Sep
 25
 2019



Ulrike

Hello,

Welcome back to The Spin! German multi-label retailers are feeling strong headwinds due to increasing competition and declining traffic. Over in Italy, Kering's top performing Gucci label remains in the crosshairs of tax authorities. Meanwhile, Nike's stock reached an all-time high after Q1 results beat expectations - big time. Enjoy the read and feel free to share! Best, Ulrike



retail

Harsh headwinds. Faced with increasing comptetion and declining traffic, Germany’s top 20 multi-label retailers (translated by DeepL) are facing strong headwinds. Revenues at stores such as Engelhorn, Reischmann and Konen are stagnating or slightly declining. Chains and department stores face an even more difficult situation. P&C, Wormland and AppelrathCüpper (in German) are all looking for new concepts for the future. To increase traffic, they all need to create new initiatives, develop new partnerships, rethink area alliances and update product ranges.





markets

Turf wars. As sneakers have taken over handbags as the newest “IT” item, luxury brands are increasingly encroaching on markets once dominated by large sports brands. In China, for example, Louis Vuitton is the second most mentioned brand associated with the #sneaker hashtag on the social shopping app Red, right after Nike. In return, activewear brands are looking to expand into the luxury segment.





brands

Just did it! Still, Nike keeps outpacing the competition. The US sports giant, which just beat analysts’ expectations with strong Q1 results, saw its shares rise more than 5.5 percent in after-hours trading. New products, investments in eCommerce and strong 27 percent sales growth in China helped to raise (press release) the group’s revenues more than 7 percent to $10.66 billion. Net income grew 26 percent to $1.37 billion.



Same old! Same old? Following Gucci’s $1.4 billion settlement for back taxes in Italy between 2011 and 2017 last May, the tax evasion probe continues (paywall) at the Kering-owned luxury brand. Italian fiscal authorities currently investigate more than a dozen current and former Gucci executives in an alleged tax-avoidance scheme. While Kering claims that the allegations are nothing new, the new probe now centers around the pay to individual managers including current CEO Marco Bizzarri and former CEO Patrizio Di Marco.



Treading too lightly. Amazon’s copy of Allbirds’ comfortable, sustainably manufactured shoes proves how aggressive the online giant is utilizing data it collects from third-party vendors. Amazon’s 206 Collective Men’s Galen wool blend sneakers, for example, have a striking resemblance to Allbirds’ popular Wool Runner style. But at $45, they sell for less than half the price, partially, because they don’t offer the same eco-friendliness. Allbirds already responded, urging Amazon to make their products more sustainable.





tech

Hot team. Alibaba’s e-commerce platform Tmall is cooperating with Japanese fabric-maker Mitsubishi Chemical to develop thermal fabrics and bring those to apparel brands. Danish label Vero Moda and Chinese lingerie firm Maniform are among the first participants. Under the partnership, Tmall will be Mitsubishi Chemical’s exclusive eCommerce partner for undergarments made of the new fabric in the Chinese market for the next three years.



Growing the base. Meanwhile, China's Alibaba Group just announced its goal to increase the number of active users from 730 million in 2018/2019 to over one billion annually by the end of fiscal 2024. In the same time frame, it plans to achieve over RMB10 trillion in annual gross merchandise volume (GMV) through its consumer business in China by the end of fiscal 2024. Including its cross-border eCommerce, Alibaba currently serves (press release) 860 million active users.







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