German fashion house Hugo Boss will expand its presence in China retail, key shareholder Gaetano Marzotto said in an interview in newspaper Welt am Sonntag.

Despite slowing growth in the world’s second-largest economy, Marzotto told the paper that he saw the potential for higher sales in China.

“Up until now China accounts for less than 10 percent of group sales, this could be ramped up,” Marzotto said in an advance extract of an interview to be published on Sunday.

His family clan holds a 7.95 percent stake in Hugo Boss, making it the company’s biggest shareholder.

The Chinese are the world’s biggest buyers of luxury goods and have been increasingly shopping abroad as big shifts in exchange rates make luxury items much cheaper for them in Europe than at home.

Hugo Boss’s currency adjusted sales in the country increased 1 percent in the six months through June versus a decline of 2 percent in the prior year period.

Finance chief Mark Langer said earlier this month he did not expect an improvement soon in China, which contributes about 8 percent of group sales.

Hugo Boss recently took over 21 stores in China, previously operated by a partner, to strengthen its brand in the market.

The group has been spending heavily on expanding its own store network, where sales are more profitable than through other retailers’ shops. (Reporting by Kirsti Knolle, editing by David Evans)




In Retail Asia – Inside Retail Asia – Retail News Asia

The rout in European luxury-goods makers is sparing nobody — regardless of how much they sell in China.

Burberry Group Plc and Hugo Boss AG plunged more than 7 percent in two days after China devalued its currency, even though the companies have some of the smallest sales exposure to the yuan among luxury makers, according to Credit Suisse Group AG. That’s because when taking into account purchases by Chinese travellers abroad, most of the companies are just as reliant on the nation, Sanford C. Bernstein says.

“It’s at these times that you understand the extent to which the market of luxury goods is exposed to China and how much it depends on the decisions of the Chinese government,” said Mario Ortelli, an analyst at Bernstein in London.

Looking at individual companies’ sales in the mainland isn’t a reliable gauge to determine which shares are the most at risk. Chinese consumers now do more than half of their spending abroad, according to Bank of America Corp.

Burberry gets 11 percent of its revenue in yuan, compared with 7 percent for Hugo Boss, according to estimates by Credit Suisse. Swatch Group AG, which has lost 8.8 percent in two days, has the biggest exposure, with 23 percent.


Business of Fashion

In Retail Asia – Retail News in Asia

Financial innovation is bubbling up around the globe, but China is where digital banking, investing, and lending have gone mainstream.

You forgot your wallet, and it’s four flights up to your apartment in Shanghai’s French Concession. No worries. You’ve got your smartphone. Open Tencent Holdings’ WeChat, the Chinese Twitter on steroids, and tap China’s versions of PayPal, E*Trade, Uber, Amazon, and TripAdvisor rolled into a single app, Bloomberg Markets magazine reports in its October issue. Order and pay for your taxi and then book a restaurant where you’ll split the bill electronically with a friend. With a few minutes to spare, transfer money into the mutual fund run by e-commerce giant Alibaba Group Holding. See a poster for a hot new movie? Snap a photo of it and let search engine Baidu find a theater and buy you tickets for later that evening.

Financial innovation is bubbling up around the globe, but China is where digital banking, investing, and lending have gone mainstream. Technology companies armed with financial apps are challenging banks and other intermediaries for a market with 1.3 billion people and $7.8 trillion of deposits. Tencent’s WeChat (called Weixin in Chinese), Alibaba’s Alipay arm, and Baidu are leading the way with digital wallets that let consumers manage their money via their phones.
The Business Fashion


Prada SpA reported first-half revenue that missed analysts’ estimates as demand for its handbags and wallets in Hong Kong and Macau continued to wane.

Sales rose 4 percent to 1.82 billion euros ($2 billion), the Milan-based luxury goods maker said Friday in a statement. Analysts predicted 1.87 billion euros, based on the median of nine estimates compiled by Bloomberg.

The Asia-Pacific region, Prada’s most important market, showed a “similar negative trend” to the first quarter, when Greater China sales fell 19 percent excluding currency effects, Prada said. Revenue in its wholesale business dropped 14 percent as Prada has trimmed its network of distributors. The company is also opening fewer stores and introducing more bags priced between 1,000 euros and 1,200 euros as it attempts to reignite demand amid a clampdown on extravagance in China.

Sales were “worse than feared,” said Luca Solca, an analyst at Exane BNP Paribas. The company’s efforts to broaden its focus beyond high-priced products should leads to improvements in the second half, he said. “We expect to hear less and less bad news from Prada.”

The stock has dropped 30 percent in the past year, compared with a 52 percent gain in LVMH Moet Hennessy Louis Vuitton SE, the world’s largest maker of luxury goods.

Prada Struggles – Bloomberg Online

Years of surging economic growth in China that spurred sales of Louis Vuitton handbags and BMW 5-Series cars have given way to the deepest slowdown since 1990.

The devaluation of the currency in the short term reduces the value of their sales in the country, and makes Chinese producers more competitive. While in the longer term it will help revive growth in China, for now it signals just how concerned the authorities are about the slowdown, and that there may be further pain ahead for companies operating there.

“China is clearly becoming a growing risk that materializes day after day,” said Anne d’Anselme, a money manager at Cogefi Gestion, which oversees 600 million euros ($662 million) in Paris.

LVMH sank 4.4 percent to 166.65 euros in Paris, while BMW lost 4.2 percent to 89.46 euros. Kone, the Finnish elevator maker, dropped 4.6 percent to 37.63 euros.
The Business of Fashion

In Retail Asia – The Business of Retail in Asia

“,A relatively weak retail market, has led to a growing number of conversions of Beijing retail shopping centres for office use,” the Urban Land Institute said in its annual report. It cited a research analyst as saying retail space can be seen “being converted to office space everywhere in Beijing”. A similar change is also taking place in Sanlitun, the capital’s trendy bar area.

Pacific Century Place lost anchor tenant Pacific Department Store in 2011 due to high rent. The space has been converted into offices after the complex, which also has two office towers and two serviced apartment blocks, was sold to Hong Kong’s Gaw Capital Partners last year for US$928 million.

Not far away, the retail space at Full Link Plaza has also become offices.

“The trend is unlikely to emerge beyond Beijing and Shanghai, as retail space usually provides higher rents than offices,” said Zhang Ping, a general manager at consultancy Insite Research Centre.

Office rents in Beijing have soared since 2011 and supply in the next two years will be limited, which means they are unlikely to fall from historical highs.

Data from global consultancy CBRE showed average office rents were 421.70 yuan (HK$533) per square metre per month in the first quarter.

The average ground-floor rent for shopping malls was 35.30 yuan per square metre per day (or 1,073.71 yuan per square metre per month).




China’s e-commerce giant Alibaba Group’s Tmall signed strategic cooperation agreements with more than 160 apparel brands of the 110-plus global groups in Hangzhou, China’s Zhejiang Province on August 5, 2015. Meanwhile, it launched the “Potential Guest Plan”, helping the merchants operate data and head for the Data Technology era of the digital economy.

Tmall’s apparel strategic partners include Gap, Decathlon, Adidas, Bestseller and Inditex’s ZARA, Massimo Dutti, PULL&BEAR, Bershka, Stradivarius and OYSHO.

These contracted brands’ turnover on Tmall will exceed RMB 30 billion yuan in the next year.

According to the agreement, the contracted merchants will have deep cooperation with Tmall in the fields of new products release, O2O, data operations, star resources, brand marketing and service innovation.

Among the more than 160 brands, the ratio for Tmall original brands, international and offline traditional ones is about 1:2:4.

More than 20 apparel brands such as Decathlon, Timberland, E·LAND, TEENIE WEENIE and Inditex select Tmall as the exclusive third-party e-commerce platform.

Daniel Yong Zhang, CEO of Alibaba Group attended the conference and said that the company’s business philosophy turned to taking sellers as center from taking consumers – to serve sellers so as to better serve consumers.

Tmall will cooperate and explore with the strategic partners to start a new era for the “Internet +” apparel retail through the full-range, whole-link merchant service system created by Alibaba, said the CEO.

Tmall also launched the “Potential Guest Plan” for the parterns – by means of Ali’s big data intelligent algorithm model to screen the potential customers of the brands and realize the transformation of the purchase from the tendency, which will effectively improve the turnover.

Currently, Decathlon, GAP, Peace Bird and Adidas have begun the operation of this plan and get good results.

East Day Online 

In Retail Asia – China Online Retail



German fashion house Hugo Boss will expand its presence in China retail, key shareholder Gaetano Marzotto said in an interview in newspaper Welt am Sonntag. Despite slowing growth...
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