The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
THE CHEAT SHEET
Watch What Happens
Bulgari is among the brands backing Geneva Watch Days, the first Swiss watch fair since the pandemic | Source: Instagram/@bulgari
The Bottom Line: Much like in fashion, the pandemic has exposed cracks in the system, including an over-reliance on wholesale and outmoded seasonal trade shows. Expect brands to use this year's disruptions to make dramatic adjustments to how they market and sell watches.
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Brands Feel the Love in China
Yang Mi collaborated on a limited edition for Qixi Festival in 2018 that was stocked in Michael Kors stores globally | Source: Courtesy
Is Better Than Expected Good Enough?
LVMH is expected to complete its acquisition of Tiffany & Co. later this year | Shutterstock
It's been an unrelentingly brutal six months for American retail. Publicly traded fashion brands stocks are still down anywhere from 20 percent to 40 percent this year, even as the S&P 500 hits new record highs. The back-to-school shopping season, second only to the holidays for some brands, is likely to be underwhelming in the age of remote learning.
When brands release results this week, expect them to outline how they plan to survive this period and give their forecasts for the rest of the year. Inventory remains a challenge, and brands will have an opportunity this week to explain how they plan to move those unsold clothes. In most cases, that strategy will likely revolve around ever-deeper promotions. Real estate is also likely to play a big role in the conversation this week, as many chains are closing stores and negotiating with landlords over rents on those that remain open.
The Bottom Line: The outlook for American retail is heavily contingent on the wider economy, where a recovery may be in jeopardy as government stimulus runs out.
SUNDAY READING
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The luxury goods maker is seeking pricing harmonisation across the globe, and adjusts prices in different markets to ensure that the company is”fair to all [its] clients everywhere,” CEO Leena Nair said.
Hermes saw Chinese buyers snap up its luxury products as the Kelly bag maker showed its resilience amid a broader slowdown in demand for the sector.
The group’s flagship Prada brand grew more slowly but remained resilient in the face of a sector-wide slowdown, with retail sales up 7 percent.
The guidance was issued as the French group released first-quarter sales that confirmed forecasts for a slowdown. Weak demand in China and poor performance at flagship Gucci are weighing on the group.