ted Baker brand, our collections and people.

Performing strongly across all of its markets, retail sales jumped 15.7% for the eight weeks to January 7, driven by a 7.3% rise in new space, while gross margins were in line with expectations as the retailer continued its trend of minimal pre-Christmas promotional activity.

Meanwhile, sales since Christmas have remained strong and the retailer expects to end the sales season with a clean stock position.

Plans for 2012 include a store on New York’s Fifth Avenue, as well as openings of first stores in Tokyo and Beijing. It will also open a new store in May on London’s Brompton Road.

Fast Retailing cuts outlook as warm autumn hits domestic sales

2012-01-12T12:06:00.000Z

Japan’s Fast Retailing Thursday reported a dip in Q1operating profit prompting the Uniqlo brand parent to trim its full-year outlook as domestic sales continue to drag.

Net profit rose to ¥31.15bn ($405m) for the September-November period, from ¥22.71bn in the year-ago period which included a one-time loss of ¥9.6bn due to a change in accounting methods.

Blaming slow domestic sales of autumn- and winterwear on unseasonably warm weather, operating profit fell 2.8% to ¥48.45bn. It was also dented by rising cotton prices and manufacturing costs in China.

Sales rose 8.6% to ¥272.69bn as its aggressive Uniqlo brand expansion plans helped to lift its international performance.

During Q1, the company opened stores in Taiwan, Thailand, South Korea and New York, helping to propel overseas Uniqlo operation sales 59% higher.

Fast Retailing has said it will aim to open 200-300 stores per year outside Japan.

For the full fiscal year ending August, the company lowered its net profit outlook to ¥70bn from ¥71bn and cut sales and operating profit targets to ¥937bn and ¥130.5bn, respectively. It previously saw sales of ¥965bn and an operating profit of Y135.5bn.

Uniqlo sales in Japan gained momentum towards the year-end with domestic December same-store sales climbing 14.2% year-on-year as cold weather arrived. That was its first comps increase in five months.

Same-store sales from the September-December period grew just 1.4% on year, prompting the company to change its full-year same-store sales outlook to a 1% gain from plus 5%.

"We had initially set a bullish 5% target .... but we've just set back our sales target to a normal one," said Nobuo Domae, Fast Retailing's executive vice president.

He added that even the 1% on-year gain "is far from a low target," when compared with the bleak picture surrounding the nation's retail industry.

Meanwhile, the company expects business segments other than the domestic Uniqlo business will perform well, with its overseas Uniqlo business accounting for ¥17bn in operating profit for this fiscal year.

The figure is still smaller than the ¥106.5 billion operating profit that the company now expects to earn from its domestic Uniqlo business, but represents nearly double the amount that the segment brought in a year earlier.

Ballmer bows out with sneak peek at Windows 8 as CES trends look towards to intuitive controls and content sharing

2012-01-11T08:25:00.001Z

Microsoft CEO Steve Ballmer delivered the company’s last pre-show keynote at CES Monday, offering an early look at Windows 8 and announcing that its motion-sensing Kinect system would be launching on Windows PCs in February.

Ballmer, who delivered the presentation in conversation with TV host Ryan Seacrest, also concentrated on the latest developments for Windows Phones. They include Nokia’s new Lumia 710 which is launching in the US on Wednesday and is Nokia’s first Windows Phone in the US, and the new Lumia 900 which will operate on AT&T’s 4G LTE network and features a 4.3” AMOLED display.

Also new is HTC’s Titan II smartphone, which is again available on AT&T’s 4G LTE network and which has a 16 megapixel camera built into it.

For Windows 8, however, Ballmer said the operating system had been re-imagined from the chipset to the user experience, and key to that is the Metro user interface, designed to deliver a simpler, more natural experience which puts apps at the heart.

Those apps will be available from the new Windows Store, which will open in late-February, and will work via touch, mouse or keyboard.

The voice and gesture recognition abilities offered by the Kinect system for the Xbox also featured heavily in the keynote, and Ballmer said that the technology would revolutionise other industries as well as gaming, including education and healthcare.

Microsoft is currently working with over 200 companies to develop Kinect apps ahead of its PC launch and the move towards the increasing use of gesture and voice – along with the simpler, more natural Metro interface – reflects some of the early pre-show trends being seen elsewhere for cleaner designs and intuitive interfaces, with the technology working seamlessly in the background.

Content sharing is also an important early theme for the show. LG, for example, said that all of its devices in 2012 would be able to communicate with each other regardless of what product category they are in, while Samsung talked up its new AllShare Play, which uses the cloud to allow content to be accessed on devices no matter where they are.

Both of those companies also highlighted new developments with Smart TVs and 3D and both of those technologies are becoming the norm – in fact LG says that half of its line-up for 2012 will feature both. There is also a broad acknowledgement, however, that more 3D content is needed before it becomes a must-have for consumers.

Meanwhile, singer and actor Justin Timberlake made an appearance at the Panasonic press conference, helping to introduce MySpace TV. Designed to enhance TV with a social layer, it allows people to watch, chat with friends in real-time and see what’s trending with friends and the public.

Seamless user interfaces, personalisation and ‘morphing’ of computing usage tipped to be key trends at CES

2012-01-11T08:23:00.003Z

Over 20,000 new products are expected to be launched at the 2012 International Consumer Electronics Show (CES) and among the most important trends will be a ‘morphing’ of computing usage, more seamless user experiences and increasing personalisation, said Shawn Dubravac, chief economist and director of research at the Consumer Electronics Association.

Dubravac, speaking ahead of this year’s CES which opens Tuesday (January 10) in Las Vegas, said that 2012 marked the entry into the second decade of digital transition. The first decade saw devices such as cameras, TVs and audio equipment moving from analogue to digital, and the big step in the second decade will see the industry really begin to leverage those devices and take advantage of what they can offer.

“We’re starting to capture all of the digital content – music, video etc,” said Dubravac. “The next step in the digital transition is to make it so we can discover them, organise them and search them.”

Dubravac said there would be more devices making use of the cloud, a continuing trend for wireless audio and more distribution of content from one device to another, as well as consumer electronics becoming increasingly intelligent as sensors become less expensive and therefore more common.

Picking out three main trends for 2012 Dubravac said the first is a morphing of computing, where there is “a friction between pulling power out of devices and pushing it into non-core areas”. Tablets and ultrabooks where the focus is on areas other than pure computing power, and smart TVs which have computing functions such as internet browsers and app capabilities added to them, are perfect examples of the trend. Dubravac added that nearly half of all TVs shipping in the US this year are expected to be able to connect to the internet.

Another major trend this year will be a focus on interfaces and the overall user experience, Dubravac said. Technology is moving away from being ‘on display’ to the consumer and towards becoming more hidden, offering a more seamless experience.

“From complexity, we start to focus on simplicity,” he said, adding that for smart TVs the focus will be on the user experience rather than just the connectivity abilities and that more intuitive controls will start to feature more prominently on other devices.

“2012 will see tablets that integrate gesture control and voice control to give consumers a much more natural experience,” he said.

The third big trend will be personalisation, Dubravac said, with the ability to customise devices so each user is getting a unique experience.

Meanwhile, hardware will be increasingly leveraged to build a wider industry around it. That not only means a wealth of accessories and enhancements for devices such as smartphones but also the harnessing of key technological capabilities, with Dubravac saying that the health & fitness sector “is an area where manufactures are taking advantage of the hardware core”.

Marks & Spencer Christmas clothing sales disappoint after highly promotional trading

2012-01-10T15:36:00.000Z

Marks & Spencer battled through a tough Holiday trading season as clothing profit margins were dented by promotions after being forced to cut prices to compete with rivals.

The UK retail giant’s general merchandise sales in the 13 weeks to December 31 were described as "disappointing" with clothing sales edging up just 1.1% and homewares tumbling 13.3%, a sharp decline blamed on the decision to pull out of consumer electricals. Together, general merchandise same-store sales were down 1.8%.

However, the retailer also reported better than expected Christmas food sales with comps up 3%. That meant total UK same-store sales rose 0.5% excluding VAT. Total UK sales, excluding VAT, advanced 1.8%.

Direct sales surged 22.4% and international sales were up 8.1%, reflecting continued growth in the priority markets of India and Shanghai, as well as in its franchise business, the retailer said, noting its new Paris flagship “had a very good start".

M&S still expects annual profits to be in line with market expectations of around £700m but said those retaliatory clothing promotions resulted in "lower gross margin" than previously indicated with the profit shortfall to be made up by cutting costs.

M&S chief executive Marc Bolland said the company had performed well in a "challenging" trading environment: "Our food business performed very strongly as customers enjoyed our new and traditional Christmas products."

“In clothing our focus was on offering our customers real value at a time when they’re managing their budgets carefully. Our trading strategy worked well, delivering a record performance in many categories including menswear and sleepwear," he noted.

Economic uncertainty means the retailer expects trading conditions to remain tough this year. "We continue to be cautious about the outlook for the year ahead," said Bolland, adding he was a "glass half full man" with the Olympics and Diamond jubilee celebrations expected to boost sales.

M&S said it continues to be cautious about the outlook for the year ahead and it expects trading conditions to remain challenging.

The retail sector has issued a chorus of cautious outlook statements as consumer confidence remains at record lows in the face of rising food and fuel costs, stagnant wage growth and job insecurity.

At 08:29 GMT, M&S shares were up 2.4%, at 316 pence.

Australian retailers ramp up promotions after weakening in consumer spending

2012-01-09T12:08:00.000Z

Major Australian retailers are reporting a steady but not overwhelming response to post-Christmas sales, with shoppers requiring more than the usual incentives to part with their cash.

Myer chief Bernie Brookes said the traditional January spending binge had been blunted by a more cautious consumer environment, forcing retailers to work harder for each sale.

“It's still a very difficult environment, with competition from new market entrants and the internet, and shoppers have become a little immune to the allure of discounts, so it's still a tough retail environment,'' Brookes told The Australian.

Myer has responded by conducting daily promotions to keep shoppers coming back throughout the sale period.

“Each day has to have additional deals, new discounts, new surprises. For example, this weekend we had a Super Saturday, which included extra discounts and prize giveaways. You need to constantly have something new to drive the customer into the store,'' he was quoted as saying.

“You can't just set the course at the start of the clearance period and wait to see how it all turns out; you need to constantly adjust to drive sales and keep customers interested. It's hard work but you've got to constantly be monitoring your sales, your prices and your inventory.''

But he noted Myer was still spending less overall on markdowns than during last year's summer clearance sales, either by pushing suppliers to fund discounts or by limiting the time deep discounts were available.

A number of retailers have complained that cool weather and rain during the sale period, particularly in Sydney, have slowed sales of summer fashions.

Meanwhile, Jason McVicar, general manager of store operations at rival department store David Jones, told The Australian newspaper the number of shoppers coming into stores was encouraging.

“We have been satisfied with the traffic into our stores over the two weeks since our half-yearly clearance began on Boxing Day; traffic has been solid, and we're hoping that will continue over the next few weeks and give us a solid outcome for the second quarter, which closes at the end of January,'' McVicar told the paper.

``We've seen some strong results in apparel, shoes and accessories; there's been some real strengthening there and I think people have realised they still do want to buy the top brands, so that's been very pleasing.''

Premier Retail chief Mark McInnes said the group’s novelty stationery chain Smiggle had achieved an “exceptional trading period over December and January'' in Singapore.

The news came as the latest official figures for Australia consumer spending for November weakened

Australian retail trade at current prices was flat in November at a seasonally adjusted A$20.933bn, compared to A$20.927bn in October, the Australian Bureau of Statistics (ABS) said on Monday.

Economists had forecast a rise of 0.3% for the month.

Commonwealth Bank chief economist Michael Blythe said the data showed the domestic retail sector remained very subdued across the board.

He said spending in cafes and restaurants was offset by declines in clothing and department stores.

November's flat retail trade figures were consistent with forecasts from retailers, Macquarie senior economist Brian Redican told Australian Associated Press.

The flat sales figures could have been a result of heavy discounting by retailers as they sought to attract business, according to Redican.

However, sales via the internet were healthy, the ABS data showed.

IG Markets analyst Cameron Peacock said bricks and mortar shops were struggling to match internet prices.

The November retail figures confirmed the Australian retail sector needed to drastically change its offering and its model and that another cut to interest rates was on its way, he told the newswire.

News lead image: Myer Department Stores

2012-01-06T12:28:00.002Z

November retail sales in the 17 nation eurozone declined, according to official statistics Friday, heightening fears of a return to recession in the currency union.

Eurostat, the European Union's statistics agency, said the volume of retail sales in the eurozone fell 0.8% month-on-month in November and were 2.5% year-on-year, steeper fall than analysts’ 0.4% on-month dip and an 0.8% on-year decline.

The 2.5% annual decline in sales is the largest fall since September 2009, Eurostat said. The monthly fall in sales is the steepest since last May.

Sales fell in Germany and France, the eurozone's two largest economies, and in Portugal and Spain. In Ireland, retail sales rose 2% on-month, although declined 0.4% on-ear. Data for Greece and Italy weren't available.

Retail sales in October were also weaker than initially estimated, Eurostat said. October retail sales increased just 0.1% on the month, compared to a previous estimate of 0.4%, the agency said.

Meanwhile, confidence across the eurozone weakened in December as concerns over the economic environment, a survey from the European Commission showed Friday.

The overall economic sentiment indicator among the 17 countries that share the euro fell for a 10th straight month to 93.3. That was down from 93.8 in November and is the lowest level in more than a year, although it is still more than 20 points above the record low of 69.6 in March 2009.

The further drop reflects weaker outlook across all but one of the sub-sectors, the survey shows.

Consumer confidence declined further to -21.1 from November's -20.4. The services sector was also increasingly pessimistic, with the measure here falling to -2.1 in December from -1.6 a month earlier.

The retail and construction sectors also declined further in December to -11.7 and -25.2 respectively, from -11.1 and -25.0.

Confidence among manufacturers held steady at -7.1 in December from November, and was likely held up by the surprisingly resilient German industrial sector.

· A separate measure of the eurozone business climate rose for the first time in 10 months. That was in line with the latest German Ifo survey and was buoyed by a more optimistic assessment of the industrial sector due to an increase in export orders, the Commission said. The business climate survey improved to -0.31 in December from -0.42 in November. While this was the first improvement since February last year, it still represents a weak business environment, with some firms viewing tentative signs of improving orders and activity cautiously.

Free shipping helps US Holiday online sales surge 15% to new record

2012-01-05T11:41:00.003Z

US online sales jumped 15% over the Holiday season to reach a record high, according to data firm comScore.

During November and December, retail e-commerce sales leaped to $37.2bn from $32.4bn a year ago. This easily outpaced the 3.8% growth that the National Retail Federation predicts for retail sales excluding online business over the period.

Free shipping was credited for much of the gain, with shoppers paying nothing for delivery on more than half of the transactions made during the season, comScore said.

During the period, 10 individual shopping days saw sales surpass $1bn, led by Cyber Monday with $1.25bn spent.

“It's clear that e-commerce continues to gain market share from traditional retail due to the attractiveness of the internet's convenience and lower prices,” said comScore chairman Gian Fulgoni.

“Consumers were especially attracted to the deals and discounts available through digital channels - particularly free shipping, which occurred on well over half of transactions this season.”

However, “what will remain unknown until retailers report their financial year end results is whether the aggressive pricing and free shipping offers came at the cost of lower margins."

Full-price Next suffers weak Christmas stores performance

2012-01-04T12:53:00.001Z

UK fashion chain Next admitted to a “disappointing” Holiday period posting weaker-than-expected store sales after its rivals discounted heavily during the crucial pre-Christmas selling season. The company's shares opened down 5% Wednesday.

However, the retailer said it would meet profit forecast of £565m ($884m) for the year to end-January after total sales rose 3.1% in the August 1-December 24 period. Store sales declined a "slightly disappointing" 2.7% offset by “strong” 16.9% sales gains at its home shopping Directory segment.

Chief executive Lord Wolfson said: "Despite a good final week before Christmas, November and December sales were disappointing given that snow adversely impacted sales in 2010.

“A number of factors have subdued sales in the final quarter and it is hard to judge to what extent warm winter weather and higher levels of competitor discounting masked the deeper, longer lasting, economic effects."

Although Wolfson noted its rivals discounting was "more than I've ever seen before”, he also told Reuters the eurozone debt crisis has started to negatively impact consumer behaviour in the UK.

"My sense is the underlying economic situation is slightly worse than it was in September and that the only thing that's really changed is the situation in Europe.”

Next was one the few fashion chains not to cut prices before Christmas and the retailer said the amount of stock going into its Boxing Day sale was 10% higher than last year.

"We do not discount our products in the run up to Christmas and maintained operating margins," he noted.

Discounting fails to kickstart UK high street sales as retailers go to the wall

2012-01-03T11:56:00.003Z

Deep discounting has failed to kickstart a retail recovery this Christmas, with total sales likely to be lower than last year once inflation is taken into account, the British Retail Consortium has said.

The BRC's monthly Retail Sales Monitor, to be published on January 10, will show that despite heavy discounting in the run-up to Christmas, the total value of sales is barely up on December 2010.

If November's consumer prices inflation of 4.8% is stripped out of that number, it would mean that sales fell in real terms as fewer goods were shifted, the BRC added.

"We are not very optimistic that growth will be significant, and if you include inflation it will almost certainly be down on last year," a BRC spokeswoman told The Guardian. "Last December was badly affected by the snow so there was even more reason to hope this December would look good by comparison. However, Christmas shopping started very late this year and there was a remarkably high level of discounting in advance of Christmas itself."

Consumer caution has toppled a number of high street names, with lingerie chain La Senza announcing the closure of 80 of its stores at the weekend and administrators at footwear chain Barratts Priceless made 1,610 employees redundant on Friday after it failed to find a buyer for its concessions business.

Fashion retailer D2 jeans also folded last week, as did toy and gift chain Hawkin's Bazaar.

Outdoor clothing retailer Blacks Leisure is expected to enter administration soon.

Other retailers are expected to go to the wall, according to BRC director general Stephen Robertson.
He said conditions were worse than at the end of 2008, acknowledged to be the worst period in a generation for the high street.

"This feels, talking to retailers, that there is more pressure than back in 2008,” he told The Daily Telegraph. “Then there had been a relatively good run up until that point. Sales were down, but margins were holding up.

This time, it's not just about the poor sales performance it's about the underlying profitability. We've seen a blizzard of deals and promotions, so gross profit margins will have been squeezed to extinction."

Retailers were so concerned about the lack of spending this December that two-thirds of them were putting up the sale signs 10 days before Christmas, according to PricewaterhouseCoopers.

The research firm Verdict predicts that retail sales will grow by just 1.2% during 2012, up £3.5bn to a total of £295.3bn. It means that 2012 will be the third weakest retail year in four decades, only beating 2009 and 2011.
There has been evidence that heavy promotions tempted consumers online and away from the high street, according to a survey by market researcher Experian.

But numbers of shoppers visiting the sales on Boxing Day, the key post-Christmas sales day for the UK retail sector, were similar to 2009.

Footfall in stores was up 21.5% compared with the same date in 2010 but that figure was flattered by Boxing Day falling on a Sunday last year, when shops have limited opening hours.

The Centre for Retail Research has calculated 7,485 retail jobs are at risk at the start of this year because of the number of firms already in trouble.

And, according to the KPMG/Synovate Retail Think Tank, the new year will fail to bring a rosier outlook for retailers. It believes cautious consumer behaviour and bargain-hunting that have become endemic in the run-up to Christmas will continue throughout the year.

· La Senza, owned by private equity group Lion Capital, is poised to confirm the appointment of KPMG after announcing before Christmas its intention to go into administration. Sources close to Lion Capital told the Daily Mail it was unlikely to recoup its investment in the business, despite owning both La Senza's equity and its secured debt. Interest repayments due to Lion will be triggered as soon as the company goes into administration and any money owed to the buyout house will be prioritised ahead of that owed to La Senza's landlords and its suppliers. The chain's huge debt has put off potential buyers, including Theo Paphitis, who sold the business to Lion for £100m in 2006. La Senza is to close 80 of its 146 stores, threatening some 2,600 jobs.

· Administrators of Barratts Priceless have failed to find a buyer for the UK shoe chain. Insolvency practitioners Deloitte announced on Friday that more than 1,600 jobs had been axed at the company. "Following a marketing of the Barratts Priceless businesses it is clear that a satisfactory sale of the concession to a new party will not be achieved," said Deloitte, although it still hopes to find a buyer. Barratts Priceless went bust at the start of December. It operates 191 shops and ran almost 400 concessions in other stores, the vast majority in the Dorothy Perkins chain.

Myer to close or downsize stores as Australian economy bites

2011-12-19T11:34:00.001Z

Australian retailer Myer is to close department stores in Victoria and New South Wales and reduce the size of surviving stores in response to economic conditions and the growth of online shopping.

Myer stores at Tuggeranong in the Australian Capital Territory and at Forest Hill in Melbourne's east will close early next year. Others units will be downsized when the shopping centres in which they operate are redeveloped.

Myer chief executive Bernie Brookes told the Weekend Financial Review: "We'll knock out some of the bottom-quartile ones and [Tuggeranong] was among the bottom few from a profitability point of view. So it's a reasonably easy decision: when we get to the lease renewal if we don't get a significant reduction in rent then we pull out."

Myer remained keen to proceed with 12 "lucrative" new stores due to open by 2015 in centres such as Townsville, Fountain Gate in outer Melbourne, Shellharbour in New South Wales, Woden in the Australian Capital Territory and Joondalup, Western Australia.

But Brookes reiterated that Myer's store portfolio could settle between 75 and 80, rather than the 80-100 flagged at the time of its float in 2009.

"In the prospectus we said 80 stores but with the growth in the internet and online trading and also the lack of growth in retail we've reframed that," he was quoted as saying.

Last month's interest rate cut had failed to overcome consumer concerns about job security and rising living costs, he noted, and Christmas this year was likely to be as poor as that in 2010.

However, Myer remained comfortable with its guidance for net profit to fall by as much as 10% in 2011-12, he said.

Brookes said the closure of Tuggeranong would have no impact on earnings because it accounted for less than 1% of sales and was only marginally profitable.

Brookes still expects Myer to lift sales from A$3.16bn ($3.14bn) in 2011 to A$4bn by 2015, but growth will come from online retailing, the sass & bide brand, new stores and possible acquisitions.

Myer said he had no interest in Gresham Private Equity's Witchery and Mimco brands, but would look at the assets of apparel retailer Fletcher Jones in the New Year.

Last week Fletcher Jones said it would close a third of its stores and shed 61 staff as administrators try to sell the struggling retailer.

Weather and economy issues hit H&M November comp sales

2011-12-15T12:12:00.000Z

Swedish fashion retail giant Hennes & Mauritz posted a third straight monthly same-store sales dip in November as economic woes and unusually warm autumn weather across its main markets kept customers away from it stores.

H&M comps fell 1% last month, missing analysts’ view of a 0.4% gain.

Total sales rose 9% in local currencies in November, also missing analysts’ expected 10.2% rise.

H&M’s comps have fallen for the past six months with the exception of August, when they were flat, reflecting weaker consumer confidence globally.

In H&M's Q4 to November, sales excluding value-added tax rose to SEK30.9bn ($4.4bn) from SEK29.7bn a year earlier and below the SEK31.4bn seen in a Reuters poll.

Full Q4 results are due on January 26.

Barratts fails for a second time, 4,000 jobs at risk

2011-12-09T11:46:00.001Z

UK footwear retail chain Barratts was forced to call in the administrators for a second time in two years Thursday, threatening almost 4,000 jobs.

Barratts Priceless Group has 191 stores and 371 concessions. Deloitte has been appointed administrator.

Daniel Butters, joint administrator and partner in restructuring services at Deloitte, said: "Barratts and Priceless Shoes have faced a downturn in trading as a result of the difficult economic conditions. This has been exacerbated by the unseasonably mild weather in recent weeks, which resulted in fewer sales across new winter lines."

Industry experts told The Guardian newspaper Barratts was under pressure from low-cost stores such as Primark rather than direct rivals such as Clarks. But critics argued the latest crisis showed the company had failed to take tougher action earlier.

Deloitte said it would continue to keep Barratts trading while seeking a buyer for all or part of the business as a going concern in a bid to save jobs.

It hopes to repeat the rescue of 2009, when the retailer was put into administration but 160 of 280 stores were bought back by Michael Ziff, a veteran shoe retailer and chairman of the Stylo group.

The privately owned Barratts Priceless Group made a pre-tax profit of £6.1m ($9.5m) on sales of £218m in the 18-month period to July 31 last year, according to accounts filed at Companies House.

In October, Barratts announced Richard Segal would become chairman. He said at the time: "Like many other retailers, the company is currently operating in a challenging economic environment and I look forward to working with the executive team to accelerate its adaptation to recent market changes."

Vogue links with WGSN to launch complete online archive, unique resource shows every page of every issue

2011-12-08T11:50:00.001Z

US Vogue today launches 120 years of fashion history online with the debut of the Vogue Archive. Powered globally by WGSN, this unique project makes 12 decades of fashion, lifestyle and beauty imagery and content available as an online research tool for the first time.

The archive includes every page of every issue, of what is arguably the world’s leading fashion magazine, from 1892 until today. It features 400,000 full colour, digitised images of Vogue covers, advertisements, features, fashion portfolios and illustrations in their original context.

The archive is engineered to support “inspiration exploration” as well as precision searches. Users can manage and print favourites, share their inspiration with colleagues and clients, and collaborate on ideas.

The Vogue Archive provides a wide-ranging, in-depth, and high-calibre resource for design professionals, students, educators, researchers, and fashion enthusiasts. It will be updated monthly with the latest issue of Vogue, and access for industry professionals is available with an annual online subscription through WGSN.

“As the world’s leading trend forecaster and supplier of digital inspiration tools for the fashion and design industries, WGSN is ideally suited to maximise the commercial potential of the Vogue Archive,” says Steve Markov, president, WGSN Americas. “Both WGSN and the Vogue Archive are must-haves for any creative, design, or fashion business. The integration of two such powerful resources is an industry first.”

Designed to be fast and specific, the archive is powered by a sophisticated tagging taxonomy allowing users to search and refine results by articles, images, covers, or advertisements; by brand, designer, photographer, or personality; by colour, materials, or clothing; to browse by decade; and to select a particular issue.

Content from the Vogue Archive will be returned alongside WGSN results on the main WGSN website from today.

For academic institutions and libraries, the Vogue Archive is also available from ProQuest, the digital-research resources provider.

It is expected to become a definitive resource for students of fashion and the visual arts. Additionally, as a comprehensive primary source of modern social history, it opens new research avenues in the humanities and gender studies.

Find out more at vogue.wgsn.com.

Indian government suspends FDI in climbdown

2011-12-07T11:59:00.001Z

India's government confirmed Wednesday it has suspended Foreign Direct Investment (FDI) plans in a decision seen as a major victory for its political opponents.

After an all-party meeting Wednesday, the decision was made to suspend the FDI process in order to get parliament functioning again.

"The decision to allow foreign direct investment in retail is suspended till [a] consensus is reached with all stakeholders," Commerce and Industry Minister Anand Sharma said.

It was not clear how long that process would take or whether the policy would be implemented or cancelled after it was over.

The initial decision last month to allow foreign companies to own 51% of supermarkets in major cities and 100% of single-brand stores was hailed by the business community as a long-overdue reform. The government said foreign retailers would bring better prices for farmers and lower prices for consumers by cutting out middlemen and upgrading the country's infrastructure.

However, opposition parties and even some members of the governing coalition protested against the deal, saying it would crush local mom-and-pop stores that are the heart of Indian retailing. Opposition lawmakers disrupted parliament for days in protest.

"It is a virtual rollback," said Gurudas Dasgupta, a Communist Party lawmaker.

"This is a signal that this government can't do anything with force," said Ashok Gulati, chairman of the Commission for Agricultural Costs and Prices in the Ministry of Agriculture. "It's the nation that loses."

But Farooq Abdullah, a Cabinet minister, denied the government had surrendered. "There is no roll back."

UK November same-store sales decline on mild weather, weak consumer confidence

2011-12-06T11:49:00.001Z

UK retail sales fell in November as non-food sales sank amid the mild late autumn weather and weak consumer confidence, the British Retail Consortium retail sales survey showed Tuesday.

The BRC said same-store-sales dipped 1.6% on the year in November, the biggest fall since June. That was weaker than the 0.6% decline in October and also the 0.7% increase reported in November 2010, highlighting that uncertainty over the UK economy and the ongoing eurozone debt crisis are weighing more heavily on consumer confidence.

Total sales edged up 0.7% on the year in November but that was down from a 1.5% rise in October and a 2.8% upswing in November last year.

"This November's mild weather contrasted with much lower temperatures last year, hitting sales of winter clothing and footwear particularly hard," said Stephen Robertson, director general of the BRC.

He added that stores were offering plenty of seasonal discounts in the hope that "customers who've managed their finances carefully in recent months will still treat themselves and their families in December, unhampered by the severe weather which disrupted shopping 12 months ago."

Helen Dickinson, head of retail at KPMG which jointly compiles and publishes the monthly survey, said: "Cash-strapped consumers continue to be reticent and last week's gloomy economic forecast by the Chancellor George Osborne won't help to boost confidence levels.”

She added: "Any sales are hard won, with high discount and promotion levels. December will require some tough decisions for a number of retailers."

The survey showed that like-for-like sales of non-food goods fell 2.1% and were 0.5% lower across all stores in November. Clothing sales were impacted by the mild weather and a general lack of confidence on economic prospects. The new wariness seems to be hurting larger homeware and furniture sales most, BRC-KPMG noted.

Food sales were less pessimistic, rising 1.5% in November across like-for-like stores and by 4.6% across all stores covered in the survey.

Confidence in the economy is playing a large part in where consumers feel they get best value for money, according to the survey.

But the BRC's Robertson added that as well as weak sales in stores, non-food, non-store (internet and mail order) retailing was also disappointing in November, despite the many one-day discount events being launched.

"Poor consumer confidence and squeezed disposable incomes are affecting all retail channels," he said.

US online sales reach record $6bn in week after Thanksgiving, free shipping increasing

2011-12-05T12:11:00.001Z

US shoppers are continuing to spend heavily online after a record Cyber Monday, e-commerce research firm comScore said Sunday.

It found shoppers spent nearly $6bn online on Monday through Friday last week, creating another record.
After hitting a record $1.25bn in sales on Cyber Monday, online sales on Tuesday and Wednesday also broke $1bn.

comScore says online sales are up 15% year-on-year to $18.7bn in November and the first two days of December.

Free shipping appears to be a big draw, applying to 63% of sales, up from 52% a year ago, it said.

"Consumers have come to expect free shipping during the Holiday promotion periods, and retailers, in turn, have realised that they must offer this incentive," said comScore chairman Gian Fulgoni.

Spending on items including clothing, general merchandise, toys and electronics and in department stores, rose 4.7% to $125bn in the October 30-November 26 period, according to MasterCard Advisor's SpendingPulse.

That includes online and brick & mortar store purchases.

US retailers post Solid November sales as early-bird Macys and Limited Brands overshadow JC Penney and Gap

2011-12-02T12:40:00.001Z

Earlier opening times and bigger promotions over the Black Friday weekend were the keys to success for several US retailers in November, while chains that held to their traditional holiday season strategies suffered the consequences.

Overall, November offered up mostly solid performances with same-store sales last month rising as expected, boosted by that record-breaking end to the Black Friday weekend. Twenty two chains that had reported monthly same-store sales Thursday morning posted an average increase of 3.1%, according to Thomson Reuters, against a collective 5.5% rise a year ago.

Michael Niemira, chief economist of the International Council of Shopping Centers (ICSC), said a same-store sales gain of 3.2% in November came in slightly below its expectations of 3.5-4%. The ICSC expects December will be stronger, with same-store sales up 3.55-4%

There were clear winners last month headlined by Macy's, Saks, Nordstrom, Costco and Limited Brands and losers included Kohl's, JC Penney and Gap, the latter citing competition from a promotional environment for its weakness.

In the run-up to Christmas, it now seems getting the balance right between profitable sales and deep discounting will characterise December performances.

"Our concern is that deep discounting in November pulled forward sales out of December," Ken Perkins, president of Retail Metrics, told Reuters.

"It's definitely a mixed bag," Matt Arnold, a consumer analyst at Edward Jones, said of the overall November landscape. "It almost seems like the chains that were catering to a higher-income consumer seemed to be more the winners and more discount-oriented chains, in many instances, got off to a weaker start."

"Clearly, retailers bent over backwards to juice sales up for the holiday weekend," said Kurt Salmon retail strategist John Long, who plans to watch traffic at stores this weekend to see if Black Friday was a sustainable trend or just an anomaly.

"The consumer has become insanely focused on promotions," said David Bassuk, head of the global retail practice at AlixPartners. "The consumer is willing to spend money, that's the good news. But consumers needs to be convinced."

"Until the entire holiday season is over there is really no verdict that you can render," added Edward Jones' Arnold.

·   JC Penney said its decision to open at 4am on Black Friday, rather than at midnight as Macy's and others did, hurt its performance on that day and the weekend as a whole. However, traffic on its website was strong over the weekend, but those sales will not be reported until the company's December tally. See full US department store report (right).

·   Limited Brands, the parent of Victoria's Secret and Bath and Body Works, November comps excelled again in November rising 7%, beating analysts' +4.4% estimate. The lingerie-to-beauty-to-homwares retailer saw comps jump 11% at Victoria's Secret and by 6% at Bath and Body Works. However, the La Senza lingerie chain was the only one to disappoint, with a 7% dip. Total sales for the four weeks ended November 26 also fell 2.3% to $872.6m due to the sale of its third-party apparel sourcing business at the beginning of the month. Limited Brands operates about 2,640 stores globally.

·   November proved to be another tough month for Gap Inc as the apparel retail giant ahead of an equally tough December. Comps last month fell 5% compared to a 5% gain in the year ago month. Total sales fell to $1.47bn from $1.51bn last time. By unit, Gap North America comps fell 2% against a 6% gain last year; Banana Republic North America comps remained flat versus a 1% gain last year; Old Navy North America comps fell 7% following a7% rise last time; and International comps fell 9% versus flat last year “This is just the start of the Holiday selling season and we expect December to remain fiercely competitive and highly promotional," said CEO Glenn Murphy. “Our brands stand ready to compete at every opportunity to win customers over – in stores and online.” Year-to-date net sales fell 1% to $11.73bn with comps down 3% against a 3% increase last year.

FDI row escalates in India as parliament stays suspended and retailers close stores

2011-12-01T12:21:00.001Z

A row over India’s decision to open up its retail sector to foreign retailers has escalated, with many stores closing in protest and cities across the country rocked by union-led marches.

Both of India’s Houses of Parliament adjourned for a seventh day on Wednesday without any business being conducted as a standoff continued between the government and opposition parties over the former’s decision to allow 51% foreign direct investment (FDI) in multi-brand retail.

As soon as the Lok Sabha [India’s lower house of the Parliament] met for the day, opposition members rushed to the Well of the House demanding a rollback of the decision. Members of Trinamool Congress, a key partner in the government, were also seen waving placards and raising slogan such as 'Cancel FDI in retail'.

Confederation of All India Traders' Delhi unit president Narender Madan, meanwhile, said a large number of traders have kept their shops shut to participate in the all-India protest, or ‘bandh’.

Wholesale and retail markets were closed in Sadar Bazar, Kamla Nagar, Chawri Bazar, Karol Bagh, Kashmere Gate, Tilak Nagar, Rohini, Krishna Nagar and other markets, he said.

CAIT secretary general Praveen Khandelwal said traders across the country were participating in the bandh to protest the government decision to allow FDI in retail.

India’s ruling party has ruled out rolling back FDI but is bracing itself for a possible adjournment motion in the Lok Sabha, and is believed to be considering suspending Cabinet until the end of the winter session. Parliament convened on November 22.

Foreign and local retailers meanwhile have instructed their employees to keep a low profile and not talk to the press.

"There is a lot of media interest about us. Employees need prior approval to talk,'' according to an internal email sent out by Bharti-Walmart to its employees on Monday. While it is standard corporate practice for executives to seek permission before talking to the media, the company chose to re-assert this policy on the day the Opposition stalled Parliament over the government's decision.

India's biggest homegrown retailer, Future Group, has also issued gag orders to its employees, instructing them not to talk to the media about FDI, or anything else.

Walmart and Future Group were two of the many companies that applauded the cabinet's decision to allow foreign retailers to set up stores in the country last Thursday. As the row in India over FDI escalates however, many are now opting for discretion.

“We are watching and waiting with the rest of the world," a Tesco India spokeswoman said Tuesday. UK-based retailer Tesco operates in the wholesale segment in India through a franchise arrangement with Tata group-led Star Bazaar stores

French retailer Carrefour, which had last week expressed its commitment to multi-brand retail, had to shut shop for several hours immediately after launching its Jaipur cash-and-carry store on Monday amid agitation by opposition parties.

Prudent Prada impresses as Asia-Pacific demand boosts standout Q3

2011-11-30T12:26:00.001Z

Despite a standout Q3 performance – earnings leaping 75% and robust sales up 33% - Italian luxury fashion house Prada maintained a cautious air Wednesday, saying it wasn’t immune to a possible economic downturn.

Deputy chairman Carlo Mazzi described the 2012 outlook as "prudent", adding the company was strong enough to weather a year that will be difficult for all businesses.

"Certainly if the economic picture starts to worsen significantly, our clientele will be affected," he said in an interview. "We don't want to forecast a specific scenario for 2012."

Net profit for the group, which listed in Hong Kong in June, rose to €93.6m ($124.7m) in the three months to October 31, from €53.4m a year ago.

Revenue rose to €596m from €449m last time, boosted by its growing strength in Asia-Pacific where sales leapt 46%, accounting for 36% of all business. Sales in Europe rose 33% while North America lifted 24% and even sales in Japan grew 20%.

Indeed, Mazzi cited the group's geographical diversification for helping it cope with any currency turbulence in 2012 and beyond.

"While we will continue to closely monitor the market's behaviour, we remain confident in the strength of our brands as well as in the luxury market's potential," said chief executive Patrizio Bertelli in a statement.

Prada will continue to pursue its long-term growth strategy of geographic expansion of directly managed shops and high-quality products, Bertelli said although Mazzi noted the company still lacks a significant presence in growth areas such as Brazil and China.

The group opened 29 stores in the first six months of the year and is planning to have 550 by the end of 2013, with around half of them in Asia-Pacific.

· Prada said Tuesday its group chief operating officer Sebastian Suhl has resigned to pursue other business opportunities. The company noted Suhl said he had no disagreement with the board and it is in the process of looking for a suitable replacement.

India opens for foreign business: approves multi-brand FDI, single-brand investment cap now 100%

2011-11-25T12:20:00.001Z

India has approved a controversial plan to open its $400bn-plus retail sector up to international supermarket chains and to allow foreign single-brand fashion labels to have 100% stakes in their Indian operations.

The country’s Cabinet approved Friday the plan that will allow international firms to hold a 51% stake in multi-brand retailers, marking one of the country’s boldest economic reforms for some time.

It also hiked the foreign investment cap for single brand retail operations such as Gucci, Gap and adidas – to 100% from a current 51%.

Foreign multinationals such as Wal-Mart, Carrefour, Tesco and Ikea have lobbied for years for the chance to sell directly to Indian consumers, seeking access to a market estimated by Indian consultancy Technopak to be worth $470bn a year.

"We believe that allowing 51% FDI in multi-brand retail is a first important step," Raj Jain, president of Walmart India, said in a statement. "However, we will need to study the conditions and the finer details of the new policy and the impact that it will have on our ability to do business in India," the statement added.

"Allowing foreign direct investment in retail would be good news for Indian consumers and businesses, and we await further details on any conditions," Tesco said in its statement. Tesco currently has a franchise arrangement with Tata Group's Star Bazaar hypermarket chain, supplying merchandise to outlets in India.

India currently allows 51% foreign investment in single-brand retailers and 100% for wholesale operations.
The spokesman for the ruling Congress party, Abhishek Manu Singhvi called the decision "centrist and reasonable." He was speaking to NDTV news channel.

The move has faced some fierce opposition, mostly from left-wing political parties concerned about the future of small businesses and mom-and-pop stores, which they say could find it difficult to compete with big multinationals.

News of the decision actually pushed up the shares in Indian retailers Friday morning, with some big names expected to benefit from deals with foreign companies. Pantaloon Retail (India) leaped 18.2%, Shopper’s Stop rallied 15% and Tata unit Trent rose 17.2%. In contrast, India’s main stock market index was down 0.29%.

Concerns arose however that caveats aimed at appeasing political opposition to the decision could hinder investments.

For example, local media reported that individual states would have the power to veto foreign retailers. This could make it impossible for these companies to work in some of India's biggest states, such as Gujarat, which are run by the country’s opposition party.

"The global players who are there in India will definitely take this opportunity to scale up their investment in the country and that will happen in the near future,” said Govind Shrikhande, managing director of Shoppers Stop. “But I do not see a lot of investments coming in immediately because getting into India and setting up shop will take time. So the impact really can be substantially felt over a 3-5-year period.

"For our company, we are not looking at tie-ups on the department stores side as they do not travel globally but on the food retail side which we run under Hypercity which is hypermarkets we are open to partnerships and will evaluate options going forward."

Jay Shankar, chief economist at Religare Capital Markets in Mumbai, said: "I think foreign chains can also bring in humongous logistical benefits and capital. There would be stupendous benefits from this move in terms of upgrading infrastructure, cold storage and it would eliminate layers of middlemen.”

Also, “it will give good prices to farmers and make it affordable for consumers, ease out supply chain bottlenecks and reduce inflation."

Meanwhile, India's commerce minister said Friday that the decision to open the country's retail sector to global chains has a built-in safety net for small shops and farmers.

Anand Sharma told reporters the initiative would vastly improve decrepit infrastructure that causes massive food waste in a country plagued by malnutrition and high inflation.

Sharma said the new rules would only apply in cities with more than 1m people. The minimum investment would be $100m and half of this would have to be invested in rural infrastructure and refrigerated transport and storage. Thirty percent of the produce sourced by the retailer would also have to come from small and medium enterprises.

Sharma said the policy would have a "multiplier effect" and tens of millions of people would gain jobs.
Ashish Sanyal, managing director of retailing consultancy AMP Retail Services, said small businesses had nothing to fear from the big chains: "At the end of the day this is like the high tide. All boats will rise. We will learn from the big retailers," he said.

Arcadia expects to close 250 stores as profits fall

2011-11-24T11:42:00.001Z

UK clothing retail giant Arcadia is planning to close up to 260 high street stores over the next three years after reporting a 38% dip in year-end profits.

"We've got 450 or 460 stores where leases expire in the next three years and... we will close more than half of those on lease expiry," confirmed Arcadia owner Sir Philip Green.

This year, in net terms, the retail group closed about 60 stores.

The move comes as Arcadia, which owns seven retail banners including value fashion retailer Top Shop and department store BhS, saw its UK same-store sales fall 1.8%, with total sales from its 3,107 stores worldwide falling 3.4% to £2.68bn, although internet sales jumped 21%.

Total sales have dipped further since the start of the new financial year, declining 4.4%, it admitted.

The group, which also owns the Burton, Dorothy Perkins, Miss Selfridge, Wallis and Evans brands, made a pre-tax profit of £133m ($207m) in the year to August.

Arcadia, which is owned by Sir Philip Green, said it had decided not to pass on certain higher business costs and this had squeezed its profit margin by 1.8 percentage points, costing £52.4m. “Costs have continued to be controlled tightly,” it said.

The retailer also said it generated “robust headline cash" of £297.4m, although that was down from last year’s £383.1m.

Sir Philip told the BBC: "Trading conditions remain extremely challenging, with style, quality and value at the top of our agenda and more important than ever.

"Additionally, the warmest October and November on record have made autumn trading much tougher."

Arcadia has 480 leases coming up for renewal in the next three years, and boss Sir Philip said he expected to close 200-300 of those.

However, Green said its young fashion brands Topshop, Topman and Miss Selfridge were “trading positively”.

Arcadia invested £112.8m into the business in the period, and ended with year-end bank debt of £444.5m.

“We remain a strongly cash generative business, enabling us to continue to invest in all of our brands,” said Green. “We have invested £113m in the last financial year, bringing our total investment over the last 5 years to in excess of £550m.

“We remain excited by our developing international business with 600 franchised outlets now operating in 36 countries, with 21 having been opened in the last year. Our second USA store opened in Chicago in September and our third in Las Vegas is due to launch in March 2012."

Green also told Reuters he is optimistic UK inflation will fall in 2012 but does not expect a material change in the UK consumer's mood.

"I don't see it getting any worse but I think where we are is people are much more constrained on a general basis by necessity," he said. "I do believe everybody today is more financially aware than they've ever been in their life."

He also said in the current tough environment retailers had to act quicker and be smarter: "You've just got to keep thinking outside the box. That's what we normally do and hopefully we'll have a couple of rabbits in our hat," he added.

China e-commerce set to be world's biggest by 2015 - report

2011-11-23T12:12:00.001Z

China's e-commerce market is set to overtake the US to become the world's largest, with more than CNY2trn of transactions by 2015, according to a new report.

Internet retail sales on the mainland almost quadrupled to CNY476bn in 2010 from CNY128bn in 2008, with 23% of the urban population shopping online last year, the Boston Consulting Group (BCG) report said.

E-commerce sales will grow from 3.3% of the total mainland retail value this year to 7.4% in 2015, it noted.
"Online shopping in China will see exponential growth through 2015," Waldemar Jap, a Hong Kong-based partner at BCG, told scmp.com.

According to the report, about 145m Chinese people have experience in internet shopping, compared to 170m in the US. And that number may hit 329m in four years, which means about 46m additional Chinese consumers will be shopping online for the first time every year.

The rapid growth of the industry has benefited from the relatively low cost of shipping as well as affordable and widely available internet access services. It costs $1 (US) on average to post a 1kg parcel in China, compared to $6 in America.

"Chinese consumers have turned from having a little familiarity with online shopping to a relatively high level of comfort and adaptation," said Jap. "We believe online spending of most of these consumers will double within five years."

The report, based on a survey of 4,000 consumers in more than 20 mainland cities, found online customers spend an average of CNY3,100 every year on the internet.

More than half are "light spenders" who spend less than CNY2,000 annually, while 7% are "super-heavy spenders" with an expenditure of more than CNY10,000.

"Fulfilling the emotional needs of China's super-heavy spenders will be key to future success in China's e-commerce landscape," said Hubert Hsu, a senior partner at BCG and co-author of the report. "It will be critical to engage them with value propositions beyond mere price savings."

Unlike in other countries, internet access has far outpaced the reach of top physical retailers in China, making shopping portals a more effective channel to reach consumers than traditional chain stores.

Taobao.com, the largest shopping portal on the mainland, achieved a transaction volume of $56bn (US) last year and accounted for nearly 80% of total mainland e-commerce business.

The BCG report predicted the market share of business-to-consumer firms will grow significantly, and goods such as leisurewear, digital cameras, tourism and skincare products will see better sales online.

Barneys unveils Lady Gaga Holiday Workshop at NYC flagship

2011-11-22T12:09:00.001Z

The heavily-hyped Barneys-Lady Gaga collaboration was unveiled Monday with the debut of the most unusual Santa’s Workshop of New York City’s Holiday season, courtesy of the pop superstar and her team.

The Workshop is a high-profile draw at the fashion destination store and features items made exclusively for the collaboration.

The store’s windows and the fifth floor have been transformed by Gaga, along with stylist/Thierry Mugler creative chief Nicola Formichetti, and artists Eli Sudbrack and Christophe Hamaide Pierson of international collective Assume Vivid Astro Focus. They also worked with the Barneys in-house team on the 5,500 sq ft space.

The Workshop is stocked with apparel, make-up, jewellery, accessories, sweets and CDs, all curated by Gaga with a wide price and age range.

At the opening event, Gaga, wearing a custom-made Chanel dress, arrived at the store at around 10pm to cut the ribbon and greet her long queue of fans who were able to shop at midnight. Barneys served the queue hot chocolate and mini cupcakes.

When WGSN spoke to those in the queue it was clear how the Gaga association is driving shoppers to the store who might otherwise not have visited this Holiday season, as well as Barneys regulars.

According to Nick Ross and Michelle Cresta, two fans from Boston had been waiting since 08.30: “We only found out last night that she was going to be here,” said Ross. “We would have come either way,” he added.

Annie Kockrum, a tourist from Austin, Texas, who had been waiting with her mother since 20.00, found out about the Workshop Sunday while shopping at Barneys: “There was so much security today... It felt different,” said Kockrum, who planned on buying fingernails and Gaga-themed Christmas stockings from the shop.

Barneys promoted the event with a “12 Days of Gaga” online campaign that allowed shoppers to buy limited edition ‘Gaga goodies’ each day, leading up to the Workshop launch on a dedicated microsite. On the opening day, Barneys also placed three large, colourful balloons with QR codes, shaped as a spider, hand with claws and Lady Gaga head, throughout the city.

The launch of the Workshop coincided with the unveiling of four Holiday windows, Gagamachine, Gaga’s Boudoir, Gaga’s Crystal Cave, and Gaga’s Constellation. A fleet of motorcycles with Lady Gaga’s Workshop signage also lined the front of the store.

Barneys will donate 25% of the sales from all Workshop purchases to the Born This Way Foundation, Gaga’s new non-profit organisation focused on anti-bullying initiatives. The Workshop will be open until January 2.

Lack of shoppers heightens fears for Christmas as Britons plan to cut spending say reports

2011-11-21T11:38:00.001Z

The number of shoppers heading to UK high streets slumped in October by its biggest amount since the heavy snowfall last December, according to the latest figures from the British Retail Consortium (BRC).

A sharp north-south divide is also developing, reinforcing fears for the key Christmas period.

Total footfall in high streets, out-of-town retail parks and shopping centres fell 2.5% between the start of August and the end of October - the worst overall figure this year, the BRC said. Director-general Stephen Robertson added that footfall was down on a year ago in all types of retail locations.

However, high street stores suffered the biggest fall - 4.7% - in customers in October, compared to a more modest decline of 1.6% in out-of-town retail parks and a 2.2% drop in shopping centres.

"In October, UK high streets saw the sharpest drop in footfall since last December's blizzards,” Robertson said. “A successful Christmas will be a lifeline for many retailers and they will be hoping that sort of disruption doesn't add to their woes this time around."

Over the past 12 months, the high street has been hit the hardest with a 2.7% fall in footfall, although there are huge discrepancies in different parts of the country, particularly between the north and south. The number of visitors to London's high streets only fell by 0.1%, and rose by 2.9% in the south-east and by 1.8% in Wales. In contrast, footfall tumbled by 10.4% in the West Midlands, 9% in Scotland and by 5.5% in Northern Ireland.

Further data showed that 11.1% of town centre shops were vacant in October, although this is a 0.1% improvement on last year.

"The town centre vacancy rate hasn't worsened but is still alarmingly high," said Robertson.

The accountant BDO does not expect retail spending to grow by more than 2% this Christmas. A separate survey by PricewaterhouseCoopers last week found that 42% of retailers were holding sales or running discount promotions.

Meanwhile, most British people do not expect the economy to pick up soon, although few see an alternative to the government's current economic policies, according to an opinion poll conducted by ComRes on behalf of the Sunday Mirror and Independent on Sunday newspapers.

ComRes, which surveyed 2,012 adults between November 16 and 18, found that while 23% of those polled expected some signs of improvement in the economy soon, 55% did not.

The opinion poll suggests it will not be a good Christmas for retailers, with 61% of those surveyed planning to spend this year than last, while only 26% plan to spend more.

In a separate survey published Monday, the Markit household finance index fell to 34.6 in November, down from October's 35.0. A balance below 50 indicates finances are deteriorating.

"The latest gloomy snapshot of UK household finances is all too in keeping with the recent economic news at home and across the rest of Europe," Tim Moore, senior economist at Markit told Dow Jones.

"More worryingly still for consumer demand, measures of households' cash available to spend and their willingness to make major purchases were both even worse than at the peak of the recession," Moore added.

Households' ability to spend remains one of the biggest problems, according to the survey, as respondents’ ability to spend remained around the record low recorded in January when the UK's sales tax rate increased to 20%.

Gap readies for Holiday battle as Q3 fails to ignite

2011-11-18T11:02:00.001Z

Gap Inc’s normally robust earnings record took a hit in Q3 as sales and margins declined, making for a nervous run into the vital Holiday shopping season.

However, CEO Glenn Murphy noted the retailer is "ready to compete aggressively" for the festive dollar.

"We've got to make sure that our marketing works harder, that our windows are great, that our store presentation is stronger than you've seen," Murphy said. "I know that the state of readiness is very high. We have to make sure we're making very good decisions and that our brands and their value propositions are strong in the fourth quarter."

The apparel giant said Thursday its quarterly profit fell 36% as continued deep discounting and rising costs cut into the bottom line. That comes amid a backdrop of 189 US store closures, or 21% of ops, leaving 700 Gap stores. The company also said it aims to maintain its Old Navy stores in North America but make them smaller.

Gap earned $193m/38 cents per share, two cents above analysts’ view, for the three months that ended October 29, compared with $303m/48 cents per share, a year earlier.

Total revenue slipped just 1.8% to $3.58bn, just short of analysts’ $3.59bn view. However, same-store sales dropped 5%, including online sales.

Gross margin deteriorated to 36.7% from 41.2%.

Gap executives admitted the company struggled to sell womenswear during the period.

By division, Gap North America comps fell 6%, were down 1% for Banana Republic North America and declined 4% at Old Navy. International comps fell 10% compared with a 4% increase the year before.

Gap stood by its full-year forecast. It expects to earn $1.40-$1.50 per share with analysts expecting $1.50 per share.

The company announced plans Thursday to repurchase up to $500 million worth of its shares. In the first three quarters this year, it spent $2bn buying back shares.

Gap shares edged up 0.3% in after-hours trading although the stock has fallen 13% so far this year.

· Separately, Gap said its board approved another $500m in share repurchases, or around 5% of its current market value. It said its buyback programme reflected "continued commitment to returning cash to shareholders." The company's market value is roughly $9.7bn.

Hugo Boss confident on Holiday success, eyes US expansion but Europe remains core

2011-11-17T10:03:00.000Z

German fashion house Hugo Boss AG expects strong Holiday sales in the US and Europe despite economic uncertainties on both sides of the Atlantic.

"The buying behaviour is better than the mood," chief executive Claus-Dietrich Lahrs told Reuters Wednesday.

Hugo Boss raised its 2015 sales target last week, on the back of a retail expansion that will see another 20 US stores opened by 2015, on top of its current 42 locations.

Its 3,000-4,000 sq ft stand-alone stores are about twice the size of its shop-in-shops in department stores such as Macy's and Nordstrom.

"Long term, I continue to see the US as a marketplace where we have strong growth momentum," Lahrs said, citing a population that is younger than Europe's and whose taste for luxury and high-end clothing is still growing.

Lahrs said more shoppers now prefer to shop at a stand- alone store. But that does not mean Boss is moving away from department stores such as Nordstrom and Saks, which account for 70% of its U.S. sales.

Earlier this year, Boss started selling at Neiman Marcus and is planning to nearly double the number of shop-in-shops at Saks and Bloomingdale's in 2012.

Boss, which gleans 80% of US sales in major East Coast and West Coast cities, is also eyeing stores in smaller markets. US sales were about $381m last year.

But the company will also open more factory outlet stores on top of its current count of 20 units.
"As long as you are a luxury brand, you need to make sure that you maximise your full price business in order to keep the respect of consumers," Lahrs said.

He also said womenswear and accessories, which currently account for about 10% of total sales, could reach 15% by 2015, when it expects €3bn ($4.1bn) in total company sales.

But Boss will remain dependent on Europe, where it gets nearly two thirds of revenue, for some time. Lahrs forecast the crisis in Europe would resolve itself over time, given the benefits of a shared currency and said it has not dampened the appetite for Boss clothing.

He also noted that, even in markets seen as being at risk from the eurozone crisis, such as Spain, sales have held up well: "For us, Europe in 2011 has been good and I don't see this changing dramatically," he added.

Saks looks to bright Holiday as Q3 sales please

2011-11-16T12:21:00.001Z

Cautious optimism coloured Saks’s outlook after the luxury department store chain delivered Tuesday a solid Q3 performance.

Despite a 50% dip in net income, mainly on tough year-ago comparisons, the latest performance topped analysts’ expectations as sales rose on more full-price selling and fewer promotions.

"We continue to be optimistic about the future of luxury retailing in general and for Saks Fifth Avenue in particular, and we believe Saks is well-positioned for additional operating margin improvement over time," said CEO Stephen Sadove.

He added that the retailer would continue to use a cautious and strategic approach due to economic and political conditions.

Net income fell to $17.8m/11 cents per share, two cents above analysts’ view, down from $36.3m/20 cents a year ago, then boosted by a 14 cents per share gain.

Revenue rose 5% to $692.3m, topping analysts’ prediction of $690.6m, as comps rose 5.8%. Sales at its Fifth Avenue flagship in Manhattan, which makes up 20% of overall business, grew by a similar amount. So far this fiscal year, companywide comparable sales are up 10.3%

Online comps for the quarter rose 24% although its Off 5th store comps came in softer than expected.

The retailer said that the strongest categories at its Saks Fifth Avenue stores included women's contemporary clothing, women's shoes, handbags, jewellery, menswear, shoes and accessories.

For Q4, Saks said it expects a mid-to-high single-digit percentage comps increase and anticipates its gross margin rate will dip in the quarter, but that it will still have an improved gross margin for H2 and the full fiscal year.

Aggressive Burberry powers ahead on all fronts in H1, maintains full-year outlook

2011-11-15T11:56:00.001Z

Burberry powered to an H1 of double-digit earnings growth with all regions and product divisions shining yet again as the UK-based luxury fashion house continues its aggressive international expansion programme.

The company also stood by its full-year forecasts despite an uncertain economic backdrop, saying demand in cities such as Hong Kong, London and New York would prove resilient in any downturn.

Chief executive Angela Ahrendts said on Tuesday 60% of its retail revenue came from 25 cities that are home to the world's wealthiest individuals and attract high numbers of tourists.

"Those top 25 markets are much more sheltered during a downturn," she said.

Burberry reported a 26% rise in H1 operating profit to £162m, ahead of analysts’ view for £160.3m. Net profit surged 41% to £117.2m from £83.1m.

As reported in September, sales lifted 29% to £830m. Retail units reported a 45% gain in underlying sales, accounting for 64% of total revenues in the six months, compared to 57% a year earlier. Comparable store sales increased 16%, driven by monthly flow of new receipts, enhanced replenishment processes, the global buy and sales and service initiatives, it added.

Ahrendts said overall growth had come from all divisions, geographies and products, and the company is starting to see the initial returns from five years of investment in infrastructure, particularly in innovative design, digital marketing and retail strategies.

That is reflected in the newly completed move of its IT systems onto one platform which allows better ops control and reaction for specific product demand.

"As the team has demonstrated in the past, we remain mindful of, and prepared to react to, any local or global uncertainties as we drive for long-term sustainable growth," she added.

Burberry cited consistent growth across all four product divisions, supported by product innovation and “high-impact marketing campaigns further increased the penetration of outerwear in men's and women's apparel”, it said.

In the six-month period, menswear grew 37%; womenswear by 35% underlying, driven in retail by strong performances in Burberry Prorsum and London, core outerwear and tailoring; and childrenswear grew 24% underlying in both retail and wholesale, with increased penetration of outerwear and non-apparel.

Non-apparel revenue increased 28% underlying and remained the largest product division at 39% of retail/wholesale revenue. Large leather goods again contributed over half of non-apparel retail sales, it noted.

Meanwhile, soft accessories and shoes showed solid growth as collections were diversified and core categories innovated. Men's accessories grew strongly in all channels, with revenue up nearly 50% year-on-year in mainline retail, and now accounting for about 15% of non-apparel mainline retail sales, with significantly higher penetration online.

Geographically, retail accounted for over 80% of revenue in Asia Pacific with double-digit comps growth led by Hong Kong and Taiwan. Flagship stores were opened in Sydney and Canton Road, Hong Kong. Comps in China continued at around 30%.

Europe, which is now about 60% retail, was led by the flagship markets including London and Paris, with northern Europe delivering a strong performance. Burberry said it continues to expand and enhance highly productive concessions in key European department stores.

Americas retail also contributed about 60% of revenue in the region, with continued strong momentum in mainline stores, especially in New York and San Francisco. Burberry's first department store concession in Canada was opened during the half.

Meanwhile, a subsidiary was formed for the five Saudi Arabia franchise stores, in which Burberry has a 60% stake. Store openings in H1 included two additional stores in India, bringing the total to seven, and the third childrenswear store in the Middle East.

Burberry reiterated second-half guidance provided in October, which forecasts mid-single digit wholesale revenue growth, and retail selling space growth of 15%. It expects operating margins for the full year to improve modestly.

Its shares were down 2.7% at 1,382 pence in early trading on the London Stock Exchange. However, its share price has risen by a third in the six weeks to November 14.

Isetan Mitsukoshi plans major stores upgrade as operating profits rebound

2011-11-14T12:28:00.001Z

A revitalised Isetan Mitsukoshi Holdings plans to spend ¥90bn ($1.17bn) over the next three years on a major modernisation plan, as Japan’s biggest department store group looks to boost operating profit still further after a stellar H1.

Under a three-year business plan released Friday, Isetan Mitsukoshi will spend up to ¥9bn apiece remodelling its flagship stores, including those in Tokyo's Shinjuku and Nihombashi districts. Both those make-overs will be carried out in two stages, the former reopening in spring 2013 and the latter in fiscal 2014.

Isetan Mitsukoshi hopes the aggressive spending and a review of its purchasing system will help it raise its operating profit to ¥33bn in the final year, up 74% from fiscal 2011.

The upbeat news comes as the group reported that April-September net profit leapt nearly 50-fold to ¥20.58bn from ¥413m in the year-ago six-month period as it booked deferred tax assets resulting from the merger of its two department store chains, Mitsukoshi and Isetan, which took place in April.

It also revised its group net profit estimate for fiscal 2011 to ¥35bn, a 13-fold increase from the previous year, up from an earlier forecast of ¥33bn.

Consolidated H1 sales increased 0.6% to ¥583.65bn despite the fall in consumption following the March 11 earthquake and tsunami in northeastern Japan, as electricity-saving devices and summer gifts sold well.

In other news, the retail giant said it plans to open a new, smaller store for business travellers at Tokyo International Airport in Haneda from next spring. Another will open at the popular Shinjuku shopping centre in Tokyo, also in the spring, in an attempt to reach more customers.

The 800 sq m airport store will be its first ever menswear unit targeting 30-50 year-olds who use the airport for business trips.

A wide range of products, including bags and other leather goods, will be available. The company is aiming to open stores in other Japanese airports in the future.

Isetan Mitsukoshi also plans to open its first luxury cosmetics store next spring in a Shinjuku shopping complex run by Lumine Co, a unit of East Japan Railway Co. The store will target women in their 20s-30s and expects annual sales of ¥500m and hopes to have 20-30 such beauty stores in a few years, some to be opened in major railway stations.

"We shouldn't just wait for customers at the store. We need to go to them," an Isetan Mitsukoshi official told the Nikkei.

Wary Richemont set to deliver “significantly higher” year-end results, H1 and October stellar

2011-11-11T12:19:00.001Z

Economic uncertainty appeared to give Richemont more cause for concern Friday rather than it trumpeting the stellar performance it expects to deliver this fiscal year based on an impressive set of H1 figures.

"Today it is extraordinarily difficult to predict what is going to happen," said chief executive Johann Rupert. "Whether we see a long and deep recession or a flip to inflation, I just don't know," Rupert said. "But with our balance sheet we have constructed we can withstand any real problems.

"For the second half of the financial year, we face both the impact of global economic problems on the luxury goods industry in general, and the demanding comparative figures against which group sales will be measured. Notwithstanding these challenges and based on the group's performance for the year to date, operating profit for the full year is expected to be significantly higher than last year," he added.

Richemont, which owns high-end jeweller Cartier and watch brands such as Piaget and Jaeger-LeCoultre, soundly beat analysts’ expectations with its performance in the six months to end-September.

Net profit rose 10% to €709m (analysts’ view, €671m) while operating profit rose 41% to €1.08bn. For its 2011 financial year to March, operating profit came in at €1.36bn.

Sales, meanwhile, rose 29%, or by 36% currency neutral, to €4.2bn, ahead of analyst expectations of €4.15bn. October sales alone were up 26% currency neutral, reflecting a luxury market in the fast lane.

"Sales for the month were 28% above those of October 2010 at actual exchange rates," said Rupert. "At constant exchange rates, they were 26% higher, with good momentum in both the retail and wholesale sales channels."

Retail sales, comprising directly operated boutiques and Net-a-Porter, increased 37%, well above the growth in wholesale sales, it noted and now accounts for 49% of overall sales.

Richemont’s Fashion & Accessories Maisons saw double-digit sales growth and generated improved profits of
€23m from €7m a year ago. It noted Alfred Dunhill and Chloé brands “performed particularly well”, without giving details.

Sales growth at its online fashion retailer Net-a-Porter “was once again well above the group’s average”, it said. Net-a-Porter incurred losses of € 22m in the period, mostly on costs associated with the continued expansion of its platforms in the UK and the US.

“The growth in retail sales partly reflected the good performance of Net-a-Porter and the expansion of the
Maisons’ network of boutiques to 919 stores. Openings during the period were primarily in high-growth
markets such as China,” it said.

The company's results had been boosted by continued strong demand in Asia, up 60% in H1 to €1.72bn, while even Japan saw a more modest 8% sales rise to €830m.

European sales remained robust - up 22% to €1.51bn - having experienced a "remarkable demand from tourists." However, he described domestic demand in Europe as remaining “sluggish”.
The Americas region saw a 35% improvement to €602m.

Rupert said he expects the US to bounce back quicker than Europe. He was also positive about China, which is now one of its biggest markets: "We have luxury brands that are very desirable in China.”

Richemont said it will continue to invest in its manufacturing and retail operations, he said.

Luxury industry flourishing in Brazil as growing middle class become core consumer - IHT Luxury

2011-11-11T12:10:00.001Z

The luxury industry is expanding rapidly in Brazil due to rising consumer demand and an influx of international brands, speakers told audiences on the first day of the 11th annual International Herald Tribune Luxury conference, held in São Paulo, November 10-11.

Focused on the theme ‘Hot Luxury’, the event was kicked off by the newspaper’s fashion editor Suzy Menkes, who asked: “Why is everyone still so fixated on the Far East, when there’s so much going on in South America?”

She suggested there will soon come a time when there won’t be a brand without a space here, and referenced the fact she’s played witness to a rush of new international stores in the market even since her last visit in February 2011.

She pointed to Gucci as an example, and its plans to have 25 stores in Latin America by the end of 2012.

Throughout the day, a number of key global players took to the stage to confirm similar moves, as well as successes in the market.

Diane von Furstenberg explained that her store in one of São Paulo’s leading shopping centres, the Iguatemi Mall, is the brand’s second most successful in the world, after the New York flagship.

Meanwhile, Lew Frankfort, CEO of high end accessories brand Coach, spoke about plans to enter Brazil in 2012, and the intention for up to seven stores across the country. He estimated the market to be worth $350m per year to them, with the expectation of 20% annual growth.

The first of the Coach stores will be in the new JK Mall – also part of the Iguatemi group – which opens in April 2012. It will join others including Lanvin, Prada and Dolce & Gabbana, as well as the first Topshop Brazil, Carlos Jereissati, CEO of Iguatemi told WGSN.

Stephen Dunbar-Johnson, publisher of the IHT, said this success in the market comes down to economic stability.

The stereotypical image of Brazil - parties, beaches and carnival - might still be there, he explained, but there’s something new and more powerful that’s emerged over the past decade that’s changing everything: “economic muscle”.

He said it would have been difficult to predict that Brazil would become this powerhouse, but the fact that it has remained relatively unscathed in a financial crisis that has affected the rest of the world is key.

Nizan Guanaes, chairman of Grupo ABC de Comunicação, a leading advertising agency in Brazil, said: “Brands can flourish here because we are a creative country and now we have the economic conditions to support it.”

He also referred to the growing consumer appetite for luxury as a product of the country’s rising middle class. This market recently increased by some 40m people.

Jereissati said by 2014 the middle class in Brazil will comprise 60% of the population. In 2002 it was only 38%.

The stellar line-up on day one of the conference also included photographer Mario Testino, Francisco Costa, women’s creative director of Calvin Klein Collection, Carolina Herrera and Christian Louboutin.

It continues Friday with Sarah Burton, creative director of Alexander McQueen, Jeremy Langmead, editor-in-chief of MrPorter.com, and local designers including Alexandre Herchcovitch and Carlos Miele.

Follow all the action live with @wgsn on Twitter, and look out for our full conference report next week.

Macy's attention to detail, Bloomie's fashion strength makes for sparkling Q3 performance

2011-11-10T12:19:00.001Z

Macy’s policy of tuning in to local market needs ensured a particularly strong quarter for the retailer as profits rocketed allowing the department store giant to raise its full-year earnings outlook Wednesday. High points were particularly healthy online sales, a strong credit-card performance and a robust showing from its upscale Bloomingdale's chain.

Macy's earned $139m/32 cents per share for the Q3 ended October 29, up from $10m/2 cents a year ago. Analysts had expected earnings of 16 cents per share.

Results also benefited from due to improved portfolio quality, it said.

Revenue rose 4.1% to $5.85bn, falling just short of the $5.87bn analysts had viewed. Same-store sales lifted 4% including a 1.5 percentage point contribution from online sales which jumped 39.8% in the quarter.

Gross margin narrowed to 39.4% from 40% as the retailer's cost of sales edged up, notably due to free shipping on web sales as well as increased cotton prices, which raised the cost of some clothing and home goods.

"You can feel the momentum and confidence that has been building at Macy's since our organisational changes in 2009, and especially over the past nine months," said an upbeat CEO Terry J Lundgren. "We believe this will help us to continue to capture market share in the fourth quarter and lay the foundation for continued innovation in our business in 2012."

He also said Bloomingdale's enjoyed a strong quarter, both in stores and online, as customers have continued to respond to bridge and designer merchandise.

“A customer-centric approach to the business at Macy's and Bloomingdale's has led to an outstanding assortment of distinctive fashion product,” he noted.

Macy's raised its profit per share forecast for the current year by 10 cents to a range of $2.70-$2.75, and expects $1.52 to $1.57 of that to come in the Holiday quarter. It also reaffirmed its sales forecast and still expects same-store sales to rise by 4-4.5% in the current Holiday season quarter.

Separately Wednesday, Macy's disclosed a plan to open three new Macy's stores - two in New York and one in California. The company currently operates around 850 department stores in 45 states under the Macy's and Bloomingdale's banners along with seven Bloomingdale's Outlet stores.

Bullish Hugo Boss ups long-term earnings outlook on retail growth, especially in China

2011-11-09T12:09:00.002Z

German fashion house Hugo Boss raised its longer-term earnings outlook Tuesday as it expands its store count and foresees strong growth in China. Its shares, which have gained 18% in 2011, were up 7.2% in afternoon trading.

The group said it now expects sales of €3bn ($4.1bn) in 2015 and core earnings of €750m, up from its previous targets of €2.5bn and €500m, respectively. It expects sales in Asia, headed by China, will treble by 2015, and account for about 21% of its group sales.

The group also said around 55% of its sales would come from its own retail business in 2015 and that it planned to open around 50 new stores a year.

"All of those driving elements we defined at the end of 2009 and the beginning of 2010 are playing out more strongly than we expected," chief executive Claus-Dietrich Lahrs said.

Finance chief Mark Langer added: "Experts believe growth in luxury will slow in 2012 compared to 2011 but we are confident we can grow more strongly than the competition.

"If you want to become important in Asia there is no alternative than to do business at your own risk, with own stores," Lahrs said, adding that retail expansion would account for the majority of investment over the next three years.

As of the end of September, Hugo Boss operated 591 of its own stores. Sales via its own retail business, which includes online and outlets, accounted for 40.4% of sales in the first nine months of 2011.

"We want to make two thirds of our sales from own retail," Lahrs said. "We will do this by opening new stores and also taking over franchise partners."

Sportswear and womenswear are also becoming more important for Hugo Boss. "The Chinese are looking out for great sportswear, they look for something branded," Lahrs said, highlighting the group's sponsorship activities with sports such as golf, Formula 1 and sailing.

For the first time, Hugo Boss has also set up a separate organisation for womenswear, appointing Eyan Allen as creative director, and said it wanted to work more on catching up in women's footwear and accessories.

Buoyant M&S maintains UK clothing market share despite “challenges”

2011-11-08T12:14:00.001Z

Marks & Spencer said Tuesday it continues to "perform well" in a "challenging" market as overall H1 sales stayed ahead of a tough year-ago comparison. The UK-based retail giant maintained its share of the domestic clothing market despite sales there declining slightly.

Total group sales, excluding VAT, rose 2.4% to £4.7bn, driven by food and international sales. UK total turnover, minus VAT, rose 1.6% while general merchandise sales, including clothing and homewares, slipped 0.8%. Food sales, however, lifted 3.9%.

UK same-store sales (ex-VAT) inched up 0.5% although general merchandise comps fell 1.3% as food rose 2.1%.
M&S Direct sales jumped 11.7%, attracting over 3m visits per week, the retailer noted.

International sales (ex-VAT) rose a healthy 9% with the retailer opening 12 stores in the half-year, taking its total to 369 stores in 42 countries. Its Paris flagship on 100 Champs-Elysées is set to open before Christmas.

Underlying pre-tax profit for the six months slipped to £315.2m/15.6 pence a share from £348.6m/16.6 pence a year ago.

M&S said it invested in general merchandise "offering customers better value in a highly promotional market" and maintained clothing market shares despite a tough comparative, at 11.5%, with growth across menswear, lingerie and kidswear. It also noted the period saw its　first ever fast fashion collections introduced in M&S Woman brand delivered on a six-week lead time.

"[Our] interpretation of the colour blocking trend really appealed and we sold 100,000 singles over the half. Customers also loved our modern twist on their favourite key pieces like court shoes, which were up 62% on the year," it said.

CEO Marc Bolland commented: "In an increasingly promotional environment, we managed costs tightly and took a decision to invest in giving our customers better value, choosing not to pass on the full extent of the increases in commodity prices.

"We have a very exciting Christmas product offer for our customers with more innovation and choice than ever before."

He said H2 had started in line with expectations and expects gross margin for the fiscal year to be broadly flat on last year due to ongoing input cost inflation and an increasingly promotional market.

Operating costs are expected to rise 3% as a result of increased depreciation, space growth and inflation, as well as investment in growth initiatives, offset by underlying savings.

New retail square footage is expected to grow 2% to UK and 10% internationally.

US Holiday selling season seen as “muted” in challenging times - report

2011-11-07T12:05:00.000Z

Sales growth for the Holiday season is expected to be generally muted, reflecting a challenging macroeconomic environment, according to the Telsey Advisory Group (TAG), which predicts total Holiday sales will rise 3.5-4.5% with same-store sales up 2-2.5%.

“We see upside potential in the forecasts; we do not believe they fully incorporate the effect of price increases, which are in the high single to low double digits at most retailers in H2 2011,” said TAG.
“Although this will naturally imply some decline in unit volume, inventory has generally been bought down substantially to account for this effect. As such, the ability to chase merchandise is essential.”

This year, TAG expects retailers to continue to offer aggressive promotions early in the season.

“With consumers now apparently more value-conscious than ever, we expect Black Friday to continue to grow in importance. In 2010, Black Friday weekend accounted for 4.5% of total Holiday sales (November and December), while Black Friday itself accounted for 2.4% of the total.”

The growing significance of e-commerce was also reflected in Black Friday 2010 results, it noted: “Similar to last year, we expect the rate of increase in Black Friday online sales to significantly outpace the gain in retail sales.”

TAG noted that the Holiday shopping season ranges from 26 to 32 days, and it will total 30 days in 2011 against 29 last year.

“Retailers will face mostly harder comparisons this year, as they go up against a 5.2% increase in Holiday 2010 sales - the biggest gain since 2004’s 5.9% increase.

“Christmas falls on Sunday this year versus Saturday last year. Sales should benefit from the addition of a Saturday to allow consumers to complete their last-minute shopping (there are five Saturdays in holiday season 2011 vs four last year.)

Hanukkah starts at sundown on December 20 vs December 1 last year, a calendar shift that should pull some purchases out of November and into December, it also noted.

Hermès sees “remarkable” sales trends in Asia, The Americas, ups full-year revenue target

2011-11-04T12:05:00.003Z

Hermès cited Friday a “remarkable growth trend” in the Americas and Asia for driving an impressive 18.2% rise in Q3 revenue, prompting the French luxury fashion house to raise its full-year revenues forecast up to 15-16% from 12-14% previously.

"Meeting this target will be highly contingent on the business sectors' ability to meet stepped-up demand ahead of the year-end Holiday season," Hermès said.

Over the full year, the current operating margin is expected to be slightly higher than the record level achieved in 2010, it added.

Sales in the Americas jumped 22% and Asia, excluding Japan, leapt 34%. Although sales in Europe rose 20%, driven by the integration of the two Moscow concessions in Moscow and new stores in Berlin and Rome, sales in France were up a more modest 5.4%.

Q3 sales at its own stores remained solid, up 19.1% at constant exchange rates, despite tough year-ago comparisons, it noted.

All business lines contributed to the “handsome” performance, “underpinned by ongoing innovation and creativity”, Hermès said.

Silks & Textiles delivered sales growth of 27% owing to the success of the new products developed over the past several seasons. Leather Goods & Saddlery sales rose 13% due to strong demand for small leather goods and leather bags (standouts were new handbag models, including the Lindy and Jypsière). Ready-to-wear & Fashion Accessories registered 31% growth due to the success of the latest ready-to-wear collections and to the extensive array of fashion accessories. The first women's ready-to-wear collection designed by Christophe Lemaire was “warmly greeted”, it noted.

Fragrance sales rose 15%, benefitting from the successful launch of Un Jardin sur le toit and of continued growth in sales of Terre d'Hermès.

There was also a rebound in sales of Watches (up 28%), Jewellery, (up 31%) and Tableware (up 22%), it added.

Revenue for the nine months ended 30 September reached €1.99bn, a rise of 20.2% at constant exchange rates and of 19.5% at current exchange rates.

Hermès added that it bought back 912,662 of its own shares for €211.7m in the third quarter as it looks to bolster its defense against LVMH, which has built a stake of some 21% in the majority family-owned group.

adidas raises outlook again on expected Olympics and UEFA gold standard sales, buys Five Ten brand

2011-11-03T15:16:00.000Z

German athletic sportswear giant adidas raised on Thursday its sales and earnings outlook for the current year and said it expects earnings per share to increase 10-15% in 2012 as it looks forward to a bumper Olympics- and European football (soccer) championships-related year.

It said exposure to fast-growing emerging markets, further retail expansion and continued momentum at all key brands were the key elements driving the company forward.

The positive outlook was also backed up by a sterling Q3 performance as growth in key regions and expansion of higher-margin retail sales boosted sales and earnings.

There was also news that adidas is to acquire action sports brand Five Ten for $25m in cash.

"The traction we are gaining as we implement our strategies is especially pleasing as the external environment is not without its challenges,” said CEO Herbert Hainer.

"Our brands and products are resonating with consumers around the world like never before... Our record third quarter results were driven by growth in all key geographies, brands and channels. We will finish 2011 clearly exceeding our initial expectations after already surpassing our 2008 record earnings mark after the first nine months. Therefore I can already confirm... 2011 will be another record year.”

adidas, which already raised its sales outlook three times this year, said it expects sales and earnings to increase at a mid- to high-single-digit rate in 2012. For 2011, it now expects exposure to fast-growing emerging markets and retail expansion to boost currency neutral sales about 12%, up from a previous guidance for a 10% increase.

Q3 net profit rose 14% to €303 million, beating analysts' expectations for €294m while operating profit rose 7.3% to €441m, just short of the €442m analysts had expected.

During the traditionally strong quarter, boosted by Back-to-School purchases, sales rose around 8% year-on-year to €3.74bn, beating analysts’ €3.65bn forecast.

However, adidas' gross margin took a hit from higher costs for materials, labour and freight, falling 0.3 percentage points to 47.1%.

The company also warned sourcing costs will increase significantly in 2011 compared to last year due to rising raw material costs and capacity constraints, as well as higher labour costs and currency volatility.

Meanwhile, adidas said the acquisition of action sports Five Ten for $25m was dependent on its performance over the next three years. The transaction is expected to close in the next couple of weeks.

As part of its Strategic Business Plan Route 2015, adidas said it expects sales in the outdoor segment to exceed €500m by 2015 based on organic growth. Through the acquisition, adidas “will be even better positioned towards the goal to become a leading player in the outdoor market”, it said in a statement.

"Five Ten is a leading brand in the technical outdoor market and within the outdoor action sport community. Climbers, mountain bikers and other outdoor athletes around the world highly value their products," said Rolf Reinschmidt, senior VP adidas Outdoor.

"Five Ten has continuously been at the forefront of innovations and shares the same passion for athletes as we do at adidas. It represents an excellent addition to the adidas Outdoor portfolio and will allow us to expand into complementary market segments. This acquisition underscores our clear commitment to the outdoors and our ambition to play a leading role in the outdoor industry going forward.”

The California-based company expects annual net sales of around €16m, excluding distributor business in Japan and Korea.

High flying Hugo Boss’ Q3 strength boosts full-year outlook

2011-11-02T12:12:00.000Z

Hugo Boss powered to a forecast-beating Q3 as the German fashion house confirmed its outlook for 2011 with global demand for luxury goods seeing no signs of a slowdown.

Net profit jumped 30% to €119.7m ($165m) in the July-September quarter.

The group also reported an 18% rise in Q3 ebitda to €177m as ebit rose to €159.7m, up on the €148m analysts had expected.

Sales rose 14%, or by 16% currency neutral, to €615m, smartly ahead of analysts’ €597m view.

US sales jumped 22% on-year for the quarter, while European sales lifted 14%, and drove 20% higher in the Asia-Pacific region.

Based in the positive Q3 results, Hugo Boss said it expects to grow currency neutral sales 15- 17% and core operating profit 25-30% for fiscal 2011.

In 2010, the group posted record net profit of €190m, underlying profits of close to €350m and sales of €1.73bn.

"We are very confident that we will reach our sales and earnings forecast for the year as a whole," chief executive Claus-Dietrich Lahrs said Wednesday, adding this was based on strong growth in China and the US.

Esprit Q1 sales inch up as eurozone woes hit core market

2011-10-31T11:58:00.000Z

Struggling casualwear retail giant Esprit Holdings said Monday Q1 sales inched up just 0.6% on-year amid an "increasingly challenging business environment," particularly in Europe.

The Hong Kong-based company said its unaudited revenue in the quarter ended September 30 was HK$8.56bn, up from HK$8.51bn last time, amid "slower global economic growth and the worsening of the eurozone sovereign debt crisis."

Retail sales rose 0.8% to HK$4.33bn from HK$4.30bn, accounting for 51% of total revenue, while wholesale sales climbed just 0.2% to HK$4.17bn.

Stripping out the foreign exchange impact, revenue in the period fell 8.2% in local currency terms with wholesale revenue down 8.8% and retail revenue down 7.8%.

The retailer didn't disclose net profit.

Its shares, which have been under pressure in a market increasingly doubtful of its turnaround plans, have fallen 69.2% so far this year.

Luxury drives sales surge at PPR but mail order operation still struggles

2011-10-27T12:04:00.001+01:00

More good news came out of the luxury sector late Wednesday as Gucci Group owner PPR reported soaring sales and no sign of them slowing down. Its luxury sales rose a massive 24.6% in Q3 and the company said October has seen similar trends.

The luxury and retail giant, which is currently in talks to acquire Brioni, has seen particular strength in star brand such as Gucci and Bottega Veneta, as well as star markets such as China.

New stores drove much of the expansion with 39 new locations opening in Q3 and operating strongly not only in markets like China but in more mature markets such as Western Europe, Japan and the US.
Despite the strength, however, PPR said that it is ready to act quickly if sales trends change, an almost identical comment to one made by an equally-buoyant Burberry this month.

Total sales for the conglomerate, which also owns the up-for-sale businesses Redcats and Fnac, were up 7% on a currency-neutral basis, reaching €3.857bn ($5.37bn). Luxury sales rose nearly 25% to €1.282bn ($1.77bn), easily beating the almost-20% growth analysts had predicted.

"We believe the luxury consumer will remain active in the upcoming Holiday season, in 2012 and beyond," PPR CFO Jean-Francois Palus said.

"The international financial situation has not had any impact on our business," Palus added, although cautious consumers in many economies appear to have affected the mail order Redcats and home electronics Fnac operations. The group’s retail sales fell 5.5% to €1.655bn in the quarter as consumer spending in France and southern Europe faltered.

There was better news at the sports and lifestyle branch that includes Puma and Volcom as sales rose 18% to €924m.

Sales results in detail
Revenue recorded by Gucci in the third quarter 2011 leapt 21% versus the same year-ago period on a comparable basis, and by nearly 18% based on reported data. All channels delivered double-digit revenue growth, with directly operated store revenue up 22% and wholesale revenue up 16%, reflecting the success of Gucci's autumn/winter collection.

All geographic areas contributed to the growth and mature markets delivered excellent performances, with North America revenues soaring 31%, Western Europe up 16% and Japan advancing 9%. Asia-Pacific accounted for 37% of total Gucci sales in the third quarter, and reported revenue growth of 22% versus the same year-ago period, with 37% growth in Mainland China. All product categories made major gains, with revenue growth for Fashion and Leather Goods at 19%.

Gucci is celebrating its 90th anniversary this year and last month the Gucci Museum opened in Florence, showcasing the brand's heritage and local roots. The celebrations also featured the Forever Now worldwide advertising campaign and a special 1921 collection, both of which received broad media coverage.

September also saw the reopening of Gucci's flagship Via Montenapoleone store in Milan following a high tech makeover.

As of end-September 2011, the Gucci network comprised 365 stores, including 132 in emerging markets.

Bottega Veneta
Revenue posted by Bottega Veneta surged 39% versus the same year-ago period on a comparable basis, and by 35% based on reported data.

Bottega Veneta posted strong revenue growth in both directly operated stores (up 34%) and wholesale (up 64%), powered by the autumn/winter 11/12 collection. All product categories contributed to the overall growth effort, led by Leather Goods, which recorded a 42% increase in revenue. Each of the brand's geographic areas also contributed to the performance. Revenue posted by the Asia-Pacific region jumped 69%, accounting for 34% of sales in the quarter, with sharp growth in Greater China. Western Europe posted a 42% increase, North America moved up 35% and Japan moved back into positive territory (up 5%). In addition to sustained demand for all product segments in the women's range, men's ready-to-wear and shoes also delivered bumper performances.

As of end-September 2011, Bottega Veneta operated a network of 158 stores, including 55 in emerging markets.

Yves Saint Laurent
Yves Saint Laurent reported sharp year-on-year revenue growth of 35% in comparable terms and nearly 33% on a reported basis. By channel, directly operated stores and wholesale posted growth of 40% and 46%, respectively.

All product categories made solid contributions to the brand's performance. Leather Goods posted strong growth of 40%, driven by carryover lines and the new Cabas Chyc bag, while Shoes soared by more than 70% on the back of the continuing success of the Tribute, TribToo and Palais lines.

Most regions achieved sales growth for the quarter, with satisfactory performances in both mature and emerging markets. Western Europe accounted for 46% of Yves Saint Laurent's third-quarter sales and advanced 44%, while North America moved up 50% and Asia-Pacific leapt 55%.

As of end-September 2011, Yves Saint Laurent operated a network of 81 stores, including 25 in emerging markets.

Other Luxury Goods brands
PPR's Other Luxury Goods brands posted comparable sales growth of 22% (31% in reported terms) with all brands and regions contributing to the performance. While there were fewer details available for the performance of these businesses, PPR said that Balenciaga achieved strong double-digit growth for the quarter, reflecting the success of its autumn/winter 11/12 collections and of the store network expansion strategy. Boucheron sales were driven by a buoyant performance in its core jewellery category. Alexander McQueen "posted a fresh jump in revenue for the period", while Stella McCartney recorded "another good quarter in all regions". Sergio Rossi registered "promising growth in retail sales, boosted by the new store concept launched this year…Girard-Perregaux posted a highly satisfactory performance."

As of end-September 2011, the store network of the Other Luxury Goods brands comprised 165 units.
Puma
Puma sales for the third quarter of 2011 moved up 7% on a reported basis and more than 10% on a comparable basis compared to Q3 2010. Revenue advanced both in directly operated stores and in wholesale. All product categories contributed to revenue growth, driven by 14% advances in Apparel and Accessories. Asia-Pacific and Latin America enjoyed double-digit growth, while Japan delivered an especially satisfying performance. Western Europe, which accounts for 38% of Puma's revenue, posted growth of 9%.

During the period, Puma signed several important sponsorship agreements with football stars such as Cesc Fabregas, as well as partnerships in Formula 1 with the Mercedes team and in sailing with Team Oracle for the America's Cup.

In track and field, the IAAF World Championships in Daegu, Korea, delivered excellent media coverage for the brand, thanks to the achievements of Jamaican athletes: Usain Bolt held on to his 200m title and the Jamaica team improved on its own 4x100m relay world record.

Volcom
Volcom is fully consolidated in the financial statements of PPR for the first time in the third quarter.

Volcom delivered revenue of €82m in the third quarter of 2011, up 7% on a comparable basis. North America, which accounts for more than half of Volcom's revenue, and the Asia-Pacific region, made strong contributions to the brand's performance. Progress on the initial stages of the integration of Volcom within PPR has been "very satisfactory".

Fnac
Third-quarter 2011 revenue reported by Fnac contracted by 4% in both comparable and reported terms versus the same year-ago period, "in the face of strong market headwinds," PPR said.

In France, Fnac posted a 6% decline in revenue, despite a 12% advance in online sales (representing 12% of revenue) and 6% sales growth in out-of-town stores. The decrease in sales of technical products was contained, despite tough trading conditions. Outside France, performances were mixed, with sales edging back by 1% overall. However, Brazil delivered "highly satisfactory" double-digit revenue growth (up 10%), while Spain and Portugal recorded major market share gains.

In all, online sales leapt 20% and represented 11% of Fnac's total revenue for the period. The banner also opened a new store in Madrid during the third quarter, and has scheduled four further store openings by year-end (including two out-of-town stores).

The rollout of the Fnac 2015 strategic plan, presented last July, began in earnest during the summer.

Redcats
In very difficult trading conditions, revenue posted by Redcats declined 6% on a comparable basis and 8% in reported terms compared to the third quarter of 2010. A shift in the timing of the regulated sales period in France impacted the third quarter; for the first nine months of the year, the drop in Redcats's revenue was less than 1%. The weight of online sales continued to grow and now stands at 63% of revenue, driven by the launch of new international sites and by online sales initiatives in France (including virtual models and social networks). Revenue for La Redoute, which is now 75% online-based, came out 8% lower compared to the same year-ago period when revenue had grown by 12%.

Redcats' Scandinavian banners were standout performers during the quarter with growth of 5%, while in the US, the Large Size division demonstrated its resilience with a 7% increase in online sales.

Coach talks of “excellent” Holiday as Q3 shines on all fronts

2011-10-26T12:17:00.000+01:00

Predictions of a possible stand-out Holiday on the back of a host of Q1 positives meant upscale accessories maker and retailer Coach was in an exuberant mood Tuesday.

Chief executive Lew Frankfort said Coach was "well positioned for another excellent Holiday season" thanks to its strong product line and positive sales trends in both full-price and outlet channels.

"Consumers are worried, but they intend to spend at similar levels to last year," he said. "The good news for us is we have a broader franchise."

He also noted the company continues to grow market share in an expanding North American market.

For the quarter ended October 1, profits jumped 14% to $215m/73 cents a share, three cents ahead of analysts’ view, from $188.9m/63 cents a year earlier.

Revenue jumped 15.2% to $1.05bn as same-store sales rose 9.2% in North America and grew 1% in Japan, on a constant-currency basis. Frankfort said in Japan, spending has stabilised in the post-earthquake and tsunami period.

China, which the company has called its largest geographic growth opportunity, saw double-digit same-store sales growth. Coach is accelerating new store openings in China with about 30 locations planned this year, and Coach now projects sales there of at least $300m this fiscal year, the top end of the guidance in August.

Online sales also increased 17% with Coach noting mobile commerce made up over 15% of Coach.com's total site traffic.

Wholesale sales increased 4%, reflecting modest growth in shipments into international wholesale and US department stores.

Gross margin fell to 72.8% from 74.2% with Coach noting figures were better than in the preceding quarter, and should improve further as more goods are made in India and Vietnam.

Frankfort said about 80% of Coach's products are now made in China, down from about 85% a year ago. Longer term, the company wants that to fall to 50%.

The fiscal year’s opening quarter saw strong handbag and accessory sales, as well as growth in the men's business which Frankfort highlighted as the “significant driver” of overall sales, potentially reaching 10% of North American business.

He also said the North American business was benefiting from a sharp increase in tourist visits to stores in Hawaii, Las Vegas, New York and other travel destinations.

Michael Tucci, president of the North American retail division, said that in time for Thanksgiving Coach would update its assortment of the Madison and Kristin bags, as well as offer a new drawstring tote for the Chelsea model. He said the company would also offer an assortment of iPad covers and wristlets priced under $100.

• Consistent with Coach’s strategy of directly operating in select Asian markets, the company is to take control of its domestic retail business in Taiwan, with the transition expected in early January. As previously announced, Coach will also acquire its Malaysian retail business next July.

VF shrugs off economy as cautious consumers choose trusted brands despite price rises

2011-10-25T14:09:00.000+01:00

VF Corp delivered another quarter of record profits Monday on a standout performance from recently-acquired Timberland and an equally robust showing by established brands including Lee, Wrangler, 7 For All Mankind and John Varvatos.

VF Corp chief executive Eric Wiseman also said he has seen "little evidence" of the tough global economy hurting sales but added: "We are unlikely to be immune to a significant economic downturn. But our experience has shown that as consumers become more cautious, they gravitate toward brands they know and trust."

Meanwhile, the apparel and footwear giant also said in a call with investors that it has partially offset higher costs for cotton and other raw materials with higher prices, particularly in its jeans segment.

That helped Q3 profits rise 24% to $300.7m/$2.69 a share from $242.8m/$2.22 a share, in the year-ago period.

"We’re confident that our brands’ momentum will continue through the fourth quarter, and look forward to delivering a year of stellar organic growth to our shareholders, capped by the highly accretive and transformational Timberland acquisition," Wiseman said. "We will, of course, continue to carefully monitor economic and market conditions globally, and are well-positioned to respond quickly, if conditions change materially, to protect our brands and ensure our business remains strong and healthy."

Results in detail

Adjusted profit for the period totaled $2.87 a share, after breaking out costs related to its acquisition of Timberland, above analysts’ $2.57 per share view. Revenue increased 23% to $2.75bn. Timberland, whose $2.3bn purchase closed in September, added $163.6m to revenue.

All of the company's business units reported an increase in revenue. Outdoor and action sports, the largest contributor to the top line which includes The North Face plus Timberland and Smartwool brands, rose 37%.

Jeanswear, its second-largest segment which includes Wrangler and Lee, rose 8%, helped by a 22% increase internationally. Although US sales to discounters declined, VF said its domestic jeans business continues to perform as anticipated, given the challenges posed by higher product costs and the impact of higher prices on volumes.

Meanwhile, its sportswear unit and contemporary brands division, which includes 7 For All Mankind and John Varvatos, grew 18% and 11%, respectively.

North Face and Vans brands sales rose 22% and 25%, respectively, while Kipling and Napapijri were up 30% and 23% respectively.

Q3 international currency neutral sales jumped 37% led by a 50% leap in China. European sales were up 20%, excluding currency translation and the purchase of Timberland.

Gross margin fell to 45.3% from 46.5% on higher costs.

Total revenues are now expected to rise 22-23% in 2011, due to continued strong organic growth and the Timberland acquisition. Organic revenue growth is expected to be 13.5% in 2011, above previous guidance for growth of 12-13%. The full year revenue contribution from Timberland continues to be about $700m in 2011.

International revenues are now expected to grow by around 40% this year. In 2011, international revenues should account for 34% of the total, up from 30% in 2010. Direct-to-consumer revenues are now anticipated to increase nearly 30%. In 2011 direct-to-consumer should account for 19% of total revenues.
Adjusted earnings should increase to around $8.15 per share, up from prior guidance of $7.50 per share.

Von Furstenberg olive branch could see fashion week dates clash settlement

2011-10-24T12:22:00.000+01:00

The battle between New York and Milan over spring/summer 2013 fashion week dates could be close to an amicable settlement.

Diane von Furstenberg, the president of the Council of Fashion Designers of America (CFDA), has proposed to her Italian counterpart Mario Boselli, president of Milan’s governing body Camera Nazionale della Moda Italiana (CNMA), that New York “bites the bullet” next year and move its dates earlier in exchange for a formal agreement about 2013 and beyond.

“We have to protect the industry,” The New York Times reported von Furstenberg as saying.
“To give jobs is the number one responsibility for anyone today, and that’s what we have to realise,” she added.

The CNMA is understood to be considering the proposal but has yet to comment.

New York's fashion week had planned to start its run on September 13 next year and end on September 20 to avoid clashing with the Labor Day holiday in the US. London’s shows were expected to run September 21-25.

This is virtually a week later than the recent show schedule for SS12 that saw NYFW running from September 8-15, London from September 16-21 and Milan from September 21-27.

However, New York's proposed dates change affected Milan’s schedule and left Italian designers arguing it would not leave enough time to satisfy production needs.

Earlier this month Milan organisers stood firm on its intention to stage its SS13 shows from September 19-25 2012, cutting into both the New York and London events.

Acne, H&M, Target, Erdem, Guinness, Net-A-Porter win top honours at WGSN Global Fashion Awards

2011-10-21T14:02:00.000+01:00

A raft of international retailers and designers were among the winners of the Global Fashion Awards held in New York Thursday night, with Daphne Guinness being named Global Style Icon and Net-A-Porter scooping the Swarovski Elements Grand Prix Award at the second annual event. The global focus of the event became clear as London-based Turkish-Canadian designer Erdem was named top womenswear designer.

In all, 21 awards were presented to the world’s best brands, retailers and designers at the black-tie ceremony at Manhattan's Gotham Hall.

Sweden’s Acne, which has enjoyed several years of growing sales an increasing influence on fashion, took the top honour for footwear and accessories while fellow Swedish success story H&M won for its impact as a global retailer.

US-based Opening Ceremony, known for its promotion of both established and up-and-coming designers, took the award for outstanding fashion collaborator, while US retail giant Target won the marketing campaign title.

Barbara Hulanicki, founder of Biba, was honoured by industry peers with the Outstanding Contribution to Fashion award. Judges said she had created an iconic design aesthetic and lifestyle business model that was far ahead of its time.

She told WGSN: “It is so wonderful to be recognised in this way by your industry peers especially when it was so hard at the start of my career to launch and run the business. It’s just very unexpected and tremendous that it happens here in New York, a city that is so important for fashion and the industry.”

Socialite Daphne Guinness won her award for being an inspiration, muse and support for so many of the world’s fashion visionaries.

The awards were created in 2010 to recognise and reward innovative international talent and achievement within the fashion industry. They are hosted by WGSN and sponsored this year by Swarovski Elements

Nadja Swarovski vice-president of international communications at Swarovski said: “The great thing about these Global Fashion Awards is in the name. They are truly international and they cross all functions within the fashion business they are not just about the designers, they are also about commerce, about individuals and about icons that have had a huge impact within this industry.”

A number of special guest presenters lined up to hand out Swarovski crystal trophies to the winners. They included designer Anna Sui, supermodel Coca Rocha and the fashion director of New York’s Lincoln Center Stephanie Winston Wolkoff. The awards ceremony was hosted by US fashion personality and stylist Robert Verdi.

The full list of winners:

Swarovski Elements Grand Prix Award: Net-A-Porter
Global Style Icon: Daphne Guinness
Outstanding Contribution to Fashion: Barbara Hulanicki
Most Influential Womenswear Designer: Erdem
Most Influential Footwear & Accessories Designer: Acne
Most Influential Design Team: Topshop
Clover Group Outstanding Fashion Innovator: Manish Arora
Outstanding Fashion Collaborator: Opening Ceremony & Partners
TNT Global Brand or Retailer: H&M
Outstanding Brand Mix: Matches
Best E-tailer: Net-A-Porter.com
Most Innovative Marketing Campaign: Target
Outstanding Customer Experience: my-wardrobe.com
Most Sustainable Brand or Retailer: Stewart+Brown
Outstanding New Store: La Boutique Palacio, Mexico
Breakthrough Brand or Retailer: Pretty Green
Breakthrough Designer: Michael Cinco
Lycra Style Emerging Talent Award: Eudon Choi
Most Creative Student Collection: Estee Anna Lindley, University of Central Lancashire
Swarovski Student Award: Alice Richardson

For more information on the Global Fashion Awards visit: http://www.globalfashionawards.com/

Limited Brands outlines major US, overseas expansion, to raise capital spending 40%

2011-10-20T12:09:00.000+01:00

While Limited Brands Wednesday outlined major overseas expansion plans, the retailer also emphasised the majority of growth would come within its own back yard, citing its US business as the “the golden goose”.

While CEO Leslie Wexner acknowledged the significance of the international market to its long-term growth, he also said it doesn’t need the overseas market to hit its growth projective.

“We are progressing in our domestic market. In about a five-year period, we have an opportunity to double the business,” to over $20bn from the current $10bn, Wexner told investors at an annual investor update meeting in New York.

The US-based 2,765-store group also said it plans to increase its capital spending by about 40% to $590m next year, with most of the increase going towards remodelling or expanding domestic Victoria’s Secret stores including increasing the number that carry a full Pink label assortment, and adding space for swim, sport and its supermodel loungewear assortments. The company also said it also will shutter underperfoming stores.

The beauty-to-lingerie giant also said it will expand its international footprint of company-owned and franchised stores by more than half to over 880 by the end of next year from 580 at the start of this year.

“We are serious about international,” Martin Waters, president of the company’s international division, said. “It will be a tremendous source of growth for us as a very healthy add-on to our domestic businesses.”

The international plan includes significantly expanding Victoria’s Secret’s beauty and accessories stores at airports and other locations to 145 from 17 while taking the number of Bath & Body Works locations outside of North America to 50 from 6. There are also expansion plans for its intimates brand La Senza.

Its first full-scale Victoria's Secret stores outside North America will include three company-owned locations in the UK, including a 22,000 sq ft flagship opening on London’s Bond Street for next June. That will be followed by two others later in the year. Meanwhile, there will be three stores opening in the Middle East next autumn.

Bath & Body Works (BBW) sees five to 10 new stores in Canada next year, on top of the 69 in operation this year, and another 25-30 in other countries next year.

BBW, Wexner said, has enormous opportunity to grow its core categories, and he believes home fragrance, where there’s “real traction,” could double in size. With the company’s focus on women, Wexner cited major potential to cater to men and children. “My view on Bath and Body Works is that we have just begun to fight.”

Meanwhile, Henri Bendel will end the year with 18 stores, but Wexner said the gift and accessories division can grow to 200 in about five years. “We think we are building a very unique brand with enormous profit potential. It’s a tourist destination... probably the biggest potential is international,” he added, citing Bond and Sloane Streets in the UK as potential sites.

Wexner said its overseas expansion strategy has been “very deliberate”.

“We see the opportunity, but we have to build the basic set of [language, communication and other] skills. We want to figure out how this works. We can’t train ourselves faster. We don’t want to take a giant leap forward and a giant leap back. We are realistic about skills we don’t have.”

Japanese department store comps dip for third month on weather issues

2011-10-19T12:00:00.000+01:00

Japanese department stores comp sales fell 2.4% in September, down for the third straight month, an industry group said Tuesday. Core apparel sales dipped 2.5% as extended summer temperatures and two typhoons hurt autumnwear purchases.

Overall sales at 253 stores run by 86 companies totalled ¥436.9bn, the Japan Department Stores Association said.

Meanwhile, sales of art works and jewellery grew 1.1%. Food sales fell 1.4%.

Sales dropped 3.6% in Tokyo to ¥107.4bn, by 1.3% in Osaka and by 6.7% in Kobe, the latter mostly due to the impact of a typhoon.

In Sendai, Miyagi Prefecture, sales grew 4.7% thanks to demand stemming from reconstruction efforts following the March 11 earthquake and tsunami, but the margin of increase was smaller than 8.9% seen in the previous month.

Purchases by visitors to Japan are recovering, mainly in western regions of the country, from a sharp fall that followed the disaster, the association said.

Also, sales of autumnwear began to improve later last month as temperatures dipped while sales of luxury wristwatches and other big-ticket items remained solid, it added.

"In addition to the ¥1m-¥2m price range, ¥10m watches have been selling well,” an association official said.

Among watches, Rolex and other imported brands have been doing well while pearls are among the popular items at department store jewellery sections.

Confident LVMH sees Q3 sales top €6bn boosted by Bulgari and Louis Vuitton

2011-10-18T12:20:00.003+01:00

Any doubts that demand for luxury goods may be showing signs of fatigue were comprehensively dismissed Tuesday as the world’s biggest sector player LVMH posted forecast-beating Q3 sales growth and said it was confident for the rest of 2011.

Consultancy Bain & Co also said Monday that the growth outlook for the global luxury goods industry in 2011 was now stronger than it was in spring, despite worries about economic conditions.

Bolstering that view, LVMH reported like-for-like sales rose 15% to €6bn ($8.27bn) in the three months to September 30, beating analysts’ estimates of €5.8bn.

"The third quarter showed a continuation of the trend evident since the start of the year," LVMH said in a statement. "The momentum continued in Asia, Europe and the United States, while Japan returned to growth over the period,” noting that the first nine months of the year had confirmed its confidence for the remainder of 2011.

LVMH said it benefited from contributions from Italian jeweller Bulgari, which it bought earlier this year and whose results were consolidated for the first time during Q3.

The group posted nine-month like-for-like growth of at least 10% at all its divisions although there was a standout 26% hike in its watch and jewellery division where total sales leapt 76%.

Its fashion and leather goods division, the largest contributor to sales, reported nine-month like-for-like growth of 15% with double-digit percentage revenue growth at Louis Vuitton leading the way.

All product categories in the Vuitton portfolio contributed to the “exceptional attraction of the brand throughout the world”, LVMH noted. Leather lines enjoyed strong demand with classical products also performing well.

Meanwhile, Fendi and Donna Karan also made “strong progress” while Céline “maintained the remarkable performance experienced since the start of the year, driven by the critical acclaim accorded to its new leather goods and ready-to-wear collections”.

Perfumes & Cosmetics recorded like-for-like sales up 10%, sustained by the growth of its flagship product lines, and in particular Christian Dior. It highlighted the success of its J'adore fragrance and the new Dior Addict lipstick.

Guerlain also benefited from the successful launch of Shalimar Parfum Initial and the new Rouge Automatique make up. The launches of Givenchy's Dalhia noir perfume and Kenzo's Madly Kenzo were also highlights of the third quarter, it said, while its Benefit brand sales also achieved strong progress across all regions.

Warm weather dents H&M's autumn sales, looks to improved October

2011-10-17T12:03:00.000+01:00

Value fashion retail giant Hennes & Mauritz saw its September same-store sales fall 7% as extended summer weather across Europe dented demand for autumn/winter lines. Its shares were down 0.3% at 08:21 GMT.

Analysts had expected the comps dip to range 5-7% last month but noted colder weather this month should herald improvements.

"We see that the weather in October has changed in most of the European markets, which I believe will drag the customers to the stores. I think we'll see a better October," Nicolaj Jeppesen, an analyst at Sydbank told Reuters.

Total sales rose 3% currency neutral. Last year, total sales in September, the first month in H&M's Q4, rose 16% while comps lifted 8%

H&M, which will launch a collection by Donatella Versace in November, has said that the negative effect from high cotton prices would remain in Q4 but that the outlook was brighter after that.

H&M, which operates over 2,300 stores in 41 countries, said in September it would speed up its expansion and open 265 stores in its fiscal year 2010/11, compared with an earlier forecast for 250.

Gap to cut US store count, boost international, e-tail and womenswear, mulls Piperlime stores

2011-10-14T16:02:00.000+01:00

Major changes are happening at Gap Inc’s with the retail giant announcing plans to close some US stores and focus on boosting online and international sales to 30% of overall business by 2013, nearly double what it was in 2007. There are also merchandise revamps due with promises of a more appealing, more colourful offer.

Headlining those changes will be the closure of 100 more of its Gap US stores by the end of 2013, reducing the banner count by 34% to around 700. Meanwhile it will increase the brand’s outlet stores by about 50 to 250 during the same period. In all, Gap aims to shrink its North American real estate footprint by10% by fiscal 2012 compared to 2007 levels.

Spokeswoman Louise Callagy said "we might have been over-penetrated," adding that a smaller store fleet is probably better and that Gap will let existing leases expire, rather than terminate them early.

Old Navy also will reduce its square footage in North America. While the company hopes to hold steady at about 1,020 stores, it is looking to shrink the average Old Navy footprint, removing up to 1m sq ft of selling space by the end of 2013.

While North America still accounts for about 80% of Gap’s business, profits fell 19% in the most recent quarter as the company continues to struggle domestically. In North America, Gap brand and Banana Republic comps fell 3% and 2%, respectively, while Old Navy same-store sales were flat.

Chief executive Glenn Murphy, speaking to analysts in New York, said the company recognizes it still has plenty of work ahead.

“We don’t like the fact that we aren’t comping positive in our home market,” Murphy said, adding the US is going to be a slow-growing market for Gap with a bigger growth opportunity overseas. “We have a number of initiatives in place that collectively will move the needle.”

On the flip-side, the retailer will accelerate its international ops, opening new stores in such key overseas markets as China and Italy. Currently it has a presence in around 90 countries.

With its current stores in China “performing well” Gap expects to have around 45 stores there by the end of fiscal 2012, and expects to double its franchise model to about 400 by the end of fiscal 2014.

In August, Gap opened its third namesake store in Shanghai, bringing the total in China at the time to six.

Meanwhile, the company is opening its first overseas Old Navy store in Japan within the next 18 months and the first Banana Republic flagship in Paris later this year.

Online, Gap said it plans to increase sales to $2bn and operating income of $500m by the end of 2014. Direct president Toby Lenk expects the division to hit $1.5bn in sales by the end of this year.

The division is also expanding shipping from stores and is working to publish all of its inventory data on its website to make it easier for customers to see what’s available and where.

The company also is expanding its Athleta online catalogue brand and aims to open over 50 stores by the end of 2013. It is also thinking about launching stores under its online label Piperlime.

Gap, meanwhile, wants to simplify its in-store merchandise offer while adding more colour. At the Gap brand in North America, the company admitted womenswear is the weak spot. To fix the business, the chain is revamping its tops assortment, adding more colour and listening more closely to customers and employees when selecting new merchandise.

It’s also rolled out a new sweater assortment, which the company said is “resonating” with consumers.

At Old Navy, Gap’s biggest sales division, the company has rolled out an Active collection of workout clothing, and featured more third-party products such as bottled water near checkout counters. It’s also remodeling stores and plans to market product messages that will attract the chain’s target young mothers to buy things for her whole family.

For Banana Republic, after being hurt by a “too casual” assortment during the Holiday season last year, it’s balancing that with what it calls “polished casual” assortment as well as “work versatile” outfits that shoppers can wear from work to dinner. The chain also will add more color to its assortment.

• The company also kept its full-year profit forecast of $1.40-$1.50 a share. Analysts, on average, estimated Gap to earn $1.46 a share this year, according to FactSet.

Claiborne identity to change as worldwide Liz brand rights are sold to JC Penney

2011-10-13T12:13:00.000+01:00

Liz Claiborne is to offload three more of its brands in a $328m cash deal as the struggling apparel group shifts focus to its higher return upscale fashion and accessories brands. The announcement drove its shares over 40% higher in afternoon trading Wednesday, calming investor concerns about its debt load.

Heading the sell-off will be its signature brand to JC Penney. The department store giant already owns the US and Puerto Rico rights to Liz Claiborne brands, but the new agreement will give it the worldwide rights to the brands which include Liz Claiborne, Claiborne, Liz, Liz & Co, LC, Elizabeth, LizGolf, LizSport, Lizwear, Liz Claiborne New York and Concepts by Claiborne. It also picks up the Monet jewellery brand in a combined deal worth about $288m.

Penny CEO Myron E Ullman III said of the deal: "This is the culmination of our extremely successful partnership with Liz Claiborne Inc. The brands we are acquiring hold tremendous appeal for our customers, and the performance of the Liz Claiborne and Claiborne brands at jcpenney has consistently exceeded our high expectations. We will now build on that strength to accelerate the brands' performance."

Claiborne, meanwhile, is also selling the Kensie brands, which include Kensie, Kensiegirl and Mac & Jac, to Bluestar Alliance, and completed the sale of its Dana Buchman brand to Kohl's Corp on Monday, with both transactions bringing in around $40m.

The company, which has failed to deliver an annual profit since 2006, anticipates using the total proceeds to lower debt further. It expects 2011 net debt of $270m-$290m after closing on its transactions.

The overall move will also force through a change in company name within the next 12 months while allowing the group to concentrate on its Juicy Couture, Lucky Brand and kate spade fashion brands.

"We will now be completely intent on building out and achieving the growth potential of our three US based direct brands… all of which had significant square footage growth opportunities in virtually every market...and huge line extension and e-commerce potential," said chief executive Bill McComb.

"Over the past few years, we have worked diligently to turn this into a more efficient, dynamic, brand-centric, retail-based company…Today marks the culmination of these efforts,” he noted.

The three brands accounted for just under half of the overall $2.5bn in revenue Liz Claiborne reported in its last fiscal year.

McComb also said that along with streamlining its operations, the company will need to "resize its corporate infrastructure," which could mean job cuts, although McComb was not prepared to give details.
Last month Liz Claiborne said it was selling its Mexx business to a joint venture led by the private equity firm The Gores Group. The company said the deal would give it $85m and an 18.75% equity stake in the joint venture.

McComb, who has served as CEO since November 2006, said that the company is not planning on any other major divestitures: “There's really nothing available left for sale in the cupboard," he said.

Burberry powers ahead as fears of luxury slowdown prove unfounded

2011-10-12T11:44:00.001+01:00

Anyone expecting signs of a slowdown at Burberry was in for a shock early Wednesday as the British luxury firm reporting yet another quarter of smashed forecasts and surging revenue. “Crisis, what crisis?” was the overall tone of its trading update as it reported strength across regions and categories.

Do what about those numbers? Analysts had expected its revenue to reach £448m in the three months to end-September but Burberry actually sold £463m ($723m) worth of goods. That was a 29% increase, almost as good as the 30% rise it saw in Q1. For the first half as a whole, total sales rose 30% to £830m (currency-neutral).

It was helped by strong demand from China – disappointing the doom-mongers who had said Chinese demand was likely to be slowing – and also by new stores, new products and healthy demand around the world.

Importantly, the company’s same-store sales growth accelerated to 16% from 15% in Q1, with Chinese comps settling at around 30%. Stores in key cities such as New York, London, Paris, Hong Kong and Dubai were key to the same-store sales growth, as were core product categories such as outerwear and large leathergoods.

The company said that, despite economic clouds in Europe and the US plus fears among analysts that China’s enthusiasm for buying high-end goods could wane, it would stick with its expansion plans but is “fully prepared to respond appropriately should we see any significant change in luxury demand."

But a slowdown does not appear to be on the agenda at the moment. In Q2, currency-neutral sales at Burberry’s wholly-owned stores rose 44% to £528m while wholesale revenue rose 9% to £248m. This latter figure was led by trading in the Americas, in emerging markets and in travel retail while new initiatives including men's accessories and tailoring were also important.

Although wholesale revenue in H2 is expected to grow only in the mid-single digits, this is mainly because of a planned reclassification of some stores into the retail category and a rationalisation of the firm’s European/US wholesale outlets.

Performance detail

Burberry said retail sales in the first half increased by 45% on an underlying basis (up 44% reported). Up to the anniversary of their acquisition, the stores in China contributed 14% to this underlying growth, with new space in all regions generating a further 15%.

Comparable store sales increased by 16% in the first half. Mainline stores further increased their penetration and all four regions delivered double-digit mainline comparable growth in the second quarter. Flagship markets including New York and San Francisco, London and Paris, Hong Kong, Taipei and Dubai were among the strongest performers.

Comparable store sales growth in China continued at around 30%, helped by the ongoing implementation of global processes and retail disciplines. Sales in the acquired stores were not included in Burberry's 16% comparable growth until September 1, the anniversary of the acquisition.

In mainline stores globally, “the consistent execution of key strategies again drove revenue growth and average selling prices”. Core outerwear and large leathergoods contributed half of the growth, while the increased focus on Burberry London drove outperformance. Replenishment products increased as a percentage of sales in every major category.

Burberry opened a net eight mainline stores in the first half, including two in India and two childrenswear stores in the Middle East and Hong Kong. The brand's presence was strengthened in European department store concessions and the first concession in Canada was opened. Average retail selling space increased by 14% in the first half, with the acquired Chinese stores adding a further 11%.

Wholesale revenue excluding China grew by 20% on an underlying basis in the first half, slightly ahead of guidance. There was particular strength in Americas, Emerging Markets and Travel Retail. Key merchandising strategies including shoes, childrenswear, men's tailoring and men's accessories performed strongly.

In June, five stores in Saudi Arabia were converted from franchise to retail through a joint operation. Burberry finished the half with 52 franchise stores, mainly in Emerging Markets, with about five franchise openings planned for the second half.

Total wholesale revenue grew by 9% underlying in the first half (up 10% reported).

Licensing revenue increased by 4% on an underlying basis in the first half (up 11% reported), consistent with full year guidance. The step-up in royalty income from the Japanese apparel license and good growth from the global fragrance, eyewear and timepiece licenses more than offset the impact of the planned termination of certain Japanese non-apparel and the final regional menswear licenses.

Burberry Body, the new fragrance for women, was launched in-store and online during September, supported by the use of both social media and outdoor advertising, further extending reach and awareness of the Burberry brand.

Outlook

For the second half of FY 2011/12, average retail selling space is planned to increase by about 15%. Burberry expects to open a net eight to 10 mainline stores, including in China, Latin America and a flagship in Paris.

In the second half, the planned shift from wholesale to retail continues, with the conversion of the five Saudi Arabia stores and menswear in Spain moving to a concession model. Further rationalisation of the brand's distribution in the US and Europe continues. As a result, against a period of tougher comparatives, Burberry expects wholesale revenue to increase by a mid single-digit percentage at constant exchange rates in the second half.

For the full year, Burberry continues to expect licensing revenue at constant exchange rates to increase by a mid single-digit percentage. Licensing revenue currency-neutral is still expected to increase by around 10%.

Mainland China's holiday week sales “still golden”

2011-10-11T12:01:00.000+01:00

Retail sales on the Chinese mainland remained robust during the week-long National Day holiday despite fears over the economy, according to financial experts.　

"The Golden Week is still golden," Merrill Lynch (Hong Kong) economists Lu Ting and Zhi Xiaojia wrote in a research note Monday.

"Markets are nervous about the contracting home sales," the economists said. "But we should note that China's consumption could also get a boost, if people spend less on investing in homes."

They expect consumption growth to remain stable thanks to rapid wage growth, increasing household wealth and people's confidence in the domestic economy.

Mainland consumers spent CNY696bn ($109.6bn) in stores and restaurants from October 1-7, up 17.5% from a year earlier, according to statistics released by the Ministry of Commerce on Friday. The growth is slightly above the average pace in the first eight months, which is 16.9%.

However, growth in 2010 and 2009 was 19.5% and 18%, respectively, and analysts said the inflation-adjusted growth rate of retail sales for this year was lower than that for 2010.

Strong home appliance sales continued to be a major driver for retail sales. Jewellery sales also saw significant year-on-year growth bolstered by weddings and the recent slump in gold prices.

Meanwhile, rore middle- and upper-middle-class households chose to spend their holiday overseas to avoid the crowds at the domestic tourist sites.

Mainland bank card association China UnionPay said overseas payments by mainland card holders soared 48% during the Golden Week holiday, outpacing the domestic payment growth of 32%.

US retailers get September lift ahead of Holiday push

2011-10-07T11:31:00.002+01:00

September, the vacuum between the end of Back to School and the start of the Holiday season saw US retailers' September sales hit mostly positive territory with markdowns helping clear the way for the festive selling season.

The 23 retailers tracked by Thomson Reuters reported a 5.1% rise in same-store sales last month, beating analysts’ expectations for a 4.6% rise. A year ago, comps collectively rose 2.7%.

Research group Retail Metrics said same-store sales last month grew 5.8%, beating forecasts for a 4.9% increase.

Chain-store sales rose 5.5% on-year, according to the International Council of Shopping Centers (ICSC). Luxury sales rose 10.4% and continued to be a key driver of total sales.

"Sales, although receiving a lift from fuel, still posted a very healthy gain for the month of September," said Michael P Niemira, vice-president of research and chief economist for ICSC. "While luxury was
once again a key driver of retail spending, new or temporary product lines at mass merchants aided in lifting industry sales as well," Niemira added.

ICSC expects that October will continue this same picture with sales up around 5%.

Limited Brands, Zumiez and The Buckle led the September successes with double-digit comps gains while a clutch of the major players – notably Target, up 5.3%, and Macy’s, up 4.9% - all beat analysts’ views last month.

At the other end of the scale, JC Penney fell 0.6% while Gap remained in the doldrums, down 4% and in line with analysts' projections, and Wet Seal suffered a 0.3% drop instead of the 3.8% rise was expected.
Retailers mostly remained upbeat in September and were either cautiously optimistic or simply uncertain of what the coming trading months will bring.

"Looking at consumer confidence, employment and stock-market volatility, I would think sales would begin slowing going into the Holiday season," Barbara Kahn, director of the Jay Baker Retailing Center at the Wharton School told The Wall Street Journal. "That makes the Holiday season itself hard to predict."

News lead image: Pink for Limited Brands

Steve Jobs dies, Apple mourns loss of "visionary" founder

2011-10-06T12:17:00.000+01:00

Apple chairman Steve Jobs has died following a long battle with pancreatic cancer. He leaves a wife, four children, and a company whose products dominate the consumer tech world in a way no other can. He also leaves millions of consumers who see Apple gadgets not just as products but as devices they cannot do without and with which many feel an emotional connection.

Apple itself has been left in excellent shape, although speculation is already starting about the impact of Jobs' death on the company. CEO Tim Cook has been a key member of the management team for many years and his executive squad has also been in place during the launch of such products as the iMac, iPhone, iPad and the iTunes store. But when a founder has been so closely associated with a company's success, there is always nervousness about the business in the transitional period after that founder is gone.

Flags outside Apple's HQ are flying at half mast and some consumers have even held vigils outside Apple stores around the world.

US president Barack Obama called him a "visionary" (a word that is most frequently used to describe him) and Microsoft found Bill Gates said: "For those of us lucky enough to get to work with him, it's been an insanely great honour."

"Despite all he accomplished, it feels like he was just getting started," Disney CEO Robert Iger said.

The death of the man who helped change the face of consumer electronics, and also affected the way consumers interact with the internet, did not come as a surprise, especially after he stepped down as Apple CEO only weeks ago.

He announced n 2004 that he had pancreatic cancer and in 2009 he underwent a liver transplant. In the past seven year he had stepped back from running Apple more than once and the recent move from CEO to chairman led to further speculation about his health.

But that lack of surprise has not lessened the impact on the people who worked closely with him, nor on the consumers who bought his products.

Jobs was a hands-on manager at Apple with a staggering attention to detail and a deep understanding of how to improve on niche technology to make millions of consumers see it as a must-have.

He also knew how to spot talent and built a team of tech wizards and marketers who had a profound impact on the devices we use, the way we buy them and the content we use on them.

Between them, the CEO and his team took technologies such as MP3players, touchscreen phones, personal computers, tablet computers, and music download services and made the world feel that not only could they not live without them but that they had to have the Apple version rather than any other.

His impact on these technologies was such that many consumers today still think Apple invented them and rival companies still see Apple's version as the standard that they have to beat.

Jobs was born in 1955 to a single mother and adopted at a week old by a couple in Mountain view, California. He grew up in the area he would later help transform into Silicon Valley, the centre of the US consumer tech industry. He got a summer job at Hewlett-Packard during high school and met Steve Wozniak, with whom he would later found Apple.

He dropped out of college but continued to take tech jobs, while also studying subjects such as calligraphy and visiting India. Many see such experiences and events as having influenced him to make his products more aesthetically pleasing than those of rivals, and to add elements to the design that make Apple users have a stronger emotional connection with their gadgets. He once described his aim as making products that were at "the intersection of art and technology.

Apple is currently the highest value tech company in the world and - depending on the stock market at any given time - occasionally the highest value business in any category globally. It has a value of around $350bn. But that was never the expectation when it was founded in his parents' garage in 1976 at a time when computers were giant devices with little more power than a modern pocket calculator.

Apple became a pioneer in personal computing but Jobs was forced out of the now-listed company in 1985. His relationship with management had broken down and his blue-sky thinking was seen as an expensive drain on resources that could have no benefit on the company.

During his time away, he co-founded Pixar, the computer animation pioneer, married in a Buddhist ceremony in 1991, and founded the NeXT Computer company that an ailing Apple bought from him in 1996. This brought Jobs back into the fold and saw Apple begin its ascent to consumer tech dominance.

Since then, Apple has launched a raft of products that changed the sectors they occupied, turning itself from a computer specialist into a consumer products giant with stores in malls worldwide.

The company has innovated not just with its technology but with its marketing and its approach to retail and display. The recent discovery of several fake Apple stores in China may have been seen as an amusing news story by many but it was also a testament to the impact of the Apple Jobs created around the world.

That impact is not one that has garnered praise alone. Over the years, lawsuits between Apple, Xerox, Microsoft, Samsung, HTC and others have underscored the fierce competition in the consumer tech sector and the huge profits to be made from particular technologies.

Consumers and critics have also been frustrated at Apple's "we know best" approach that has seen it controlling the way its products are sold, the features its products do or do not contain, and not supporting older versions of its products. And Steve Jobs, the manager with the obsessive attention to detail, has been seen as being at the centre of this approach. "Don't let the noise of others' opinions drown out your own inner voice," he once said.

But it cannot be denied that, with the company being more valuable than almost any other company on the planet, that approach made him just about the most successful businessman of all time. The products his company makes are not just used, they are loved. Who can criticise that?

Miu Miu and Louis Vuitton go girlie-sweet-with-an-edge as SS12 shows end

2011-10-06T12:15:00.000+01:00

The month of spring/summer 2012 womenswear collections finished on a high on Tuesday as Miuccia Prada and her team played with sweet, girlie looks at Miu and Miu and Marc Jacobs did much the same at Louis Vuitton.

Miu Miu’s butter-wouldn’t-melt sweet girlie looks were given a menacing and slightly seditious twist with glowing red eyeshadow and killer-toed pointed boots hinting at something darkly provocative

Key items were kept to a simple permutation of sweet A-line dresses and high waisted half circle schoolgirl skirts, teamed with prim corsage-trimmed blouses and Sunday-best duster coats or velvet tied shoulder capelets, all worked in a roster of fabrications.

The low cut cropped Lolita blouses, off the shoulder necklines, bra tops peaking above smocked bandeau dresses and the tightly wrapped cross-over shirts brought a more subtly subversive look into play before order was restored with naïve folkloric style patchworks, recoloured lace and sleek satin velvet tied coats that turned our bad girl back into her own sweet self.

Footwear came as ultra-pointed velvet ankle boots and high-vamped shoes, western style cowboy boots with appliqued 3-D rose trims, and printed pointed-toe boots

Over at Louis Vuitton earlier in the day, we saw a fusion of those 1950s and 60s silhouettes that we have seen elsewhere this season, with straight-cut sheaths and dropped-waist bell skirts all reaching that new longer length, ending just below the knee.

There were duster coats, boxy jacket skirt suits and sheer shirts with exaggerated lace collars - the shapes were simple enough, but detail was key. Items were worked in daisy motif broderie veiled with organza layers, sometimes further embellished with plastic daisy appliqué, degradé sequins and flyaway feather fringing. As a counterbalance to all the sweetness and light, Jacobs then added crop-sleeved biker jackets and coats to the mix, offered in powdered or polished pastel-coloured alligator.

Colour came as fondants pales of peach, lemon, mint and soft sky blue with white, cornflower and navy blue.

Footwear included pointed courts and mules with metal or contrast-coloured toecaps while those all-important accessories took in plastic Speedy bags, open basket-weave bags, monogrammed umbrellas, tiaras and bands hairbands, silver necklaces with wishbone or feather-and-pearl pendants.

Chanel and McQueen dive into oceans for SS12 as fantasy aquatic themes dominate

2011-10-05T14:19:00.001+01:00

The round of runway shows may be coming to a close but Fashion Month always goes out with a bang rather than a whimper simply because some of the industry’s biggest names show at the end of the Paris schedule. Miu Miu and Louis Vuitton are today but yesterday was the turn of Karl Lagerfeld at Chanel and Sarah Burton at Alexander McQueen. And what did they come up with? Well, both of them seem to have a serious obsession with the oceans.

Karl Lagerfeld’s cool white underwater kingdom was the perfect antidote to Paris’s unseasonal heatwave, as the designer tapped into the aquatic trend that has preoccupied many designers this season. The collection shimmered and sparkled under an ocean of sequins, cellophane tweeds and iridescent organza.

The look was Little Mermaid but beneath the obvious theme elements it boiled down to some highly wearable, mostly waisted pieces or simple boxy layers.

Key items were the classic Chanel cardigan suit which came in the softest tweed with pearl buttons, pearlescent appliquéd edging and strands of pearls replacing the traditional gold chain belt, while soft waisted jackets were teamed with millefeuille layered skirts in weightless plisse silk. Tweed dresses sported dropped waists or panniers of organza sculpted to resemble undulating sea anemones and soft tendrils of chiffon drifting like seaweed caught in the tide. A sportier element was brought into play with drawstring skirts and athletic shorts, teamed with sequinned jackets and cropped tied tops or mesh-like knits embedded with crystals and pearls.

A palette of underwater pales, often with a pearlescent quality that rendered them almost luminous, was offset with black and soft white. Think shell pink, sea foam, limpet grey, aquatic blue, pale aquamarine, coral and a sliver of silver.

Fabrics had a weightless feel with the lightest tweeds and summer boucles, spangled with pearly sequins or shot with cellophane yarns, creating an almost translucent effect. Others were so lightly constructed they appeared as mesh-like weaves. They were teamed with the softest plisse silks and sheers, iridescent satins and penalised leathers to resemble the translucence of jellyfish.

Meanwhile, Alexander McQueen collections under Lee McQueen always hovered somewhere between couture and costume, and under the leadership of Sarah Burton things are no different. Winter’s ice maidens have morphed into summer’s creatures of the deep, but either way the looks are always breathtakingly crafted, fiercely sculpted and historically slanted.

The silhouette veered from hourglass to super short swing. Key items included sculpted body-con tailleurs, including one in intricately laser-cut black leather. They were made up of strong shouldered jackets with fluted sleeves and pencil skirts hitting below the knee in a swishy kick flare pelmet. Other jackets featured cascading ruffle closures and undulating ruffled peplums while dresses were given hourglass shaping with curvaceous waspie belts.

Short fit-and-flare babydoll dresses arrived in clouds of shredded millefeuille chiffon while corseted gowns featured micro-beaded hi-lo sheer skirts and coral twig shoulder shrugs with high necks.

Pilati trumps doubters as sophistication rules at Yves Saint Laurent

2011-10-04T12:29:00.000+01:00

It cannot have been easy putting a spring/summer collection together knowing the fashion rumour mill was in overdrive, suggesting an imminent departure from Yves Saint Laurent, but Stefano Pilati came up trumps, silencing his critics in the process.

Whether he stays or goes, he certainly understands the house’s style with his signature brand of sophisticated high-end dressing. It may not have a lot to do with the hottest trends on the runways, but that is the dilemma facing several older established houses in a fast-paced fashion world and one that many learn to turn into a benefit.

Pilati’s look for SS12 was pure elegance based on an A-line or trapeze-shaped silhouette elongated for evening.

Key items showed neat tailoring in boxy trapeze jackets over A-line skirts with hemline details in the form of slits or inset godets as Pilati continuing his foray into architectural silhouettes with sloping shoulders and angled sleeveheads.

Trapeze lines also informed the silhouette for his outerwear creating an almost seasonless look when combined with the jewel-toned palette.

But it was in the eveningwear stakes where the designer scored most highly. Perfectly crafted halter tops were tucked into richly patterned palazzo pants and floor-sweeping maxi skirts. Also strong was a beautifully weightless sapphire blue halter dress with a peplum etched skirt and elegant spangled black evening gowns.

Colour centred on an intense palette of rich jewel tones – think garnet, sapphire, malachite, amethyst offset with midnight blue, raspberry, candy pink, petrol, steel, seafoam and black.

For footwear, there were block heeled high vamp courts with rounded toes and a metal plaque trim; double ankle strap sandals with jewelled toes or metal toe caps, block heeled suede platforms with metal trims.

Philo marches to her own beat in Paris

2011-10-03T11:57:00.004+01:00

Phoebe Philo is such a big name in – and a major influence on – fashion these days that her Celine shows are always must-see events. So it was at the weekend when she bucked the trends seen so far on the spring/summer runways, marching to her own beat with an ultra sharp collection of uniform-inspired looks.

There was nothing fluffy or unnecessary in her vision or next spring, everything was buttoned to the neck and crisply belted. It was plain and simple and instantly covetable.

That uniform precision look came with sharp, precise silhouettes or with unexpected volume through reworked proportions.

Key items included the crisp white shirt worked with neat collars, flat fronts and panelled details, teamed with matching pencil or hip-slung crystal pleat midi skirts tethered with one of the wide belts that anchored the collection.

Tailoring had military pocket detailing on exaggerated jacket shapes or came with sculpted volume through the tapered sleeve, mirrored with a bell-shaped hipline. There were gold buttons, covered buckles on wide belts, fan pleats, grosgrain trims on jetted pockets, military pockets and sculpted peplums.

Pant shapes veered from low-slung and flared to ultra wide with contrast band details at the hem, perfect to team with Philo’s peplum edged T-shaped tops in leather, sharp pressed cotton or leather and suede panelled treatments.

Philo’s colour palette is always one to watch and this time a seasonless palette of tonal whites - with the emphasis on crisp paper white - was offset with burgundy and bottle green with black and an eye-popping accent of lacquer red

Footwear featured high platform courts with an ultra-deep ankle strap – best in black suede with a lacquer red platform. Meanwhile accompanying bags were a surprisingly low-key with flat hand-held purse shapes in bottle, yellow or with sharp red piping details.

Eurozone retail sales decline slows in September weighed down by Italian weakness

2011-09-30T11:55:00.001+01:00

Eurozone retail sales continued to fall in September, albeit at a slower rate, with France and Germany both showing growth, as the overall figure was pulled down by weakness in Italy, new data from Markit reveals.

Its Eurozone Retail Purchasing Managers’ Index (PMI) – a single-figure indicator of changes in the value of sales at retailers – came in at 49.6 in September. A reading greater than 50 indicates sales growth and below 50 a contraction. The fact that September’s reading was higher than August’s 48 implies that sales revenues only slipped slightly in the later month.

During the month, Italy remained the eurozone’s weakest link for retail, registering a seventh consecutive monthly drop. In contrast, Germany retail sales registered their 12th straight month of growth, although the pace of growth slowed to a weak rate. French retail sales also rose for the first time since May, but the rate of growth was again very modest.

Year-on-year sales have fallen for the past four months, but the decline in September was the weakest in this sequence.

In Germany, sales rose at the strongest annual pace since April, while year-on-year growth resumed in France following a three-month period of decline. Yearly sales in Italy declined for the 20th successive month, and the pace of contraction remained substantial.

"The latest Eurozone retail PMI survey results again highlighted economic disparities in the single currency area, as German and French retailers continued to outperform their counterparts in the next-largest economy, Italy,” said Markit senior economist Trevor Balchin.

“German retailers have enjoyed the longest sequence of continuous sales growth since at least 2004, though the momentum has slowed during the third quarter. In contrast, Italian retail sales have seen steep declines every month since March. France is somewhere in between, with sales rising in September following a three-month downturn. Cost pressures at retailers have yet to subside, in contrast to the recent trends seen in manufacturing and services."

Lead story picture: LaRinascente, Milan

Bullish H&M profits dip on costs as expansion plans accelerate, to delay US online launch

2011-09-29T12:16:00.000+01:00

Value fashion giant Hennes & Mauritz posted Thursday a better-than-expected 15% dip in Q3 net profit but said it will open more stores than originally planned this year and next. At 07:06 GMT, H&M shares were up 3.6% at SEK202.80 ($30.07), outperforming the broader market.

"H&M continues to gain market share in a challenging environment for the fashion retail industry ... We are increasing our expansion for full-year 2011 to approximately 265 new stores net, from the originally planned 250," a bullish chief executive Karl-Johan Persson said in a statement.

China, the UK, the US and Germany will be the company's largest expansion markets. But the group also said it was delaying the launch of its online business to autumn 2012 from spring next year.

The world's second-largest fashion retailer said net profit for the quarter to the end of August dipped to SEK3.59bn ($529m) from SEK4.24bn a year earlier. Analysts had expected SEK3.39bn.

The company said the strengthening of the Swedish krona continued to have a negative impact on reported profits in the quarter. The company was also hit by a spike in cotton prices and other input costs.

Earlier this month, the Swedish retailer reported that total Q3 sales rose to SEK26.91bn from SEK26.89bn a year earlier, despite a challenging retail environment. Comparables were tough and unfavourable weather in several European markets in the quarter hurt sales.

September sales were also hit by unseasonably warm weather, although sales between September 1 and September 27 in local currencies were up by 3%, it said.

Gross margin fell slightly to 58.6% from 60.5%, hit by cost inflation in sourcing markets, including high cotton prices, and a weaker US dollar relative to the Swedish krona. But the drop was less than analysts had expected.

"We expected that the markdowns had been a bigger issue in the third quarter, which would have caused a lower gross margin. Overall it's a strong development for H&M," he said.

Analysts expect H&M's gross margin and earnings to start growing again from Q4, thanks to easing input costs and more favourable currency effects.

H&M operates more than 2,300 stores in 40 countries with its bulk of sales coming in Europe.

UK retail sales fall at fastest pace for 16 months in September

2011-09-28T12:08:00.000+01:00

UK retail sales took a battering in September, tumbling at their fastest pace for 16 months and forcing retailers to brace themselves for what is expected to be a tough Holiday season.

According to a survey by the Confederation of British Industry (CBI), the UK’s retail sales balance slipped to -15 in September from -14 in August, marking its lowest point since May 2010. The sales balance measures the percentage of retailers reporting a rise in sales year-on-year minus those reporting adecline.

Underlying sales were even weaker, with the balance gauging the three-month moving average falling to -11 from -7, its lowest since August 2009. The three-month reading is important as it smoothes out monthly volatility.

The CBI survey of 74 retailers between August 24 and September 14 showed 24% of retailers said sales volumes were higher in September than over the corresponding period last year while 39% said they were lower.

"With the consumer squeeze set to get tighter with the winter utility bills rise, we expect retailers will face a challenging October," said Judith McKenna, COO of Wal-Mart's Asda supermarket group and head of the CBI's retail panel.

· September’s sales falls compounded an already delicate financial balance for many retailers and could push many big names over the edge when rent payments become due, according to insolvency trade association R3. Frances Coulson, R3 president, said heavy discounting and rising input prices pushed firms closer to the edge of bankruptcy: "Last time round, the rent day identified many retail businesses that had survived the recession [but] did not have the funds to meet their rental obligations. They had depleted their reserves to stay afloat and had no contingency plan for additional costs, unexpected outgoings or a fall in sales," she said. "Over the preceding three months we have seen little improvement in retail sales, economic growth or consumers increasing their expenditure. For that reason we are likely to see further retail casualties."

Global retailers call for decisive action on euro debt crisis

2011-09-27T13:08:00.000+01:00

Global retailers and commentators Monday expressed their frustration that Europe's political leaders are not acting swiftly to deal with the eurozone debt crisis and stop contagion in the continent and beyond.

Speaking at the World Retail Congress in Berlin, Tony DeNunzio, chairman of Maxeda, said: "The crisis is causing investors to make decisions not to invest, that means consumers are also making those decisions. There's a chance of a real economic downturn because of the political impasse."

His comments were echoed by many retailers during the first day of the Congress in what was the dominant theme of discussions. Mark Olbrich, executive director of Komex, added: "I'm incredulous at how long this is taking," and called for governments to take decisive action quickly.

Their fears are well founded. Economist Dr Ira Kalish, director of global research at Deloitte said further transfers of funds from richer European nations to poorer nations are required. "The bailouts so far have not done enough to suppress fear and contagion; and political leaders so far have been unable to instil confidence."

Kalish outlined the potential fallout of the debt crisis further afield: "If the eurozone fails and there is a deep recession in Europe it will have a negative impact on the US." There is a risk of a double dip recesssion, he added, in a market that is otherwise stalled but seeing slow growth and positive consumer spending patterns.

Deloitte's overview of global economic trends also highlighted the widening gap between household income levels in the US. A disproportionate amount of growth and consumer spending will come from higher income households. "Looking ahead, spending by US consumers will be constrained by incomes. The impact will be a continuing bifurcation of retail; discounters and retailers offering strong customer experiences will do well."

Within Asia, Kalish sounded a cautious note around growth in China. "A slowdown in growth is under way, China's economy is overheated and inflation is running at 6%. A property bubble has developed and there are some major problems as a result of excessive investment and inadequate consumer spending. Fifty per cent of GDP is in fixed assets and consumer spending only makes up 35% of GDP.

The result, says Kalish, is a high-speed rail system no one can afford, and a glut of shopping centres with 90% vacant selling space.

The solutions are the privatisation of state-run companies and banks, less investment in property and a greater social safety net.

Kalish also highlighted the long-term issue with China’s one child policy which will lead to a labour shortage and out upward pressure on wages: "China's ageing population is going to grow old before it grows rich."

• A Monday survey of 100 retailers with annual turnover of more than $1bn showed western European store groups more pessimistic about domestic consumer confidence than those in any other part of the world, except Australia. On a scale from -5 for deep pessimism to +5 for high levels of optimism, western Europe was -1.2, just ahead of Australia on -1.3, but below north America on -0.3. Retailers elsewhere were more positive, producing scores of +2.5 in South America and +2.8 in Asia.

Kane does basketball babes with youthful collection at Versus

2011-09-26T14:11:00.000+01:00

Sportswear has been one of the season’s top trends so far, and Sunday night in Milan Versus offered one of the most literal translations yet.

Christopher Kane and Donatella Versace took inspiration from basketball uniforms and courtside cheerleaders. The styling was relatively subtle and veered away from fancy dress but the mini recreation of a basketball court on the runway made the message crystal clear.

The silhouette was short and sporty with minidresses the key product vehicle. There were stretch knit tube dresses, raglan-sleeved body-con styles piped in black and dropped-waist cheerleader looks with reverse-coloured strip fringe hems.

Also on show were sheer wide-leg pants with drawstring waists, snug-fitting zip-through jackets, clingy knit tube skirts and sheer knit tanks.

Colour focused on iced pales of pink, mint, lemon and blue with graphic black while fabric mixed high shine jersey, chiffon, silk, sheer stretch knits, and glitter yarns.

Fine zigzags taken from an athlete’s heartbeat recorded on a cardio electrogram were the main pattern message.

Prada taps into key spring trends, celebrates 50s Americana

2011-09-23T11:07:00.000+01:00

Prada’s spring/summer 2012 show was an unusual sight on Thursday as the Italian brand sent out a collection completely in tune with emerging fashion trends, rather than one giant step ahead of them.

Perhaps it was the uncertain economy that encouraged a certain amount of playing safe. Not that Prada needs to be cautious given the recent 21%-plus revenue rise it reported this week with CEO Patrizio Bertelli also saying the company is seeing no slowdown with both Europe and the US proving strong at the moment.

Back with the show; Miuccia Prada and her team expanded the 1950s look first seen on the menswear runway in June and presented one of the label’s prettiest collections for some time. It was an all-American dream, celebrating a world of blonde pin-ups, poolside cocktails, the cash-flash of baby pink Cadillacs and Elvis on the juke box.

The collection’s major print story is likely to influence retail worldwide for next spring with a hand drawn 50s-style conversational car print, air brushed hot wheels car motifs and appliqués worked as placements, while a hot wheels flame motif was worked as a border.

Key items included boxy duster coats, flirty on-the-knee crystal pleat skirts, slim pencil skirts, cocooning Harrington jackets, soft pleated blouses, bandeau tops and waisted full skirted dresses.

These were dress-up clothes but still with a simple laid-back edge even when the dusters and Harringtons came in rich floral guipure, fresh broderie Anglaise or double faced satin with studded rhinestone trim.

She brought swimwear into the mix too, but the one-piece swimsuits were strictly for poolside lounging with their va-va-voom silhouettes, appliqué lace rose and jewelled trims

The palette was as sweet as a tray of home-baked cupcakes, all fondant lemon, vanilla, orange, baby blue and sugar pink. As ever there were unexpected offbeat colour mixes that gave the collection its edge – pale aqua and marron, camel with fondant orange, tan and malachite with a shot of vibrant red and of course black

And as far as details are concerned, it’s official – elastic waists are cool, appearing on Prada’s new pull-on skirt shapes along with shirring and dressmaker-style pleated tucks.

But what about those real engines of Prada’s growth, the footwear and accessories? On shoes, car-inspired detailing included hot wheels flames as appliqués or 3-D trims shooting from the back of needle-thin heels. Piped patent sandals and decorative wedges (with Cadillac-inspired trims like metal fenders and bullet-shaped rear lights embedded in the heel), also looked good.

Next summer’s must-have eyewear from the label came in green or baby pink with cat’s eye frames, working well with while ladylike framed bags that had contrast trims and rhinestone studs. Soft clutch bags, some with appliqué lace trims, with others in crocodile are also likely to be influential, as will the jewellery that had a girlie feel with pretty rose necklaces and matching earrings.

Art Deco nostalgia and Blade Runner inspire Gucci’s 90th anniversary runway collection

2011-09-22T11:05:00.000+01:00

The Gucci spring/summer 2012 collection at Milan Fashion Week on Wednesday leant heavily on some of the most iconic images of Art Deco, characterised by gold and black trimmings, feather handbags and dinner jackets.

However, the look was strictly elegant than seductive… a Gucci statement said it was like "a cross between Metropolis and Blade Runner".

Androgynous-looking models swept down the catwalk with chiffon neck scarves fluttering in the wind and gold belts twinkling in the low lights.

The Sheraton hotel in Milan which hosted show was decorated to match with gold mosaic columns, muted colours and hard lines.

"I wanted to explore an optical side of feminine beauty by creating a sculptural glamour for the Gucci woman," said creative director Frida Giannini.

"It's a fusion of elements of our DNA, starting with the history of design and photography. It's the opulence of the era of hedonism," she said, likening the designs to famous images by legendary Art Deco photographer Man Ray.

Sequined Flapper dresses complete with fluttering fringes and pleats shared the runway with cropped jackets and high-waisted, slim-fitting pants that were at the same time minimalist and masculine.

Motifs gleaned from the Gucci archives from animal prints to tiger heads and the trademark horse were given a contemporary twist by using modern graphics including a 3D effect and high-tech fabrics and stitching.

The Deco de-luxe look’s silhouette was drop-waisted and relaxed, elongated with boxy jacketweights
Key items included the elongated straight legged pant was a key item, coming with gold buttoned ankle detailing or a contrast tuxedo stripe, teamed with cropped boxy jacket shapes worked with gold angular banding, signature Gucci chain closures or with intricate striped fringes.

Angled tux-style revers continued the Deco theme as did a biker hybrid in bold graphic stripes worked in the collection’s palette of black, white, gold and emerald.

Colour centred on a tight Deco-inspired palette of black and white, gold and emerald or shagreen green

Boutique Jacob wins sign-off on recovery plan

2011-09-21T11:02:00.000+01:00

Canada’s Boutique Jacob Inc looks set to be resurrected after the Superior Court of Quebec sanctioned Monday a ‘yes’ vote by the retailer’s creditors on a Plan of Arrangement.

The CICB has been supporting Jacob since March and under the new plan it will continue to do so by offering it a C$20m operating line of credit as of October, Canada NewsWire reported.

Jacob will also be supported by the Business Development Bank of Canada (BDC) with a C$7m loan.

"Today, we are experiencing a defining moment in Jacob's transformation. We are starting fresh on new fundamentals that are much more solid," said president and founder Joey Basmaji.

"I am extremely proud of all that we have accomplished since the beginning of our restructuring process in November 2010.”

British seaside inspires Mulberry as Saunders brings 50s Miami to London

2011-09-19T12:15:00.001+01:00

The great British summer was a key theme at London Fashion Week over the weekend as a host of designers took inspiration from vacations and days at the seaside for spring/summer 2012.

Mulberry served ice cream and pink lemonade outside its show on Sunday while the collection itself referenced kitsch arcades and pier rides through a selection of girly summertime looks.

Creative director Emma Hill poked fun at British summer weather by pairing drawstring-waist dresses with waterproof outerwear such as swing shaped cagoules in denim or treated cotton, long macs or cropped parkas and thermal leggings, while sporty summer pieces included retro curved-hem running shorts, snug-fitting raglan-sleeved sweatshirts and baseball bomber jackets. There was also a heavy emphasis on maxi lengths for loose-fit dresses or sheer tulle skirts topped with leather biker jackets.

At Jonathan Saunders, beautifully judged silhouettes perfectly melded to his masterly palette and delicate prints in a collection that had a 50s Miami look, confirming WGSN’s Cinematic macro trend.

Key items included a longer-length 50s waisted dress with scoop or slashed neckline, which served as a canvas for Saunders' pretty prints, while there were retro-inspired casual pieces in the mix with soft mismatched pyjama pants and breezy poolside shirts, shirt jacket and shorts, swinging tucked-hem dirndls, slouchy boyfriend knits and sheer camisoles, all worked in a palette of light-infused pastels and mismatched prints. Solid colour provided an anchor with neat SB blazers and easy swing coats.

Over at Acne, designer Jonny Johansson worked spicy colours of rust, ochre and orange into street-sport shapes and loose, oversized pieces. It was all about the scale mix, as super-wide cropped pants and culottes were offset with cropped sweaters, while singular looks saw a corset-bodiced prom dress with full skirt paired with a capacious ochre parka, while an oversized jean jacket cut wide and voluminous was teamed with a narrow midi-length denim skirt. Elsewhere there were motorcycle pants, skirts and cropped jackets, structured shell tops – sometimes with an on-trend but awkward-looking peplum – and knee-length wrap skirts.

Meanwhile husband-and-wife design team Clements Ribeiro, now firmly reinstated on the London schedule, brought their own brand of sweet femininity into play for spring/summer 2012 with beautifully wrought prints and coordinating knitwear.

The collection played on a simple riff of elongated shirt dresses, sheaths and narrow skirt shapes, with soft pull-on pants topped with understated shell tops or pretty coordinated knitwear and a soft edge-to-edge tie-belt linen coat with printed silk trims.

The collection scored in the mismatched print combinations, especially the optic distorted chequerboard patterns offset with chevron striped lace. That same lace was overprinted and scalloped for midi-length columnar dresses. Knits were colour-blocked, worked in coordinated stripes or with delicate lace trims, and for evening simple floor-sweeping T-shaped dresses with a curved split hemline.

Richard Nicoll took a trip to the 60s for summer, referencing Henri-Georges Clouzot's unfinished 1966 work L'Enfer.

Opening the show was a softly sculpted neoprene jacket which alluded to an on-trend sportswear theme – comfortable territory for Nicoll – but instead things took a more girlish turn with delicate layered tunics and T-shirts worn over columnar maxiskirts, spaghetti-strapped chemise dresses, A-line princess coats and swingy trapeze-line tops and minidresses with circular wired hems that had a 60s vibe, particularly when offered in clear plastic à la or Cardin.

Elsewhere there were glittery knit sweaters and twinsets, signature corsetry, pointed cone cups and wide-leg pants offering an alternative layering piece.

Marc Jacobs plays with colour, texture and shape as New York Fashion Week closes

2011-09-16T12:51:00.000+01:00

New York Fashion Week saved some of its biggest names until its last day with Marc Jacobs, Ralph Lauren and Calvin Klein all sharing their new ideas. Jacobs in particular presented buyers and fashion editors with a puzzle as they looked for easy buzzwords to sum up his spring/summer 2012 vision.

Forties headscarves, Country & Western ginghams and flapper-style fringing? Not to mention all the futuristic plastics, metallics and paillettes.

If we were looking to tie this collection into any of the emerging trends this week it would have to be the 1920s, but the thing about Jacobs is that he never quite fits neatly into any box and this collection was no different in that respect.

Opinions were divided on its success - not Jacobs at his game-changing best, some said, while others praised it for its audacious experimentation. But either way, it had plenty of wearable options and some interesting style statements.

The look was futuristic flapper with a silhouette that was drop-waisted and straight-cut. Key items included tiered fringe flapper dresses, simple columnar sheaths with banded hems or yokes and silk dresses with swagged and gathered dropped-waists.

There was also a sporty section of colour-blocked sweatshirts and zip-through track tops worn with hitched-up or swagged and gathered skirts. Elsewhere there were boxy jean jackets, trapeze-line princess coats and ultra cropped jackets sometimes layered atop sheer gingham Western shirts worn with ruffle-hem sequinned pencil skirts.

Colour focused on iridescent neutrals and cool ash grey with pops of primary yellow, electric blue and emerald. Black and navy were the key darks.

Fabric and knit took in cellophane organza and techno plastics, lamé chiffon, metallic tulle, paper finish and high gloss leathers, tinsel led silk, silicone, cotton, polyester, taffeta, silvery gazar, satin, nylon and lace.

Sporty Lim on track with winning runway performance

2011-09-15T12:52:00.001+01:00

Phillip Lim hit all the season’s high notes with a stellar catwalk collection Wednesday, checking off trends with every exit.

Lim made next summer’s sports chic theme believable with his breezy relaxed shapes and sporty layers; the palette of candied pastels was right on track and there was even a nod to 90s via cool stonewash denim.
Key items were loose-fits and roomy cuts lending each piece a sporty casualness – from tapered silk pants with zippered ankles and wispy silk racer tanks (vests) to the wide culottes with mesh inserts.

The modern take on sportif dressing saw T-shirts offered in breezy silks with flyaway back panels, an oversized sports jacket thrown over a loose silk jumpsuit and a simple sweater with cutaway shoulders and notched hemline paired with a simple bonded leather mini skirt in tonal neutral colours.

Outerwear was more obviously sporty with a lightweight lemon yellow cagoule with dipped hem and an upscaled jean jacket with torn-off sleeves and drawstring collar while delicate spaghetti-strapped dresses and camisoles provided feminine counterbalance.

The overall candied pastels palette included lilac, peach, lemon and shell pink with a barely-there mint, anchored with graphic black, white, khaki and stonewash denim blue.

Fabrics & knits were in breezy silks, silk chiffon, gazar, chintzed chino cotton, bonded leather, techno plastics, stonewash denim, grey marl jersey.

Accessories centred on zip-round clutch bags, bi-colour leather bags, squashy across-body bags (carried by hand) in tumbled lemon yellow leather. Footwear featured block-heeled peep-toes in powdery fish skin leather, high-shine silver leather or clear plastic with mirrored heel.

J Crew takes first steps onto runway as wearable elegance meets relaxed styling

2011-09-14T15:35:00.003+01:00

If there was any doubt that big league fashion week runway collections are as much about commerciality as the lower-key pre-collections then J Crew dispelled that Tuesday. The preppy apparel specialist made its runway debut with a series of eminently wearable looks, mixing a mouth-watering palette with feminine-but-casual pieces.

There was a subtle 1950s resort feel with a silhouette that was what used to be called ‘ladylike’ – below-knee lengths and more slouchy casual styling that still kept to the right side of elegant.

Every item was a standalone key piece, but the signature of this label being to mix and match, there were almost endless options. Midi skirts and dresses had a subtle retro feel, best when worked in sugar candy colours with a classic western denim shirt. Slim tailored pants were recurring pieces, best in mimosa yellow teamed with a white gypsy blouse, or in a vintage-style rose print with a matching peplum edged shell top.

Slouched tunic knits layered over easy pencil skirts or tailored resort shorts, while coats were neat, maybe in blazer stripes worn with a spotted bow blouse and denim shorts. Some had a more casual feel as in the navy sateen trench and a four-pocket yachting jacket.

Colour was a winner here with candy shop appeal for mix-and-match pieces in sea foam, bright jade, that mimosa yellow, candy pink, mandarin, lemon and palest lime offset with classic red, white and blue.

Print was also important with a vintage-style rose print on navy ground, leopard print, polka dots and a confetti-like all-over print in red white and blue. Blazer stripes, simple stripes, a broken diagonal check in blue and white also continued the classic print themes that have been a feature of New York.

Autumn/winter 2011/12's ad campaigns analysed

2011-09-13T15:34:00.002+01:00

Our full anaylsis of the autumn/winter 2011/12 ad campaigns is now live, pulling together some 300+ fashion brands and over 2,000 images into 10 key visual trends.

From the eye of a wicked thunderstorm to youth riots on the street, it’s a predominantly dark aesthetic for the season, although a sense of beauty prevails in classic portraiture and the visual richness of science and technology.

Here's a sneak preview of our top trend: "Dark and Stormy". Leaving behind the lurid fantasy of spring/summer 2011’s New Worlds, yet remaining firmly directed by Mother Nature, it finds inspiration in a turbulent landscape. Forget the mythological and instead consider a surge of reality where changing climates command attention and beauty is found in tumultuous weather conditions.

Subscribers can read the full report, here: wwww.wgsn.com

Rachel Arthur, Editor, media & marketing

Sporty vibe and power colour are key at marc by Marc Jacobs

2011-09-13T12:11:00.002+01:00

Marc Jacobs delivered a clean-cut structured collection full of preppy and sportswear reference points, given a new twist with a palette of pop brights and playful prints The look was clean-cut sportswear with a functional utility edge.

Key items included lightweight A-line commuter and trench macs that provided the perfect summer cover-ups for slim cigarette pants, casual chinos and tailored shorts. That androgynous look was compounded with neat button-down shirts or a big boxy masculine white shirt worn as a breezy shirtdress.

Slick A-line skirts were cropped thigh high while dresses came as simple colour blocked shifts.

Jacobs worked the season’s sportswear vibe in his colour blocked sweatshirt and striped shorts combo or in a cropped parka jacket and matching cuffed shorts. There was a foray into swim too with playful one-piece swimwear – best with a flirty peplum trim, while for evening the simple but glamorous combination of slim tailored pants and a bustier top.

Colour was also sporty and reflected the summer mood. Orange, methyl blue, muted brown, jade, electric blue, bone white, deep fuchsia and highlights of scarlet, flame, sand, marshmallow and birch.

Footwear, always an important category for this label, included toe-cap Mary Janes, ankle strap platforms, tan and burgundy loafers, closed-back wedge sandals and multi-coloured hi-top sneakers.

Alongside those were logo slide belts, canvas messenger bags, leather totes, cuff watches, transparent visors, canvas duffel bag, baseball caps, backpacks, zig-zag satchels, leather ball bag, patent leather clutch and silk ties.

UK August same-store sales dip, footwear, homewares suffer most

2011-09-06T13:02:00.001+01:00

UK retail sales growth slowed in August as consumers were unwilling to spend money on big-ticket items, according to the latest survey by the British Retail Consortium (BRC).

Footwear and homewares suffered the largest declines, despite price reductions.

Total sales increased 1.5% last month following a 2.5% rise in July and a 2.8% pick-up in August last year.
Same-store retail sales fell 0.6%, compared with a 0.6% increase in July and a 1% rise in August 2010. Economists had expected comp sales to be flat.

BRC director general Stephen Robertson said the current retail sector was a "tale of two halves", with food sales proving more resilient than non-food sales.

"Poor consumer confidence, high inflation and the ongoing squeeze on personal finances remain the biggest threats to the retail sector," said Robertson. "Sales of big-ticket items are very dependent on discounting and many retailers' margins are being cut to the bone."

He added the August riots were neither sufficiently widespread nor prolonged to have a major impact on the figures.

Speaking before the data was published, Howard Archer, chief UK economist at IHS Global Insight said: "Given the critical role of consumer spending in the economy, a weak survey would fuel mounting concerns that the UK economy will see very limited growth in the third quarter."

Mango's year-end profits fall on promotions, expansion costs, sales remain strong

2011-09-05T13:00:00.000+01:00

Spain’s Mango saw its fiscal 2010 pre-tax profit fall 9.8% to €112.9m ($159.8m), mostly on the fashion retail giant’s relentless expansion drive and market pressure to discount merchandise. The retailer also said it plans to open 700 points of sale this year.

The increasing number of shop-in-shops and smaller mall-based stores opened in the past two years continued to pressure the bottom line, general director Enric Casi said.

Another factor was the market trend for bigger discounts and more promotions to sell larger volumes, he also said.

Year-end consolidated sales, however, grew 11% to €1.27bn on top of a 4% rise in the previous year

In 2011, the retailer said it intends to invest €135m, mostly on new stores, but also for modernising existing stores and improving logistics.

US retailers see solid gains for August on strong Back-to-School season, Limited Brands excels, Gap woes continue

2011-09-02T12:59:00.000+01:00

Even Hurricane Irene at its most powerful failed to ruin US retailers’ solid revenue gains for August, capping a solid Back-to-School season despite ongoing concerns over the economy.

Retailers posted surprisingly strong sales Thursday underpinned by a strong demand for Back-to-School merchandise. Overall, same store sales rose 5.5% year-on-year, according to Retail Metrics while analysts expected a 4.6-5% increase. Around 60% of those reporting beat views, up from 58% last month.

But the outlook for September remains unclear as the aftermath of Irene and the subsequent mopping up could hurt many clothing retailers hoping to make up for lost sales.

Target Corp, Costco and BJ’s led the value retailers while the high-end retailers Saks and Neiman Marcus led the mostly successful month for the department store sector. Limited Brands.and teen retailer Wet Seal posted sales gains that beat analysts’ expectations. But Gap posted a bigger-than-expected drop.

Consumers appeared to have been inspired by pent-up demand for goods after cutting back for many months, mostly looking for bargains, in a sign that competitive markdowns could hurt retailers' profit margins.

Analysts had expected department stores and specialty retailers to be among the worst hit by Irene. In aggregate, there’s only likely to have been a 0.1 to 0.2 percentage point of negative impact industrywide, said Retail Metrics.

Limited Brands excelled again in August with comps for the month climbing 11%, beating analysts' expectations of a 7.6% surge.

The company, whose stores include Victoria's Secret and Bath & Body Works, said Thursday that total revenue for the four weeks ended August 27 also increased 11% to $702.4m. For the year to date, comps rose 11% with totals up 12% to $5.38bn.

Limited Brands operates 2,623 stores in the and its brands, which also include Pink, La Senza and Henri Bendel, are sold in more than 800 company-run and franchised stores globally.

Gap Inc’s lackluster run of monthly results continued through August with net sales last month falling 3% year-on-year to $1.10bn as comps dipped 6%.

By division, Gap North America comps fell 8% versus a year-ago dip of 1%; Banana Republic North America comps fell 4% versus a 6% rise last year; Old Navy North America fell 4% on top of a 1% dip last time; and International fell 9% versus a 5% gain last year.

“We’re determined to make the necessary adjustments to women’s product and marketing to improve our overall performance and drive top-line growth going forward,” said CEO Glenn Murphy.

Year-to-date net sales rose to $7.78bn for the 30 weeks to August 27 from $7.77bn in the year-ago period. Comps fell 3% compared with a 3% increase last year.

Global retail markets “rebounding” as major city rents jump, Fifth Avenue stays top of the pile says survey

2011-09-01T12:57:00.000+01:00

New York's Fifth Avenue headed the list of the world’s most expensive shopping streets for the 10th year running, following a 21.3% increase in rents in the 12 months to June to $23,850 per sq m, according to a report by Cushman & Wakefield.

Overall, the report, which tracks 278 areas in 63 countries, said that global retail markets were "rebounding strongly", with 81% of the areas surveyed recording either an increase or maintenance of prime rents - up from 66% in 2010.

Hong Kong's Causeway Bay and Tokyo's Ginza district followed in second and third places, with rent rises of 16.7% and 8.7%, respectively.

New Bond Street, which was fourth last year, fell two places, nudged down by Paris, while a 33% increase in rents at Sydney's Pitt Street Mall propelled the Australian city from ninth to fourth. Rents along the pedestrianised street are at a record €7,384 and mark the first time that an Australian city has made the top five.

London’s New Bond Street lost its crown as Europe's most expensive shopping street to the Champs-Elysées, with the French capital becoming the only European city in the world’s top five.

The report revealed a 5.3% growth in the French boulevard’s rents to €7,364 per sq m, leapfrogging its rival, where rents rose by 4.3% to €6,901.

The property consultancy's report said that the jump in had been boosted by the recovery of the luxury sector and reversed a 9.5% slide the previous year.

Emerging markets dominated the list of the biggest rent rises, with Wangfujing in at the top after rents on the street soared by 109.5%.

Cushman said that China's top 100 retailers were growing by 21% every year, which was driving demand for space.

Despite the turmoil from the Arab Spring, the ABC Achrafieh shopping centre in Beirut was the biggest riser in the Middle East, with a 33.3% increase. The most expensive location in the region is still Tel Aviv's Ramat Aviv Mall.

Clouds set to gather over PacSun despite Q2 improvements

2011-08-24T12:41:00.001+01:00

Teen retailer Pacific Sunwear of California narrowed its Q2 loss, beating analysts' forecast Tuesday, but its revenue fell and a weaker Q3 outlook pushed its shares 17% south in after-market activity.

The surf- and skate-inspired apparel retailer reported a loss of $19.3m/29 cents per share, down from a loss of $23.5m/36 cents a year ago.

Excluding one-time items, the company said it lost 18 cents per share, well above the 24 cent loss analysts had expected.

Revenue slipped to $214.9m from $218.3m last time but there was better news on the comps front which rose 1%.

"We continued to make progress in [Q2] which included our second consecutive quarter of positive comps, better than expected merchandise margins, reduced inventories, and further reductions in operating expenses," said CEO Gary H Schoenfeld.

"Until recently we had expected [a] positive momentum to continue, yet we are now more cautious in our near-term outlook due to a combination of factors including macroeconomic pressure, along with a highly promotional start to the Back-to-School season," he added.

The company expects to report a Q3 adjusted loss of 10-18 cents per share, ahead of the adjusted loss of 6 cents per share analysts were expecting. It expects same-store sales to fall in the mid- to high-single digits during the period.

PacSun operated 821 stores at the end of the quarter, down from 880 a year earlier.　

FJ Benjamin powers ahead in Asia on record sales, Indonesia remains focus

2011-08-23T14:41:00.001+01:00

FJ Benjamin Holdings saw its year-end net profit leap55% on record sales and improving margins as the Singapore-based fashion retailer looks to expand its already broad-based reach across Asia.

Earnings for the 12 months to June 30 surged to S$12.96m/2.28 cents ($10.76m). Gross profit margins rose to 43% from 41%.

Sales from its diverse portfolio of fashion, watch and jewellery brands grew 22% to a record S$353.9m, on the back of strong consumer demand in all its key markets, including Singapore, Malaysia, Hong Kong, China and Taiwan.

Revenue for its fashion business climbed 17% to S$229.6m, while its watches and jewellery ops leapt 35% to S$123.4m, just ahead of the 32.9% year-on-year increase announced in June.

Revenue in North Asia for the year jumped 69% to S$68.6m while Southeast Asia sales improved 16% due to increased growth in Singapore and Malaysia. Indonesia, the group's biggest retail market, saw a 7% year-on-year sales rise.

The retailer reported that although the strong Singapore dollar had partially contributed to the better net profit, the currency had also had a negative impact.

Nash Benjamin, CEO of FJ Benjamin, said: "When tourists come here, and if they come in from a country where currencies have depreciated against the [Singapore] dollar, they have less money to spend.

"On the other hand, it helps in our purchases of goods where our imports cost less. So, you know, one washes the other, basically," he explained.

Benjamin also said the company sees Indonesia continuing to be its growth market where it is considering new business ventures in the fashion sector, without giving details.

He added that the group had successfully negotiated for the rights to introduce French luxury accessories brand Goyard into Singapore in 2013, following strong sales generated after the brand launched in Hong Kong.

“Indonesia is clearly an important market for us,” said Benjamin.”We see potential there; we are well placed to grow in that market. In the downturn in 2008, we never suffered in Indonesia.”

The group said it remains cautiously optimistic of organic growth in Asia, though the global economic uncertainty in the US and Europe may soften consumer sentiment in the region.

UK shopper numbers fall as consumers tighten belts, shop vacancies grow

2011-08-22T14:05:00.002+01:00

UK high street retailers suffered a 2.6% year-on-year drop in July footfall over the past 12 months, as shoppers cut back on their spending, figures released by the British Retail Consortium (BRC) show.

The hardest-hit regions were Wales, with a 9.2% dip, followed by the West Midlands, down 6.6%, and the east of England, off 6.2%.

However, Greater London rose 1.6% with gains also seen in the South West, up 0.4%, and Scotland, up 0.2%.

Overall, UK footfall between May and July was 1% lower than a year earlier, driven by a 1.9% fall in people visiting out-of-town malls.

"In July, all types of shopping locations saw reduced footfall year-on-year and that was before the effect of this month's [riots in] England," said Stephen Robertson, BRC director general.

"Fewer people are shopping because households are facing high inflation, low wage growth and uncertainty about future job prospects. But that's slightly offset by hard-up customers spreading their spending over more but less costly shopping trips."

Meanwhile, some 11.2% of stores on high streets and in town centre malls stood vacant in May, with the highest vacancies in Northern Ireland (17.1%), Wales (13.4%) and the north of England (13.1%).

Diane Wehrle, research director at Springboard who compiled the data for the BRC, said: "Traditionally retail parks and malls outperformed the high street due to ease of access. These areas are now experiencing similar challenges to town centres."

She added: "If the trend identified this year continues into 2012, there is a real chance that footfall levels in high streets could stabilise next year."

Stephen Robertson, the director-general of the British Retail Consortium, said the figures laid bare the sharp regional differences across the country. "This is the first time we've been able to publish footfall and vacancy figures in this level of detail and it shows stark differences in retail health between some of the UK's nations and regions," he explained.

"Generally, the parts of the UK where the public sector is a bigger proportion of the economy are the ones where customer spending is most likely to be hit by worries about job prospects and cuts, meaning people are shopping less and more retail businesses are failing. By both measures, Northern Ireland and Wales are suffering particularly badly."

Lead news picture courtesy Westfield London

Markdowns hurt Gap as profit falls, improvements needed in women’s business

2011-08-19T12:43:00.000+01:00

The double blow of cautious consumers and higher expenses hurt Gap Inc badly in Q2 as the apparel retail giant was forced to offer deeper discounts despite the rising cost of producing its ranges.
Gap, which has consistently proved itself able to generate strong profits even in the face of weaker sales, could not work that magic this time round and profits fell 19%, a worse performance than many of its sector peers, which had been able to pass price rises onto consumers.

The extent of the discounting could be seen in the same-sales figures for its Gap, Old Navy and Banana Republic businesses, with overall comps dropping 2%. This was better than the comps at Gap, down 3% domestically, at Banana Republic, down 3%, at Old Navy, where they were flat, and at the International unit, where they dropped 4%. Those comps are not at all bad but highlight just how many margin-denting markdowns the company had to make to generate revenue. As a result, the margin fell 2.7 percentage points.

So how much did Gap Inc make during the summer quarter? Even with the fall it still earned $189m/35 cents a share on total sales up 2% to $3.38bn - better than it had predicted earlier this month. The firm’s shares rose 3.1% in after-hours trading but that vote of investor confidence must be seen in the light of a 30% share fall overall this year.

CEO Glenn Murphy said on an investor conference call: "That's not a good performance. Our goal is to have moderate, steady growth in our domestic business and we've not achieved that."

He admitted that shopper confidence is unlikely to pick up in the second half as the effects of economic uncertainty at home and Europe’s debt crisis that is negatively affecting the US share market combine to make all but the wealthiest consumers very cautious. “We're certainly thinking the sentiment in the back half, relative to the first half, will be neutral at best,” were Murphy’s exact words.

He also thinks that price rises would not be able to keep pace with the approximately 20% higher production cost that Gap is seeing per item. However, he maintained his full-year earnings forecast of $1.88 to $1.93 a share.

Some analysts however said Gap had done a relatively good job at managing its costs. Erika Maschmeyer, at Robert W Baird & Co told Reuters: “Gross profit margin, although down a lot from last year, was slightly better than we expected.”

Even Glenn Murphy was not completely downbeat. He insisted to investors that the opportunities ahead are greater than the challenges with more effective North American marketing and a women’s business turnaround his key priorities.

Gap has been working to improve its ranges and also to boost profitability by focusing on the best performing locations and expanding in key markets. It closed 27 stores in Q2 (19 of them Gap-brand stores in North America) and total square footage fell 2%, although it still has a massive 3,248 stores.

The company has been revamping its Old Navy chain and opened its 300^th redesigned store last quarter.
It is also expanding its Athleta stores and has announced plans to open in New York, LA, Washington DC, Minneapolis, and Philadelphia markets. Athleta last week opened its doors in Manhattan's Upper East and Upper West Side neighbourhoods.

Its international comps decline came as the firm has expanded its business outside of its core North American market. It has opened in China, expanded in Eastern Europe, opened its first store in Rome, Italy and launched its outlet concept in that country. It also expanded its Gap and Banana Republic outlet business in Japan.

Gap has also added more countries to its online shipping operation Direct. The latter unit turned in a 20% sales increase to $309m in Q2.

Key collaborations have included the GapKids and babyGap collection created by Diane von Furstenberg for Spring 2012 and Banana Republic's Mad Men series-inspired collection.

Headline-grabbing Abercrombie & Fitch shines in Q2 but rising costs could cloud outlook

2011-08-18T12:40:00.000+01:00

If Abercrombie & Fitch’s continued impressive fiscal run wasn’t enough of a headline grabber Wednesday, the teen retail giant was almost assured of an award for marketing coup of the year by offering to pay the stars of a US reality television series not to wear its merchandise.

Q2 net income may have jumped 64% on strong demand in the US and Europe but it was the offer of a "substantial payment" to Mike ‘The Situation’ Sorrentino and his fellow ‘Jersey Shore’ cast members so they will stop wearing the brand on the MTV reality show that dominated media reports, overshadowing an admission that continuing cost pressures could dent its future performance.

Quarterly earnings rose to a better- than-expected $32m/35 cents per share from $19.5m/22 cents a year ago as analysts had penciled in a 29 cents gain.

As previously announced, sales rose 23% to $916.8m as US sales rose 12% to $684.9m while international ops sales leapt 74% to $231.9m. Comps meanwhile rose a more-than-solid 9% reflecting a 5% increase at it core signature brand, plus a 7% hike at Abercrombie kids and a 12% lift at its fast growing surf-themed Hollister stores.

Gross margin fell to 63.6% from 65.1%, reflecting a 28% jump in the cost of goods. However, analysts said the margin erosion was less than expected. Abercrombie had warned in May that margins would decline in Q2 as it wasn't planning on raising prices until Q3.

After having lost ground to its cheaper peers during the recession on a stubborn insistence not to cut prices, Abercrombie & Fitch has bounced back on an appealing merchandise offer plus sustained international expansion and the closure of underperforming stores.

The company plans to open 40 international Hollister stores this year and close up to 65 weak US stores.

However, the retailer isn’t immune to higher commodity prices during the key Back-to-School season, admitting costing pressures will be greater in H2 alongside what CEO Mike Jeffries called increasing “macroeconomic uncertainty”.

“However, our strong top-line momentum and overall performance for the past several quarters give us confidence that we are well positioned to navigate through this environment," he assured.

Separately, Abercrombie said it is concerned that having Sorrentino seen in its clothing could cause "significant damage" to its image.

"It's a clever PR stunt and we'd love to work with them on other ways they can leverage Jersey Shore to reach the largest youth audience on television," MTV replied in a statement.

Its shares were off 8.2% Wednesday but are still up over 90% in the past year.

Saks cut losses, sells more full-price goods, will expand online this autumn

2011-08-17T12:40:00.000+01:00

Confident-but-cautious was the tone at Saks on Tuesday as the high-end department store retailer said it had cut its losses in Q2 and, like sector peers Nordstrom and Neiman Marcus, sold more merchandise at full price. The company also said it is expanding its online offer and its own-brand womenswear this autumn.
But while it predicted positive comps and improved margins for the rest of the year, the economic environment in the US could make the second half a challenging one.

"We're approaching the fall season a bit more cautiously," CEO Steve Sadove said, noting that short-term instability in the stock market has not affected sales but that longer-term share volatility has historically affected Saks turnover and could do so again in the future.

Saks was badly hurt during the recession of 2008/9 when high inventory levels saw it slashing prices and while inventory levels rose 3% in Q2, Sadove said Tuesday that the uncertainty surrounding the second half means the company is careful about how much inventory it carries in case of a sudden spending downturn.

The second half is crucial for the company’s overall results with Saks seeing as much as 30% of its total sales in the important November/December Holiday season. It expects overall comps for the second half to be up in the mid-to-high single digits with inventory levels up in the mid-single digits, meaning it is less likely that company will be forced to resort to heavy discounting, even if spending slows.

"None of us knows what the future will bring,” Sadove said. “[But we are] in a much stronger position than we were in late 2008.”

While the response to that earlier downturn was to cut prices on luxury goods and offer lower priced goods overall, thus denting the chain’s luxury image, in the current environment the opposite has been the case. Full-price selling is now at pre-recession levels and the company has been steadily refocusing inventory towards higher-end product. Chief merchandising officer Ronald Frasch said Tuesday that “we've had a really nice response to luxury elevation."

So what about those Q2 figures? Saks is still loss-making as costs and expenses rise but in the quarter to end-July, Saks lost $8.37m/$0.05 a share compared to a loss of $32.2m/$0.21 a year ago, as sales rose 13% to $670.2m. Selling, general and administrative expenses rose to $183.4m from $170.6m but the gross margin rose to 38% from 37.3% due to those improved full-price sales. Same-store sales rose 16% in what is traditionally Saks’s weakest quarter of the year and at a time when the company reduced its promotions.

In the Saks Fifth Avenue stores, numerous merchandise categories showed strength during the quarter, including womenswear, women’s shoes, menswear, and men’s accessories.

Surprisingly given the bargain-focused American consumer, the firm’s expanding discount arm, Off 5th, saw a lower same-store sales rise, although its internet ops continued to perform well with Saks Direct sales up 50% on a comparable basis.

The company has embraced the internet and launched a website this month called Saks Fashion Fix so it can offer more flash sales. From the end of this month it will launch nine flash sales a week. It is also reaching more shoppers through sites such as Facebook and Twitter and will launch a mobile app next month.

Sadove also told US trade paper WWD Tuesday that he sees “substantial growth opportunity” in Saks Fifth Avenue-branded women’s merchandise and is to add more career and casualwear to the offer at bridge prices this autumn. The move comes after the Saks Fifth Avenue men’s line, launched in 2009, became the biggest men’s brand in the chain.

Luxury brand sales excel in South Korea despite tough economy

2011-08-16T12:37:00.000+01:00

The demand for luxury goods continues to grow among high earning South Koreans despite global economic uncertainties, according to industry figures released Monday.

Sales of Louis Vuitton, Chanel, Hermès, Prada and Gucci in South Korea jumped 17% year-on-year to KRW78.4bn ($72.5m) in July.

About 90% of domestic sales of leading brands came from the country’s four largest department stores - Lotte, Hyundai, Shinsegae and Galleria - the figures showed.

In terms of revenues, Louis Vuitton maintained its top spot with KRW32.7bn, up 10% on a year ago, while Chanel sales jumped almost 20% to KRW17.6m, matched by Gucci, whose sales rose 9%. Prada sales rocketed 66.7% to KRW9bn as Hermès sales lifted 16% to KRW5.8bn.

The numbers reflected an ever-growing appetite for high-end handbags, shoes and accessories among Korean customers, even though some of the European luxury groups such as Louis Vuitton and Prada hiked prices in the first half of the year, industry watchers said.

"The data throws a sidelight on a trend that Koreans are increasingly thirsty for pricey, sumptuous goods," an industry official told The Korean Herald, adding that sales may go up further in the latter half of the year.

According to the National Tax Service, the government collected about KRW5trn of special consumption taxes imposed on luxury products last year, up almost 40% from 2009.

US retail sales in biggest rise since spring but consumer sentiment worsens

2011-08-15T12:36:00.000+01:00

US consumer sentiment worsened sharply in early August, falling to the lowest level in more than three decades, after retail sales posted the biggest gain in four months in July.

High unemployment, stagnant wages, gridlock in Congress, and a stock market slump all contributed to a darker consumer mood, Reuters reported.

Despite the gloom, US consumers kept spending in recent weeks with retail sales up in July by the most since March. Consumers spent more on autos, furniture, clothing and gasoline.

The 0.5% increase in retail sales to $390.42bn reported by the US Commerce Department was in line with analyst forecasts and followed an upwardly revised 0.3% gain in June.

Excluding autos, sales were up 0.5%, well above forecasts for a 0.2% gain. Retail sales excluding autos, gasoline and building materials rose 0.4%.

Electronics and appliance store sales climbed by 1.4%. Furniture stores, groceries, clothing stores, and non-store retailers - a category that includes online retailers - also posted gains.

In related news, the preliminary August reading on the consumer sentiment index fell to 54.9 early in the month, down from 63.7 in July, and the index has fallen for three straight months in the Thomson Reuters/University of Michigan survey.

Unemployment at 9.1% of the workforce, low wage rises, and the protracted debate in Congress over raising the US government debt ceiling spooked consumers, survey director Richard Curtin said in a statement.

Bad economic times were expected by 75% of all consumers in early August, just below the all-time peak of 82% in 1980. Buying plans for household durables and vehicles declined in early August, falling back to their recession level lows.

The current gloomy consumer sentiment suggests restaurant sales will slip as autumn approaches, according to the Kurt Salmon's Restaurant Spending Trajectory report.

"Economic uncertainty and protracted unemployment continue to impact consumers' spending decisions across all categories," said Todd Hooper, a Kurt Salmon restaurant industry analyst.

In another report, the Commerce Department said business inventories rose slightly less than expected in June, suggesting firms remained cautious about future demand at the end of Q2. Inventories climbed 0.3%, after a downwardly revised 0.9% upswing in May, the report said. Economists had expected a rise of 0.5% in June.

Macy's Q2 is best in decade as key USPs appeal, ups sales outlook

2011-08-11T15:16:00.001+01:00

Macy's highlighted its sustained success Wednesday calling Q2 its best performance in more than a decade. The department store retailer also raised its sales outlook for the rest of the fiscal year saying revenues would continue to rise despite the economic uncertainty, especially in recent weeks.

"As we continue to closely monitor developments in the economy and financial markets, we are cautious but optimistic," chief executive Terry Lundgren said, citing the success of its key USPs - catering to local tastes and offering private and exclusive merchandise which now account for around 43% of its revenue.

That optimism was based on enviable quarterly figures released Wednesday which Lundgren described as "the most successful second quarter and spring season in more than a decade.

"We have moved quickly to establish a culture of growth at Macy's since reorganising the company in 2008 and 2009, and yet we feel we are just beginning to take advantage of the benefits we envision,” he said.
Earnings leapt 64% to $241m/55 cents per share, seven cents above analysts’ view, from $147m, or 35 cents per share in the year-ago period. Operating income for the period totaled $506m, or 8.5% of sales, compared with $370m, or 6.7% of sales, a year ago.

Revenue rose 7.3% to $5.94bn from $5.54bn a year ago as same-store sales lifted 6.4%. Online sales were also up 40%.

The strongest merchandise categories in the second quarter were jewelry, watches, fashion accessories, cosmetics, fragrances, men's and home, the company said.

Gross margin inched down to 41.8% from 41.9%.

For H1, sales totaled $11.828bn, up 6.5%, with comps up 5.9% and online sales rising 39.2%. Operating income totaled $836m, or 7.1% of sales, compared with $573m, or 5.2% of sales, for the same period last year.

Macy's, which also operates the upscale Bloomingdale's chain, said it expects same-store sales to rise 4-4.5% in H2 and raised its fiscal 2011 profit forecast by 20 cents a share, to range $2.60-$2.65 per share. Analysts’ view is $2.58.

Disney Q3 tops view as ad sales offset weaker movie returns

2011-08-10T15:15:00.000+01:00

Walt Disney Co's Q3 results topped analysts’ forecasts Tuesday as strong ad sales boosted its cable networks, while increased television fees and higher theme-park prices offset weaker movie returns. The solid results sent its shares up 3% in after-hours trade.

Net income rose 11% to $1.48bn/77 cents per share, from $1.33bn/67 cents a year earlier. Excluding certain items, it earned 78 cents, above the 73 cents analysts had expected.

The television, movie studio and theme parks operator saw Q3 revenue rose 7% to $10.68bn, topping analysts’ expectations of $10.5bn.

The Media Networks arm, which incorporates sports channel ESPN and the ABC TV network, posted a better-than-expected 5% gain in Q3 sales to $4.95bn.

Sales from theme parks and resorts, which include its Disneyland parks around the world, jumped 12% to $3.2bn in the period.

Attendance at Disneyland and Disney World increased, although the company said the bigger revenue contributors were higher ticket prices, hotel rates and restaurant spending. Operating income at the division was up 9%, to $519m.

Disney's studio division turned in a lacklustre performance despite the box-office success of the fourth Pirates of the Caribbean film plus Cars 2 from the Pixar animation unit. Revenue slipped 1% to $1.62bn.
CFO Jay Rasulo added that its current bookings are down 2% in terms of number of visitors, but up slightly in terms of total expected spending by those visitors.

At Disney's videogame unit, a 27% increase in revenue, to $251m, was offset by a wider operating loss of $86m, compared with $65m a year earlier. The company said the wider loss was related to accounting for the acquisition of social-game maker Playdom.
Consumer products revenue grew 13% to $685m.

London retail counts cost as looting and arson spreads

2011-08-09T14:50:00.001+01:00

Retailers are today counting the cost of a wave of looting, vandalism and violence that spread across London for a third day on Monday. Stores are also upping security as the danger of further looting and even arson remains high. WGSN reporters have seen groups of local shopkeepers standing guard outside stores armed with baseball bats.

Riots hit retailers across the UK's capital in the worst mob violence seen there since the 1980s. Despite thousands of extra police officers being deployed, they seemed powerless to prevent the escalating vandalism and buildings were in flames in London suburbs to the south of the capital where youths attacked retail parks and shops. The 144-year-old Reeves furniture store in Croydon was destroyed by arsonists. Meanwhile, gangs of looters also roamed the streets of Hackney in the east.

The violence also spread to Birmingham, in central England, as well as other major cities, with youths smashing shop windows in the city centre and stealing merchandise.

On Sunday, shops were looted in South London neighbourhood Brixton, while there were similar incidents in in North London where up to 200 youths ransacked and torched businesses, including sports apparel stores, consumer electronics and cellphone stores.

Six fire engines were dispatched to deal with a blaze at a Foot Locker store in Brixton, and witnesses saw riot police clash with looters at a Currys electrical store nearby.

More than 30 youths, many in masks, vandalised and looted shops in Walthamstow Central, including department store BHS, while in Clapham Junction, South London, stores including Debenhams were ransacked.

The violence appeared to be indiscriminate with passengers on buses also being attacked. Even stores on central London’s main shopping thoroughfare were the victims of random attacks of violence. Oxford Street was earlier hit by around 50 youths who damaged property. Police officers were deployed both there and at the Westfield shopping centre in Shepherds Bush to deter looters.

Copycat attacks across London was carried out by "small and mobile" groups, a police spokesman said.
The violence first erupted on Saturday in the multi-ethnic neighbourhood of Tottenham in North London after a man was shot dead by police two days earlier. But politicians and community leaders have said the violence is less about legitimate protest and more about opportunistic criminality.

Home Secretary Theresa May condemned the riots as "sheer criminality" and vowed that the perpetrators would face justice.

Authorities in London are concerned that tourism wil be affected with tourist spending making up a key part of London retail receipts. Popular events have alreday been affected. Earlier Monday, the Hackney Carnival was cancelled amid fears of spreading violence, while plans for Wednesday night's international football (soccer) match between England and Holland at Wembley were being reviewed. This month’s Notting Hill Carnival, already seen as a big challenge for the city's police, are also to be reviewed.

Tod's strong in H1, sees momentum continuing

2011-08-08T11:46:00.002+01:00

Italian luxury footwear and accessories producer/retailer Tod's said H1 net profit leap 26.7% to €65m, driven by double-digit sales growth which it expects to continue throughout H2, boosted by the strength of its autumn/winter orders.

All its distribution channels posted “outstanding performances”, in all the product categories and the
geographical regions, it said in a statement..

Total revenue rose 16.4% to €448m from €387m a year earlier. Ebitda lifted 27.5% to €115.6m while ebit rose 29.8% to €96m, with a 21.9% ebit margin on sales compared to a 19.7% margin a year ago.

Sales of its core Tod's brand, leather goods and across its expanding directly-owned store network were especially strong.

By brand, Tod’s sales rose 22.3% to €239.7m “driven by the outstanding results of the DOS network, in all the product categories and the geographical regions.

Hogan lifted 7.9% to €148.3m, driven by organic growth in Italy. Tod’s said the brand is currently focused on expansion abroad, with emphasis on the Asian markets, where some stores are scheduled to opened in the next few months.

Fay brand sales were up 3.3% to €35.4m, also driven by the Italian market; and Roger Vivier sales jumped “a considerable” 64.3% to €15.6m, “despite... this brand is still consolidating its positioning among the most exclusive luxury brands worldwide,” it noted.

By product, core shoe sales lifted 15.3% to €325.5m for the period, thanks to those outstanding performances of Tod’s and Hogan brands, it said.

Sales from leather goods and accessories also posted a significant acceleration, up 21.6% in Q1 and by 29.7% in Q2, driven by the outstanding results of the Tod’s brand in the entire collection of handbags and accessories. That meant an H1 rise of 25.7% to €72.7m

Sales from apparel totalled €41m, a growth of 10.7% from a year ago.

Geographically, the group said it confirmed its leadership in Italy with all its brands showing H1 domestic sales up 11% to €226.1m.

Sales in the rest of Europe rose 13.5% to €91.2m while there was “strong” acceleration of the US market, up 5.3% in Q1 and by 23.5% in Q2, driven by further “excellent” results in the DOS channel. That meant H1 sales lifted 15.2% to €29.3m, or by 18% currency neutral.

Revenues for the Rest of World jumped 36.6% to €92.9m headed by the acceleration of the Asian performance, driven by mainland China and Hong Kong. Japanese revenues also grew in H1 despite March’s earthquake and tsunami, it added.

Revenues through its DOS global channel grew 22.4% to €227m as same-store sales grew 17.2%. As of June 30, it had 161 DOS and 70 franchised stores, compared to 151 and 71 a year ago.

In the first six months of 2011, the group said it invested €37.7m, including around €20m as sole sponsor for restoration of the Coliseum in Rome.

It said future spending focus will be on the Chinese market, where the group intends to add a “significant number” of stores to the 38 existing ones, to the refurbishment of some important boutiques and to the industrial and logistic structures.

CEO Diego Della Valle said of the H1 performance: “[These] results confirm once more the effectiveness of our strategy, which allows our group to continue to grow double-digit its revenues and to further improve its good profitability.

“The strong results achieved by our stores, in all the product categories and the areas where we operate, demonstrate that our customers increasingly appreciate the superior quality of our products and their iconic image, both being even more important to face challenging moments, as the current one.

“Considering the strong results of the fall/winter orders’ collection, I’m confident that also the second half of the year will deliver great results.”

US retailers report solid sales gains for July as luxury and discounters defy difficult market

2011-08-05T08:36:00.000+01:00

As expected, US retailers reported solid same-store sales gains for July as deep discounts and high summer temperatures drove shoppers to air conditioned malls.

There were a host of analyst-beating comps figures Thursday with Limited Brands, Saks, Macy’s, Costco and Target among the standout winners. Losers included Gap (see below) and the usually robust teen sports retailer Zummiez.

Same-store sales at the 25 retailers tracked by Retail Metrics rose an average 5%, topping analysts’ estimates for a 4.7% gain.

Meanwhile, The International Council of Shopping Centers' (ICSC) preliminary tally of retailers' comps was up 4.6% in July, a slower pace than June's 6.9% gain but in line with forecasts.

Although the Back-to-School season got off to a solid start, there are still concerns that a budget-conscious, discount-demanding consumer will react as the important period gains traction.

The B-to-S season accounts for 16.1% of annual retailers' revenue, according to the ICSC. It's also an opportunity for retailers to gain insight into consumers' shopping habits are heading into Thanksgiving and the Holiday.

"Overall, July sales reports were decent, but the worry is when you look further out over the next three to six months," said Michael P Niemira, chief economist at the ICSC. "The growing economic uncertainty may take its toll on future spending."

News lead images courtesy of Victoria's Secret and La Senza

Toned adidas on course for record 2011 after muscular H1

2011-08-04T08:33:00.000+01:00

After delivering a strong H1 performance Thursday, adidas CEO Herbert Hainer confirmed the German athletic sportswear giant is on course to achieve record sales and earnings for fiscal 2011.

"No matter which way we break down our results - by segment, by region or by brand, all facets of our business are excelling," Hainer said in a statement.

Highlights of the muscular six-month performance showed earnings jumped 19% to a record €349m/€1.67 per share; overall Q2 sales lifted 5% to €　3.064bn, or by 10% currency neutral; H1 sales grew 13% to €6.337bn with both adidas and Reebok brand sales jumping 14% currency-neutral; while retail store comps lifted 15%.

Operating profit increased 12% to €　219m as gross margin improved 20 basis points to 49.2% in Q2, despite rising input costs, while operating margin increased 0.3 percentage points to 8.4% in H1.

By region, H1 currency-neutral revenues in Western Europe increased 10%, supported by double-digit growth at TaylorMade-adidas Golf and sales increases at adidas, with strong sales growth in Germany, France, Italy and Spain.

European emerging markets were up 23% currency neutral on strong increases at both adidas and Reebok, due to growth in most of the region's markets, in particular Russia.

North America grew 15% supported by double-digit increases at adidas as well as TaylorMade-adidas Golf
and double-digit sales increases in both the US and Canada. Latin America grew 8%.

Greater China was up 38% supported by strong growth in all major categories; and Other Asian Markets grew 6%.

Herbert Hainer said: "No matter which retailer I speak to, or which market share statistic I read, our product sell-throughs are stronger than they have ever been. Despite severe external pressures from currency volatility and rising commodity prices, we were able to defend our profitability as a result of our unparalleled strength in
innovation and design as well as supply chain excellence.

"After the strong first half performance, we are on our way to record sales and earnings in 2011. This is all the more notable as various currencies have been weakening versus the euro, which negatively impacts our financial results in the short term."

After the stronger than expected first-half performance, adidas increased its full-year group sales and earnings guidance. Sales are now expected to increase around 10%, currency neutral, from an increase in the high-single-digit rate previously. This will be boosted by its high exposure to fast-growing emerging markets, further retail expansion and continued momentum across all its key brands, more than offsetting the non-recurrence of sales related to the 2010 football (soccer) World Cup.

Currency-neutral wholesale segment revenues are now projected to increase at a high-single-digit rate from a mid- to high-single-digit rate due to strong performance of the adidas brand in Greater China and North America and a less severe decline in Japan than originally expected.

adidas group currency-neutral retail segment sales are projected to grow at a mid-teens rate from a low-double-digit rate with comps expected to grow at a higher rate than the expansion of its own-retail store base.

Segmental revenues of Other Businesses are now projected to increase at a mid- to high-single-digit rate on a currency-neutral basis from mid-single-digit rate previously.

Gross margin is forecast to reach a level of 47.5-48% from 47.8% in 2010.

Operating expenses as a percentage of sales are expected to fall modestly in 2011 from 42.1% in 2010. Sales and marketing working budget expenses as a percentage of sales are also projected to decline modestly compared to the prior year.

Operating margin is expected to increase to 7.5-8% from 7.5% a year ago.