June 12th, 2012

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Michael Kors Q4 soars on growth across all units

Tuesday, June 12th, 2012

Luxury clothing brand Michael Kors Holdings Limited has more than doubled its fourth quarter profit thanks to strong performances across all of its business segments, and says it sees continued growth in the year ahead.

The company, which went public in December, today (12 June) said net income in the three months to 31 March surged to $43.6m or $0.22 per share, up from $17.4m or $0.10 per share in the same period last year.

Total revenues rose 58.3% to $380.0m from $240.0m. New store openings helped retail sales jump 80.3% to $172.2m, with a 36.1% increase in comparable store sales. Wholesale net sales climbed 45.5% to $190.7m and royalty revenue increased 26.9% to $17.1m.

Gross profit in the quarter surged 63.4% to $219.1m, and rose to 57.7% of total revenue from 55.9% last time.

“Our results for the quarter were driven by strong performance across each of our retail, wholesale and licensing segments,” said chairman and CEO John Idol.

“Our North American comparable store sales increase was 37.2%, reflecting the strong demand for the Michael Kors luxury brand, our exciting assortment of fashion merchandise and our exceptional jet-set in-store experience.

“We also delivered significant growth in our wholesale segment, reflecting the strength of our brand and the favourable results from our transition to shop-in-shops in department stores.

“In Europe, total revenue increased 122.6% for the quarter as a result of a 13.6% comparable store sales increase, in addition to strong performance in our wholesale operations. In Japan, we are cautiously encouraged by our results for this business, which is in the start-up phase.”

For the year, net income more than doubled to $147.4m or $0.78 per share, up from $72.5m or $0.40 per share a year earlier. Total revenue jumped 62.1% to $1.3bn from $803.3m, with retail sales up 82.1% to $626.9m, wholesale revenues rising 47.5% to $610.2m and royalty revenue increasing 43.1% to $65.2m.

“We are uniquely positioned to continue to build the Michael Kors global luxury lifestyle brand, and are pleased that our momentum has continued into the first quarter of fiscal 2013,” Idol added.

Looking ahead, the company expects first quarter earnings per share in the range of $0.18 to $0.20, on revenues rising to $360m to $370m.

For the fiscal year, earnings per share are expected to be in the range of $1.08 to $1.12 and total revenue of $1.7bn to $1.8bn.

The company operates 237 retail stores, including concessions, with another 64 operated through licensing partners. There are 301 Michael Kors stores worldwide.

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Sales fall but losses reduce at Kookaï

Tuesday, June 12th, 2012

Sales at womenswear retailer Kookaï UK dropped 24.6% in the year to August 27, 2011 while pre-tax losses fell back to £2.5m – a reduction of 23% compared to the previous year.

Turnover at the retailer, a wholly-owned subsidiary of French company Kookaï SA and minority-owned by investor Amery Capital and French parent Kookaï, fell £2.5m to £7.8m down from £10.3m the previous year. Pre-tax losses were £3.3m the previous year.

According to the director’s report in the results filed at Companies House, the business has made changes to its store and concession locations to reflect a more premium positioning and going forward intends to develop its online business.

“The changes to the business have allowed the company to restructure its operations during this financial year,” it said. “The directors are satisfied with the way the restructure was managed and are confident the new measures will make further improvements on its performance.”

Kookaï operates in the UK via one standalone store at St Christopher’s Place in London as well as four concessions in two branches of John Lewis, Selfridges Manchester, De Gruchy in Jersey, and a transactional website.

Kookaï was established in Paris in 1983. In 2006, retail entrepreneur Maurice Helfgott’s investment vehicle Amery Capital formed a joint venture with the Kookaï parent company, which is a subsidiary of the Vivarte Group, in order to run Kookaï UK, buying Kookai out of administration.

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Li Ning in profit warning as sales slump

Tuesday, June 12th, 2012

Sportswear brand Li Ning says full-year profits in 2012 are set for a “substantial decline” as sales continue to fall, with apparel orders down by as much as 20%.

The Chinese business said trade fair orders from 2012 would be down in the high single digits in percentage terms, with the situation deteriorating in the fourth quarter, which showed a high teens decline.

“Throughout this year, competition within the sporting goods industry has intensified, discount promoting efforts have further increased and the pressure of inventory clearance at the retail level remains strong,” the company said.

“Despite taking an early initiative in implementing a series of reforms at the retail level, the group is still affected by the unfavourable market conditions, and the effects of the reforms have yet to emerge.”

Meanwhile, Li Ning announced that it had signed up to be equipment sponsor of the Chinese Basketball Association (CBA) for the following five seasons, describing the move as an “important strategic choice” and signalling that it will further develop its basketball business in the future.

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

Burberry sued for using Humphrey Bogart image

Tuesday, June 12th, 2012

British luxury brand Burberry is being sued for using an image of American actor Humphrey Bogart across its social media platforms.

According to The Telegraph, Bogart’s son, Stephen, filed a lawsuit in April seeking unspecified damages and claimed that Burberry illegally used an image of Bogart wearing a trench coat in the film Casablanca to promote its products.

The image of Bogart was used across Burberry’s Twitter and Facebook pages in a historical timeline of the brand.

The brand filed a counter claim last month in which they said the use of the image wasn’t directly connected to selling its merchandise and also said that a license fee for the image was paid for photo agency Corbis.

In a statement Stephen Bogart said: “This is such an incredibly disappointing and disrespectful action by Burberry. It is important brands are not allowed to commercially use my father’s name or image without our permission.”

In further reports, however, Stephen Bogart claimed that the trench coat may not have been made by Burberry and could be a coat made by Aquascutum.

The case is ongoing.

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Debenhams rolls out wifi as latest phase of multichannel strategy

Tuesday, June 12th, 2012

Debenhams has introduced wifi across all of its 167 UK stores.

The rollout follows a trial run with O2 in three UK stores and one million downloads of the Debenhams app. The department store claims that 20% of its online traffic now comes from mobile devices.

Debenhams is offering the service so that customers can access information, special deals, check for sizes and availability or arrange for good to be delivered to their homes.

Scanning a product bar code details its manufacture, and available colours and sizes, while out of stock garments can be ordered for home delivery. Debenhams has already been using its Extra kiosks – internet-enabled touch screens introduced last September – to offer up to five times the available range.

Debenhams Director, Simon Forster, said in a statement: “We’re seeing the shape of shopping in the future emerging right before our eyes. With over one million customers already with our app on their phones, free Wifi in stores has the potential to transform how people shop.”

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Retail discontent brews over Portas TV show as ‘gagging clause’ imposed

Tuesday, June 12th, 2012

Concern is mounting that plans to make a TV programme about Portas Pilot towns could undermine the efforts of retailers to revive troubled high streets.

Retailers have reacted with disquiet and anger to a contract circulated by TV company Optomen Television to local businesses in Margate, which won £100,000 of Government funding for its Portas bid and is afflicted by a high retail void rate.

The Optomen contract imposes draconian filming conditions on retailers including a ‘gagging’ clause, access to company accounts and business plans, a requirement to provide staff to facilitate filming and agreement to participate in “tasks and challenges” set by Mary Portas.

The Margate Town Team has begun a debate on the issue on its Facebook page and says: “We can’t escape the inevitable conclusion that the desires of a TV production company are being placed above the needs of a community in transition. Can this really be the case?”

On the Facebook page the organisation said it is excited and grateful for the opportunity to work with Portas but noted: “We’re confused and concerned about the involvement of the TV production company, especially the overly restrictive contracts which seem to want to quash and silence the public involvement and discourse which has been so effective and essential (and encouraged) to date.”

Dan Thompson, founder of the Empty Shops Network, said that the restrictions imposed in the contract – including a ban on discussing involvement in the programme on social networks such as Twitter and Facebook – go against the spirit of collaboration that has enabled hard-pressed town centre traders to learn from others’ experience.

He was also concerned about the requirement for participating businesses to take part in the “tasks and challenges”. Having already won financial backing the focus should be on doing what was proposed rather than being diverted in the interests of TV, he maintained.

Thompson said: “What’s become clear is there’s a real gap between what the Government is managing and what the TV company wants. The line is being blurred between a Government programme and a reality TV programme.”

He added: “We want [lessons from the schemes] to be public and shared but the businesses are being gagged.”

Independent retail adviser and founder of Independent Retailer Month in the UK Clare Rayner said:  “When Grant Shapps announced the first 12 Portas Pilot towns would have an opportunity to feature on a reality TV show I had major concerns that this approach would make the serious matter of economic regeneration of our high streets into light entertainment.

“Reality TV rarely represents reality, focusing on the most extreme examples of the whole of the reality to make for interesting viewing. Towns were excited about the opportunity, perhaps confusing a reality show with credible publicity that they would have got from a well-structured news or documentary feature.

“Having had sight of the contracts that the production company wish to impose on the retailers and towns participating, and having seen comments online from Margate Town Team voicing their concerns, I am certain that Shapps has got this very wrong. I am disappointed that my concerns were valid.”

No comment was immediately available from Optomen

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Hibbett Sports names Scott Bowman CFO

Tuesday, June 12th, 2012

US sporting goods retailer Hibbett Sports has appointed Scott Bowman as CFO and senior vice president, replacing Gary Smith who is retiring next month.

Bowman most recently served as chief financial officer of the northern division of home appliances retailer The Home Depot.

“As financial leader for a 795-store division representing US$25bn in annual sales, Scott certainly has the qualifications and wealth of retail experience that will complement the talented management team we have in place,” noted Jeff Rosenthal, Hibbett Sports president and CEO.

“Given our continued investment in and emphasis on information systems, Scott’s IT background was particularly attractive along with his demonstrated ability to drive cost savings.”

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Ted baker reports growth of 14.6% in revenue for 19 week period

Tuesday, June 12th, 2012

With an increase of 16.2 per cent in retail sales, British designer brand, Ted Baker reported its financial results for the 19 week period that ended June 2012. Group’s revenue sore by 14.6 per cent compared to the same period last year.

Average retail square footage increased 12 per cent to 259,936 sq ft as compared to 232,157 sq ft in 2011. While, wholesale sales for the period was reported to have grown by 8.9 per cent, compared to same term last year. Gross margins were, as anticipated, in line with last year.

The company opened additional concessions in the US, Spain and Ireland and a new store on the Brompton Road, London. Expanding its business internationally, Ted Baker opened its first store in Tokyo, Japan, and new concessions with leading department stores in the Netherlands and South Korea.

Commenting on trading, Ray Kelvin CBE, Founder and Chief Executive said, ” We continue to develop the Ted Baker brand in the UK and overseas. We opened a new store in London last week, and have exciting international store openings planned for the coming months, including Fifth Avenue, New York, Harbour City, Hong Kong and our first stores in Toronto, Canada, along with Beijing and Shanghai, China.

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