Jan
 30
 2019



Ulrike

Hello,

Welcome back! Brand news dominate today's issue of The Spin - from LVMH's record results and optimistic outlook to Justin Bieber's costly corduroy concept. We also look at the unexpected effect a lack of shareholder attendance can have, and tell you why suppliers are concerned about the Karstadt/Kaufhof merger in Germany. Enjoy the read and feel free to share! Best, Ulrike



brands

Raising hopes. As fashion and retail companies prepare for a global downturn, LVMH soothes the minds with its record numbers, resilient business in Asia, and optimistic outlook. For 2018, the French luxury group reported a 18 percent increase in net earnings on record revenues of €46.8 billion - a 11 percent increase in constant currencies. According to President Bernard Arnault, fiscal 2019 started well and will remain dynamic.


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True blue. Compared to 2017, the search for sustainable denims has increased (paywall; in German) 3 percent at fashion search engine Lyst. Brands have already taken notice. PVH, the company behind Calvin Klein and Tommy Hilfiger, just opened a denim innovation center in Amsterdam, to make (paywall; in German) Hilfiger the largest jeans brand worldwide. Over in the US, J. Crew will roll out its first Fair Trade Certified denim collection at its namesake and Madewell stores. Featuring about 30 styles retailing under $100, the line is produced at a factory in Vietnam that achieved Fair Trade certification with J. Crew funding.


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Costly corduroy. US pop star Justin Bieber has launched a clothing line under his Drew House fashion brand. Bieber started the business last year with a pair of cheap hotel slippers, which quickly sold out. Highlight of his new, 14-piece collection is a $138 corduroy short with “drew” embroidered across the front. Additional items include corduroy tops and pants as well as T-Shirts with Smiley Face prints retailing from $48 to $148, which already drew criticism.



Sole control. The EU Commission has approved (press release) the acquisition of sole control over German fashion company Tom Tailor Holding by Fosun International. In December, Fosun informed the Commission that it could passively obtain de facto control over Tom Tailor due to declining attendance at shareholder meetings. The Commission concluded that the transaction would raise no competition concerns given the companies' limited combined market shares in Europe. The Chinese conglomerate, which also controls Wolford and Lanvin, has been involved with Tom Tailor since 2014 and currently holds a 28.89 percent stake.





retail

Who you gonna call? The newly built joint-venture between German department store chains Karstadt and Kaufhof has suppliers worried (paywall; in German) about possible demands for large discounts. Rumors of a "wedding bonus" of two to three percent made the rounds, but have not been confirmed. At the recent fashion fairs in Berlin and Dusseldorf, strikingly large joint Karstadt/Kaufhof purchasing teams were going around to meet and greet, but suppliers still wonder who to contact and what to expect.





people

Top cat. Puma has promoted (paywall; in German) Anne-Laure Descours to Chief Sourcing Officer, a newly created board position, effective February 1. Descours joined Puma in April 2012 from sourcing specialist Li & Fung and has also worked for Otto International Asia. In her new position, she will also be responsible for Puma’s sustainability efforts. Descours will continue (press release) to be based in Hong Kong.





markets

Rules of Engagement. In March, the World Trade Organization (WTO) will begin discussions to launch a comprehensive set of global rules for the growing eCommerce market. So far, 76 WTO members including Europe, the US, and China have agreed to construct a framework for consumers and businesses to conduct electronic commerce. Until March, additional members can (press release) still join.



Short stories. The average lease term for apparel retailers in US shopping malls has dropped from six years during the mid-2000s to about 4.5 years. Meanwhile, large box stores left behind by former anchors are increasingly being used for fitness centers, food halls, bowling alleys and movie theaters.







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