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Carrefour Q3 sales rise 2.1% Thursday, 11th October 2012
Photo credit: Carrefour SA
The world’s second largest retailer said sales rose 2.1 per cent to EUR 22.63 billion for its third quarter, managing to beat the average EUR 22.57 estimate from analysts polled by Reuters.
Strong sales in convenience stores and Asian and Latin American markets managed to offset a weaker performance for Carrefour SA at hypermarkets and mainland Europe.
Carrefour in January appointed Georges Plassat as chairman and chief executive of the company, as it looked to counter-act the declines in growth seen across the globe, especially at its core hypermarket business. Sales at larger stores have fallen 2.4 per cent so far for the year, whilst smaller stores grew 6.6 per cent.
Sales in Asia grew 12.3 per cent, whilst Latin America saw a 5.2 per cent increase. Brazil, now Carrefour’s second-largest market after France, recorded like-for-like sales growth of 9.7 per cent for the period.
Despite an improved performance in Carrefour’s French domestic market, the recession in Spain and Italy weighed in heavily on the retailer’s overall performance in Europe, with sales down 2.2 per cent.
In emerging markets, China continued to struggle amid an economic slowdown, while Brazil, now Carrefour's second-largest market after France, had like-for-like sales growth of 9.7 percent.
Burberry results confirm fears of slowdown Thursday, 11th October 2012
Photo credit: My Retail Media
British fashion house Burberry on Thursday confirmed what many investors had feared, as retail sales growth saw a sharp slowdown in the second quarter, with demanding easing in the UK and China.
Sales at stores open a year rose 1 per cent in the three months to 30 September, compared with first quarter growth of 6 per cent.
"In a more challenging external environment, footfall declined but brand momentum remained strong, particularly with our higher spending luxury consumer," said chief executive Angela Ahrendts.
As one of the only luxury brands to continue to report growth in sales throughout the UK’s double dip recession and eurozone crisis, the results confirm that not even Burberry is safe from a slowdown in China and emerging markets.
"The fears surrounding Burberry's high profile profit warning last month will not have dissipated on the back of this trading update.” Jaana Jatyri, chief executive of fashion forecasting company Trendstop.com said in light of the results.
"Naturally, the longer the global economic crisis goes on, and the deeper it affects emerging markets in particular, the more exposed Burberry will be.
“The emerging markets have proved to be a double-edged sword for Burberry. Yes, there is money in the emerging markets but newly acquired customers can also be more fickle than those in the established territories where wealth is arguably more stable. The fact that Germany and France have proved particularly robust for Burberry underlines this fact. If Burberry can cope with the current turbulence, it will be tremendously well positioned in the medium to long-term.” Jatyri added.
Burberry on Thursday said it expects retail selling space to increase by 14 per cent for the second half, with underlying wholesale revenue to remain mostly unchanged year-on-year.
Karen Millen opens the doors to first China store Wednesday, 10th October 2012
Photo credit: Karen Millen
Fashion chain Karen Millen opened its first of 65 stores in China this week as it looks to take the brand global.
With 314 stores and concessions already open across 40 countries, Karen Millen is now focusing on an ambitious Asian expansion plan over the next five years, adding 65 stores in China alone.
Karen Millen also revealed plans to launch a local language website in early 2013 along with a second store in Shanghai.
Hermès enjoys luxury of stronghold in Asian markets Monday, 1st October 2012
Photo credit: Hermès
“We have not seen any inflexion of any kind in our sales.” Hermès chief executive Patrick Thomas told Reuters on Sunday: “Therefore our targets for the year remain unchanged.”
With the global luxury market becoming increasingly polarised, healthy sales and a strong presence in emerging markets have shown Hermès to be resilient against deteriorating trading conditions elsewhere. As an economic slowdown in China rocks many premium brands’ reliance on the country, Thomas told Reuters that Hermès is ready to move with the times of the world’s developing luxury markets.
"Chinese customers are becoming increasingly sophisticated very fast," Thomas said.
"Before, they wanted ostentatious items, now they want quality objects. The future of the luxury market lies in products which demonstrate genuine craftsmanship."
Thomas was speaking to Reuters following the brand's fashion show held in the Jeu de Paume museum in Paris.
Home Depot axes big box China stores Friday, 14th September 2012
Home Depot today announced it is to close its remaining seven big box stores in China in order to focus on online sales and speciality stores.
The closures will result in the loss of 850 jobs.
The homewares retailer will keep two stores in Tianjin and is currently in the process of developing relations with Chinese e-commerce websites.
"We've learned a great deal over the last six years in China, and our new approach leverages that experience and reflects our continuing interest in providing value to Chinese customers, as well as our shareholders," Home Depot chairman and CEO Frank Blake said in a statement.
Prada “will not be immune” as Burberry warning sends investors in a spin Wednesday, 12th September 2012
Prada navigates stormy conditions in its latest campaign. Photo credit: Prada S.p.A.
Signs of a paradigm shift for China’s luxury market prevailed on Wednesday, as shares in Italian fashion house Prada fell nearly 4 per cent after Burberry’s unscheduled profit warning this week.
It seems the after-effects of the surprise announcement from the British fashion house have been felt across the globe, as shares in Prada fell to their lowest in three weeks. The news couldn’t have come at a worse time for the luxury market, after recent Chinese data emerged suggesting a further slowdown of the world’s second-largest economy.
According to Reuters, China’s retail sales growth for all consumer goods including luxury slowed to 13.2 per cent year-on-year in August to CNY 1.67 trillion, from 18.1 per cent growth in December.
For many, Burberry’s shock profit warning on Tuesday was long overdue. Analysts have been warning of a slowdown in China’s economy for months, as luxury retailers' reliance on Asian markets begin to look increasingly precarious.
Shares of Prada fell as much as 3.9 per cent to HKD 57.65, their lowest since 24 August.
"Prada will not be immune," Gloria Tsuen, an analyst at CIMB, wrote in a research note reported by Reuters. "We think the long-awaited slowdown in luxury consumption driven by global economic and political uncertainties is finally starting to have a meaningful impact on performance."
Burberry saw GBP 1 billion knocked off its market value on Tuesday, after an unexpected trading update warned like-for-like sales at the group had ground to a stop in the 10 weeks to 8 September, and have even started to fall in recent weeks.
Hermès raises targets as Birkin bags help buck downturn Friday, 31st August 2012
Photo credit: Hermès International
Named after actress Jane Birkin and a firm favourite with the fashion set since its creation in 1982, it seems the enduring allure of the Birkin bag has helped Hermès withstand the growing pressures within the eurozone, as the Paris-based group reported a rise in first-half profits.
The luxury accessories brand said net profits grew from EUR 291 million last year to EUR 335 million for the first six months of 2012, according to a report by the Financial Times. Excluding one-off gains, this represented a rise of 28 per cent.
On the back of such a strong performance, Hermès now expects sales growth at constant rates of 12 per cent this year, up from its previous forecast of 10 per cent.
The company has also raised expectations for operating profit margins, stating it would fall between 27.8 per cent and the record 31.2 per cent achieved in 2011.
Despite its strong French heritage and appeal in Europe, Asia (excluding Japan) continued to generate the highest demand for Hermès, with sales up 25 per cent.
Stella McCartney opens first freestanding store in Shanghai Friday, 17th August 2012
Photo credit: Stella McCartney Winter 2012 campaign
London-based brand Stella McCartney has opened its first freestanding boutique in Shanghai.
China’s largest city by population will play host to Stella McCartney’s brand new 1,195 sq ft store, located at the Reel Mall on Nanjing Road.
According to WWD, Stella McCartney is now looking to expand its Chinese presence with a second store in Shanghai and a new store in Beijing planned in the coming year.
Prada sees 36.5% rise in H1 revenue Monday, 6th August 2012
Photo credit: Prada campaign
Prada SpA on Monday revealed a 36.5 per cent rise in first-half revenue, thanks to strong demand for its Prada and Miu Miu brands in Asian markets.
The Italian fashion house said revenue for the six months to the end of July rose EUR 1.55 billion.
Asia-Pacific was the luxury group’s best performer by region, with revenue growth of 45 per cent. European markets followed with a 37.3 per cent rise, ahead of Japan’s 34.2 per cent, the Americas’ 31 per cent and Italy’s 21.7 per cent increase.
Prada opened 28 new stores during the half year, bringing its total number of directly operated stores to 414. The Milan-based company, which listed on the Hong Kong stock exchange last year, is set to announced its half-year earnings on 24 September.
Hugo Boss Q2 sales rise 14% but concern for Asia abounds Tuesday, 31st July 2012
Opening of Hugo Boss' Taipei Store. Photo Credit: Hugo Boss
German fashion house Hugo Boss on Tuesday reported back on second quarter sales of EUR 485 million, a rise of 14 per cent on a currency-neutral basis.
But despite strong growth in Europe, where sales rose 17 per cent, and 11 per cent in the Americas, Asian sales rose just 4 per cent compared with a 9 per cent rise in the previous quarter.
The luxury retailer is now warning that its full-year profit would fall short of analyst expectations as the Chinese market begins to slow.
"We are still growing in Asia. But at the moment we too are feeling the slowing in consumer demand that can be seen across the sector," chief executive Claus-Dietrich Lahrs told investors according to a report by Reuters.
Despite second quarter sales of EUR 485 million coming in well above analyst forecasts of EUR 462 million, shares in Hugo Boss fell 5 per cent on Tuesday morning.
The company said it now expected 2012 core profit to rise by 10-12 per cent, disappointing some analysts who had expected a rise as high as 15 per cent.