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.
Comparable retail sales fell 9 percent at constant exchange rates for the 13 weeks ending December 26, British luxury brand Burberry said in a statement Wednesday. Analysts had been expecting a 7 percent decline, according to a note from Bernstein.
The steep decline during the pivotal holiday quarter shows how the coronavirus pandemic has continued to weigh on luxury fashion brands, whose sales rely on a mix of economic optimism, spendthrift travellers, and social occasions that merit dressing up.
The pandemic has also widened the gap between the strongest players like LVMH and Hermès, whose fashion sales returned to growth by the end of last summer, and more novel propositions like Burberry, which overhauled its designs and weeded out diffusion lines in a bid to move upmarket under designer Riccardo Tisci and chief executive Marco Gobbetti.
Burberry pointed to a silver lining in the form of full-price sales that increased by more than 10 percent in its key leather and outerwear categories. The brand blamed low tourist traffic at its off-price outlets and an effort to limit markdowns in its mainline stores for the overall sales decline.
Fashion brands are edging in on the world’s largest gathering of design professionals and their wealthy clients, but design companies still dominate the sector, which is ripe for further consolidation, reports Imran Amed.
Blocking the deal would set a new precedent for fashion M&A in the US and leave Capri Holdings in a precarious position as it attempts to turn around its Michael Kors brand.
After preserving his fashion empire’s independence for decades, the 89 year-old designer is taking a more open stance to M&A.
The sharp fall in the yen, combined with a number of premium brands not adjusting their prices to reflect the change, has created a rare opportunity to grab luxe goods at a discount.