July 26th, 2012

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Puma Q2 profits dive ahead of Olympics

Thursday, July 26th, 2012

Sportswear brand Puma today (26 July) revealed a dive in second-quarter profits on the eve of the Olympics, after being hit by poor consumer sentiment in Europe combined with the impact of strategic investments. The company said the results meant it would now speed up its transformation plan to “establish a more efficient business model, operating on a leaner cost base.”

The Herzogenaurach, Germany-based sporting goods firm reported that second-quarter net profits plunged 29.2 percent over the second quarter to 26.7 million euros, or $34.3 million, as sales grew 11.8% to EUR752.9m, or $967.4 million. In the EMEA region, sales declined 3% to EUR283.6m, which the company attributed to the difficult market environment in Europe and weaker footwear performance.

Puma SE, which outfits Jamaican sprinter Usain Bolt, blamed the weaker than expected earnings on a challenging business environment, particularly in Europe, coupled with increasing strains on gross margins.

The transformation plan, which began in 2011, will see the company trim its retail portfolio in Europe and North America, reduce the number of products developed, and cut its endorsement contracts.

It also intends to streamline its cost bases by setting up a new regional business model which will initially be rolled out in Europe. The European set-up will restructure its operations from 23 countries to seven areas.

Puma will also establish a fully regionalised supply chain to improve order management, inventory levels and turns, as well as production flows on the sourcing side.

Together, these actions are likely to incur one-time costs of up to EUR100m, which will “ultimately result in higher cost efficiency and working capital improvements” in the upcoming years.

“Despite the poor consumer sentiment and challenging business environment particularly in Europe, Puma achieved respectable sales growth in the second quarter and first half of this year,” said CEO Franz Koch.

“However, pressure on gross profit margins and further strategic investments related to our “Back on the Attack” plan, in combination with a weakening European business, impacted second quarter net earnings.

“We have therefore taken measures to secure sustainable and profitable growth by broadening the scope of our Transformation Program. This program is designed to reduce complexity and establish a more efficient business model, operating on a leaner cost base.”

Puma also announced the promotion of Michael Lammermann, currently the company’s general manager finance, to the position of chief financial officer, effective Jan. 1, 2013. Klaus Bauer, chief operating officer, announced to the administrative board that he will part ways with Puma at the end of the year due to personal reasons. His successor will be announced at a later date.

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

Fifth & Pacific Q2 losses narrow

Thursday, July 26th, 2012

Fifth & Pacific has managed to narrow its losses from continuing operations during the second half, helped by strong sales growth at the Kate Spade brand.

The company, which recently changed its name from Liz Claiborne Inc, said losses from continuing operations narrowed to US$50m , or 0.46 dollars per share, compared to a loss from continuing operations of 54 million dollars, or 0.57 dollars per share, for the second quarter of 2011. On a reported basis, net losses narrowed to US$52.1m from $89.8m the year before.

Net sales for the second quarter of 2012 fell 6.5% during the second quarter to $337m, a decrease of 23 million dollars from the comparable 2011 period. On a comparable basis, net sales rose 13%, excluding the $62m in net sales associated with brands that have been sold or exited but not accounted for as discontinued operations.

Kate Spade recorded the strongest sales gain, up 34%, while Lucky Brand recorded 8% sales growth. However, Juicy Couture saw sales decline 9%, which the company attributed to poor inventory management.

Net sales for the first half of 2012 were 654 million dollars, a decrease of 37 million dollars, or 5.3 percent, from the comparable 2011 period. Net sales increased 75 million dollars, or 13.1 percent on a comparable basis from the 2011 period, excluding the 112 million dollars decline in net sales associated with brands that have been sold or exited but not accounted for as discontinued operations. Cash flow from continuing operating activities for the last twelve months was 81 million dollars.

For the first half of 2012, the company recorded a loss from continuing operations of 101 million dollars, or 0.96 dollars per share, compared to a loss from continuing operations for the first half of 2011 of 107 million dollars, or 1.13 dollars per share.

“Looking at the performance during the quarter of our three global lifestyle brands – Juicy Couture, Lucky Brand and Kate Spade – we were very pleased with the results at Kate and Lucky, where performance exceeded our expectations, while performance at Juicy was below our expectation,” said CEO William McComb.

“Kate Spade had another strong quarter, posting a 34% increase in direct to consumer comparable sales, driven by strong performance across all categories.

“At Lucky Brand, direct-to-consumer comparable sales increased 8% in the quarter. Lucky’s strong full price selling in the quarter drove direct-to-consumer gross margin improvement in excess of 700 basis points compared to last year.”

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EBay Backs British Initiative

Thursday, July 26th, 2012

EBay is a new sponsor of British Fashion Council’s Fashion Forward initiative, which helps designers to show their collections and develop their businesses in London. The BFC said eBay’s fashion arm would sponsor the initiative in a “multi-season” agreement from spring 2013. The program, now in its sixth year, currently supports designers including Mary Katrantzou, Henry Holland and James Long.

The partnership involves a number of activities. Melanie Smallwood, the head of eBay fashion brands, will sit on the panel to decide the next round of designers that Fashion Forward will support, to be announced in January, while eBay will also host a fashion auction with the BFC to benefit Save the Children. The auction is to run from Sept. 13 to 23, coinciding with London Fashion Week’s spring 2013 season, and will carry pieces such as the Burberry dress Samantha Cameron wore to the Duke and Duchess of Cambridge’s 2011 wedding, along with pieces by Jimmy Choo, Alexander McQueen and Temperley London.

Smallwood noted that working with the BFC would give eBay additional “fashion credibility,” to add to the designer collaborations that eBay has launched in the U.S., most recently with designers including Chris Benz and Tibi for the holiday season. “That’s the evolution of where we’re going from a fashion perspective,” she said.

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Crocs Q2 profits up after strong sales in Asia

Thursday, July 26th, 2012

Footwear specialist Crocs has posted a rise in second quarter profit thanks to higher sales in Asia and the Americas.

Net income for the three months ended 30 June increased 10.8% to US$61.5m, or $0.68 per diluted share, compared to net income of $55.5 million, or $0.61 per diluted share, in the second quarter of 2011.

Revenue for the second quarter of 2012 increased 12 percent to $330.9 million, over revenue of $295.6 million reported in the second quarter of 2011. This represents the highest three month revenue level in the company’s history.

This was primarily due to the company’s performance in Asia and the Americas, but partially offset by a decrease in Europe. Geographically, revenue increased 10.9 percent for the Americas, increased 20.5 percent for Asia and decreased 5.2 percent for Europe.

From a channel perspective,  retail sales increased 22.6 percent to $112.5 million, over sales of $91.8 million in the second quarter of 2011. Wholesale sales increased 7.3 percent to $188.5 million, over sales of $175.8 million in the second quarter of 2011. Global same-store sales edged up 1.8% on a currency neutral basis. Internet sales increased 6.6 percent to $29.9 million, over sales of $28.1 million in the second quarter of 2011.

The company ended the quarter with 484 retail store locations, which compares to 397 locations a year ago.

Gross profit rose 15.2% to $196.1m, or 59.3% as a percentage of sales., from $170.2 million, or 57.6 percent as a percentage of sales in the same period last year. Cash and cash equivalents at June 30, 2012 increased 54.9 percent to $278.8 million compared to $180 million at June 30, 2011.

“We’re pleased with our ability to deliver profitability that exceeded our second quarter projections despite some challenges in certain areas of our business,” said president and CEO John McCarvel.

“We are very encouraged by continued strong growth of Asia, sell through of our products in key wholesale accounts, our international retail performance, all driven by customer enthusiasm for our new products.”

For the third quarter, the company forecasts revenue of $300m and earnings per share in the range of $0.42 and $0.44.

Posted in Brand, Children, Finance, Men, News, Retail, accessories, ladies | No Responses »

Skechers slashes Q2 losses to US$1.3m

Thursday, July 26th, 2012

Footwear firm Skechers has reported narrower second quarter losses on the back of improved gross margins and the clearance of excess stocks of toning shoes.

Net income for the three months ended 30 June narrowed to US$1.3m, compared to a $30.1m loss in the same quarter last year. Loss from operations also narrowed to $1.5m, from a loss of $48.2m last year, while net sales declined 11.6% to $384m.

For the first six months of the year, the company’s net loss narrowed to $6.7m from $19.3m, while loss from operations narrowed to $5.9m from $32.9m. Meanwhile, net sales fell 19.3% to $735.3m.

“The focus at this time last year was the clearing of excess toning inventory, which is now substantially complete and allows us to capitalise on the strength of our brand by selling more full priced product while offering new lifestyle and performance looks,” explained CFO and COO David Weinberg.

Looking ahead, he added: “We are continuing on the path we set last year of cleaning up our inventory and bringing forward new and relevant product in the diverse categories our brand represents.

“We believe that we will continue to see sales improvements in the second half of 2012, including in our international business, which was adversely affected by the Euro exchange rate in the quarter, as well as toning sales during this same period last year.”

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Jigsaw parent company posts £10m loss

Thursday, July 26th, 2012

Robinson Webster Holdings, the parent company behind womenswear chains Jigsaw and Kew 159, has posted pre-tax losses of almost £10m for the full-year to October 1, 2011.

The group saw its losses widen dramatically to £9.98m compared to the previous full-year when it made a pre-tax loss of £121,000.

According to documents filed at Companies House, group turnover was up by around 3.7% from £81m the previous full-year to £84m in this full-year period.

In terms of its individual fascias Jigsaw made the biggest loss – a total of £21.2m – which the business has attributed to “one off changes arising from the decision to provide against intercompany loans and investments.”

Kew 159 made a loss of £6.8m in the full-year period as a result of unprofitable stores within its portfolio.

In March Robinson Webster Holdings announced that it wasto shutter its Kew 159 fascia after the spring ‘12 season. As part of this process some stores will be sold off while others will be converted in to Jigsaw stores.

As a result, the group will actively focus on the Jigsaw brand, and is “seeking commercial opportunities to earn profit and add value by pursuing growth outside of the established store and web channels.”

The group said these opportunities will come from licensing and franchise agreements for the Jigsaw brand both in the UK and overseas and it also hopes to build on the success of its menswear business which it relaunched earlier this year. Jigsaw’s concession and online business is also being targeted for growth.

The directors’ report described the decision to cull Kew 159 as “difficult”.

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