May
 18
 2017



Ulrike

Hello,

Happy Thursday and welcome back to The Spin. Today, editor Ulrike Howe highlights the controversial new CEO at US brand Ralph Lauren, new developments at European retailers BHS, Otto and C&A and reveals how to get your hands on Karl Lagerfeld's famous feline, Choupette. Enjoy the read!



brands

Ralph Lauren’s CEO pick leaves investors unimpressed. To help turn its ailing business around, Ralph Lauren filled the vacant position of CEO with Procter & Gamble veteran Patrice Louvet. Most recently, Louvet oversaw P&G’s $11.5 billion beauty business which was sold to Coty Inc for $12.5 billion in 2016, but his lack of fashion expertise left investors unmoved . Following the announcement, shares of the New York-based luxury company fell 1.62% to $72.75, bringing the valuation of the company to about two thirds of its annual high at $114 in November 2016. Louvet replaces Stefan Larsson who abruptly left the company in February amidst disagreements about the future strategy.





markets

World's richest people lose billions as markets react to Donald Trump's newest controversy. US stocks plunged upon reports of a memo by former FBI chief James Comey suggesting that President Donald Trump had tried to interfere with a federal investigation. As a result the world's richest people lost $US35 billion . Among them Amazon.com co-founder Jeff Bezos, who dropped from No. 2 to No. 3 after losing $US1.7 billion when shares of the online retailer fell 2.2%. His spot went to Spanish retailing tycoon Amancio Ortega who lost $US355 million to end in the second position with $US83.2 billion.



eCommerce accelerates. In Q1, US online sales grew by 14.8% to $98.06 billion and now account for 12,4% of total US retail sales excluding foodservice, fuel and automobiles. Including those items the rate remains at about 8.4%. According to experts, the next major boom market for eCommerce will be Southeast Asia . As the number of Internet users will triple in that region Google expects e-commerce sales to grow at a 32% CAGR from $5.5 billion in 2015 to $88 billion in 2025, which is equivalent to about 6% of total retail sales in the area.



Chinese fashion brands turn to foreign designers. To free themselves from the association with mass production and establish their own fashion brands, Chinese apparel and lifestyle companies are increasingly relying on Western design talent . But there is also an increasing number of new home-grown talents working hard to change that perception.





retail

British Retail Acquisitions could be sued for millions. A judge has ruled the most recent owner of collapsed British Home Stores (BHS), Retail Acquisitions, insolvent . Now the company, which was put into liquidation in early May, and its main director Dominic Chappell could be sued (paywall) for millions of pounds owed to Sir Philip Green's enterprises as well as a number of creditors. In March 2015 Retail Acquisitions bought BHS for £1 and has since been accused of extracting an estimated £17 million from the unprofitable department store chain.



German Otto Group plans massive expansion. Through partnerships with independent retailers and the dramatic widening of its assortment, Hamburg-based Otto Group plans to increase sales from €12.5 billion in 2016 to €17 billion in 2022. According to CEO Alexander Birken, the mail-order giant is going to expand its offering from currently about 2 billion items to 5 to 10 billion items (in German) in the next few years. In addition, the company plans to integrate more partner shops for fashion brands and brick-and-mortar retailers who are new to eCommerce. Through its online platform otto.de the company already works with about 200 third party partners . In the near future about 100 additional names including independent retailers should be added. Recently the former catalogue retailer has gone through a massive transformation and now makes about 90% of its sales online.



European fashion chain C&A converts shoe departments into concessions. While several international department store companies including Saks Fifth Avenue und Macy’s have recently expanded their investments in shoe segment, C&A is outsourcing (in German) the business. Starting on September 1st, German Hamm Reno Group (HR Group) will operate the shoe departments in 292 C&A branches, 233 of which are located in Germany. The assortment will feature HR Group’s own labels including Young Spirit, Cityline and Bama. In addition, HR Group will develop exclusive product for C&A. C&A operates about 1.575 stores in Europe and is also present in Brazil, Mexica and China. Osnabrück-based HL Group currently operates approximately 400 stores and about 1.800 concessions. Industry insiders speculate that Reno might be interested in buying up to 20 stores (in German) of bankrupt shoe retailer Schuh&Schuh PKTS GmbH (previously Vögele Shoes GmbH).





last

Karl Lagerfeld launches faux Choupette. About 98.800 fans follow Karl Lagerfeld’s Birman cat Choupette on Instagram . Starting May 23rd, 2.000 can own a plush version of the famous feline. In collaboration with German toy maker Steiff the Paris-based designer is launching a limited edition of faux Choupettes. Next week, the plush animals will be available on Karl Lagerfeld’s website as well as steiff.com, in Steiff stores and at select fashion and toy retailers. The Choupette retails at €499, which is about half the price of the famous Karl Lagerfeld Bear , which was released in 2008 in limited edition of 2.500 at a retail price of €1000 each.











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