- Kristopher Fraser |
The online economy is growing, and not just here in the United States. South Asia is all about the e-commerce train, and the proof is in the pudding. Business of Fashion has reported that South Asia's internet economy, will reach 50 billion dollars this year. This puts it on trajectory to grow fourfold by 2025.
A large portion of Southeast Asia's economic growth was due to startup businesses developing there. As reported by Business of Fashion, of the 12 billion dollars of capital invested in Southeast Asian internet companies since 2016, 9 billion of those dollars were raised by startups with more than 1 billion dollar valuations.
The increase in the number of smartphone users has contributed to this growth. Southeast Asia is also expected to have 330 million internet users by the end of the year.
According to an article by Tech Crunch, Southeast Asia is now the world's largest region for internet users. Although online travel is still the largest segment for spending, but e-commerce and ride-sharing saw the highest growth this year.
According to a report by Tech Crunch, E-commerce, not including second-hand/consumer-to-consumer sales, grew at a compound annual rate of 41 percent to cross 10 billion dollars for the first time in 2017.
Southeast Asia has become the major global economy to watch, and international investors should take notice.
- Danielle Wightman-Stone |
Shopping centre giant Westfield, which has two centres in London, is being acquired by Paris-based Unibail-Rodamco to create the “world’s premier developer and operator of flagship shopping destinations” in a 24.7 billion dollar deal.
The deal, which has been unanimously recommended by Westfield’s board of directors and Unibail-Rodamco’s supervisory board, will see the creation of a global property leader worth 72.2 billion dollars, strategically positioning its combined shopping centres in 27 of the world’s most attractive retail markets and cities including in the UK, Australia, France, Spain and the United States.
France's Unibail will pay shareholders in Australia's Westfield Corporation, which owns 35 shopping centres in the United States, including in New York and Los Angeles, and in the UK at London's White City and Stratford, 7.55 cents a share at a 17.8 percent premium.
Unibail chief executive and chairman of the management board, Christophe Cuvillier said: “The acquisition of Westfield is a natural extension of Unibail-Rodamco’s strategy of concentration, differentiation and innovation.
“It adds a number of new attractive retail markets in London and the wealthiest catchment areas in the United States. It provides a unique platform of superior quality shopping destinations supported by experienced professionals of both Unibail-Rodamco and Westfield.”
In a statement, Unibail-Rodamco stated that the acquisition is expected to result in 100 million dollars in cost savings per year across the 104-strong property group, while adding that they are still committed to the “progressive roll-out of the world famous Westfield brand in the Group’s flagship shopping destinations”.
It also notes that the deal will see the creation of a collection of 56 high quality flagship shopping destinations, representing 84 percent of the GMV, with an average footfall of 15.7 million per annum, such as Westfield London, Westfield Stratford City, Les Quatre Temps, Westfield Century City, Le Forum des Halles, Westfield World Trade Center, La Maquinista, Shopping City Süd, Mall of Scandinavia, Centrum Chodov and Arkadia.
Westfield group to be bought by France’s Unibail-Rodamco
Cuviller added: “We believe that this transaction represents a compelling opportunity for both companies to realise benefits not available to each company on a standalone basis, and creates a strong and attractive platform for future growth. We look forward to welcoming Westfield’s security holders as shareholders in the new Group and continuing to create significant value for our existing and new shareholders.”
Westfield chairman, Frank Lowy, said: “The transaction announced today is the culmination of the strategic journey Westfield has been on since its 2014 restructure. We see this transaction as highly compelling for Westfield’s security holders and Unibail-Rodamco’s shareholders alike.
“Unibail-Rodamco’s track record makes it the natural home for the legacy of Westfield’s brand and business. We look forward to seeing Westfield continue to grow as part of the world’s premier owner of flagship shopping destinations.”
This is the latest consolidation in the shopping centre market, earlier this week Hammerson agreed an all-share takeover of rival Intu in a 3.4 billion pounds deal to create Britain's biggest property company. Its portfolio will include Intu-owned Trafford Centre and Lakeside joining the Bullring in Birmingham under one roof, forming a 21 billion pound shopping centre giant in the UK.
Image: courtesy of Westfield Stratford City
- Angela Gonzalez-Rodriguez |
Private equity advisory firm Apax Partners LLP has raised a technology-focused fund, called Apax Digital, with 1 billion dollars in capital commitments. The fund’s first investment has gone towards online retail platform Moda Operandi.
The Anglo-American private equity firm has raised and advised more than 48 billion dollars in assets under management since inception. Normally focusing on the technology and telecommunications, business services, healthcare and consumer goods sectors, Apax’ new fund, Apax Digital, will make minority and buyout investments in high-growth tech and consumer internet businesses globally.
As explained by the company in a corporate release, Apax Digital fund, advised by a dedicated team of 14 investment professionals based in New York and London, will target individual equity investments between 30 million and 150 million dollars. The capital raise of Apax Digital follows the close of Apax IX in December 2016 with 9 billion dollars in capital commitments.
Apax Digital’s first investment has been awarded to Moda Operandi Inc. The online luxury retailer has secured 165 million dollars in growth capital from the newly created fund.
Apax Digital’s investment in Moda Operandi will be used to help “fuel continued international growth and increased development across several key business verticals.”
Additionally, the funding will help accelerate improvements in mobile tech, customer acquisition programs, and marketing strategies. Prior to this round of funding, New York-based Moda Operandi has raised more than 132 million dollars since inception in February 2011.
- Angela Gonzalez-Rodriguez |
Nautica will be extending its marketing partnership with PGA Tour player Cameron Tringale for an additional year. This will mark the sixth year for the partnership.
To add to its bid for the golf apparel and lifestyle segment, the brand owned by VF Sportswear, a subsidiary of VF Corporation, is introducing 24-year-old PGA Tour player Michael Kim as a golf brand ambassador.
Born in Seoul, South Korea, Kim moved to the United States when he was 7 and later played for the University of California, Berkeley where in 2013 he became the first Cal men's golfer to ever win national player of the year honours when he received both the Jack Nicklaus Award & the Haskins Award. He is known as one of the dominant young players in the game.
As part of the agreement, both golfers Tringale and Kim will wear Nautica apparel on course, focusing on the brand's NavTech performance golf shirts and pants, as well as complementary sweaters, belts and outerwear.
"We are excited to continue our partnership with Cameron Tringale and add Michael Kim to the team for 2018," said Brendan Sullivan, President of Nautica. "Both athletes are great representatives for the Nautica brand, and all that it stands for: an active lifestyle, youthful energy, and strong determination."
In addition to wearing the brand's apparel, Tringale and Kim will both be featured in Nautica digital advertising campaigns along with in-store POS, and will be showcased throughout the Nautica website and social media channels.
- Danielle Wightman-Stone |
Students of Design (SODS) has launched a crowdfunding campaign to raise 300,000 pounds to fuel its global expansion.
The Students of Design platform, which offers emerging independent designers “who wish to champion continuity and sustainability in their work” a marketplace to sell their collections. Each designer creates a brand profile from anywhere in the work and then they can market their items and complete sales transactions easily using the SODS integrated logistic set-up.
Founded by Lindy Staadecker, Anoesjcka Gianotti and Michelle Parekh, the marketplace has 50 designers worldwide using the platform, and a recent collaboration with Vivienne Westwood giving the brand more visibility and credibility. In addition, The University of the Arts, New Designers, Prince’s Trust and Google Campus London have already partnered with SODs to further its mission.
The marketplace has shown continued sales growth through the first year, with online retail sales predicted to double to 4.4 trillion dollars by 2021, the brand states, and that’s why it is looking to raise 300,000 pounds to grow the platform.
Students of Design has stated it will use 75 percent of the funds to grow its existing marketplace, while 25 percent will be used on its digital trade development, which it hopes will change the trade show landscape, by allowing users to ‘attend’ trade shows online using the latest virtual reality technology, saving brands valuable time and budget.
“Students of Design is an innovative marketplace that expertly caters for the new wave of independent artists, homeware and fashion designers who put sustainability at the forefront of their work. These designers can now offer a premium service, user experience and delivery method directly to customers which allows them to independently compete with large established companies with virtually no setup cost,” the company states. “The current retail system is failing emerging designers due to the small margins, while trade shows see dwindling footfall. We provoke a new way to think about online consumerism by opening doors to an entirely new global buying audience and by bringing significant change to the conception of trade show formats.”
The Crowdfunding campaign is about to launch on Crowdcube but potential investors can register their interest on the SODS dedicated investment page - sodscrowdfunding.com, with no obligation before the campaign goes live.
Image: courtesy of The Students of Design - co-founders Michelle Parekh, Anoesjcka Gianotti and Lindy Staadecker
- Prachi Singh |
For the third quarter ended October 29, 2017, Lululemon Athletica’s net revenue was 619 million dollars, an increase of 14 percent compared to the third quarter of fiscal 2016. On a constant dollar basis, net revenue increased 12 percent. Total comparable sales increased 8 percent, or increased 7 percent on a constant dollar basis and comparable store sales increased 2 percent or 1 percent on a constant dollar basis. Direct to consumer net revenue increased 26 percent or 25 percent on a constant dollar basis. Gross profit was 322 million dollars, an increase of 16 percent, while adjusted gross profit was 323.1 million dollars, again an increase of 16 percent.
Commenting on the Q3 trading, Laurent Potdevin, CEO, Lululemon, said in a media release: "As we start the holiday season, I'm energized by our momentum and we are increasing guidance to reflect this performance. I'm grateful for the enthusiasm I see every day across our collective as we remain on our path to delivering 4 billion dollars in revenue in 2020."
Lululemon updates Q4 and FY17 outlook
Gross margin was 52 percent, an increase of 90 basis points compared to the third quarter of fiscal 2016. Adjusted gross margin was 52.2 percent, an increase of 110 basis points. Diluted earnings per share were 0.43 dollar compared to 0.50 dollar in the third quarter of fiscal 2016. Adjusted diluted earnings per share were 0.56 dollar compared to 0.47 dollar for the third quarter of fiscal 2016.
In connection with the restructuring of the Ivivva operations, the company expects to recognize total pre-tax costs of between 45 million dollars and 50 million dollars in fiscal 2017, inclusive of 45.4 million dollars recognized during the first three quarters of fiscal 2017.
For the fourth quarter, Lululemon expects net revenue to be in the range of 870 million dollars to 885 million dollars based on a total comparable sales increase in the mid-single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of 1.18 dollars to 1.21 dollars for the quarter. Excluding the impact of the Ivivva restructuring, the company expects adjusted diluted earnings per share to be in the range of 1.19 dollars to 1.22 dollars for the quarter.
For the full fiscal 2017, the company now expects net revenue to be in the range of 2.590 billion dollars to 2.605 billion dollars based on a total comparable sales increase in the mid-single digits on a constant dollar basis. Diluted earnings per share are expected to be in the range of 2.20 dollars to 2.23 dollars for the full year. Excluding the impact of the Ivivva restructuring, Lululemon expects adjusted diluted earnings per share to be in the range of 2.45 dollars to 2.48 dollars for the year.
- Prachi Singh |
Iconix Brand Group in its preliminary financial results announcement for the third quarter ended September 30, 2017 said that the company expects licensing revenue for the third quarter of 2017 to be approximately 53.2 million dollars, a 12 percent.
The company added that revenue in the prior year's third quarter included approximately 2.3 million dollars of licensing revenue from the Sharper Image brand which was sold in the fourth quarter of 2016 and approximately 1.3 million dollars of revenue from its Southeast Asia joint venture which was deconsolidated in the second quarter of 2017. Excluding Sharper Image and Southeast Asia, revenue declined approximately 7 percent in the third quarter of 2017.
Iconix reveals preliminary Q3 results
The company added that it has not yet finalized its impairment analysis, however, as a result of such testing which will be completed prior to the filing of the company's Form 10-Q for the period ended September 30, 2017, the company expects to recognize a non-cash intangible asset impairment charge of approximately 500 million dollars to 750 million dollars primarily related to the women's segment. The company also expects to have a non-cash tax charge of approximately 15 million dollars related to the write off of certain deferred tax assets.
The company expects GAAP diluted EPS from continuing operations excluding the impairment charge, to be a loss of approximately 0.10 dollar compared to earnings of 0.25 dollar in the third quarter of 2016. The loss of 0.10 in the third quarter includes the non-cash tax charge of approximately 15 million dollars or 0.26 dollar per share.
Non-GAAP diluted EPS from continuing operations is expected to be approximately 0.24 dollar compared to 0.18 dollar in the third quarter of 2016.
- Prachi Singh |
Net revenues at Vera Bradley totalled 114.1 million dollars for the third quarter ended October 28, 2017 compared to 126.7 million dollars in the prior year third quarter ended October 29, 2016, while net income was 0.4 million dollars or 0.01 dollar per diluted share compared to 8.8 million dollars or 0.24 dollar per diluted share. On a non-GAAP basis, the company’s net income totalled 8.3 million dollars or 0.23 dollar per diluted share against 7.6 million dollars or 0.21 dollar per diluted share.
Commenting on the third quarter results, Robert Wallstrom, Vera Bradley’s CEO said in a statement: “Our ability to implement certain expense reductions in conjunction with the initial implementation of our Vision 20/20 plan more quickly than originally expected, along with diligent expense management, drove third quarter EPS meaningfully ahead of our guidance.”
Third quarter result highlights
Current year third quarter direct segment revenues totalled 83.2 million dollars, a 3.4 percent and comparable sales including e-commerce decreased 7.4 percent for the quarter reflecting a 6.9 percent decline in comparable store sales and an 8.6 percent decrease in e-commerce sales, which the company said, was partially offset by new store growth. The company opened one full-line store and seven factory outlet stores during the past 12 months.
The company added that indirect segment revenues decreased 23.8 percent to 30.9 million dollars reflecting a reduction in the number of specialty accounts coupled with a reduction in orders from both specialty accounts and certain key accounts.
Gross profit for the quarter was 63.8 million dollars or 55.9 percent of net revenues, compared to 72.9 million dollars or 57.6 percent of net revenues, in the prior year third quarter. The year-over-year 80 basis point gross profit decline, the company said, was primarily related to increased promotional activity at the company’s factory outlet stores and channel mix changes, partially offset by a reduction in product cost, all of which caused the gross profit percentage to fall below the low end of the guidance range of 57.1 percent to 57.6 percent.
The company’s operating income totalled 0.5 million dollars or 0.4 percent of net revenues compared to 11.4 million dollars or 9 percent of net revenues, in the prior year third quarter. On a non-GAAP basis, the company’s operating income totalled 13 million dollars or 11.4 percent of net revenues compared to 12 million dollars or 9.5 percent of net revenues, in the prior year.
Review of the nine month results
Current year net revenues for the nine months totalled 322.6 million dollars compared to 351.1 million dollars in the prior year. Direct segment revenues were 241.3 million dollars, a 2 percent decrease from 246.3 million dollars in the prior year. Comparable sales including e-commerce decreased 7.7 percent for the period reflecting a 6.1 percent decline in comparable store sales and an 11.4 percent decrease in e-commerce sales.
Indirect segment revenues for the nine months decreased 22.4 percent to 81.3 million dollars from 104.8 million dollars. Gross profit totalled 179.8 million dollars or 55.7 percent of net revenues, compared to 201 million dollars or 57.2 percent of net revenues, in the prior year. The company’s operating loss was 0.6 million dollars or 0.2 percent of net revenues, in the current year nine month period, compared to operating income of 23.6 million dollars or 6.7 percent of net revenues, in the prior year. On a non-GAAP basis, the company’s operating income was 17.1 million dollars or 5.3 percent of net revenues, compared to 26.7 million dollars or 7.6 percent of net revenues, in the prior year.
Vera Bradley predicts Q4 and FY18 expectations
For the fourth quarter of fiscal 2018, the company expects net revenues of 127 million dollars to 132 million dollars compared to prior year fourth quarter revenues of 134.8 million dollars, a gross profit percentage of 55.4 percent to 55.8 percent compared to 55.7 percent in the prior year fourth quarter and diluted earnings per share of 0.30 dollar to 0.33 dollars. Net income totalled 3.5 million dollars or 0.09 dollar per diluted share, in the prior year fourth quarter and excluding charges, net income totalled 10.1 million dollars or 0.28 dollar per diluted share.
For fiscal 2018, the company expects net revenues of 450 million dollars to 455 million dollars compared to 485.9 million dollars last year, a gross profit percentage of 55.8 percent to 55.9 percent compared to 56.8 percent last year and diluted earnings per share of 0.57 dollar to 0.60 dollars. Diluted earnings per share totalled 0.53 dollar last year and excluding charges, diluted earnings per share were 0.72 dollar last year.
“As we discussed last quarter, we have launched Vision 20/20, an aggressive plan to turn around our business over the next three years. Vision 20/20 will restore brand and company health by moving to a less clearance-driven business model combined with a meaningful reduction in our SG&A expenses,” added Wallstrom.
The majority of the product and pricing initiatives will be implemented beginning in fiscal 2019; management expects annualized revenues will be negatively impacted by these initiatives by 30 million dollars to 50 million dollars in fiscal 2019 from fiscal 2018 levels.
- Sara Ehlers |
Heritage Global Patents and Trademarks (HGPT), global brokerage and advisory service, just announced that it will manage an auction for British Wellington Rain Boot Company. The sale will include all assets of the company including its trademarks and intellectual property.
The sale will also include all product formulations, manufacturing contracts, retail distribution and more according to a statement released by the company. The brand, which has been renown for its rain boots, has merged fashion along with utilitarian use. By capitalizing on the rain boot market, the company holds value for its status as a footwear company.
Interested buyers can find out more information on the company's assets through a non-disclosure agreement (NDA) available on the Heritage Global website. As the company is now accepting offers for the Wellington Rain Boot company, it seems the footwear brand will be acquired soon.
- Prachi Singh |
American Eagle Outfitters reported EPS of 0.36 dollar for the third quarter ended October 28, 2017. Excluding restructuring and related charges of 0.01 dollar per diluted share, the company’s adjusted EPS was 0.37 dollar for the third quarter. Total net revenue increased 2 percent to 960 million dollars, while consolidated comparable sales were up 3 percent, following a 2percent increase last year.
Commenting on the company’s performance, Jay Schottenstein, Chief Executive Officer said in a press release: “The third quarter produced record sales, sequential margin improvement and marked eleven straight quarters of comp sales growth. Digital sales continued to grow at a rapid pace, while we also saw store sales strengthen. I’m very pleased to see strong momentum continue into the fourth quarter, positioning us well for the next few critical weeks of the holiday season.”
Third quarter financial results
Gross profit for the quarter was 375 million dollars compared to 378 million dollars last year with a gross margin rate of 39 percent to revenue compared to 40.2 percent last year, a 120 basis point decline due to higher promotions and increased shipping costs associated with a strong digital business.
Operating income was 111 million dollars including 4 million dollars of restructuring charges related to severance and a lease buy-out. Adjusted operating income was 115 million dollars compared to 118 million dollars last year with a rate of 11.9 percent to revenue compared to 12.6 percent last year.
During the quarter, the company opened four new AE stores, with one in Mexico, one in Canada and two in the US. Additionally, the company opened one new Aerie location in Canada and 11 international licensed stores and closed one. The company added that it is on track to close a total of 25 to 30 stores this year.
American Eagle Outfitters expects rise in Q4 EPS
Based on an anticipated comparable store sales increase in the mid-single digits, management expects fourth quarter 2017 EPS to be approximately 0.42 dollar to 0.44 dollar. Last year’s fourth quarter reported EPS of 0.30 dollar that included approximately 0.09 dollar per share of asset impairment, restructuring and related charges. Excluding these items, last year’s fourth quarter adjusted EPS was 0.39 dollar.
Picture:American Eagle website