June 8th, 2012

...now browsing by day

 

Quiksilver cuts Q2 loss despite European headwinds

Friday, June 8th, 2012

Surf and sportswear retailer Quiksilver Inc has reported a second quarter loss of $5.1m after economic uncertainty in Europe and clearance sales and higher input costs hurt margins.

But the company was buoyed by a 3% rise in revenues to $492.2m from $478.1m a year ago, with gains across its three major brands – Quiksilver, Roxy and DC. Same store sales in company-owned retail stores grew 6%.

It also saw “solid growth” in Asia/Pacific where revenues jumped 27% to $74.0m, as well as a 5% rise in the Americas to $221.0m. This helped offset a 6% drop in European net revenues in the three months to 30 April to $195.6m.

The company also said it expects to reduce inventory levels in the second half on a strong autumn season.

The loss of $5.1m or $0.03 per share, booked in the quarter compares to a net loss of $83.3m or $0.51 per share, in the same period last year – which included a $74.1m charge related to the company’s business in Australia and Japan.

Gross margin fell to 49.2% of net revenues from 54.8% a year ago. As well as higher levels of clearance business and higher input costs, the company also blamed the timing of certain royalties and the impact of foreign currency exchange rates.

“The improvements we’ve made to our retail presence continue to drive positive comparable store sales in all three regions,” said Robert McKnight, CEO and president.

“We’re also pleased to be turning the page on a challenging first half of the year that included a number of known headwinds that particularly affected our gross margins.

“We expect the second half of fiscal 2012 will compare favourably to last year as we anniversary higher input costs that we began to see in Q3 of 2011 and as we begin to deliver goods for our highly anticipated back-to-school season.”

Posted in Activewear, Apparel, Brand, Finance, Men, News, Retail, ladies | No Responses »

Boxpark bets on loyalty card to turn around flagging footfall

Friday, June 8th, 2012

Pop-up shopping mall Boxpark has introduced a loyalty card scheme in a bid to drive footfall and sales.

The loyalty card, operated by marketing firm Footfall123, launched two weeks ago and offers customers 20% off their first order and 10% off subsequent purchases. Boxpark, which opened its doors in Shoreditch, east London, in December, will be able to personalise customer offers based on their purchasing habits with the card.

Boxpark founder Roger Wade said the loyalty programme was introduced to help boost flagging footfall: “Like all retailers, Boxpark isn’t immune from the current economic situation. Boxpark hasn’t come up with a bunch of customers with a disposable income.”

Wade also blamed May’s bad weather for the poor footfall. “The reality is we are not God and when the weather isn’t fantastic then Boxpark struggles. It’s not an overnight thing – this site had been vacant for 40 years – it’s a slow and gradual increase [in footfall]. We are trying to proactively encourage footfall and turn this into sales.”

Wade said three quarters of the retailers are involved in the card scheme, including Boxfresh and Vans. Diesel and Nike are among those not included.

David Halliwell, head of marketing at Footfall123, said 200 people used the cards within the first two days, generating £16,000 of additional sales.

Posted in Apparel, Brand, Men, News, Operations, Retail, ladies | No Responses »

JD Sports sizes up One True Saxon

Friday, June 8th, 2012

The deal would be the latest purchase by the sports giant, which has already snapped up young fashion brands such as Fly53 and Fenchurch and outdoor retailer Blacks Leisure this year. JD chief executive Barry Bown said in April that the business was “not going to quell” its acquisitive nature.

One True Saxon was bought by Pentland Brands in 2006. The Pentland Group has a 57% stake in JD Sports Fashion. The deal would mean Pentland would still own a stake in the brand.

Pentland Brands chief executive Andy Rubin told Drapers in April that One True Saxon had been put under review due to “tough” UK market conditions.

A number of One True Saxon’s 12 staff are also thought to have left since it emerged the brand was up for review. Managing director Richard Robinson will leave at the end of June, it is understood.

The business has closed its Nottingham store. JD Sports Fashion could not be reached for comment; Pentland Brands declined to comment.

Posted in Activewear, Apparel, Brand, Finance, News, Operations, Retail | No Responses »

Fifth & Pacific to buy out Kate Spade Japan

Friday, June 8th, 2012

Apparel firm Fifth & Pacific Companies Inc (formerly Liz Claiborne Inc) is to buy its Kate SpadeJapan business from a joint venture partner as part of an ongoing international push for the brand.

Under the deal, Sanei International will be bought out of its 51% stake in the Japanese joint venture. The purchase price of between $45m and $50m will include debt repayment and related transaction costs.

The move is part of what is described as “a robust international expansion” of Kate Spade New York, which includes recent store openings in the UK, Dubai, and Kuwait as well as further expansion into Brazil with additional store openings in Rio de Janeiro and Sao Paulo planned for this summer.

“Kate Spade New York has a long and successful history in the Asian market,” explains Craig Leavitt, CEO of Kate Spade New York.

“We believe the brand has a unique ability to continue to grow internationally and be relevant to consumers around the world. In order to realise our international potential, we believe partially or wholly owned business models better enable us to connect more directly to our consumers, understanding and investing in their preferences and tastes more keenly.

“It is our strategy to build a global company to support what is already quickly becoming a global brand.”

The move to acquire the Japanese business aligns with Kate Spade New York’s strategy to fully or partially own the majority of its Asia based businesses.

In May last year it announced a joint venture in the People’s Republic of China with the E.land group to grow to nearly 300 points of distribution by 2020. At the same time it said it was buying back the Hong Kong South East Asia business from its long term distribution partner in January 2014.

The purchase of the Japanese business – the company’s second largest market outside of the US – is expected to be completed in autumn 2012.

Kate Spade Japan currently operates 52 points of sale in the country, and achieved net sales of $71m in the year to 31 August 2011 – with growth of around 20% seen in the 12 months to April 2012.

Posted in Apparel, Brand, Finance, News, Operations, Retail, accessories, ladies | No Responses »

Lululemon Athletica Q1 profit up 40.2%

Friday, June 8th, 2012

Lululemon Athletica Inc. topped first-quarter profit expectations, but the yoga-inspired brand said comparable-store sales growth was slowing and disappointed Wall Street with its outlook, prompting an early-morning stock selloff. Shares of the Vancouver-based firm fell 11.4 percent to $62.05 in pre-market trading today.

Specialist apparel operator Lululemon Athletica posted a 40.2% surge in first-quarter net profits, but its outlook suggests same-store sales growth is set to slow.

For the thirteen weeks ended 29 April, net income was US$47m, compared to $33.5m the same period last year. Income from operations for the quarter increased 41% to $73.1m.

Net revenue surged 53% to $285.7m, while comparable store sales increased 25% on a constant dollar basis.

Comparable-store sales rose 25 percent on a constant-dollar basis, but the company said that increase would slow to a low-double-digit pace in the second quarter.

CEO Christine Day said: “Our strategy to increase inventory levels led to strong revenue growth and earnings performance in the first quarter as our guests responded well to our spring styles and colours.”

Looking forward, the company expects diluted earnings to be in the range of $0.28 to $0.30 per share for the second quarter, below the 33 cents analysts excepted, with comparable-store sales rising by a low double-digit percentage.

For the full year, Lululemon projected earnings of $1.55 to $1.60, less than the $1.63 analysts projected.

Even though Wall Street was unhappy with the outlook, Lululemon has been one of fashion’s strongest players. Its cash stockpile at the end of the quarter expanded to $424.3 million from $260.9 million a year earlier.

Posted in Activewear, Apparel, Brand, Finance, News, Operations, Retail | No Responses »

Harvey Nicks eyes BRIC spend with luxe classics

Friday, June 8th, 2012

Harvey Nichols is introducing classic luxury brands for the first time across all fashion categories in a bid to capture spend from its growing emerging markets customer base.

The department store is looking to add “classic elegance” brands including Chanel, Dior and Hermès at its London Knightsbridge flagship in response to demand from customers from countries including Brazil, Russia, India and China (BRIC).

Chief executive Joseph Wan said more traditional luxury brands would broaden the retailer’s offer, which has historically been led by a more trend-led buying strategy.

The brand mix to date has included contemporary labels such as Alice + Olivia, young British designers such as Peter Pilotto and Erdem and brands with higher price points including Alaïa.

Wan said: “Harvey Nichols is not a full-range department store and we have always been very fashion-led. We don’t want to dilute this fashion impact, but going forward, with the rising importance of BRIC customers it’s in our interest to bring in these classic elegance brands that are most attractive to them.”

Space will be freed up for the brands at Harvey Nichols’ 220,000 sq ft Knightsbridge store through an overhaul, expected to cost tens of millions of pounds. Wan declined to give any time frame for the project.

The “classic elegance” brands are expected to be rolled out across Harvey Nichols’ seven UK and six overseas stores.

Harrods chief merchant Marigay McKee previously told Drapers its biggest spenders were increasingly customers from China, Russia, India and the Middle East “who are all about power brands like Chanel, Dior and Vuitton”.

Posted in Apparel, Brand, Designer, Men, News, Operations, Retail, ladies | No Responses »

Prada reports strong first quarter sales

Friday, June 8th, 2012

Prada SpA yesterday (June 7) reported strong sales and profits in its first quarter to April 30, 2012. The Italian fashion group said Thursday that it saw double-digit sales growth in all of the company’s markets in the first quarter but added that it was staying cautious on the economic outlook for 2012, underlining the “uncertain international economic environment.”

Prada—which includes brands such as Miu Miu and Church’s, in a addition to signature label Prada—said it is confident in the company’s ability to achieve its objectives but said in a statement it “must consider” the increasing risks in the current economic context, as its net profit for first quarter more than doubled from the same period last year.

The company’s prudent stance mirrors comments made by other luxury-goods purveyors in recent months, amid concerns that the euro-zone crisis may dent the current booming business in high-end goods although growth in the sector remains strong.

The Italian fashion house, which listed in Hong Kong last June, said that despite its “excellent results achieved in the first quarter,” the company must “be ready to take any necessary actions to safeguard [its] assets and preserve [its] long-term growth strategy.”

Net profits at the Milan-based group, which listed on the Hong Kong stock exchange last year, rose 105.6 percent to 164.8 million euros ($207.4 million) from the first quarter of 2011, the company said in its earnings statement. Gross revenues (Ebitda) went up 77.2 percent to 200.1 million euros and turnover also rose 47.9 percent to 686.8 million euros.

Sales of high-margin leather goods increased 58% to account for 62% of the company’s sales. Though the Prada brand has become known in the past 20 years as a trendsetting fashion house, its roots are as a luggage maker.

The Asia Pacific region excluding Japan—the company’s largest market—reported sales up 47%. However Europe—excluding Italy—led growth. Sales soared 57% across the continent from a year ago and increased 54% in the company’s domestic Italian market, boosted by wealthy tourists—in many cases from China—shopping for pricey handbags and clothes during their vacations.

Prada and competing labels are pouring millions into flagship shops in Europe to burnish their image and meet the demand from tourists shopping in the region.

“We are more certain than ever that we have chosen the correct route to growth based on a balanced geographical presence around the world and on the strength of our brands,” said Chief Executive Patrizio Bertelli, in a statement.

Recently, Hermès RMS.FR -1.33% SCA and LVMH Moët Hennessy Louis Vuitton SAMC.FR -1.32% both pointed to risks arising from the uncertain outlook in Europe. Nonetheless, the companies first-quarter sales growth remained strong.

Posted in Apparel, Brand, Finance, Labor, Men, News, Retail, accessories | No Responses »