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Puma's sales growth continued in the first quarter of 2017 with the company reporting an increase of 15.4 percent currency-adjusted or 18 percent reported to 1,005.1 million euros (1,093 million dollars). Net earnings improved by 92.2 percent to 49.6 million euros (53.9 million dollars) and earnings per share were up at 3.32 euros (3.61 dollars) compared to 1.73 euros (1.88 dollars) in the first quarter 2016.
Commenting on the first quarter trading, Bjørn Gulden, Chief Executive Officer of Puma said in a press release, “For the first time in the Puma history, we achieved sales exceeding 1 billion euros in a quarter. Our EBIT also developed very positively with a growth of 70 percent to 70 million euros. Therefore we have raised our outlook for the full year to low double digit growth in revenue and the full-year EBIT to be between 185 million euros and 200 million euros.”
The gross profit margin improved slightly by 30 basis points from 46.8 percent in the first quarter 2016 to 47.1 percent, which the company said was due to selective price adjustments and further improvements in sourcing.
The operating result (EBIT) increased by 70.1 percent to 70.2 million euros (76.3 million dollars), as sales grew stronger than operating expenses, supported by a slightly higher gross profit margin.
Puma raises FY17 outlook
In light of the strong first-quarter increase in sales and profitability as well as the positive business outlook for the current year 2017, Puma has raised the full-year guidance for its consolidated sales and operating result (EBIT). The management now expects that sales will increase currency-adjusted at a low double-digit percentage rate (previous guidance: currency-adjusted increase at a high single-digit percentage rate).
The guidance for the gross profit margin remains unchanged (improvement to approximately 46 percent; previous year: 45.7 percent). Operating expenses for the full-year 2017 are now expected to increase at a high single-digit percentage rate (previous guidance: mid to high single-digit percentage rate). As a consequence the operating result (EBIT) is now anticipated to come in between 185 million euros (201 million dollars) and 200 million euros (217 million dollars) against previous guidance of between 170 million euros (184 million dollars and 190 million euros (206 million dollars). In line with the previous guidance, the management still expects that net earnings will improve significantly in 2017.
Total sales at John Lewis for the week ending April 22, 2017 were 74.9 million pounds (95 million dollars), up 1.6 percent, with sales, the company said, still impacted by the fall of Easter this year compared to last. The majority of John Lewis shops were shut on Easter Sunday, during the last week’s trading period. Fashion sales were down 0.4 percent.
John Lewis however said that women’s casualwear continued to see sales rise and swimwear and nightwear also enjoyed sales growth this week and were up by 16.9 percent. Children’s wear sales were driven by positive response to children’s shoes, that witnessed a 31.5 percent growth, as kids head back to school after the Easter break.
Sales in Home were down 5 percent, while gift food and seasonal remained strong with 7.1 percent sales rise due to continued Easter sales, and stationery saw a 5.2 percent growth. EHT had a strong week of trading, up 11.7%, largely driven by compelling promotions over the Easter period. Vision, including TVs, reported sales increase of 14.3 percent, and audio and connected home also saw a healthy uplift of 7.4 percent. Elsewhere within EHT, mobile and photograhy saw sales rise by a huge 57.9 percent as the company said, new launches helped drive sales.
Picture:John Lewis website
London - One of the biggest deals within the fashion industry is set to take place this year as luxury giant LVMH announced plans to buy fashion house Christian Dior for a 12.1 billion euros (10 billion pounds) and Christian Dior Couture for 6.5 billion euros (5.52 billion pounds).
The deal, announced Tuesday morning, sees the Arnault family making an offer on the publicly held Christian Dior shares it does not already own and regrouping the entire Dior brand within LVMH as part of its two-headed strategic plan to further solidify its luxury offering. The move sees LVMH, which currently owns Perfumes Christian Dior, buying the Christian Dior brand and its Haute Couture, women’s and men’s ready-to-wear lines, footwear and leather goods, uniting one of the most iconic fashion houses under one roof for the first time in decades.
LVMH to buy Christian Dior SA
Through Semyrhamis, a company held by the Arnault family, the group will file a simplified mixed public offer on Christian Dior shares it does not own, which are equal to 25.7 percent of the share capital. The primary offer sees the group offering 172 euros per share in cash and 0.192 Hermes International shares for each Christian Dior share, with the deal being completed by two secondary offers which will be cash-only and Hermes International shares only at 260 euros per Christian Dior share and 0.566 Hermes International shares per Christian Dior share respectively.
The public offer values each Christian Dior share at 260 euros, and represents a premium of 14.7 percent over Christian Dior closing share price as of April 24, 2017, as well as an 18.6 percent premium over the 1 month average share price. This offer values the remaining Christian Dior shares at 12.1 billion euros (10 billion pounds). Revenue at Christian Dior has doubled over the last five years, as profitability has soared during the same timeframe. For the last 12 months which ended March 31, Christian Dior reported revenue in excess of 2 billion euros, with an operating profit of 270 million euros.
“This project represents an important milestone for the Group. The corresponding transactions will allow the simplification of the structures, long requested by the market, and the strengthening of LVMH’s Fashion and Leather Goods division thanks to the acquisition of Christian Dior Couture, one of the most iconic brands worldwide,” said Bernard Arnault in a statement. “They illustrate the commitment of my family group and emphasize its confidence in the long-term perspectives of LVMH and its brands. I am delighted to announce this project today and thus continue and reinforce the development of LVMH in France and worldwide.”
The announcement led to an increase in LVMH shares on Tuesday morning, which rose 2.9 percent to 221 euros during early trading. The move sees LVMH merging the entire Christian Dior brand together, which could create great synergy between Christian Dior and Parfums Christian Dior, which is set to be be accretive to LVMH earnings per share once the deal is complete. The luxury conglomerate expects the filing of the proposed offer to be completed by the end of May 2017, after which the acceptance period of the offer would last three weeks.
“Reuniting Christian Dior Couture and Christian Dior Parfums, so one brand under one leadership, has to be a good thing for LVMH shareholders,” said Stephen Mitchell, head of strategy for global equities at Jupiter Asset Management, during a Bloomberg Radio interview. “It does clean up the corporate structure.” Couturier Christian Dior first founded his eponymous fashion house in 1946, thanks to support from businessman Marcel Boussac. He later expanded his namesake brand into fragrances, watches and accessories and began opening stores in New York, London and Tokyo. Iconic designers such as Pierre Cardin and Yves Saint Laurent also worked for the leading fashion house early in their careers, as Christian Dior himself passed away in 1957.
Photo: Christian Dior and Dior.com
Rocket Internet has said that aggregate revenue across the focus sectors food & groceries, fashion, general merchandise and home & living grew by 29 percent from 1.7 billion euros (1.8 billion dollars) in 2015 to 2.2 billion euros (2.3 billion dollars) in 2016. The aggregate adjusted EBITDA margin improved by 16.4 percentage points from -31.3 percent in 2015 to -14.9 percent in 2016, which the company said equates to an absolute EBITDA loss reduction of 234 million euros (254 million dollars).
"In 2016, our selected companies progressed on their path towards profitability, while demonstrating further growth ", said Oliver Samwer, CEO, Rocket Internet in a statement.
Key group companies report positive growth
During the period, Global Fashion Group (GFG) revenue and net merchandise volume growth across all regions, reaching revenue of over 1 billion dollars (1.08 billion dollars). GFG's adjusted EBITDA margin improved from -26.9 percent in 2015 to -12.5 percent in 2016. The company said, Middle Eastern online fashion retailer Namshi successfully reached breakeven, with an adjusted EBITDA margin of 1.8 percent for the year.
In 2016, online Home & Living companies Westwing and Home24 respectively reduced adjusted EBITDA losses from -49.9 million euros (54 million dollars) to -13.8 million euros (14.9 million dollars) and -75.3 million euros (81 million dollars) to -40.1 million euros (43 million dollars), respectively.
African online platform Jumia, formerly known as Africa Internet Group, completed the rebranding of all services under the Jumia brand in 2016 with a positive impact on traffic and brand awareness. Jumia reduced its adjusted EBITDA losses from -161.3 million euros (175 million dollars) in 2015 to -91.9 million euros (99 million dollars) in 2016.
Rocket Internet said that the group and its companies continue to be very well funded, with an available gross cash position of 1.5 billion euros (1.6 billion dollars) at Rocket Internet and an additional gross cash position of 0.8 billion euros (0.86 billion sollars) at selected companies and regional internet groups, as of the end of March 2017. Rocket Internet Group's cash flow from operating activities improved by 19.8 million euros (21.5 million dollars) to -85.7 million euros (93 million dollars).
ANALYSISJimmy Choo announced Monday that it's putting itself up for sale and looking for buyers. The decision not only has been strongly backed by the Board of Directors but also by namesake designer and company’s founder, who said to be “supportive of the sales process.”
The company, founded in 1996 by designer Jimmy Choo and former Vogue accessories editor Tamara Mellon, said it was considering a potential sale to "maximise value for its shareholders." Furthermore, Jimmy Choo executive team has discussed its plans with 68 percent shareholder JAB, which supports the process as part of a move away from a luxury sector it now considers "non-core".
Jimmy Choo said Britain's Takeover Panel has agreed that any talks with third parties can be conducted within the context of a "formal sale process". That enables talks with interested parties to take place on a confidential basis.
However, the firm said it is currently not in receipt of any approaches. The sale process will be run by BofA Merrill Lynch and Citigroup.
How did this (going on the sales table) happened to Jimmy Choo?
As explained by the British luxury retailer to investors, the decision is aimed at maximising shareholder value as majority investor JAB Luxury increases its focus on consumer goods. "JAB has therefore made the strategic decision to focus on its successful core businesses of consumer goods, including Coty Inc," the company said in a statement, adding that it expects the review to complete in the second half of 2017.
Last month Jimmy Choo reported a 15.7 percent rise in annual core earnings to 59 million pounds, on revenue up 14.5 percent, according to data collated by Reuters. Jimmy Choo sales dipped by nearly 2 percent in the U.S. last year, but it posted double-digit growth in Asia. Demand in China has been particularly strong.
"What remains to be seen is whether growing interest from Asia and the Middle East for luxury UK brands, will see Jimmy Choo receiving offers from foreign buyers searching for well-known British brands," said about the future consequences of the potential sale Jonathan Buxton, partner and head of consumer at Cavendish Corporate Finance.
Jimmy Choo’s shares gain 10 percent in London after sales’ announcement
On the back of the news, Jimmy Choo shares surged by as much as 10 percent, valuing the business at around 720 million pounds. It’s noteworthy that the stock, which floated on the London Stock Exchange at 140 pence in 2014, had increased 35 percent over the last year prior to Monday's announcement.
Since they started trading on the London Stock Exchange, shares in Jimmy Choo have been on a bumpy ride since the company's initial public offering in 2014. They hit a record low in June 2016 at less than 1 pound apiece.
JAB Holdings, the investment vehicle of Germany's billionaire Reimann family, has been building up its coffee and food chains and agreed this month to buy bakery group Panera Bread for 7.2 billion dollars. The investment firm’s luxury portfolio also includes British jacket brand Belstaff which could now be surplus to requirements. It indicated that it intended to retain its investment in beauty products maker Coty.
Photo: Ruben Dillan, Dual Gender, Jimmy Choo Corporate Web
ANALYSISThe rise of online shopping, shrinking margins, ever expensive rents, and consumer behavior’s shifts are just some of the reasons why American retailers are closing more stores than ever. And they are doing so at a record pace this year, according to analysts and market experts.
In fact, up to April 6, closings have been announced for 2,880 retail locations this year, including hundreds of locations being shut by national chains such as Payless ShoeSource.
That is more than twice as many closings as announced during the same period last year, according to Credit Suisse. Furthermore, based on the speed at which retailers have reduced their commercial network, the Swiss brokerage firm estimates retailers will close more than 8,600 locations this year, which would eclipse the number of closings during the 2008 recession.
Just this week, Bebe Stores said it would close its remaining 170 shops by the end of May and sell only online, while teen retailer Rue21 announced plans to close about 400 of its 1,100 locations, being poised as the next retailer to seek for bankruptcy protection.
Shutting down stores – or at least announcing the plan – helped JC Penney’s stock to pick up
Similarly, JCPenney will be closing 138 stores anytime soon, although later than previously publicised as sales are up since the retailer announced that it was shutting them down. Sources close to the matter cited by ‘USA Today’ said that liquidation sales at those locations have been postponed until May, 22 and store closures have been pushed back six weeks to July, 31.
It’s worth recalling that at least 10 retailers, including apparel seller Limited Stores and sporting goods chain Gander Mountain, have filed for bankruptcy protection so far this year. Meanwhile, nine retailers actually declared bankruptcy in 2016.
“There is no reason to believe that this will abate at any point in the foreseeable future,” said Mark Cohen, the director of retail studies for Columbia Business School and a former executive at Sears Canada, as reported by ‘The Australian’.
One of the most argues reasons for shuttering down physical stores is the ever rising price of rent. “Thousands of new doors opened and rents soared,” Richard Hayne, chief executive of Urban Outfitters, told analysts last month. “This created a bubble, and like housing, that bubble has now burst.” Besides, margins on average fell to 9 percent last year from 10.5 percent in 2012, according to consulting firm AlixPartners.
Despite the view that shoppers prefer to try on clothing in physical stores, apparel and accessories are expected this year to overtake computers and consumer electronics as the largest e-commerce category as a percentage of total online sales, according to eMarketer.
Image:JC Penney Store, Oak Hollow Mall. Credits: Mike Kalasnik, Flickr
Safilo and Authentic Brands Group (ABG) have announced a five year extension of their license agreement for the design, manufacturing and distribution of the Juicy Couture eyewear collections of sunglasses and optical frames. The company said that the agreement will now run until December 31, 2022.
“The renewal of our license agreement, originally forged in 2005, is a result of positive performance year over year and our strong partnership with ABG,” said Luisa Delgado, CEO of Safilo Group in a statement, adding, “The Juicy Couture brand fits very well with our portfolio strategy, offering popular brands to our target market. We are excited to partner with the brand to grow our diversified distribution channels.”
“We are thrilled to continue a successful partnership with Safilo. Together, we have forged a long-standing relationship that has led to the expansion of the Juicy Couture brand, its categories and distribution channels around the world,” added Jarrod Weber, EVP of Fashion at ABG.
Wall Street brokerages forecast that American Eagle Outfitters (NYSE:AEO) will report earnings per share (EPS) of 0.17 dollars for the current fiscal quarter, according to Zacks.
According to Zacks’ poll, eight analysts have made estimates for American Eagle Outfitters’ earnings, with the EPS estimate ranging from 0.16 dollars to 0.17 dollars. American Eagle Outfitters reported earnings of 0.22 dollars per share during the same quarter last year, which would suggest a negative year-over-year growth rate of 22.7 percent.
The firm is scheduled to issue its next earnings report before the market opens on Wednesday, May 17th. For then, Zacks, analysts expect that American Eagle Outfitters will report full year earnings of 1.25 dollars per share for the current financial year, with EPS estimates ranging from 1.11 to 1.32 dollars.
Looking further ahead, for the next financial year, analysts expect that the business will report earnings of 1.31 dollars per share, with EPS estimates ranging from 1.15 to 1.43 dollars.
Last time American Eagle Outfitters (NYSE:AEO) posted its quarterly earnings results was on March, 1. Back then, the fashion retailer topped the Thomson Reuters’ consensus estimate of 0.38 dollars by 0.01 dollars. The firm feel short though from analysts’ estimates for quarterly revenue, posting revenue of 1.10 billion dollars for the period versus the 1.11 billion dollars estimated by analysts.
Upscale department store operator Nordstrom (NYSE:JWN) has announced that its board has initiated a share buyback program, which permits the company to repurchase 500 million dollars in shares on Friday, February 17, ‘EventVestor’ reported.
This buyback authorisation permits the retailer to re-acquire up to 6.3 percent of its stock through open market purchases. Although there might be many reasons for a traded company such as Nordstrom to repurchase its own stock, the most likely one in this case – according to analysts consulted by FashionUnited – is taking advantage of the current stock’s undervaluation to increase or reinstate its weight on the company’s equity capital without issuing any additional shares.
On a related note, a number of research firms have changed their views on Nordstrom’s shares recently. Cowen and Company lowered their target price on Nordstrom from 64 to 50 dollars and set an “outperform” rating for the company in their last report on the stock.
Meanwhile, Zacks Investment Research downgraded shares of Nordstrom from a “hold” rating to a “sell” rating, while analysts at Goldman Sachs Group Inc downgraded shares of Nordstrom from a “neutral” rating to a “sell” rating and set their target price on the stock at 35 dollars apiece.
Finally, Credit Suisse Group AG upgraded shares of Nordstrom from a “neutral” rating to an “outperform” rating and set a 58 dollars price objective for the company in a research note.
Nordstrom has a 12 month low of 35.01 dollars and a 12 month high of 62.82 dollars. The firm has a market capitalisation of 7.95 billion dollars.
May will be a sad month for fans of Bebe Stores, as the U.S, fashion retailer will shutter down all its physical stores across the U.S, by the end of the month.
Bebe share its plans earlier this week in a filing with the Securities and Exchange Commission (SEC). The official communication said Bebe expects to record a 20 million dollars impairment charge as a result of the closings.
According to its web, the womenswear chain has to close 134 stores and 34 outlet stores in the country. Regarding its online presence, it was not indicated in the filing whether Bebe would stop selling clothes online, although they said at an earlier date they will continue to sell online.
Only upside of such news was that the stock closed 6 percent higher last Friday.
Bebe thus joins the ranks of failed retailers such as The Limited or American apparel, which shut its stores because of a drop in sales and other financial struggles.