Inside Retail Asia

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

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

As Chinese visits to Cambodia continue to grow duty-free retailers DFS Group and CDF are looking to cash in.

CDF Mall, the world’s largest duty-free mall funded by Chinese investment, opened a 4,500 square meter store in Siem Reap, Cambodia. Opening in time for the Chinese New Year, CDF Mall is home to a number of lesser-known clothing, leather goods, watch, and cosmetics brands, according to Want China Times. China is now second only to Vietnam in terms of the number of tourists it sends to Cambodia annually, and the number of Chinese visitors is expected to double by 2020. Siem Reap, in northern Cambodia, is a popular city for Chinese tourists on their way to Angkor Wat, the home of more than 100 ancient temples. Like CDF, DFS Group has its sights set on Siem Reap. DFS, of which LVMH is a majority owner, plans to open an 8,000 square-meter duty-free shopping mall in the city by 2018, which will be capable of housing 700 luxury brands.

In Retail Asia – Duty Free Retail in 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

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).



The Danish jewellery group has opted to buy the retail network in Macau and Singapore as the distribution rights in the territories that belong to Norbreeze group come to an end

The jewellery group Pandora will pay MOP170 million (US$ 21.48 million) to buy their own brand store networks in Macau and Singapore.

read more:

Macau Business Daily

Inside Retail Asia – Macau Retail News


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

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


Japanese retailer MUJI is set to open its first Cafe&Meal outlet in Singapore come September.

The 122-sqm self-service cafe will open at Paragon shopping centre at Orchard Road on Sep 5, next to the existing MUJI store, which will be undergoing a revamp as well.

This will be Cafe&Meal MUJI’s 5th outlet outside of Japan, in addition to its 23 outlets across Japan.

According to a statement from MUJI, the concept behind the cafe’s menu is, “Simple food is delicious”.

AsiaOne Women

Singapore Retail News – In Retail Asia



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...