May
 15
 2019



Christopher

Hello,

Welcome to a new edition of The Spin. Today there's more news about the economic toll the US/China trade war could have on retail and a shocking statistic about female-run fashion companies. You'll also learn why Ralph Lauren's stock took a dip yesterday and be reminded to not turn your friends into enemies – especially when it comes to business. Enjoy the read! Best, Christopher



markets

Casualties of war. A just released report from UBS called "The Tariff Risk the Market Isn't Thinking Enough About" spotlights another possible result if proposed tariffs go into effect between the US and China: the closure of 12,000 brick-and-mortar stores in the US in a single year. The analysts say that store closures, which are already up 5.3 percent this quarter compared to last year, would be sped up dramatically. They also noted that their findings only include public companies and don't even factor in the retail carnage (paywall) that would befall privately held ones.



Little women. Another recently released industry report reveals and explores a surprising fact: just 12.5 percent of apparel and retail companies on the Fortune 1000 list have female CEOs, which is even lower than the aerospace and defense sectors. The full report (download), called "Unravelling The Fabric Ceiling" by PwC, notes that this is especially odd since women drive fashion as customers and account for 80 percent of students at the world's best fashion schools. The causes for this gender gap are said to include innate bias, a lack of opportunity for growth and no support structure for working mothers.





brands

Pregnant pause. Speaking of not supporting working mothers, Nike is continuing to try to save face after the New York Times published a story (paywall) on Sunday, Mother's Day in the US, about how three of its sponsored female athletes faced pay reductions for not being able to perform while pregnant or after the birth of their child. The athletic giant, which champions female empowerment in its ads, says it has since "standardized" its approach so that no female athlete is penalized for becoming a mother.



Half empty. Although Ralph Lauren reported Q4 financials yesterday that exceeded analysts' expectations and caused the company to raise its dividend by 10 percent, Wall Street took a more pessimistic view of the situation. Overall same-store sales were up 1 percent with strong growth in Europe and Asia but they were down 4 percent in the company's native North America. By the end of the trading day Ralph Lauren stock was down about 4 percent due mostly to concerns that the possible Chinese tariffs will severely impact its business.



Innerwear investment. TomboyX, a six-year-old Seattle-based gender-neutral underwear line that offers sizes XS to 4X, will receive $18 million in additional funding from The Craftory, a venture capital fund that is its majority stakeholder. Combined with the $4.3 million in funding it received last summer the DTC online-only brand has now raised more than $25 million to date to expand its global presence. Sales at the brand grew by double digits last year – proof that nonbinary fashion may not be a mere trend.





people

Abercrombie alternation. Abercrombie & Fitch has made its COO – and the role itself – redundant. The retailer said yesterday that Joanne C. Crevoiserat, who was appointed to the role in 2017 after coming aboard as CFO in 2014, will soon leave the company because her job is being eliminated. The move (press release) is the latest in its so-called "transforming while growing" effort to turn its business around.



Quick change. Leather goods brand Coccinelle has a new CEO (paywall; translated by Google). Its Korean parent, E-Land, which has owned the label since 2012, announced that Peter Sungho Kim, who was CEO for the UK and CFO for Europe, will now assume (in Italian) the role. He replaces Fabrizio Stroppa, who only took on the job in October 2018.



Betrayal's a bitch. YouTube star and makeup maven James Charles, 19, continues to feel the negative effects (paywall) of his very public falling out with his fellow vlogger and mentor Tati Westbrook who cut all ties with him – and urged others to do the same – after he posted an Instagram ad of one of her competitor's vitamin companies last week. In addition to losing about 3 million of his 16.5 million subscribers, his clothing and merchandise line, Sisters Apparel, has apparently been shut down by its distributor Killer Merch, which is owned by Westbrook's friend Jeffree Star. As of a few days ago, the label's webshop is no longer accessible. Ouch!







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