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Matchesfashion.com has announced plans to open a new distribution center near Heathrow Airport, in London, reports WWD. It adds that the new center to be opened in 2018, will let the company manage more number of shipments.
The proposed site has the capacity to expand over 500,000 sq. ft. space, which will ultimately enable Matchesfashion.com to achieve its target of handling around four million shipments a year by 2020, says WWD. Since the site of the distribution center is close to the Heathrow Airport, the company would also be able to make quick deliveries to its customers based in international locations, while offering its 90-minute delivery system in London. The report further states that as of now, the company ships to 176 countries, and has ambitious targets of expanding its global presence.
Apart from plans of opening the new distribution center, the reports states, the company is investing in expanding its office spaces. For instance, its office headquarters at the Shard were increased by 40 percent, to 48,000 sq. ft. and at the beginning of this year, Matchesfashion.com opened a new hub in East London to accommodate editorial, photography and video teams.
Contemporary women’s wear label Lavish Alice has appointed Sharon Fraser, previously sales manager at Glamorous, as Head of wholesale for UK and international. The company said, Fraser commenced her role in September 2017 and is responsible for all of wholesale operations, including key accounts, independents and agents across core women’s wear, footwear, jewellery and swimwear.
Commenting on Fraser’s appointment, Matthew Newton, Director at Lavish Alice, said in a media statement: “We have experienced exponential growth over the past five years and having reviewed our commercial structure, we have developed new strategies to further enhance our offering. We have made huge investments in staff, processes, procedures and infrastructure to enable us to service existing customers better whilst maintaining growth. We are delighted to have Sharon on board and look forward to the continued growth at Lavish Alice.”
The company added that Lavish Alice has created a unique place in the market, offering affordable luxury that appeals to an international fan base including Hollywood stars Kendall and Kylie Jenner, Gigi Hadid, Ashley Graham, Jessica Biel, Eva Longoria, Olivia Munn and Regina Hall.
Picture:Sharon Fraser via Lavish Alice
Guess has released its second sustainability report highlighting the company's development towards a higher standard for social and environmental performance. This year, Guess assessed the water footprint of its denim, and mapped its denim production by global water availability, as an important first step to better manage its impacts. The company is currently working on a comprehensive water action management plan to address these impacts that will be released next year.
"Through my experience leading this truly global company, I see one constant across borders: people, particularly the younger generation, are deeply concerned about the future of this planet," said Victor Herrero, Chief Executive Officer, Guess in a statement, adding, "At Guess, we understand that we must continue to grow and contribute to the global community with increasing care for people and the environment; we aim to embrace existing solutions as well as try new ones to address the social and environmental challenges of our time."
Guess releases its second sustainability report
Since the release of its first sustainability report in 2015, the brand has developed its first formal sustainability strategy and commitments, and established new goals and initiatives that will play a large role in the future business of Guess. The company added that these goals will motivate the company's efforts over the next five years to enhance the sustainability of both its global operations and local communities, and connect customers with more sustainable fashion choices.
The company said, as a member of the Global Reporting Initiative's Standards Pioneers Program, Guess is one of the first organizations to implement GRI's rigorous international sustainability reporting standards. Guess has also joined a global industry pledge to advance a circular fashion system – the idea that fashion should last, and be continuously repurposed, reused and recycled. The company will also be announcing a product take back program later this year.
The report also updates other areas of progress, including successfully reducing its carbon footprint across its stores, distribution centers and headquarters in Los Angeles, California. In FY 2015, Guess reported its efforts to improve store energy efficiency by replacing existing lighting systems with more efficient LED lighting. As part of the company’s recent commitment to the science based target initiative, the company will also be transitioning its current emission reduction goal to create more aggressive carbon emission reduction goals within the next two years as its contribution to help limit global warming.
For the year ending December 31, sales at River Island increased 4 percent from 932.7 million pounds (1,259 million dollars) to 970.5 million pounds (1,310 million dollars), driven by a 21 percent rise in online and mobile sales, reports Retail Gazette. The company’s operating profit, however, declined 7 percent from 145.8 million pounds (196 million dollars) to 135.7 million pounds (183 million dollars).
The report added that due to the decline in operating profit the company owners have decided against taking dividend for the second year in a row. The Lewis family had gained a dividend of 180 million pounds (242 million dollars) in 2013 and 2014. Instead the company would invest funds in its online as well as offline shopping services by increasing the number of its IT and digital positions in the UK and opening new stores and hiring more buying, merchandising and design staff.
River Island opened doors to five stores in the last month, and now the company operates a network of around 250 stores.
Richemont has announced two new additions to its senior executive committee. The company said, Dr Jean-Jacques van Oosten has been appointed to the newly created role of Chief Technology Officer and will join the committee effective January 1, 2018. Additionally, Sophie Guieysse has been appointed Group Human Resources Director and will join the company from October 1, 2017.
Commenting on the changes, Johann Rupert, Richemont Chairman, said in a statement: “Jean-Jacques van Oosten brings over fifteen years of experience in scaling, transforming and internationalising online and multichannel businesses. Sophie Guieysse brings a twenty-year Human Resources experience across diverse cultural environments in the luxury and digital sectors. These appointments will strengthen significantly the group's ability to address current challenges and bring Richemont into a new era of agility and performance.”
Jean-Jacques van Oosten and Sophie Guieysse join Richemont
The company added that Dr van Oosten’s twenty one-year career has been primarily in the retail and digital sectors. Prior to his latest role as group chief digital officer and CEO of Rewe Digital, he held a number of CIO positions at Travis Perkins Group, Tesco, Kingfisher, EDS and Unilever and through his consulting company, van Oosten advised retailers on their multichannel strategy, roadmap and transformation programmes.
A graduate from the Ecole Polytechnique and Ecole Nationale des Ponts et Chaussées, Guieysse began her career holding operational functions at a number of French Ministries. From 1997 until 2005, she held various human resources roles at LVMH. Her ultimate role there was as director of human resources of the LVMH group. In 2005, Guieysse joined Canal + group where she spent ten years as human resources director and member of the executive committee. Since 2016, she had been advising Dior on the future of luxury in a connected world.
Guieysse will succeed Thomas Lindermann who is leaving Richemont for personal reasons and step down from the group management committee with effect from October 31, 2017.
Picture:Facebook/James Purdey and Sons
ANALYSISThe Spanish textile giant grew 11.5 percent in the first half of 2017, closing the first semester of its fiscal year with 11.671 million euros. The results of the as Zara or Massimo Dutti parent group have accused "the strong appreciation of the euro against most currencies".
Profit has also taken a hit, closing the period at 1,366 million euros, which includes an increase of 9 percent over a year earlier. Inditex has therefore presented a profit slightly below market forecasts for the period comprehended between February,1 to July, 31 July.
Comparable sales have been the biggest blow, growing 6 percent in the first six months of the year, almost half of the 11 percent growth recorded in the same period last year.
The euro’s appreciation weights Inditex’s H1 results
The company's profit rose 9 percent to 1,366 million euros. The currency effect has meant a considerable slowdown for the world’s largest fashion retailer’s profit growth, which came in at 18 percent more.
Thus, although Inditex's revenues in the semester improved by 11.5 percent over the same period in 2016, this rate reflected a decline from the 14 percent that increased in the first quarter. The reason? The rally of the European currency, which accumulates increases of 14 percent against the dollar so far this year and more than 4 percent against the pound.
Bankinter experts precisely call out the deceleration of comparable sales for the textile giant, saying that "Although the results of the first half of the year have been presented in line with the estimated, the slowdown in comparable sales (up 6 percent in the first semester compared to 10 percent in 2016 and 11 percent in the first half of 2016) and the narrowing of the gross margin (54.8 percent compared to 58.2 percent in the first quarter and 55.7 percent of the second quarter of 2016) are the most worrisome aspects.”
"The negative impact of the euro appreciation on sales was an expected effect but we preliminarily believe that the impact suffered is not only justified by this," they added.
Analysts at Morgan Stanley cut target price for Inditex from 38 to 30 euros
Meanwhile, Morgan Stanley’s analysts have cut their valuation on Inditex stock by 21 percent, recommending to pay 30 euros per share - previously held a target price of 38 euros per share.
Following the financial release and various analysts’ commentary, Inditex shares fell on Wednesday, closing down 0.84 percent to 32.41 euros. However, the company’s shares have kept a positive balance of 0.92 percent so far this year, according to the Spanish financial newspaper 'Expansion'. At the close of trading Wednesday, the market capitalisation of the textile giant is slightly above 101,000 million euros.
The graph shows Inditex financial performance in H1FY17 by revenue and net income. All in euros.
Image:Zara, Official Web
Total sales at OVS grew by 57 million euros (67 million dollars) to 697.1 million euros (828 million dollars), a rise of 8.9 percent, with a 4.1 percent positive contribution from network development and the initial effects of the commercial agreement with Charles Voegele, up 4.8 percent. The company however said that like-for-like sales registered a flat performance, reflecting a particularly unfavourable market in July, which saw sales decline by 2.8 percent. EBITDA was 82.1 million euros (97 million dollars), up by 7 million euros (8.3 million dollars) or 9.4 percent and with margin improvement of around 10bps, compared with the same period of 2016.
Commenting on the company’s results, the company’s Chief Executive Officer, Stefano Beraldo said in a press release: “We believe that our strategy will result in further consolidation and market share gains in the Italian market, which continues to reward players that are versatile and able to benefit from economies of scale. At the same time, expansion in foreign markets will bring tangible benefits for OVS, mainly thanks to the roll-out of the commercial agreement with Charles Vögele, whose effects start becoming material in the second half of the current year.”
Sales improve across brand segment
OVS brand registered an increase in sales of 3.4 percent, 18.2 million euros (21 million dollars), driven by the steady expansion of the direct network. The company added that sales were temporarily negatively affected by changes to customs procedures that led to delays in goods imports. UPIM registered strong sales growth of 8.1 percent or 8.2 million euros (9.7 million dollars), benefiting from the positive development of the full-format Upim network and Blukids franchising.
The company’s both brands made positive contributions to the EBITDA performance. The EBITDA of the OVS brand increased by 3.5 million euros (4.1 million dollars) or 5.2 percent year on year, while the EBITDA of the UPIM brand grew by 3.6 million euros (4.2 million dollars) or 44.5 percent.
Normalised net profit was 38.4 million euros (45.6 million dollars), up by 7.6 million euros (9.03 million dollars) compared with the first half of 2016 and with a slightly lower tax rate compared to last year.
OVS opens doors to 13 new stores in H1
During the period, 13 directly operated stores and 32 stores in franchising were opened in Italy. International expansion also continued, with the opening of 19 stores, including four DOS and 15 franchised, mainly kids stores. In particular, the Spanish expansion continued to generate positive results with four new openings, including one full-format store in Madrid.
The company added that Charles Vögele restructuring plan has begun and the first two phases of cutting central costs have been completed, resulting in more than 40 million Swiss franc (41 million dollars) in cost savings on an annual run rate basis, and the whole of the Slovenian network of 11 stores has been converted to the OVS. The process of converting the Swiss stores has begun, with 75 stores converted since the second half of July to date.
Network expansion continued in the first part of the second half of the year, with another 17 stores added to date, including one full format DOS.
American Eagle Outfitters is entering India through licensed stores. The company has signed a multi-year license agreement with the Aditya Birla Group, a leading Indian company having an extensive retail portfolio, as well as strong digital and omni-channel capabilities. The company said first stores are expected to open in Mumbai and Delhi in spring 2018.
“India’s rapidly developing and vibrant economy, anchored by the world’s largest youth population, provides an exciting growth opportunity for our brands, expanding our global reach,” said Andrew McLean, EVP-Global Commercial Operations, American Eagle Outfitters in a media release, adding, “Aditya Birla brings deep market experience and extensive retail capabilities, giving us a strong platform to deliver our leading AE jeans collections and casual American style to India’s growing market.”
American Eagle Outfitters, under its American Eagle Outfitters and Aerie brands, operates more than 1,000 stores in the United States, Canada, Mexico, China and Hong Kong, and ships to 82 countries worldwide through its websites.
A 41 billion dollars corporation, the Aditya Birla Group’s retail operations in India extends through 900 retail stores and 6,000 additional points of sale.
Picture:American Eagle Outfitters website
For the year ended June 30, 2017, Esprit reported a net profit of 67 million Hong Kong dollars (8.5 million dollars), representing an improvement in the group’s results against 21 million Hong Kong dollars (2.6 million dollars) reported for FY15/16. The company said, this improvement was primarily driven by the performance of the underlying operations with EBITDA and LBIT from underlying operations improving by 307 million Hong Kong dollars (39 million dollars) and 386 million Hong Kong dollars (49 million dollars) respectively.
Commenting on the company’s results, Jose Manuel Martínez, Group Chief Executive Officer of Esprit, said in a media statement: “FY16/17 has been a year of good progress and marks the completion of the strategic plan that was announced in 2013. The new model implemented for product (based on best practices from vertical retailers) and for our channels (based on an omnichannel approach) has proven instrumental in stabilizing the Group financially and operationally.”
Esprit revenues decline 8.7 percent in FY16/17
Revenue of the group for FY16/17 amounted to 15,942 million Hong Kong dollars (2,041 million dollars), representing a decline of 8.7 percent in LCY, in line with the corresponding reduction in total controlled space of 8.5 percent.
However, the company added that group’s gross profit margin increased to 51.6 percent, a 1.4 percent points from last year, despite the drag from a lower proportion of retail excluding eshop revenue and the weakness of the euro for the most part of the financial year.
“Despite difficult operating conditions in the industry, we are encouraged by the continuous improvement in profitability from our underlying operations, driven by closure of unprofitable space, commercial actions to protect our gross profit margin, and decisive reduction of operating costs in FY16/17,” said Thomas Tang, Group Chief Financial Officer of Esprit.
The group’s regular OPEX (excluding exceptional items) also improved to 8,416 million Hong Kong dollars (1,078 million dollars), representing a reduction of 9.9 percent in LCY.
Esprit to close unprofitable stores to drive growth
Esprit expects that its stronger position - both in financial and operational terms, is better poised to capitalize on opportunities. In the very short-term, the group will continue its downsizing efforts, closing the most unprofitable stores. The move, Esprit said, will pose pressure on the group’s topline, but that pressure is expected to be partly alleviated by business expansion and space productivity improvements.
Overall, the Group’s revenue is expected to see a modest decline in FY17/18, to be offset by a slightly higher gross profit margin and a further decrease in operating expenses, which should outweigh the revenue decline to produce a similar improvement in EBIT (excluding exceptional items) as experienced in FY16/17.
Dr. Raymond Or, Chairman of Esprit further added that looking ahead to FY17/18, the company expects the overall operating environment to remain challenging.
Picture credit: Esprit
British department store chain House of Fraser half-year earnings fell to an 8.6 million pound loss for the 26 weeks to July 29, 2017, down significantly from its EBITDA profit of 900,000 pounds for H1 2016.
House of Fraser’s like-for-like sales and profits for the first half of the year dropped after being heavily disrupted by HoF’s new online platform launch and “significant discounting” of its in-house womenswear labels. Like-for-like sales fell 5.2 percent compared to 2016 and online sales dropped 9.8 percent during the 26 week period following the roll-out of House of Fraser’s 25 million pounds revamped online store in April. Gross profit slipped 5 percent from 207.2 million pounds in H1 2016 to 196.9 million pounds in H1 2017 as HoF cut prices to move old stock.
HoF sees 5 percent decline in profits for H1 2017
However, in spite of the sales and profits hit HoF remains upbeat about achieving growth in its final quarter, as the impacts caused by its new online platform and womenswear ranges were mainly over. House of Fraser’s new ecommerce system is said to be “working well” as “good progress” has been made to recover sale volumes. The department store group announced that it aims to be trading normally by the beginning of its final quarter in its trading update.
HoF also announced that it has completed the launch of its new womenswear in-house labels, which saw five existing womenswear brands dropped and the remaining four relaunched for AW17. The new collections have been “well received” so far, with “initial revenues” exceeding expectations” added the company. In addition, HoF also began its 18 million pound investment scheme in its distribution centre to increase capacity, drive operational efficiencies and improve profitability during the first half of the year.
The department store chain predicts this investment will deliver 5 million pounds of efficiency savings during the second half of the year, increasing to a run rate benefit of 15 million pounds of efficiency savings by the time the project is completed by mid-2018. House of Fraser also opened its first new store in the UK in nine years time during the first half go 2017. Located in Rushden Lakes, the store opened its doors on August 24. HoF also closed a loss-making store in Leicester and aims to shut an additional location in Aylesbury.
“My observations after a few weeks are that since Sanpower acquired the business in 2014 the primary focus has been on stabilising an enterprise that had been starved of investment for many years,” said Alex Williamson, CEO of House of Fraser. “Whether it be refinancing the business, the investment of over 100 million pounds in capital expenditure since the acquisition or a root-and-branch upgrade of the executive team, much has already been done to prepare us for significant transformation.”
“House of Fraser has much to be optimistic about. This is just the start of our journey with several other projects designed to provide additional sales and costs savings as part of the overall Transformation Programme due to commence shortly. I am excited about what lies ahead for the business and I am optimistic for the future. With the support of Sanpower, we are building the right foundations that position us well to deliver on our ambitions for sustainable profit growth.”
Photos: HoF AW17 LookBook