Dec
 18
 2018



Christopher

Hello,

Welcome to this Tuesday edition of The Spin. The UK's retail scene took another beating yesterday while H&M reported improved results. Guess got busted by the EU and now must pay the price for its illegal actions. And speaking of illegal, it seems that China is using slave labor so if you manufacture there be sure to do a thorough investigation of your supply chain. (Actually, that should be the case wherever you manufacture....) And on a side note, can you believe that Christmas is only one week away? Enjoy the read. Best, Christopher



retail

Asos anxiety. British retail stocks fell yesterday after Asos issued an unexpected profit warning in the wake of weaker than expected sales in November, the first indication that online retailers are not immune to the current woes faced by physical ones. Asos now expects annual sales growth of 15 percent rather than its previous projection of 20 to 25 percent. Asos shares dropped nearly 40 percent thereby reducing the company's market value by £1.3 billion and leaving an already spooked sector with an even bigger case of the jitters.


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Hold it, H&M. H&M also released new quarterly numbers yesterday and although they were positive the company's stock dropped due to a suspicion that the turnaround is neither as strong nor long-lasting as H&M would like investors to believe. The chain said net sales were up 12 percent in the quarter but analysts warned that the rise could be due to excessive discounting. H&M's full results will be released on January 31.



Bye, Brookfield. Saks Fifth Avenue will close its women's store at the Brookfield Place mall in Lower Manhattan next month only two years after opening it to concentrate on its digital business and its Fifth Avenue flagship, which is currently under a major renovation. Saks, which is owned by Hudson's Bay Company, said the smaller store was "a test concept." And although it is shuttering the women's store, its men's branch in the complex will remain open.





brands

Getting Guess. Guess has been fined nearly €40 million – half of what the financial punishment could have been – by European Union antitrust regulators for illegally blocking cross-border sales in the EU. The brand did not let retailers use its assets for online searches nor allow them set their own prices. It also insisted on giving approval before they could sell Guess merchandise online, which allowed it to charge more in certain parts of Europe than others.



(Nearly) a done deal. Yesterday's Annual General Meeting of German brand René Lezard approved (paywall; in German) Turkish textile producer Cemsel as a new majority investor. The Istanbul-based company plans to take a 60 percent stake (in German) in the brand in the first half of 2019. Cemsel's owner, Yasar Esgin, is also a majority owner of the German brand More & More.





markets

Slave sewers.... Recent stories (paywall) by The New York Times and The Associated Press have revealed that China is using Muslim detainees in internment camps as forced laborers to create clothing for fashion clients – unbeknownst to the foreign firms. The Chinese government has denied the claims but the report says that the factories are either in the camps themselves or state-owned ones offsite. Under UN rules, it is illegal to import items made by modern slaves so brands are being warned to investigate and check their supply chains carefully.



... but better boxes. China is looking to make its e-comm industry greener by encouraging companies to use recyclable parcels made from renewable matter as well as less packing materials in general. Officials from the country's post office have approved guidelines for green packaging and continue to iron out plans on how to implement the new initiatives. Thanks to the e-commerce boom, Chinese logistics companies now deliver more than 76,000 parcels per minute there.





tech

Magic mirrors. The Max Fashion store in Dubai's Ibn Battuta Mall has found great customer success with the two interactive voice activated mirrors it has installed on the sales floor. Developed with Microsoft and Ombori, the two devices are bilingual and speak both Arabic and English. They have prompted 20 percent of all those who interact with them to purchase something in-store or online.







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