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.
NEW YORK, United States — Capri Holdings Ltd missed Wall Street estimates for quarterly profit on Wednesday, as protests in Hong Kong and negative Chinese consumer reaction to an "incorrectly labeled" T-shirt hurt sales of its Versace brand.
Milan-based Versace had come under fire in China as the luxury label sold a T-shirt that identified the Chinese-controlled territories of Hong Kong and Macau as countries.
Due to this, Versace lost its first Asia brand ambassador, Chinese actress Yang Mi, who terminated her contract with the brand.
Luxury labels rely on Hong Kong as a magnet for travelers and shoppers across Asia, and several months of pro-democracy protests have forced some retailers to close their doors.
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The company said comparable sales for Versace was flat compared with a year earlier.
Capri said it expects third-quarter revenue of $1.53 billion, below analysts' average estimate of $1.60 billion.
Adjusted net income fell 7.8 percent to $177 million, or $1.16 per share, in the second quarter ended September 28, from a year earlier and missed analysts' expectation of $1.24 per share.
Total revenue rose 15.1 percent to $1.44 billion, in line with analysts' estimates, according to IBES data from Refinitiv.
By Aditi Sebastian and Uday Sampath; editors: Maju Samuel and Arun Koyyur.
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.