- Prachi Singh |
Sears Canada has managed to get a stay order from the Ontario Superior Court of Justice. The company said it will continue to work to complete its restructuring in a time to exit CCAA protection. As a part of the restructuring plan, the company would be closing 20 full-line locations, 15 Sears Home stores, 10 Sears Outlet and 14 Sears Hometown locations as well as a corresponding planned reduction in its workforce of approximately 2,900 positions across its retail network and at its corporate head office in Toronto.
The company added that monthly pension payments to beneficiaries from that pension plan are not affected by the Initial Order and will continue in accordance with the terms of the plan. In order to assist the company with this process, it has retained BMO Capital Markets, as financial advisor, and Osler, Hoskin & Harcourt LLP, as legal advisor.
Sears continues its restructuring efforts
Over the last 18 months, Sears Canada said that it has rebuilt its front and back-end technology platform, redefined its brand positioning, revamped its product assortment, and rebooted its customer experience and service standards. These changes led to the company reporting an increase in same-store sales in its two most recently completed quarters. However, the company added that the continued liquidity pressures facing the company as well as legacy components of its business are preventing it from making further progress in its brand reinvention efforts and from restructuring its legacy assets and businesses, which is why it sought creditor protection under the CCAA.
As a result of the CCAA filing, the TSX and NASDAQ have suspended trading in the common shares of the company and the TSX has initiated an expedited delisting review. The company also announced that Shahir Guindi, a director of the corporation, has resigned his post due to time constraints in his schedule.
Picture:Sears Canada website
- Vivian Hendriksz |
London - SMCP is currently mulling over a public listing in Paris, as the group continues to grow thanks to an increasing appetite for its accessible luxury brands Sandro, Maje and Claudie Pierlot.
The group announced its intention for a potential listing of its shares on Euronext Paris Wednesday evening, adding that it has the support of its majority shareholder Shandong Ruyi Technology Group. SMCP added that Shandong Ruyi Group, which recently acquired British heritage brand Aquascutum through its holding company Jining Ruyi investment, would retain its majority stake in the group following any listing.
SMCP sets its sights on an IPO in Paris
Shandong Ruyi stressed that it remains committed to supporting SMCP's ongoing development and "strongly believes a public listing would support its global development and visibility." A potential IPO, which would be subject to market conditions, is said to be part of SMCP broader aim to continue "its profitable growth journey and to pursue its mission to spread Parisian chic around the world," according to a statement.
A public listing would come after strong trading results and year-over-year growth, which sees SMCP nearly doubling its total sales in three years. In 2016 SMCP reported a 16.4 percent increase in sales, as well as a 22 percent increase in profitability. E-commerce sales for the group grew 80 percent in 2016, totaling 10 percent of its total sales. "SMCP intends to build on the strength of its unique business model and continue to implement its winning strategy, with the objective of confirming its position as a leader in the global apparel and accessories market," added the group.
Sandro, Maje, and Claudie Pierlot are currently available at more than 1200 points of sales in 36 countries. Evelyne Chetrite and Judith Milgrom founded Sandro and Maje in Paris, in 1984 and 1998 respectively and continue to oversee the creative direction for the brands. Claudie Pierlot was also founded in 1984 by Madame Claudie Pierlot, and acquired by the group in 2009.
Shandong Ruyi Technology first acquired a majority stake in SMCP in October 2016. SMCP's founder and senior management, in addition to private equity firm KKR, currently hold a minority stake in the group.
Photos: SMCP website
- Angela Gonzalez-Rodriguez |
ANALYSISThe U.S. preppy fashion label is making progress towards restructuring its debt. J. Crew has just received the green lights to get a credit agreement amendment approved, which it has been seeking to dissolve a lender lawsuit. The legal case pursues the blockage of the transfer of intellectual property to an affiliated company, after Canyon Partners sold 100 million dollars’ worth of J.Crew’s loan earlier this week.
A source close to the matter cited by Bloomberg said that the fashion retailer, which faces a total debt of 2.1 billion dollars, asked creditors to agree to an out-of-court restructuring that would extend the maturity on bonds to 2021. Once approved, this exit will give J. Crew more time to turn around its business and boost declining sales.
On June,16 J.Crew gets closer than ever to moving on with its debt restructuring
On June, 16 J.Crew Group announced they have received consents to the Term Loan Amendment announced on June 12, 2017 from a majority of the lenders under its term loan agreement, the requisite threshold for approval. The retailer has received to date consents from holders representing more than 80 percent of the Term Loan. As per information gauged by Bloomberg, in order to implement the recently announced restructuring out-of-court, J.Crew will need 95 percent of its bondholders to sign on.
The Term Loan Amendment was announced in connection with the offer to exchange any or all of the outstanding 566.5 million dollars aggregate principal amount of 7.75 percent/8.50 percent Senior PIK Toggle Notes due 2019 issued by Chinos Intermediate Holdings, A, Inc., an indirect parent company of the fashion retailer.
Next steps for the company is “to immediately stay all litigation activities regarding the Company's intellectual property transactions that occurred in December 2016. Upon the satisfaction of all conditions to the effectiveness of the Term Loan Amendment, the direction will require the Term Loan Agent to withdraw and dismiss, with prejudice, all pending litigation, including any claims that were or could have been asserted between the Company and the Term Loan Agent.”
As previously explained by the retailer, J.Crew “views these transactions as strategically important to its overall effort in positioning the company for long-term success. Addressing the nearest-term maturity removes an overhang in a challenging market environment and provides the company a clear and more confident path to execute its business plan.”
New deal gets J.Crew more time and cheaper debt to repay
The deal would help J.Crew move on to a second phase of debt restructuring and also settle a lawsuit that has been lingering over the company since December. This deal would exchange J.Crew's senior bond debt (currently standing at 566.5 million dollars and maturing in 2019), for new bonds worth less than half as much and due two years later. The group would also receive new stock recalls Reuters.
Earlier this year, in April, J. Crew advanced it wouldn't be able to pay interests on these bonds in due time in November. To make it up for that, the retailer would pay in kind.
Despite the deal going through, the company would still be forced to implement further restructuring of its debt.
- Kristopher Fraser |
Since hiring Anthony Vaccarello as their creative director, YSL has been rampant about trying to grow their business. While the brand saw impressive growth under previous creative director Hedi Slimane, The company plans on opening 20 stores a year and increase in-house production as they aim to double sales in the next three years.
YSL's target revenue is 2.2 billion dollars for the next three to five years.
Growth has continued to increase under Vaccarello, who has also brought a slate of new celebrity followers, including Nicki Minaj, Robin Wright and Dakota Johnson.
The brand has also become very popular among millennials, with that demographic now making up 70 percent of their customer base.
YSL aims for 2.2 billion in revenue
That is quite a feat for a luxury brand, as millennials are some of the trickiest consumers.
As millennials are slowly entering their years for increased salaries and more stable jobs, they have more disposable income to spend. Saint Laurent, under Slimane and now Vaccarello, has managed to create an aesthetic that appeals to the millennial consumer.
To reach more of their consumers, the company will be focused on store openings in strong growth areas like Shanghai and Beijing. At the end of 2016, YSL had 159 stores worldwide.
As part of their new business plan, YSL will be increasing production at their Tuscan factory.
Kering, which saw 12.4 billion euros in revenue last year, intends to keep growing their billion dollar business, with Saint Laurent as part of the bread and butter of that plan. The luxury conglomerate also owns reputable brands, including Gucci and Alexander McQueen.photo: via Saint Laurent Facebook page
- Prachi Singh |
Lululemon Athletica and 7mesh Industries have announced a strategic partnership to co-create and push the boundaries in advanced technical apparel.
“We’re always open to unlock opportunities to fuel our innovation pipeline,” said Lululemon CEO Laurent Potdevin in a statement, adding, “In bringing together 7mesh’s extensive technical apparel expertise and performance-focused mindset with the capabilities of our industry disrupting R&D Whitespace team, we perfectly blend fashion and function to co-create transformational products for our guests.”
Lululemon said, building on the success of its engineered sensation, Whitespace R&D is an investment priority and catalyst for innovation through its creation of new fabrics and construction technologies, product testing and future concept development.
“Working in close partnership with lululemon’s Whitespace team is an incredible opportunity for us. We’re excited to push the state of the art together in co-creating the most advanced technical performance apparel available,” added 7mesh CEO Tyler Jordan.
Located in Squamish, British Columbia, 7mesh is in close proximity to Lululemon’s Vancouver headquarters. Alongside the strategic partnership, Lululemon has also made a minority investment in 7mesh.
- Kristopher Fraser |
Victoria's Secret has learned their lesson about paying their employees and not messing with their time. The company has reached a 12 million dollar settlement for their use of call-in shifts.
A call-in or on-call shift is where a retail store will over schedule hours in case the store is busier than expected at a given time. Employees call in a few hours before the on-call time posted on their schedule, and they are told whether or not they are needed. If they are not needed, they are not compensated for their potential scheduled time.
In 2014, a Victoria's Secret employee named Mayra Casas decided this was unethical and unfair to employees, so he hired a lawyer and took on Victoria's Secret in a class action lawsuit. The employees involved in the suit declared that call-in shifts "required them to mold their lives around the possibility that they might have the chance to work more hours."
The lawsuit originated in California. According to California labor law, employees must be paid for reporting time for on-call shifts, equating to payment of half the shift if they don't end up working, or equal to two hours if they are called in for less than one hour of work.
Victoria's Secret to pay out 12 million dollars in lawsuit
The original lawsuit asked for 37 million dollars in damages, and asked for compensation for time employees spent waiting for managers to unlock and lock stores. The employees won an appeal for Victoria Secret's total dismissal of the lawsuit, and the end settlement of 12 million dollars was reached.
The settlement will be split 70-30, with 8 million dollars going towards former and current employees, and 3.6 million going towards the legal counsel. Victoria's Secret will not be able to regain any unclaimed settlement money. An approval hearing is scheduled for July.
This ongoing lawsuit has affected the scheduling practices of several retailers nationwide, far before this verdict was announced. In December 2016, AP announced that six retailers agreed to stop using on-call scheduling following an inquiry by a coalition of nine attorney generals.
New York Attorney General Eric Schneiderman said 50,000 retail workers nationwide benefitted from this.
“On-call shifts are not a business necessity and should be a thing of the past,” Schneiderman said in a statement. “People should not have to keep the day open, arrange for child care and give up other opportunities without being compensated for their time.”photo: via Victoria's Secret Facebook page
- Angela Gonzalez-Rodriguez |
The largest world’s largest company by revenue is now also a name to consider within the menswear industry thanks to the 310 million dollars acquisition of men’s fashion retailer Bonobos.
The label’s clothes and accessories will be available on Jet.com, the online marketplace Walmart bought for 3.3 billion dollars last year. This is the last e-commerce acquisition by Walmart digital chief Marc Lore since Walmart acquired his company Jet.com seven months ago and the one coming with the biggest price tag.
The Walmart-Bonobos merger marks Walmart’s fourth retailer acquisition in less than a year, adding up to the retailer’s growing fashion portfolio: women’s retailer ModCloth, outdoor apparel supplier Moosejaw and ShoeBuy.
Following the closing, Andy Dunn, founder and CEO of Bonobos will report to Marc Lore, president and CEO of Walmart U.S. E-commerce, and oversee the company’s collection of digitally-native vertical brands. These are brands born online, and owned from design through distribution. The brands will be offered on Jet.com and possibly other Walmart brands in a variety of countries over time, and include Bonobos and recently-acquired ModCloth.said Walmart in a statement.
The acquisition, which is subject to regulatory approval, is expected to close toward the end of the second quarter or the beginning of the third quarter of this fiscal year.
Is Walmarts’ acquisition of Bonobos marking the start of mega-conglomerates?
This type of acquisitions will soon be seen more often, according to Mortimer Singer, CEO at TRAUB, who this weekend told ‘Forbes’ that this “is the beginning of powerful mega-conglomerates that combine digitally-native, direct-to-consumer businesses with traditional brick-and-mortar on a grand scale.”
Truth is that this bid for e-commerce is already paying off for Walmart: last quarter, Walmart’s US e-commerce sales were up 63 percent from the same time a year ago, with most of the gains coming from Walmart.com.
Lore has been trying to buy digital-native companies with strong brands that appeal to a different demographic than Walmart does, and ones that have the potential to be healthy standalone businesses with Walmart’s backing.
“We’re behind,” he said at Recode’s Code Commerce event in March. “We need to catch up.”
On the other hand, Andy Dunn, CEO of Bonobos said in a statement how they “are excited about applying all that we have learned to help shepherd in the next era of retail.” “We began Bonobos ten years ago to give men a completely different product and shopping experience: better fitting, higher quality clothing, in new and imaginative ways. That will always remain our mission.”
The deals have also been intended to bring new digital leadership into Walmart — the CEOs of the acquired companies have been staying in place — and to increase the selection of goods on Jet.com.
- Prachi Singh |
Total sales in the first quarter rose by 19.4 million euros (21 million dollars) or 6.5 percent at OVS. The company said, OVS brand increased its sales by 4.6percent or 11.5 million euros (12.8 million dollars), despite inventory count carried out in February 2017 and the leap year in 2016. UPIM sales increased by 7.8 million euros (8.7 million dollars) or 16.4 percent and the brand also increased profitability. EBITDA was equal to 29.3 million euros (32.7 million dollars), an increase of 3 million euros (3.3 million dollars) or 11.2 percent, 40 bps of margin improvement compared to the same period in 2016.
"OVS SpA continued to grow in the first quarter of 2017, with net sales increasing by 6.5 percent and EBITDA increasing by 11.2 percent thanks to good like-for-like sales performance as well as the network expansion, with central costs under control. 2017 targets are confirmed. The favourable weather conditions starting from the second half of May resulted in an acceleration of the positive dynamics of the first quarter. Finally, the expansion plan as of today is continuing with the further network expansion of 15 stores in franchising and five directly operated,” commented Chief Executive Officer Stefano Beraldo in a statement.
Both OVS brands contributed positively to EBITDA growth
Both divisions contributed positively to the achievement of improved EBITDA result, benefitting from an improvement in gross margin, despite a significant increase in the franchise channel, a profitable expansion of the network, and a corresponding benefit in terms of operating leverage. EBITDA of both brands was up on the previous year, with OVS increasing by 1.1 million euros (1.2 million dollars), while UPIM’s growth of 1.8million euros (2 million dollars), 270 basis points margin improvement, as the new openings show significantly better metrics than the average of the existing brand.
Operating income, at 16.9 million euros (18.8 million dollars), was up by 2.5 million euros (2.7 million dollars) or 17.4 percent compared to the same period of last year. Earnings before tax were 13.8 million euros (15.4 million dollars), up 3 million euros (3.3 million dollars) year on year.
“During the period, 11 directly operated full format stores and 42 stores in franchising (mainly kids) were opened. In addition to the positive consolidation of the domestic market, which is proceeding as envisaged, the internationalization process of OVS SpA is continuing in line with expectations, through the network expansion of a further nine stores, out of which five directly operated and four in franchising. The integration with Charles Vögele and the consequent external international growth is in line with the plan, both in terms of store conversions and central costs rationalization,” added Beraldo.
- Prachi Singh |
The H&M group’s sales including VAT increased by 4 percent in local currencies in May 2017 compared to the same month the previous year. Converted into SEK, the company’s sales increased by 8 percent. H&M said that in the first half of the month sales were affected by tough market conditions in several countries and sales improved considerably in the second half of the month.
In the second quarter period, from March 1 to May 31, 2017, sales including VAT increased by 5 percent in local currencies compared to the corresponding quarter the previous year. Converted into SEK sales including VAT increased by 10 percent and amounted to 59,538 million Swedish krona (6,485 million dollars) compared to 54,341 million Swedish krona (6,247 million dollars) for the same quarter last year. Sales excluding VAT amounted to 51,383 million Swedish krona (5,907 million dollars) against 46,874 million Swedish krona (5,388 million dollars), representing an increase of 10 percent.
The total number of stores in the group were 4,498 on May 31, 2017 compared to 4,077 stores on May 31, 2016. The company added that the amounts are provisional and may deviate slightly from the six-month report, covering the period December 1, 2016 to May 31, 2017.
- Prachi Singh |
Mulberry said in its preliminary results announcement that total revenue grew by 8 percent to 168.1 million pounds (214 million dollars) for the year ended March 31, 2017. Profit before tax was 7.5 million pounds (9.5 million dollars) against 6.2 million pounds (7.8 million dollars) last year.
Commenting on the company’s annual results, Thierry Andretta, Mulberry CEO said in a statement, "During the year we have made good progress. Our sales and profits are growing, enhancing our strong cash position. We have advanced our international growth strategy with a new partnership in Asia and the continued expansion of our omni-channel offer in key markets."
Key initiatives boost annual revenues at Mulberry
Mulberry said that during the year, a significant number of new products were launched under the creative direction of Johnny Coca. The Zipped Bayswater became an immediate bestseller since its launch during October 2016 and the family will be further extended in coming seasons. The bag was highlighted during the marketing campaign, "Modern Heritage", which ran during April and May 2017.
Global digital sales were up 19 percent to 25.5 million pounds (32 million dollars) for the period, accounting for 15 percent of group revenue. Retail sales including digital were up 8 percent to 128.3 million pounds (163 million dollars) for the period with like-for-like sales up 5 percent.
A number of services were added to the Group's omni-channel offer during the period and local mulberry.com sites were introduced in China and Korea. In the USA, a local distribution centre was established in order to facilitate local fulfilment. There were 67 directly operated stores at the end of the period. The year witnessed relocation of the Covent Garden and Bicester stores; and acquisition of the store in Sydney, Australia and through the Mulberry Asia agreement, signed at the end of the financial year, the group acquired one store in Hong Kong post year-end.
Mulberry will acquire two stores in China, and one concession in Taiwan during the financial year ending March 2018. In North America, two stores were closed, New York (Madison Avenue) and Washington, the digital offer was enhanced and sales commenced to the Nordstrom department store chain.
Wholesale revenue, comprising sales to partner stores and selective multi-brand wholesale accounts, increased 7 percent to 39.8 million pounds (50.6 million dollars). The franchise store network at the period end had a total of 52 stores in Asia, Europe and the Middle East. The four stores acquired by Mulberry Asia will join the group's own Retail store portfolio during the financial year to March 2018. Selective new wholesale accounts were opened in Europe, North America and Asia.
Profit before tax was 7.5 million pounds (9.5 million dollars) against 6.2 million pounds (7.8 million dollars) last year, after accounting for non-recurring costs relating to activities in North Asia, adverse currency movements and non-cash store impairments. The board of Mulberry has recommended the payment of a dividend of 5.0p per ordinary share.
Like-for-like sales up 1 percent as of June 3, 2017
Like-for-like retail sales including digital were up 1 percent for the 10 weeks to June 3, 2017. In the UK, like-for-like sales were up 2 percent and the company said, sales continue to benefit from an increase in tourist spending in London, although domestic demand has been softer. International like-for-like sales show a weakening in non-strategic locations with management continuing to focus on the optimisation of the store network.