Monday, June 27, 2011

Prada's IPO Debut? Eh.

A souvenir Prada bag is offered to the Hong Kong Exchange during
the debut of Prada SpA at the Hong Kong Stock Exchange June 24, 2011.
(Photo: Bobby Yip/Reuters)

Good thing Prada lowered expectations.

Prada, the first Italian company to list in Hong Kong, ended its first day of trade at 39.60 Hong Kong dollars (US$5.08), 0.3% higher than its IPO price of HK$39.50, after hitting an intraday high of HK$40. The shares stayed afloat as the Hang Seng Index staged a rebound, climbing 1.9%, although the benchmark index is still down 6.4% this month on growing worries about the European debt crisis and concerns about slowing Chinese growth.

"The rebounding market today helped the debut performance of Prada," said Ben Kwong, associate director of KGI Asia Ltd.

Tuesday, June 21, 2011


Very interesting that H&M announces it's collabo with Versace one day before releasing its Q2 earnings, which are expected to drop for a record-breaking third consecutive period:
Earnings at H&M (HMb.ST), the world's second-largest fashion retailer, are expected to have dropped in the second quarter as the firm chose not to pass on higher costs such as cotton and Asian wages to price tags.

The Swedish budget apparel firm, with some 2,300 stores in 40 countries, will publish its March-May report on June 22 after unveiling last week a mere 2 percent year-on-year rise in sales to 27.6 billion crowns amid slack spending in Europe.

The mean forecast in a Reuters poll of analysts is for a 16 percent drop from last year in pretax profit to 5.89 billion crowns ($921 million). The gross margin is estimated at 62.0 percent, down from 65.9 percent a year ago.

Yarn House Rules

All fashion industry eyes are on Vietnam where the seventh round of the Trans-Pacific Partnership (TPP) trade negotiations are taking place this week.

Reps from nine countries, including the U.S., have gathered in Ho Chi Minh City in hopes of coming to an agreement on a trade deal before the Asia-Pacific Economic Cooperative (APEC) meeting in November.

Fashion industry execs are paying close attention to the U.S. stance on textile and apparel import issues, particularly the rule of origin:
Importers plan to push negotiators in Vietnam for a “flexible” rule of origin that does not restrict where the fabric and yarns are made in order to qualify for duty free benefits. The rule-of-origin debate has pitted apparel importers against the U.S. domestic textile industry, which is advocating a “yarn forward” rule of origin that would require apparel to be made of fabric and yarn supplied by the U.S. or the other TPP partner countries.

“When you have a rule that is more restrictive and burdensome, it discourages trade and investment from occurring,” said Steve Lamar, executive vice president of the American Apparel & Footwear Association, who will also be in Vietnam this week, adding that AAFA member companies often use U.S. yarn and fabric and forgo duty free benefits in other trade deals because the rules are so burdensome.

But a yarn forward rule is a linchpin for U.S. textile industry support.
A bipartisan group of 52 House lawmakers, many from traditional textile states, recently sent a letter to U.S. Trade Representative Ron Kirk making their support of any deal contingent upon a yarn-forward rule of origin, exclusion of certain products from tariff reduction or elimination, tariff reductions for specific sensitive imported products versus phaseouts for groups of products, and strong customs enforcement language to prevent transshipments from China.

“It makes no sense in our opinion to disenfranchise textile producers in the U.S. so Vietnam [a nonmarket economy that subsidizes its exports] can source product components from China and ship products to the U.S. duty free,” said Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition. “What we know is that the yarn forward rule of origin will create an environment that gives support to expanding our export markets.”

Tuesday, June 14, 2011

Macy's Workers Threaten To Strike [UPDATE 3 6/17]


Women's Wear Daily reports details of the contract agreement:
Under the terms of the contract, all union workers will receive a general raise of $3.05 an hour over the next five years, full-time employees who work between 35 and 40 hours a week are guaranteed to hold onto those hours, workers will get one guaranteed day off a month expect during the holiday season and they can select the day. Extra hours can be picked up by part-timers, who will be eligible to participate in the medical plan if they reach full-time hours, no vacation benefits will be reduced and Macy’s will contibute more to cover the cost of health care while the workers will pay less.

According to a union officials, the new contract “delivers real gains and protections for the Macy’s workforce in the New York City area.”

UPDATE II 6/16 @10:20am:

NYC Macy's workers reach tentative agreement

The retailer and the union representing workers at several of its New York City area locations reached a tentative contract agreement Thursday morning.

(AP) - Macy's and the union representing workers at its flagship Manhattan store and three other New York locations reached a tentative contract agreement Thursday following all-night negotiations.

The union and Macy's made the announcement on the five-year proposed pact in separate statements.

Local 1-S of the Retail, Wholesale and Department Store Union said workers at the Herald Square flagship store would begin voting on the proposed contract on Thursday. Workers at the other stores, in the Bronx, Queens and Westchester County, would vote next Monday through Wednesday, it said.

"This is a solid contract and it reflects the fact that our workers are the true magic of Macy's," said RWDSU President Stuart Appelbaum. (MORE...)

UPDATE 6/16 @7:30am: Reuters reports negotiations continue past the midnight deadline into the morning.

If you live in Manhattan, the Bronx, Queens or White Plains, NY, and you need to get a few items at Macy's, you better hurry!
After five weeks of intense negotiations between Macy's management and the Local 1-S of the Retail, Wholesale and Department Store Union, 4000 workers have voted to strike if they can't come up with a new contract by 11:59pm Wednesday. Among the issues are benefits, wages and work hours:
Under the contract proposed by Macy’s, new employees would receive a 401(k) package rather than a defined-benefit pension plan; hours would be set by a new computerized system, which would dole out work assignments on a first-come-first-served basis, rather than recognize seniority or student or family schedules; and workers would pay more for health care.

Management has proposed a 35-cent hourly wage increase for current workers, and no change to the starting hourly wage of $7.50, which union negotiators have said does not constitute a living wage in New York.
However, with Macy's posting comp. sales up 7.4% in May, first quarter sales for FY 2011 up 5.7% to $5.89M and net income for the quarter increased to $131M from $23M, union officials feel management can afford to share the wealth.
“This is a company that’s in great shape financially, so it’s unacceptable for Macy’s to try to extract such massive concessions when many members of its workforce are struggling,” said Stuart Appelbaum, president of the RWDSU. “This is a textbook case of corporate greed and excess. Macy’s is in a position to give its workers a much better contract. It must stop trying to take away everything its dedicated workers have fought so hard and so long to get.”

Sunday, June 12, 2011

Tom Ford Expands His Beauty Collection

Products from the Tom Ford Beauty collection
(Photo Credit: Thomas Iannaccone/WWD)

Tom Ford sets out to redefine the world of prestige beauty with the launch of his expanded color collection in September.
With five FIFI awards under his belt, total Tom Ford Beauty global retail sales estimated at $150 million, a strong debut of his lip color collection (retail sales of $6 million in just 100 stores!), plus a resurgence in consumers' appetite for luxury products, the time is right for Mr. Ford and Estée Lauder Cos. Inc. to expand.

Here are the deets for the beauty mavens:
  • The color cosmetics collection will have 132 products, including six skin care products, ranging in price from $30 to $250
  • The collection includes contouring products Shade and Illuminate cream duet, heavily pigmented lip glosses like Lost Cherry and caligraphy tip brow pens
  • Skin care products include Traceless Foundation Stick, Illuminating Protective Primer, Purifying Crème Cleanser and Intensive Infusion Concentrate Extreme, which is an oil-based serum.
  • The Private Blend Lip Color Collection includes 18 shades (up from 12) and will retail at $48
  • Two new Private Blend Collection fragrances: Santal Blush and Jasmine Rouge priced from $195 to $475
  • A new Signature Collection fragrance: Violet Blonde.
Keeping in line with Mr. Ford's exclusivity mantra, the new color line will only be in 35 doors worldwide, and sold in Tom Ford stores, Berdorf Goodman, and select Neiman Marcus and Saks Fifth Avenue stores in the U.S.. Overseas, Italy’s La Rinascente and the U.K.’s Harvey Nichols and Selfridges will carry the line. A rollout in Asia is planned within 18 months of its launch.

The lip color and new fragrances will have a slightly wider global distribution -- 100 and 225 doors respectively -- and will be sold in the aforementioned stores, as well as Nordstrom and Bloomingdales. In the U.S., Saks will get a four-week exclusive on Violet Blonde in August before the fragrance is rolled out to other stores.

Industry sources estimate the line to do $40 million in global retail sales the first year, and $400-$500 million globally in five years.

(SOURCE: Estée Lauder Puts Together a Prestige Brand - WWD)

Thursday, June 9, 2011

Radha Chadha: Men Are Driving China's Luxury Goods Sales


In an interview with Bloomberg Television's Rishaad Salamat, author and brand consultant Radha Chadha discusses the emerging luxury market in China, and how men are the driving force behind it.