Apr
 09
 2018



Caroline

Hello,

Welcome back to a new edition of The Spin! Today we are looking at global markets: the potential consequences of new tariffs on imports from China. We are also interested in the battle of the American eCommerce titans in India. Walmart and Amazon initiatives often have an impact on other retailers. Sadly, Nine West couldn't adjust quickly enough to the new commercial landscape. The chain declared bankruptcy. Enjoy the read and have a great week! Caroline



markets

Collateral damage. President Trump's second round of proposed tariffs on $100 billion of imports from China could lead to higher prices on apparel and footwear products. The proposal for the first $50 billion excludes these 2 categories but they could be part of the second tier. Footwear and apparel represented $39 billion in US imports last year. It's difficult to ignore them. There's another cause for concern: tariffs on Chinese made equipment (paywall) would have an impact on the American cut and sew industry.


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Taxes damage. Donald Trump's multiple attacks on Amazon recently (paywall) focused on taxes. According to the president's tweets, Amazon pays "little or no taxes" to state and local governments. However, the president's own online store, Trumpstore.com (paywall) collects taxes in just 2 states Florida and Louisiana. The Trump organization relies on the fact that it only has to pay taxes in states where it has a physical presence. Meanwhile, Amazon collects sales taxes on its own inventory in 45 states.





retail

Stores closing... Nine West just filed for chapter 11 bankruptcy protection, listing debts of more than $1 billion. The company, property of Sycamore partners, intends to sell its Nine West and Bandolino brands. It will retain its profitable and growing apparel activities through Anne Klein, One Jeanswear and Kasper. The rapidly changing retail landscape is forcing many stores out of business. Last year, 40 retailers filed for chapter 11. This year Bon Ton department stores and Claire's joined the club.



...Karl opening. Karl Lagerfeld is coming to America. The brand Karl Lagerfeld Paris just (paywall) opened its first US store in New York. The 290 square meter flagship store was inspired by the home and studio of the creator. It even has a Tokidoki sculpture of Karl Lagerfeld with his favorite cat, Choupette, in his arms. In America, the designer is represented by G-III, which holds several fashion licenses including Karl Lagerfeld, Tommy Hilfiger and Calvin Klein. Last year, G-III doubled its sales of Karl Lagerfeld Paris products.





tech

Amazon itching powder. Walmart and Amazon are competing in India to acquire a controlling stake in eCommerce firm Flipkart. Walmart seems to have the advantage. The Bentonville firm is ready to pay more than $10 billion for Flipkart, an eCommerce player, created by 2 former Amazon employees. However Amazon could still come back to sweeten the pot. The fight between the 2 giants is justified by the potential of the Indian eCommerce market. According to Morgan Stanley, it should reach $200 billion by 2026.



Walmart's trick. Walmart is more than tripling down on its high tech pickup towers. The kiosks will be available at 700 locations by the end of 2018. They will make it possible to retrieve bigger online orders such as televisions and soon they will be used for returns as well. Of course Amazon, Macy's, Target...all have their own lockers from which to pick up online orders, but Walmart kiosks seem particularly good at doing the job. They reduce the need for staff and drive down fulfillment costs.



Under the influence. Not long ago, using influencers to launch a marketing campaign was quite daring. Not anymore. According to a survey by the Association of National Advertisers, three quarters of their US constituents just did that in 2017. Data analytics provider Launchmetrics (firewall) emphasizes that half of the fashion advertisers in Europe and the US prefer to work with micro-influencers with 10,000 to 100,000 followers. They reach fewer people but their audiences are more likely to buy.





last

Ugly all year round. Remember the ugly Christmas sweater, blithely knitted by grand-ma? You simply had to put it back in the closet for the new year. Ironically repeat offenders have another opportunity to wear ugly products all year round with men's shoe trainers. Fat sneakers with thick orthopedic soles are the season's bigger trend, thanks to Balenciaga's Triple S and Raf Simons Adidas Ozweego. Everybody loves them: Louis Vuitton, Prada, Gucci... each has its own version. Beauty can be so boring.







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