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New York – Retail sales in the U.S. fell in September for the first time in seven months as most stores posted lower receipts, signalling that a widely expected slowdown in consumer spending might be underway.
The U.S. Government reported Thursday a 0.3 percent fall in retail sales last month, which ended a streak of six straight strong gains that helped to fuel economic growth in the middle of the year. This decline –inclusive of purchases at stores, at restaurants and online—put an end to six months of consecutive gains. Online sales’ decline was the first this year.
Economists Gregory Daco and Lydia Boussour of Oxford Economics told investors in a note echoed by ‘MarketWatch’ that “With employment growth cooling and private sector confidence increasingly susceptible to policy uncertainty, we anticipate a further slowdown in consumer outlays heading into 2020.”
“Consumption is poised to cool along with slower job gains ahead, and the Fed will be looking closely for any signs of trade uncertainty contaminating the most important segment of the U.S. economy,” pointed out Katherine Judge of CIBC Capital Markets. “However, lower interest rates and ample savings to draw from should allow household spending to remain absolutely healthy for now.”
Business groups have urged the Chancellor Sajid Javid to scrap business rate increases in the Autumn Budget.
According to The British Retail Consortium (BRC), retailers in England will have to pay an extra 137 million pounds next year after it was confirmed that business rates would rise by 1.7 percent, based on the Consumer Price Inflation (CPI) figure for September.
Retail accounts for 5 percent of the economy, but pays a quarter of all business rates, according to the BRC.
Dominic Curran, property policy advisor at the British Retail Consortium, said in a statement: “Today’s CPI announcement means retailers will have to cough up an extra 137 million pounds from April. Already, while retail accounts for 5 percent of the economy, it pays a massive 25 percent of all business rates.
“This 137 million pounds increase will reduce the ability of retailers to invest in their business, their staff and their shops. The Chancellor must take action on rates in the forthcoming Budget and scrap ‘downwards transition’, which takes 1.3 billion pounds from retailers and uses most of it to subsidise rates in other industries. Meanwhile, with the retail industry facing store closures and jobs losses, the Government should freeze the impending business rates increase.”
The total increase for all sectors in England will be 536 million pounds, according to Altus Group, of which retailers will have to shoulder 137 million pounds.
Alex Probyn, UK president of expert services at Altus Group, said: “The compound effect of annual inflationary rises are completely unsupportive of UK businesses. Businesses want and expect the Chancellor to deliver a pro-business Autumn Budget amid these uncertain times and Sajid Javid could do that, in part, by being the first Chancellor in history to scrap the inflationary rise next year.”
Photo credit: Pixabay
Tod’s Group has appointed former Bottega Veneta designer Walter Chiapponi as its new creative director.
Chiapponi’s first designs for Tod’s will be revealed in the form of the brand’s women's and men's autumn-winter 2020/21 collection, which will hit stores next Autumn.
The Italian fashion designer has made a name for himself holding senior designer positions at luxury heavyweights including Valentino, Gucci and Prada Group’s Mui Mui. Most recently, Chiapponi worked at Italian label Bottega Veneta where he was design director for over two years.
Chiapponi will be joining another Bottega Veneta alumni in his new post. The Italian brand’s former CEO Carlo Alberto joined Tod’s in February as general manager, a connection that has been reported as a potential link to Chiapponi.
The news comes after the then-creative director of menswear Andrea Incontri stepped down from his role at the Italian luxury group in June after being appointed in 2014.
Walter Chiapponi joins Tod's Group
Commenting on his appointment in a statement, Chiapponi said: "It is a great honour to work for this Group. Tod’s is a brand that has always represented an excellence in the international panorama of Italian quality and style. Being able to contribute to the development of this Italian lifestyle is, for me, a challenge and a reason to be proud."
Diego Della Valle, president of Tod's Group, added: "Walter Chiapponi is a talented Italian creative who knows and is able to combine Tod’s Italian lifestyle with a touch of modernity, without ever losing sight of the high quality and craftsmanship that represents the brand’s DNA. I welcome him and wish him well in his new role.”
This latest appointment comes as Valle moves forward with a shake-up of the brand’s executive team, a refocus on a younger consumer, and the launch of a new business model called Tod’s Factory in late 2017. The turnaround strategy has resulted in higher than expected investments for the brand. For the first half of 2019, sales at the brand were down 4.7 percent to 454.6 million euros (509.5 million dollars).
Photo courtesy of the brand
Wolverine World Wide, Inc. has announced the addition of veteran merchandising and branding expert Angelo Ng as the company’s first-ever Chief Merchant Officer. The company said in a statement that Ng brings more than 25 years of merchandising, sourcing and marketing experience from a variety of apparel, footwear and accessories brands.
“We’re thrilled to add Angelo to our leadership team,” said Blake W. Krueger, Chairman, CEO and President of Wolverine Worldwide, adding, “We believe his passion and strategic vision, as well as his global industry experience, will be instrumental as we continue to pursue our Global Growth Agenda.”
The company added that over the course of 18 years, Ng held multiple merchandising roles of increasing responsibility for both the Levi’s and Dockers brands in Europe, America and Asia. Most recently, he served as vice president of Levi’s men’s, collections, collaborations and accessories merchandising. Prior to joining Levi’s, Ng held various managerial roles in both merchandising and sourcing at Nike Europe.
Ng has worked across Europe, gaining experience in design, sourcing, sales, athletic apparel and more, before overseeing three factories in the United Kingdom. In this newly created role at Wolverine, the company said, Ng will lead the merchandising growth strategy and innovation roadmap for the portfolio of brands. Ng will focus on aligning consumer insights, market intelligence, advanced concepts, trends and strategy to support Wolverine’s Global Growth Agenda.
“I was attracted to Wolverine because of the company’s brand portfolio, demonstrated success and incredible team. I look forward to establishing the merchant mindset and acumen to drive accelerated growth and to further establish Wolverine as a market-leading footwear and apparel company,” added Ng.
Picture credit: PRNewsfoto/Wolverine World Wide, Inc.
Harrods has reported a slight increase in sales in the past year, but a dip in profits due to an increase in capital expenditure relating to a revamp of the company's flagship Knightsbridge store.
The British department store chain saw a 3 percent fall in pre-tax profits to 171.6 million pounds for the year to 9 February. The company said it spent 64.1 million pounds in the year as part of a major store revamp of its 90,000-square-foot beauty hall at its flagship Knightsbridge store. This compares to 55 million pounds spent the year before. The company added that capital expenditure is expected to increase in 2019.
Despite a drop in profits, sales increased to 868.6 million pounds from 862.5 million pounds for the same period a year before.
The full-year report also revealed that Harrods Qatari owners, Qatar Holding, paid themselves a 125 million pound dividend despite a dip in the luxury department store chain’s profits. The dividend brings the total payouts handed to the group to 900 milion pounds.
In 2010, Qatar Holding bought Harrods for 1.5 billion pounds from Egyptian businessman Mohamed Al-Fayed.
Photo credit: FashionUnited
Ted Baker has appointed the former boss of Scotch & Soda USA, Ari Hoffman, to the newly-created role of CEO of its business in North America.
Hoffman, who will join the British luxury label in December, has over 30 years’ experience working in senior positions for a range of fashion and retail brands in North America. Most recently he was CEO for Scotch & Soda US, before which he was president and CEO of US operations at Benetton. He has also worked at Gant, Yves St Laurent, Christian Lacroix and Lacoste.
The newly-created role aims to help accelerate Ted Baker’s growth in North America, which currently represents the company’s second biggest market.
Commenting on the new appointment in a statement, chief executive Lindsay Page said: “We are delighted to announce that Ari will be joining the Ted Baker team in December. His vast experience and in-depth understanding of the North American market will further strengthen our global executive team.
“Ari has a deep understanding of the North American market and he has significant experience of working with well-known and prestigious global brands like ours. I have no doubt that he will be a driving force in continuing to develop the Ted Baker brand in North America, particularly supporting our online and digital business development.”
Hoffman added: “I am delighted to join Ted Baker to lead the company’s North American team to even greater success. Ted Baker is an outstanding brand that I have been an admirer and consumer of for some time. I look forward to accelerating the development of this quintessential British brand in the significant North American market."
Photo courtesy of the brand
For the year to August 31, 2019, Asos plc reported 68 percent decrease in profit before tax to 33.1 million pounds (42.2 million dollars) after transition costs of 45 million pounds reflecting a substantial amount of one-off costs in support of warehouse transitions. The company also incurred 5.5 million pounds of restructuring costs. Asos said that basic and diluted earnings per share decreased by 70 percent to 29.4p driven by the decrease in profit before tax during the year. Asos added that revenues at 2.7 billion pounds (3.4 billion dollars) rose 13 percent or 12 percent on a constant currency basis but conversion remained flat, in part impacted by the warehouse transition issues.
Commenting on the full year trading, Nick Beighton, the company’s CEO, said in a statement: “This financial year was a pivotal period for Asos, where we have invested significantly and enhanced our global platform capability to drive our future growth. Regrettably this was more disruptive than we originally anticipated. But with over 60 percent of our revenue coming from international customers and a strong global logistics platform with capacity to grow, we are well positioned to take advantage of the global growth opportunity ahead of us.”
Highlights of financial performance of Asos
In FY19, Asos saw over 72 million orders, an increase of 14 percent on the previous year with visits to the site growing by the same amount. Active customer database grew by 10 percent with active customer base now over 20 million. Gross profit increased 8 percent, with gross margin down 240 bps versus the prior year.
The company’s UK retail sales grew by 15 percent in the year, despite an increasingly competitive market, while total UK customer base grew 7 percent in the year and conversion was strong, up 40bps. The company added that EU retail sales grew 12 percent or 9 percent in constant currency, below expectations as operational challenges following Euro Hub automation impacted stock availability. As a result, conversion stepped back 10bps. Orders growth improved in P4 as trading stock increased and is reflected in P4 sales growth of 17 percent. Despite the operational challenges, active customer base improved by 10 percent.
US retail sales grew by 9 percent or 4 percent impacted by operational challenges reflecting the move for customers from the Barnsley warehouse to the newly commissioned Atlanta warehouse in February of this year and lower availability of some key products. However, total active customer base in this region grew 12 percent in the year to 2.8 million. Rest of the world retail sales grew by 12 percent or 14 percent in constant currency with particularly strong growth in Russia and the Middle East. The company said that changes to promo calendar and proposition supported a recovery in sales and momentum after a poor peak period performance in P1 and the remainder of the year saw visits growth of over 20 percent in P2 to P4, resulting in full year visits growth of 19 percent and orders growth of 15 percent.
Children’s apparel retailer The Children’s Place, Inc.has announced plans to relaunch Gymboree brand in early 2020 on an enhanced website, Gymboree.com, and in shop-in-shop locations in over 200 select Children’s Place stores in the US and Canada.
Commenting on the development, Jane Elfers, the company’s President and Chief Executive Officer said in a statement: “We have embarked upon an exciting journey to bring this iconic brand back to the loyal Gymboree customers, who continue to voice an unrivalled passion and affinity for it. We are thrilled to be able to revitalize bow-to-toe collections that create magical childhood moments.”
The company added that enhanced, personalized, online shopping experience at Gymboree.com will offer a customer-centric and vibrant online experience. The site will be upgraded to include access to all Gymboree collections, an option to shop by collection, a shared online basket to streamline checkout processes and shipping and an enhanced loyalty program. The online experience will also feature Gymboree’s mobile app.
“We believe a multichannel offering combining an enhanced online shopping experience with inviting in-store locations will best serve long-standing Gymboree customers, and also welcome a new generation of moms to the iconic brand,” added Claudia Lima-Guinehut, Senior Vice President, Global Merchandising.
J. C. Penney Company, Inc. has appointed Laurie Wilson, a senior executive with more than 25 years of experience in planning and allocation, merchandise, finance, pricing, operations and strategy, as Senior Vice President, planning and allocation and pricing, reporting to Michelle Wlazlo, Executive Vice President, chief merchant. Wilson, the company said, replaces John Welling, who stepped down in August.
“Laurie is a highly esteemed and accomplished retail industry veteran and an expert in implementing transformational and foundational strategies to serve today’s customer digitally and in-store,” said Wlazlo in a statement, adding, “Her extensive experience in planning and allocation, merchandising, pricing and operations will play a significant role as we focus on restoring disciplines required to enhance inventory management, lower our cost of goods sold and restore growth in a sustainable and profitable manner.”
Wilson joins JCPenney from LW Associates, a consulting practice focused on transformative strategies leveraging digital technology for retail and wholesale brands and solution providers, where she served as president and CEO. Prior to LW Associates, Wilson spent the majority of her retail career at Macy’s and Federated Department Stores.
She joined Federated in 1994 and was promoted into several roles of increasing responsibility across planning, merchandise information systems, financial planning and operations, merchandise and financial planning and allocation. The company added that she ultimately served as executive vice president of business strategy for Macy’s and Macys.com. Wilson began her merchandising career at Carter Hawley Hale Stores and Bloomingdale’s.
Laura Ashley has announced that its finance director and joint chief operating officer, Seán Anglim, has stepped down after 20 years at the company.
Anglim, who joined the Britsh fashion and furniture brand in 1998, will remain at the business until the end of 2019. Laura Ashley has promoted Sagar Mavani to chief financial officer.
Anglim was named CFO of the company in 2009 before being appointed joint chief operating officer in 2011. In October 2012, he took on both roles.
In the year to 30 June, Laura Ashley reported a pre-tax loss of 14.3 million pounds (17.3 million dollars), compared to a profit of 100,000 pounds in the prior year. The company blamed its poor annual trading partly on a weak performance of its home furnishing business and changes made to its website late last year.
Photo credit: Laura Ashley, Facebook