May 31st, 2012

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Nike to divest Cole Haan, Umbro

Thursday, May 31st, 2012

Sports goods giant Nike, Inc. today (31 May) revealed plans to divest t two of its wholly-owned affiliate brands – Cole Haan and Umbro – to sharpen its focus on driving growth in the NIKE, Jordan, Converse and Hurley brands.

Cole Haan specializes in casual and dress leather footwear and bags. It was acquired by NIKE in 1988. The company is based in New York. Umbro is a football specialist brand based in Manchester, UK, acquired by NIKE in 2008.

Nike president and CEO Mark Parker said the move will “allow us to focus our resources on the highest-potential opportunities for Nike, Inc. to continue to drive sustainable, profitable growth for our shareholders.”

“We see tremendous opportunity to accelerate profitable growth around the world by continuing to deliver innovation and inspire consumers through the NIKE brand. We also see significant potential in Jordan, Converse and Hurley, which have unique consumer relationships that complement the NIKE Brand… Divesting of Umbro and Cole Haan will allow us to focus our resources on the highest-potential opportunities for NIKE, Inc. to continue to drive sustainable, profitable growth for our shareholders,” Parker added.

It will begin the process of divesting the two businesses immediately, and expects the move to be complete by the end of Nike’s 2013 fiscal year.

Nike acquired New York-based Cole Haan, which specialises in casual and dress leather footwear and bags, in 1998. Umbro is a football specialist brand based in Manchester, UK, which Nike acquired in 2008.

Saks May Comparable Store Sales Up 4%

Thursday, May 31st, 2012

Saks Inc.  said owned sales for the four weeks ended May 26, 2012 grew 3.7% to $215.8 million from $208.2 million in the same period a year earlier. Comparable store sales rose 4% for the month.

For the four months ended May 26, 2012, owned sales rose 4.1% to $959.7 million from $921.8 million in the prior year. Comparable store sales increased 4.6% for the four months.

American Apparel’s May comparable store sales up 19%

Thursday, May 31st, 2012

Casual wear manufacturer and retailer American Apparel Inc saw its comparable store sales increase for the 12th consecutive month during May.

Comparable store sales rose 19%. The increase included a 19% growth in comparable store sales for its retail store channel and an 18% jump in net sales for its online channel.

“May will represent our 12th consecutive month of positive comparable sales, and I am particularly pleased with the strength of retail store sales,” said Dov Charney, chairman and chief executive.

“Store performance built steadily week over week and that trajectory gives us increased confidence about sales trends as we move into the summer months.”

American Apparel’s May comparable store sales up 19%

Thursday, May 31st, 2012

Casual wear manufacturer and retailer American Apparel, Inc. announced preliminary comparable sales for the period May 1, 2012 through May 26, 2012 which saw its comparable store sales increase for the 12th consecutive month during May.

The company reported that for the period May 1, 2012 to May 26, 2012, comparable store sales increased 19%, including a 19% rise in comparables store sales for its retail store channel and an 18% growth in net sales for its online channel.

The company will announce full month comparable sales, wholesale net sales and total net sales for the month ended May 31, 2012 on Thursday, June 7, 2012 after the stock market closes.

“May will represent our 12th consecutive month of positive comparable sales, and I am particularly pleased with the strength of retail store sales,” said Dov Charney, Chairman and Chief Executive of American Apparel, Inc. “Store performance built steadily week over week and that trajectory gives us increased confidence about sales trends as we move into the summer months.”

Phase Eight posts pre-tax profit growth

Thursday, May 31st, 2012

Womenswear retailer Phase Eight delivered a 9.4% pre-tax profit increase to £17.8m for the year to January 28. But growth has slowed at the retailer compared to the previous year when pre-tax profit soared 42.2%.

Phase Eight described the economic environment of the last year as “challenging”. Turnover for the year jumped 16.7% to £108.4m.

The fashion retailer, which was acquired by Poppy Bidco in February 2011, focused on bolstering its buying and merchandising and head office teams in the year. It said it had seen improvements in ranges, sourcing and sell-through rates.

In documents filed at Companies House, Phase Eight said the sales increase was due to “positive” customer responses to its spring and autumn collections.

Distribution and selling costs were kept tight. The retailer opened 11 stores and 36 concessions during the year, bringing the number of outlets to 282.

Phase Eight plans to open further stores and concessions in the current financial year and opened its first store in Switzerland in April to “more fully address the needs of international customers”. In addition, it launched international online deliveries in May.

Coldwater Creek first-quarter losses narrow

Thursday, May 31st, 2012

US clothing retailer Coldwater Creek saw first-quarter net losses narrow as margins and overheads improved. The company yesterday (30 May) reported a US$23.8m net loss against a $30m net loss in the same period of the previous year.

Sales fell 3% to $132.3m, which it said primarily reflected the impact of 12 net store closures since the end of the first quarter of the prior year. Comparable store sales declined 0.6%, while direct sales declined 13.1% to $38.7m.

“Our first quarter results reflect meaningful progress in our operating performance as evidenced by an improvement in our comparable sales trend, an increase in our gross margin rate, and a reduction in SG&A expense, all of which led to a narrowing of our net loss,” said chairman and CEO Dennis Pence.

“Customers responded favourably to our spring and early summer collections, which offered an increased emphasis on colour, print, and pattern. While traffic remained challenging, we believe that our ongoing cross channel marketing efforts, combined with the improvements we have made to our merchandise, will enable us to see an upturn in this metric over time. We are encouraged to see that we gained traction in several key categories in the first quarter and we believe that we can build upon these successes as we move through the year.”

Arcadia interns paid a year after working

Thursday, May 31st, 2012

The multibillion-pound clothing retail group Arcadia, which runs some of the UK high street’s biggest names, including Topshop, Miss Selfridge and Dorothy Perkins, has sent retrospective payments worth hundreds of pounds to dozens of its former unpaid interns.

Interns who worked at Arcadia’s head office in London said they have received cheques for their labour up to a year after their placement with the company’s PR department ended.

Arcadia had been using dozens of unpaid interns to ship clothing back and forth to media contacts from a “windowless” stockroom, former interns have told sources in the UK.

Arcadia’s move comes as HM Revenue and Customs has been putting pressure on the fashion industry to enforce the minimum wage and rid the sector of a culture of unpaid labour.

HMRC told the Guardian it has brokered a deal with the fashion industry to make sure it complies with national minimum wage legislation, which states that over 21s who work must be paid at least £6.08 ($9.40) an hour.

Over the past few months HMRC enforcement officers have visited scores of designers and fashion houses to perform “health checks”, making sure all workers, including interns, are paid what they are legally owed, the Guardian understands.

The health checks are being carried out in conjunction with the industry body, the British Fashion Council, which has welcomed the move on Wednesday, saying: “The fashion industry provides access and opportunities to many young people, and the BFC aims to ensure that these valuable opportunities can continue in a legal framework.”

In correspondence with the website Graduate Fog, which has campaigned against exploitative work experience, and which discovered that interns were being retrospectively paid, Arcadia said cheques were issued after an “internal review” of intern placements.

Miss Selfridge intern Emily Wong said she spent a month, starting in April 2011, doing what she called “dogsbody work” for the company.

Wong, a 23 year-old graduate of Royal Holloway, University of London, said she and other interns spent their four weeks there photocopying, scanning images, sending clothes to journalists and organising clothes that had been sent back. They also tidied the fashion cupboard, which she described as a walk-in, windowless wardrobe stuffed full of clothes.

She said the company gave her only travel to cover zones 1-6, though she commuted from Worthing, West Sussex, five days a week, and £2.50 a day for lunch.

Wong, who received a cheque for £851 ($1320), added that she found the experience a waste of her time and that interns were excluded from any serious meetings or learning experiences. She also told UK tabloid the Guardian that interns would be left to their “menial” tasks without much supervision and then go on to train other unpaid interns who would arrive at head office.

She said she met 10 other interns in the PR department during her time at Arcadia. ”At the time, I agreed to work at Arcadia for free in the hope that it would lead to a paid job. However, since then I’ve done several more internships – mostly paying expenses only – with other companies and I’m now furious about the whole intern thing,” Wong said.

“I’m glad Arcadia have finally paid me – but they should have done it at the time, not a year later. They should never have allowed me to work for free. As I now know, the minimum wage law says that anybody who does the job of a ‘worker’ must be paid at least the minimum wage for their labour,” she said.

A second intern who has also now been paid, but declined to be named, confirmed the existence of the windowless stock cupboard and described doing the same basic tasks for a different section of Arcadia.

Wong said she complained to HMRC about her lack of pay and it is understood that HMRC has received other complaints about unpaid interns.

Arcadia’s billionaire owner, Sir Philip Green, has said: “We’ve done everything we think we’re supposed to do. We think we’ve been leaders in education in the fashion retail business. We’ve built an academy. We’ve got 700 kids working. We try to encourage other people. We’ve done our job.”But when asked further questions about the payments, he said: “We’re not interested in getting into a running debate about who said what to who and this that and the other”.

In a statement the company said: “Having had a thorough review with regards to interns, the company is perfectly satisfied that it has complied, and is fully compliant, in this area.”

A spokesperson for HMRC said: “HMRC’s position has always been clear regarding the national minimum wage – we want employers to get it right first time.”

“Working with companies is the best way to ensure they pay all their workers what they legally owe. There is no excuse for not paying the minimum wage, and HMRC will relentlessly pursue those who try to bend or break the rules. Anyone who thinks they may not be paid what they are legally entitled to should call the free Pay and Work Rights helpline on 0800 917 2368.”

Tanya de Grunwald, founder of Graduate Fog and author of How to Get a Graduate Job in a Recession said, “This is a massive victory in the battle to end unpaid internships. Pressure is building on big companies, who are finally getting scared about the possible consequences of ‘hiring’ young staff without paying them a wage for their work. Frankly, they should be scared. For too long, too many employers have viewed young people desperate for experience as a source of unlimited free labour. That is completely unacceptable.

“While I’m pleased that Arcadia has made these payments, big questions remain. If they admit these interns were entitled to wages, why weren’t they paid at the time? And will other companies follow suit, making mass pay-outs to those who have worked for them unpaid in the past?”