Hong Kong

China-luxury-sales
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

in-retail-asia

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

china-retail-update
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

asia-retail-news

Work closely with the Managing Director to help build up new businesses; Over 10 years of management experience in commercial fitting out, preferably in…

ISG ASIA (HONG KONG) LIMITED
Location : HK

More >>

In Retail Asia tries to provide jobs of interest to the top retailers who take time to visit our site. To see more jobs click here.

china-retail-news-asia

Luxury companies including Kering SA are demanding lower Hong Kong store rents to reflect the island city’s waning appeal with wealthy Chinese shoppers.

The owner of the Gucci brand may close some of its shops there if those costs don’t come down, Kering Chief Financial Officer Jean-Marc Duplaix said late Monday.

“Many landlords have not necessarily understood that the markets have changed,” Duplaix said, speaking on a conference call with analysts. In some locations, rent is eating into profitability.

U.K. trenchcoat maker Burberry Group Plc said last week it may also try to lower its rent bill after sales growth slowed to a two-year low. Luxury spending in Hong Kong, one of the world’s largest hubs for high-priced shopping, has been suffering since China began discouraging extravagant spending by government officials in late 2012.

Hong Kong and Macau accounted for more than 10 percent of Kering’s first-half luxury retail sales, a spokeswoman said, declining to say how many stores it has in Hong Kong. Burberry, with 17 shops there, gets a similar proportion of revenue from those markets, excluding licenses.

BoF Online

In Retail Asia – Hong Kong Retail News

asian-retail-news
The Asian-ification of Beauty Retail

The Asian beauty craze has now gone mainstream, with brands such as Suqqu setting up shop in Fenwick, Shiseido in Harvey Nichols, AmorePacific in Nordstrom, RMK in Selfridges, and SK-II in Harrods. So, what does this world of double-cleansing, essences and mask sheets have to offer?

“The Western market has long been influenced by emerging beauty trends from Japan, but we are increasingly looking to China and South Korea for developments in skincare,” said Daniela Rinaldi, group commercial director at Harvey Nichols. “They are driving innovation in the field, from BB creams to serums, brightening creams, dark spot correctors, face masks and anti-aging products. Asian consumers are some of the most discerning globally and tend to spend more on beauty products than those in the West, which tends to translate to Asian brands investing in higher quality ingredients within their products.”

With unusual ingredients, new science and branding prowess, companies from Korea, China and Japan are challenging the dominance of Western beauty brands.
The Business of Fashion

In Retail Asia – Beauty Retail News

china-retail-news

SuperGroup is stepping into China via a joint venture deal with Trendy International Group, a casual fashion company backed by LVMH, the luxury goods house that owns Louis Vuitton and Céline.

The company behind the fashion brand Superdry said it would invest £9m in the deal with TIG, which has around 3,000 stores across China including outlets for Italian brand Miss Sixty as well as its own labels Ochirly, Five Plus and Trendiano.

SuperGroup said it was entering the new market in a “controlled and managed way” and would not open the first stores until the middle of next year.

“China is a very exciting market and forecast to overtake the US as the largest apparel and footwear market in the world,” it said.

“Customer tastes are evolving from luxury brands to brands influenced by pop culture and we believe that the Superdry brand, with the right product, pricing model and infrastructure, is well positioned to be successful.”

The move into China comes after SuperGroup bought back exclusive rights to distribute the Superdry brand in the US, Canada and Mexico for £22.3m, and hired Luther and The Wire actor Idris Elba to help relaunch its brand across the Atlantic.

From The Guardian  – More retail views of Asia – In Retail Asia

indonesia-retail-update

A fashion festival is set to grace Bali at the Trans Resort Bali, organized by the M Group, the event is set to feature various programs including contemporary fashion shows from Australian, Singaporean, Indian, and Indonesian designers.

One of the participating Indonesian designers, Didiet Maulana, will present the latest collection from his Ikat label, created from different types of local fabrics.

“The collections will showcase woven fabric from Palembang and Bali, lurik from Klaten and Yogyakarta as well as rarely exhibited fabric embroidery from Tasikmalaya and Sumatra,” said Didiet as quoted by kompas.com.

He added that the collection will also have a lighter look featuring more colors and a unique cutting technique.

The Fashion Festival Bali is entering its third year and is expected to provide opportunities for talented local fashion designers to showcase their collections to an international audience.

“The event will be a new and exciting experience for me as well as other Indonesian designers. I hope that our work can bring the Indonesian fashion scene to a higher level,” Didiet stated. (nov/kes)(++++)

The Jakarta Post Breaking News

POPULAR POSTS

china-retail-expansion

38
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...
Finding the right hotel just got a whole lot easier - www.hotelscombined.com