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House of Fraser has extended its administration for another year as Mike Ashley presses forward with his turnaround plan for the struggling retailer.
The administration of the company was due to end on 10 August, but has now been extended to the same date in 2020 by consent of the company’s creditors.
Last year, Mike Ashley’s Sports Direct bought House of Fraser out of administration for 90 million pounds, with an optimistic Ashley vowing to transform the embattled department store chain into the "Harrods of the high street."
Since then, however, the company has changed its tune, admitting that the retailer was in worse condition than Sports Direct had expected when it made the acquisition. For the year to April, it had made a loss of 54 million pounds.
In its annual report, Sports Direct said: “On a scale out of five, with one being very bad and five being very good, House of Fraser is a one, albeit we are trying very hard to turn the business around this will not be quick and it will not be easy.
“Even though we do believe there could be a bright future for House of Fraser, and indeed have publicised our Frasers vision which we are very excited about, if we had the gift of hindsight we might have made a different decision in August 2018.”
Due to the uncertainty surrounding House of Fraser’s future, Sports Direct said it wouldn’t be giving a consensus to the market for its FY20 performance. “We will review the current situation again at the half year and depending on factors mentioned above being resolved to a suitable extent we may be able to give guidance at that point,” the company said.
Earlier this month, an anonymous person in regular contact with Ashley told The Financial Times the Sports Direct boss could close as many as two-thirds of the original 59 House of Fraser stores.
Photo credit: FashionUnited
The CEO of Karen Millen and Coast, Beth Butterwick, has reportedly left her role after the two brands were acquired earlier this month by online fashion retailer Boohoo.
All pattern cutting roles at the brands have reportedly also been placed into consultancy, with those affected offered redeployment opportunities at Boohoo's Manchester headquarters, a source close to the situation told Drapers.
Earlier this month, Boohoo Group plc acquired Karen Millen and Coast for 18.2 million pounds in a pre-pack administration deal. The two brands will continue to trade through their 32 stores and 177 concessions across the country for a short period as the administration process continues.
Commenting on the acquisition in a statement, Boohoo Group CEO John Lyttle, said: “The acquisition of the online business of two great and renowned British brands in Karen Millen and Coast represents another milestone in the Group’s growth story as it continues to invest in its scalable multi-brand platform and gain further share in the global fashion e-commerce market.”
Last year, Karen Millen acquired Coast’s UK concessions portfolio and online businesses.
According to Boohoo, unaudited management information showed that revenues across all operations for both Karen Millen and Coast totalled 174.1 million pounds for the financial year to 28 February 2019, of which direct online sales were 28.4 million pounds.
Photo courtesy of Karen Millen
Dick’s Sporting Goods reported consolidated net income for the second quarter ended August 3, 2019 of 112.5 million dollars or 1.26 dollars per diluted share, compared to 119.4 million dollars or 1.20 dollars per diluted share in the previous year. Net sales for the quarter increased 3.8 percent to approximately 2.26 billion dollars and consolidated same store sales increased 3.2 percent compared to 4 percent decrease last year.
“Our strong comp sales performance was driven by increases in both average ticket and transactions and represented our strongest quarterly comp since 2016. We saw growth across each of our three primary categories of hardlines, apparel and footwear, our brick-and-mortar stores developed positively and our ecommerce channel remained strong, increasing 21 percent,” said Edward W. Stack, the company’s Chairman and Chief Executive Officer in a statement.
Dick’s Sporting Goods H1 same-store sales up 1.7 percent
The company reported consolidated net income for the 26 weeks of 170.1 million dollars or 1.85 dollars per diluted share compared to 179.5 million dollars or 1.78 dollars per diluted share. On a non-GAAP basis, the company’s net income was 171 million dollars or 1.86 dollars per diluted share. Net sales for period increased 2.3 percent to approximately 4.18 billion dollars and consolidated same store sales increased 1.7 percent.
In the second quarter, the company opened two new Dick’s Sporting Goods stores and closed two. As of August 3, 2019, the company operated 727 Dick’s Sporting Goods stores in 47 states, 95 Golf Galaxy stores in 32 states, and 35 Field & Stream stores in 16 states.
Dick’s Sporting Goods raises full year outlook
Based on an estimated 90 million average diluted shares outstanding, the company currently projects earnings per diluted share to be approximately 3.30 dollars to 3.45 dollars. The company reported earnings per diluted share of 3.24 dollars for the 52 weeks ended February 2, 2019. Consolidated same store sales are currently expected to increase low single-digits, compared to a 3.1 percent decrease in 2018.
The company expects to open eight new Dick’s Sporting Goods stores and relocate three Dick’s Sporting Goods stores in 2019. The Company also expects to open two new Golf Galaxy stores and relocate two Golf Galaxy stores in 2019. Seven of the new stores are expected to open during the third quarter.
Picture:Facebook/Dick's Sporting Goods
In its interim results announcement for the six months, Li & Fung Limited, supply chain solutions partner for brands and retailers, said, on a like-for-like basis, turnover decreased 8.4 percent to 5,356 million dollars mainly due to ongoing destocking, customer turnover and customer bankruptcies as brands and retailers continued to face pressure on sales and margins. The company’s core operating profit decreased 18.6 percent to 105 million dollars.
Commenting on the first half results, Spencer Fung, Group CEO of Li & Fung, said in a statement: “The new management team has been focused on restructuring the company and all operational KPIs are now improving for both our customers and suppliers. We are starting to gain momentum and winning market share and new customers due to our operational excellence, global diversified network and 3D virtual design services. As a result, turnover decline is stabilizing and beginning to bottom out.”
Total margin as a percentage of turnover was 10.9 percent in the first half. Operating costs decreased 1.4 percent to 478 million dollars, while operating costs of the onshore wholesale business decreased by 9 percent due to the company’s ongoing restructuring efforts, particularly in the United Kingdom. Turnover and COP of the logistics business increased 3.8 percent and 6.4 percent to 563 million dollars and 43 million dollars, respectively. On a constant currency basis, COP increased by 10.8 percent. Profit attributable to shareholders was 21 million dollars compared to 2018 interim loss of 86 million dollars on a reported basis. The board of directors declared an interim dividend of 1 Hong Kong cent per share.
“We are facing increasing geo-economic instability and uncertainty. Regardless of other factors, the acceleration of the migration of production out of China will continue given China’s upgrading of its industrial base from a manufacturing exporter to a high-technology service provider. The proliferation of bilateral free trade agreements has become the new norm, and this presents Li & Fung with opportunities not seen for the past 20 years,” added Group Chairman William Fung.
The Cato Corporation reported net income of 11.9 million dollars or 48 cents per diluted share for the second quarter ended August 3, 2019 compared to 6.5 million dollars or 26 cents per diluted share for the second quarter ended August 4, 2018. Sales for the quarter were 210.4 million dollars or an increase of 2 percent, while same-store sales increased 4 percent to last year.
“Our performance in the second quarter and first half of 2019 exceeded our expectations with higher same-store sales, higher merchandise margins and savings in SG&A,” commented John Cato, Chairman, President, and Chief Executive Officer in a statement, adding, “However, we remain cautiously optimistic about the second half of the year given the difficult retail environment and the potential effect of new tariffs.”
For the six months, the company earned net income of 33.1 million dollars compared to 29.9 million dollars for the same period last year, while earnings per diluted share were 1.34 dollars compared to 1.20 dollars last year. Sales for the six months were 438.4 million dollars, down 1 percent and same-store sales increased 1 percent.
As of August 3, 2019, the Cato Corporation operated 1,299 stores in 31 states, compared to 1,350 stores in 33 states as of August 4, 2018.
Ted Baker’s finance director Charles Anderson is leaving the company after 17 years to join Mulberry as group finance director, with effect from early October.
Anderson will replace Neil Ritchie who stepped down from the board on 30 June.
For the last 17 years, Anderson worked at Ted Baker, initially as head of finance before being appointed as finance director of the group's subsidiaries in 2014. In addition to developing and overseeing its global finance function, Anderson played an active role in the FTSE 250 global lifestyle brand’s international expansion and systems transformation.
Prior to joining Ted Baker, he held various finance positions at House of Fraser plc, NatWest Markets and Carpetright PLC.
Mulberry CEO Thierry Andretta said in a statement: “We are delighted to welcome Charles to the Mulberry team. His experience of developing and overseeing a global finance function during a period of international expansion will be relevant as we grow Mulberry worldwide."
Photo credit: Mulberry, Facebook
The cost of clothing made in Europe and being sold in the UK could increase by 11.5 percent if the country crashes out of the EU without a deal later this year, new research suggests.
According to personal finance website NimbleFins, the price hike - which could also see EU Footwear prices rise by 4.1 percent - would be due to imports being subject to World Trade Organization (WTO) tariffs enforced in a no-deal Brexit scenario.
Other items of clothing that could increase in price include coats (by 12 percent), dresses, shirts and jumpers (by 12 percent), baby clothes (by 10.5-11 percent), and gloves and mittens (by 8.9 percent).
Currently, around a third of the UK’s clothing imports and more than half of its footwear imports come from the EU, with the most arriving from Italy, Germany and the Netherlands.
CEO of NimbleFins, Erin Yurday, said in a statement: "British consumers are already paying higher prices on many imports due to the falling pound. If we leave the EU without a trade deal, consumers may need to pay an additional 11.5 percent on their favourite clothing imports from the EU due to tariffs."
Retailers' concern over no-deal Brexit
Earlier this month, over 50 UK retailers, including Harrods, John Lewis Partnership, Marks and Spencer, Debenhams, and River Island, wrote to the new chancellor Sajid Javid in an open letter urging him to fix a “broken business rates system”. In the letter, which was coordinated by the British Retail Consortium, the retailers warned that a no-deal Brexit would put “considerable strain” on companies who are already struggling in tough retail conditions.
In March, research revealed that the British luxury sector could lose up to 6.8 billion pounds worth of exports a year as a result of a no-deal Brexit. Data from international consultancy firm Frontier Economics, commissioned by trade association Walpole, suggested that up to 20 percent of the country’s luxury exports could be lost if the UK crashes out of the EU without a deal
The UK was originally due to leave the EU on 29 March, 2019, but the withdrawal agreement was rejected three times by MPs. After an initial extension until 12 April, 2019, the leave date was extended again until 31 October 31, 2019.
Photo credit: Terje Sollie, Pexels
Clothing and furnishing retailer Laura Ashley has reported a pre-tax loss of 14.3 million pounds (17.3 million dollars) in the year to June 30, compared to a profit of 100,000 pounds in the prior year. The company has blamed weak performance of its home furnishing business and changes made to its website late last year for poor annual trading.
Reuters quoted a statement from Chairman Andrew Khoo, which said: “The last twelve months have proved to be a difficult trading period for the group and indeed for the retail sector as a whole. Weak consumer confidence had been one driver of the 10.1 percent fall in furniture sales, but said the company remained confident of its product range and would introduce more contemporary styles in the months ahead.”
The company, which issued two profit warnings earlier this year, said that total UK retail sales fell to 222.9 million pounds (270.5 million dollars) from 236 million pounds a year ago, impacted by closure of six store closures and low consumer sentiment. Like-for-like retail sales fell by 3.5 percent, while UK sales of furniture were down 9 percent, and decorating, down 13.7 percent. However, the company’s fashion collections performed well and posted a sales rise of 9.2 percent, while home accessories grew 1.1 percent.
Board of directors at Ross Stores, Inc. has declared a regular quarterly cash dividend of 255 cents per common share, payable on September 30, 2019 to stockholders of record as of September 12, 2019.
Headquartered in Dublin, California, with fiscal 2018 revenues of 15 billion dollars, Ross Stores operates Ross Dress for Less, the off-price apparel and home fashion chain in the United States with 1,523 locations in 39 states, the District of Columbia, and Guam. The company also operates 249 Dd’s Discounts in 18 states that feature moderately-priced assortment of apparel, accessories, footwear, and home fashion.
Picture:Facebook/Ross Dress for Less
L Brands, Inc. earnings per share for the second quarter ended August 3, 2019, were 14 cents compared to 36 cents for the quarter ended August 4, 2018, while operating income was 174.6 million dollars compared to 228.1 million dollars last year and net income was 37.6 million dollars compared to 99 million dollars last year. Adjusted earnings per share were 24 cents and adjusted net income was 67.6 million dollars.
The company reported net sales of 2.902 billion dollars for the quarter compared to 2.984 billion dollars in the prior year, while comparable sales for the period decreased 1 percent.
L Brands is projecting a third quarter earnings per share result between loss of 5 cents and earning of 5 cents and reiterates its guidance for 2019 full-year adjusted earnings per share of 2.30 dollars to 2.60 dollars.
Picture:L Brands media resources