It’s been a busy few days with news that Whistles has been sold, Versace profits are heading upwards, Ferragamo’s creative head has quit and Sandro and Maje are expanding further. Times are tough with Steilmann going under only five months after its IPO, VF looking at divesting its sports unit, Finish Line profits plunging and Fast Retailing closing Princesse Tam Tam in Japan. Read on…
Whistles bought by Foschini
So Whistles has become the latest UK-based retailer to be snapped up by a South African firm with its purchase for an undisclosed sum by the Foschini Group. Most important is the fact that Jane Shepherdson is retaining her 20% stake in the firm. The former Toyshop fashion supremo has helped turn Whistles into the must-have label it is today and its prospects may have been seen as weaker if she’d exited the firm. Foschini’s buy, which already owns Phase Eight after last year’s £140m purchase, says as much about the South African market as it does about the UK one as that market has become more unstable as the rand has weakened. Other South African activity in the UK includes Steinhof buying Darty, as well as being a bidder (for a while) for Argos and launching Pep & Co, and Truworths buying Office. TFG chief Doug Murray said he sees great potential for Whistles in Europe and North America.
Versace powers ahead
Some luxury labels are finding the going tough at the moment. Is Versace one of them? Not at all. The company’s core profit rose 20% to €81m last year and it expects 2016 to be strong too. Last year’s sales rose 17.5% to €645m, but even without the positive effect of currency exchange rates, sales rose 8.6% with a 30% rise in Europe and a 16% rise in China. The ultra-expensive Versace line saw its sales up over 23% and accessories sales accounted for half of all turnover. That’s good news as the firm, which is still 80% controlled by the Versace family, is seeking a stock market listing next year.
Ferragamo creative chief quits
Ferragamo’s creative director Massimiliano Giornetti is leaving after 16 years at the label and the Italian company said it’s taking the opportunity to “revisit our approach to creativity.” What does that mean? He’s being replaced by the current team of designers, not a star creative director. CEO Michele Norsa said “Over the years, the company has discovered and supported so many young talents and today can count on an excellent in-house creative team.” Numerous labels have experimented with not having an overall creative head in the past but often, a star name (or several star names) tend to emerge over time. High-end fashion labels like having a big name at the helm and there’s no denying that the publicity value of such a name is huge (just ask Gucci and Balenciaga). It will be interesting to see how this one pans out.
Princesse Tam Tam to close in Japan
Japan’s Fast Retailing may be aiming for world domination but its Princesse Tam tam brand isn’t going to achieve it. The company is withdrawing the brand from Japan and will focus on growing it in France where most of its 140 stores are located. The company has struggled to achieve brand recognition in Japan, Reuters reported. Fast Retailing acquired the brand in 2006 for around ¥10bn ($70m at the time) and launched it in Japan in 2012. Princesse Tam Tam’s co-founder, Loumia Hiridjee, remained design director after the acquisition but was killed with her husband during the Mumbai terrorist attacks in 2008.
VF explores options for sports unit
Lee, Wrangler and North Face owner VF Corp is facing sluggish consumer demand in its home market, the US, and has said it’s exploring alternatives for its athletic apparel business. The $550m Licensed Sports Group business supplies apparel and ‘fanware’ via licensing deals with sports teams, college teams and lifestyle brands, as well as operating its own Majestic brand. While the unit’s sales rose 4% last year as Major League Baseball and National Basketball Association items proved popular, VF said: “As active portfolio managers, we constantly assess the composition of our company to ensure VF’s portfolio is aligned with our strategic objectives and positioned to maximise growth and return to our shareholders. In this respect, we are exploring options for our LSG business to position the organisation to continue its success and achieve its future potential.”
Finish Line faces tough times
Athletic shoes may be big business but they’re not helping to bring in rising profits for retailer Finish Line. The company said profit plunged 90% in Q4 as it closed stores and booked a writedown of tech assets. Profit was $4m, down from $40.8m a year earlier, and that came after the company had reported a loss of $21.8m for Q3, due to major disruption to its supply chain. But sales were up 5.2% to $580.5m and comp sales rose 4.6%. The company is closing around 25% of its stores in the next few years with a focus on shuttering under-performing locations. But it will open new stores too and will upgrade others. “We are going to touch our stores in a more aggressive way over the next several years, starting with this year, and that will include … improved storytelling and increasing the brand presence through the store remodel effort,” new CEO Sam Sato said, adding that the aim ”is to make product innovation the hero and inspire the consumer.”
Steilmann in shock insolvency
Germany’s Steilmann has big questions to answer. Five month after its IPO, the company has filed for insolvency. Its shares had debuted at around €3.50 and are now worth €0.31. Ouch! The company, which targets women over 45, had cut its outlook back in December on the back of mild autumn and winter weather and said last week that recent developments and failed restructuring negotiations had led to the insolvency filing. But investors want to know whether there was ny hint of trouble at the time of its IPO. “We’re shocked, especially considering how fast this went from IPO to insolvency,” said Marc Tüngler, general manager of shareholder protection group DSW. One bank involved in the IPO said it was as shocked as everyone else but other banks haven’t issued any statements yet.
Cornelia James owner to list shares
Better news on the IPO front, The House of Britannia, which owns glove maker Cornelia James, is hoping to raise £6m with a listing on the ISDX small company market, the Mail on Sunday reported. It wants to use the capital raised to invest in British luxury brands. CEO Simon Petherick said sales of British personal luxury goods were £8.2bn in 2013 and are forecast to reach up to £57bn by 2019. “Many British luxury brands are underdeveloped. Our aim is to help them develop globally while at the same time taking a stake to show our commitment.”
Sandro and Maje hit the Baltics
SMCP’s Sandro and Maje are continuing their relentless expansion and have opened their first stores in the Baltic States in a deal with the region’s power retailer Apranga. The stores have opened in the Spice shopping centre in Riga. Apranga currently operates 175 stores in the Baltic States and has the license for some of the world’s leading fashion brands there.