Nov
 08
 2018



Caroline

Hello,

Today's edition of The Spin is full of British news. The influx of wealthy international tourists pushes more luxury brands to open their stores in London. The specter of Brexit doesn't scare them. Nevertheless chains such as New Look and Marks and Spencer keep adding new stores to their list of future closures. On the other side of the pond, there's more fun to share. Marc Jacobs is reissuing his scandalous grunge collection from the nineties. This time everybody loves it. Enjoy the read. Best, Caroline.



markets

London appeal. Rich international tourists are flocking to London lured by the weak pound. They are not deterred by impending Brexit, in fact they are looking for bargains. So luxury stores keep investing (paywall) in Bond street and Mayfair. Chloe and Stella Mc Cartney recently opened in Bond street while Chanel is (paidwall) in Chelsea. Loewe and Givenchy should soon follow suite. There are also many refurbishments taking place at concept store Natasha Zinko, Louis Vuitton and Cartier.



Still at risk. With Sears' chapter 11 out of the way, the American landscape seems less gloomy. The drum beat of retail bankruptcies has slowed this year but it hasn't stopped. Moody's and Standard and Poor's still have a few big names on their radar: JC Penney, Neiman Marcus, Hudson's Bay, J Crew, Pier 1 Imports...All of which are saddled with billions in $ of debts and declining sales. Fortunately the luxurious Neiman Marcus is making progress but its $4 billion debt is still threatening to drag the group into the red.





retail

One sings, the others cry... When Britain's New Look announced (paywall) its financial result recently, the group said sales for the last 6 months were down 4,2% and it needed (paywall) to shut down 98 more stores worldwide. The same day, competitor Primark said that its sales were up in England (+5,3%) and in America, too. The company plans to open stores in Poland and Slovenia and the number of Primark's fashion followers is close to 13 million. Brick and mortar lives happily at Primark alley.



... and cry. Marks and Spencer didn't fare much better than New Look. Pre-tax profits for the semester increased 7.1% to £126,7 million but sales declined 3,1%. Apparel and food revenues were disappointing (paywall). That's why Steve Rowe, M and S boss promised to close 100 stores by 2022, and perhaps more. "No stone will be left unturned" he said. One third of the high street giant's 1029 stores predate the second world war. "We won't pause at 100" threatened Steve Rowe.



Chinese interlude. Hermès International defies luxury jitters by heading East. The manufacturer of Birkin bags and silk scarves posted a 6,6% rise in revenue in the third quarter. Thanks to its push in China, sales in Asia Pacific grew by 8,8%. There are concerns about the slowing Chinese economy and the trade war with the US, but true luxury customers haven't stumbled. Hermès International maintains 3 stores in China and the company has just opened its own website. Hermes.cn allows online sales throughout all of China.





tech

Catching up. Spanish fast fashion retailer Zara, the subsidiary of Inditex is launching its online global store in 106 new markets, many of them in Africa, the Caribbean and Asia. Customers will pay in Euros and the orders will be fulfilled from an online platform in Spain. Henceforth, Zara will have a presence in 202 markets. Zara, as well as its rival H&M (paywall) was late to the digital game. E-commerce accounts for only 10% of Inditex sales. But the company wants to catch up: all its brands will be available online in 2020.





people

Bye bye Sir Charlie. Sir Charlie Mayfield, chairman of the partnership John Lewis, will step down ...in 2020. Sir Charlie announces his departure very early to give time to the employee owned business to find his replacement. The partnership, owner of the eponymous department store and Waitrose supermarkets is going through trying times. In September, it posted a 99% fall in profits. Costs are rising and the shift towards online shipping doesn't help. Internal and external candidates will be considered.





brands

Grunge again. Marc Jacobs is bringing back the famous grunge collection, the 26 key looks that he had created for the spring 1993 collection of Perry Ellis. In the nineties, creators were still supposed to cater to working women and ladies who do lunch. Critics were choked, Perry Ellis was horrified and fired the insolent designer. Today is another story. The seam by seam reproduction is blessed by Perry Ellis and the collection will be available at Marc Jacobs online and in store by November 15.







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