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☆ The fall of Gucci was inevitable
▼ + stars: | 2024-05-03 | by ( Madeline Berg | ) www.businessinsider.com time to read: +13 min

"We got used to hearing about double-digit growth at Gucci," Fflur Roberts, the head of luxury goods at Euromonitor, told Business Insider. "I think of what a fashion editor is wearing — it's not Gucci," Lindsey Solomon, a fashion publicist, told BI. After taking the top spot on the Lyst Index of fashion's hottest brands in 2022, Gucci dropped to number 11 last quarter. "We still believe the Gucci brand's current growth rate, which is 10 times higher than that of the industry, represents a risk going forward," Morningstar's Sokolova wrote in a 2017 note. Gucci relied heavily on China for its growth, but stores — perhaps including this one in China's Hainan Province — have struggled recently.

Persons: Alessandro Michele's, loafers, Gigi Hadid, Sienna Miller, Steve Madden, ASOS, Sally Singer, Michele, Fflur Roberts, Alessandro Michele, Harry Styles, Billie Eilish, Jared Leto, Kevin Mazur, Bauer, Griffin, Jeff Kravitz, Gucci, Sabato De Sarno, Lindsey Solomon, De Sarno, François, Henri Pinault, China —, Jelena Sokolova, Solomon, Daniele Venturelli, Michele —, Sokolova, It's, Thomas Chauvet, Morningstar's Sokolova, Michele's Gucci, wasn't, Jeremy Moeller, Chauvet, Roberts, Chanel, Gucci's, Gucci hadn't, Hermès, Birkin, Louis Vuitton's Neverfull, Pinault, Louis, Euromonitor's Roberts Organizations: Creative, Gucci, The Recording Academy, Axelle, Morningstar, BI, Citi, Disney, Getty, Revenue, China News Service, Bain, Louis Vuitton Locations: Euromonitor, China, The Asia, Pacific, China's Hainan Province, Asia

☆ Coach owner's Michael Kors deal creates US giant to take on European luxury rivals
▼ + stars: | 2023-08-10 | by ( Aishwarya Venugopal | ) www.reuters.com time to read: +3 min

Aug 10 (Reuters) - Coach parent Tapestry (TPR.N) will buy Michael Kors owner Capri Holdings (CPRI.N) in a deal valued at $8.5 billion, creating a U.S. fashion powerhouse to challenge larger European rivals for a bigger share of the global luxury market. Thursday's deal will also bring under one roof Tapestry's more affordable luxury brands Kate Spade, Stuart Weitzman and Capri's Jimmy Choo and Versace labels. That compares with about $87 billion for LVMH last year and roughly $23 billion for another European rival Kering (PRTP.PA). The deal will help Capri revive its Michael Kors brand under "better management" at Tapestry after weak sales in the past few quarters, analysts said. In the same year, Capri, formerly known as Michael Kors, acquired British shoemaker Jimmy Choo for $1.2 billion.

Persons: Michael Kors, Tiffany, Louis Vuitton, Thursday's, Kate Spade, Stuart Weitzman, Jimmy Choo, Versace, Morningstar, Jelena Sokolova, Tapestry, Neil Saunders, Capri, Joanne Crevoiserat, Kering, Valentino, LVMH, Aishwarya Venugopal, Savyata Mishra, Deborah Sophia, Chandni Shah, Sonia Cheema Organizations: Capri Holdings, Dior, Capri, Thomson Locations: Paris, U.S, Capri, Bengaluru

"The luxury industry seems to be outperforming the consumer market as a whole in China, but you know, really, almost everyone you speak to, there's a level of uncertainty," said Agility's managing director Amrita Banta. "There's a level of not feeling entirely comfortable with their future economic position that is really affecting almost everybody in China." Those factors disproportionately affect "aspirational" luxury customers who can easily live without another Gucci bag or $900 pair of sneakers. In China, luxury consumers are younger than in the rest of the world with an average age of 28, according to BCG - something companies had seen as positive for future growth. "In the trends that I'm seeing in the U.S. and also in China, more aspirational younger consumers are feeling more of a pain," Morningstar senior equity analyst Jelena Sokolova said.

Persons: Richemont, splurge, Morgan Stanley, Hermes, Chanel, Amrita Banta, Dior, Balenciaga, Gucci, Jelena Sokolova, HSBC's Erwan, Rambourg, Casey Hall, Mimosa Spencer, Catherine Evans Organizations: Cartier, Citigroup, Richemont, Citi, LVMH, Bain, Morningstar, Thomson Locations: SHANGHAI, PARIS, China, North America, Wuhan, Zhengzhou, Charlotte, Nashville, Swiss, Americas, Asia, United States, luxury's, U.S, Japan

In-store and online sales rose 13% to 7.6 billion euros in the first quarter, in line with the 13.5% seen in the first six weeks of the financial year. The company said it plans to invest 1.6 billion euros to increase gross store space in 2023 by about 3%. Inditex closed its over 500 stores in Russia in March 2022 following Moscow's invasion of Ukraine in February and subsequent Western sanctions. Inditex has begun to charge for online returns in more countries with no impact on sales, the company said. Inditex is also invested in more self-scanning checkouts and is replacing hard anti-theft tags with chips sewn into garments to avoid checkout queues.

Persons: Inditex, Massimo Dutti, Anne Critchlow, Jelena Sokolova, Zara, Corina Pons, Helen Reid, Charlie Devereux, Matt Scuffham, Josephine Mason, Elaine Hardcastle Organizations: Spain Company, Societe Generale, Inditex, Group, Morningstar, Thomson Locations: Spain, MADRID, LONDON, Zara, United States, Mexico, Saudi Arabia, U.S, Europe, Russia, Ukraine, UAE, France, Germany

☆ Investors punish Zara owner Inditex over spending plans
▼ + stars: | 2023-03-15 | by ( Corina Pons | ) www.reuters.com time to read: +4 min

As the cost of making garments increased, H&M took a profit hit while Inditex was able to pass on costs to shoppers. But higher expected capital expenditure for 2023, of 1.6 billion euros, surprised investors, sending Inditex shares down more than 5% by 1140 GMT. An Inditex logo is seen at the entrance of a Zara factory, the headquarters of Inditex group, in Arteixo, northern Spain, March 9, 2016. Inditex closed stores in mainland China at double its average rate, shutting a fifth of its shops there in 2022. Meanwhile Inditex plans to continue expanding in the United States, with at least 30 new projects planned from 2023 to 2025.

☆ Europe's luxury stocks have room to rise, but becoming costly
▼ + stars: | 2023-01-31 | by ( Lucy Raitano | ) www.reuters.com time to read: +5 min

REUTERS/Sarah Meyssonnier/FilesLONDON, Jan 31 (Reuters) - Europe's glittering luxury companies, the region's top stock-market performers in 2023, may see yet more gains driven by a rebound in Chinese spending, but for some the sector is starting to look expensive. An index of European luxury goods retailers (.dMIEU0TA00PUS) has rallied around 18% so far this year, outperforming the wider pan-European STOXX 600 (.STOXX), which is up 6.2% in the same time frame. But the fact that luxury goods companies are not as cheap as they once were is a "concern/point of attention", said Kasper Elmgreen, Head of Equities at Amundi, Europe's largest asset manager. Jelena Sokolova, senior equity analyst at Morningstar, said that China reopening is the key issue for European luxury stocks this year, and is already at least 50% priced in. These shares have more room to run higher as Chinese consumers hit the shops again and luxury companies flex their pricing power.

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