Italy is becoming notorious for making sure retail companies don't skip out on even so much as a dime in taxes. Today, the country's tax authority has announced that Amazon has agreed to pay 100 million euros to resolve a tax dispute regarding outstanding claims from the 2011 to 2015 period.

According to Reuters, Milan's tax police believed that Amazon had evaded 120 to 130 million euros worth of taxes in Italy. Amazon responded by saying that its taxes were low because of their significant investments in the country.

In a statement today, Amazon said they had reached an agreement on "matters of the past" and didn't specify what that entailed, or off any specific details. The company wasn't immediately available for comment.

Amazon isn't the only company to come under fire by Italy's tax authorities recently. Gucci's offices were raided* by the country's tax authorities earlier this month. If company's think they can get away without paying Italy their taxes, they can think again.

H&M in a tough spot: stock plummets following worst quarterly sales in a decade

ANALYSISThe world’s second largest apparel group is in trouble: Hennes & Mauritz AB shares plummeted after the Swedish fashion retailer lost more market share to rival Zara, noting the worst quarterly sales in ten years.

The Swedish group reported Friday the biggest drop in quarterly sales in at least a decade. H&M has seen its sales badly affected by consumers’ growing inclination towards a more online focused model. As a result, the fast fashion giant will start paring its store network expansion down, considering several closures in the upcoming months.

The news rapidly affected the stock’s performance: shares in H&M fell as much as 16 percent Friday, marking the steepest intraday decline since March 2001, according to data collated by Bloomberg.

Furthermore, note analysts covering the stock, H&M is attracting short selling. Almost 15 percent of H&M’s shares that are readily available to trade (free float) has been shorted, according to Markit Securities data, reports the ‘Wall Street Journal’.

Analysts’ take: H&M reported “quite possibly the worst quarterly sales performance on record”

In Cedric Lecasble’s words, H&M reported “quite possibly the worst quarterly sales performance on record.” The analyst at Raymond James based its commentary on the fact that Hennes & Mauritz’s sales excluding value-added tax fell 4 percent to 50.4 billion kronor (6 billion dollars) in the three months through November. This was not even remotely close to the 2 percent increase expected by analysts.

Indeed, H&M’s sales have declined in only three quarters in the past 10 years, according to data compiled by Bloomberg.

'It looks like H&M's product offer has been very sub-optimal this season for what is now a more globally diversified company, and this will need to be addressed for investors to regain faith in H&M longer term,” pointed out RBC analyst Richard Chamberlain. Chamberlain currently rates the stock as an 'outperform'.

H&M to ramp up online presence in an eleventh hour attempt to revert its fate

In an attempt to calm the (much troubled) waters, the Swedish retailer said Friday it aims to accelerate a transformation plan to better integrate physical and digital stores, and it will give more details on strategy changes at a February, 14 meeting with investors.

Until then, H&M would be increasing its efforts to integrate physical and online stores; even allowing online purchases to be returned to shops in some countries. It will also review its physical stores expansion plans, closing the worse performing ones.

H&M blamed a drop in customer numbers in its stores because of online shopping, as well as “imbalances in part of the H&M brand’s assortment composition”, highlighted the ‘Financial Times’.

“H&M’s supply chain lacks reactivity, which is one of the group’s structural issues in front of abrupt changes in fashion,” wrote in a note to investors Cedric Rossi, an analyst at Bryan Garnier.

H&M’s future looks multi-branded: bigger focus on smaller, better performing brands

On a more positive note, the group said online sales and revenue of brands other than H&M have been going well. Aware of this incipient shift in revenue’s contributions, the company is shaking its management team, having recently named Madeleine Persson Managing Director for the group’s flagship brand.

“The H&M group has a multi-brand matrix organisation with currently eight well-defined brands: H&M, COS, & Other Stories, Monki, Weekday, Cheap Monday, H&M Home and ARKET. Each brand is headed by a responsible individual and has local sales organisations. Centrally, there are a number of joint group functions that support each brand in order to enjoy the advantages of these common areas, so that each brand and country works purposefully according to central policies and guidelines,” explains the company in its corporate site.

Photo: H&M Global Web

Kering announces interim dividend of 2 euros per share

Kering’s board of directors has decided to distribute an interim dividend for the financial year 2017 of 2 euros (2.36 dollars) per share. The company said, this interim dividend will be paid on January 17, 2018 on positions closed as of the evening of January 16, 2018.

The balance of the dividend for the financial year 2017 will be decided by the board of directors on February 12, 2018 and put to the vote at the next annual general meeting, which will take place on April 26, 2018. The group generated revenue of 12.385 billion euros (14.5 billion dollars) in 2016.

Picture:Kering website

H&M extends collaboration with Tmall in China

After the company opened first H&M store in mainland China 10 years ago, the brand will now launch its first store on Alibaba’s Tmall platform. After witnessing encouraging response to another group label Monki in China since its launch on Tmall, the company has decided to extend the collaboration to include both - H&M brand and H&M Home. H&M also added that advanced discussions regarding the launch of the remaining H&M brands on Tmall is also underway.

“As one of the world’s most innovative fashion companies, H&M is a perfect fit for Alibaba’s Tmall platform,” said Michael Evans, President of Alibaba Group in a media release, adding, “We are honored to expand our cooperation with H&M and host their flagship store, enabling H&M brands to engage with our half a billion consumers.”

“We are very happy to be able to make H&M even more accessible in mainland China. Tmall is an important complement to our existing physical and digital stores. We see great potential for substantial future growth and Tmall will be an important part of this,” added Karl-Johan Persson, CEO of the H&M group.

Today, the company said, H&M group revenues in China amount to 11 billion Swedish krona (around 1.3 billion dollars) through over 500 physical stores and online.


H&M to shut more stores after Q4 sales drop 4 percent

For the fourth quarter of 2017, H&M sales including VAT amounted to 58.545 million Swedish krona (6,928 million dollars) compared to 61,098 million Swedish krona (7,241 million dollars). Sales excluding VAT amounted to 50,390 million Swedish krona (5,975 million dollars), a decrease of 4 percent compared to the corresponding quarter last year. In local currencies, sales decreased by 2 percent. The company said that in order to respond even quicker to customers’ fast-changing behaviour, the H&M would close more stores.

The H&M group added that though it continued to grow during the year, the growth was dampened by the fact that the sales development in the fourth quarter was significantly below the company’s own expectations. The quarter was weak for the H&M brand’s physical stores, which were negatively affected by a continued challenging market situation with reduced footfall to stores due to the ongoing shift in the industry. In order to correct this, H&M said, a number of actions have been taken including continued integration of the physical and digital stores, and intensifying the optimisation of the H&M brand’s store portfolio – leading to more store closures and fewer openings.

The H&M group’s sales including VAT increased by 4 percent to 231,744 million Swedish krona (27,480 million dollars) in the financial year of 2017. Sales excluding VAT amounted to 199,987 million Swedish krona (23,714 million dollars). In local currencies, sales increased by 3 percent.


Ferragamo unable to confirm medium-term targets set in February

The board of directors of Salvatore Ferragamo, while evaluating the development programs of the company and the significant IT and marketing investments, in order to re-launch the brand and to optimize the group’s commercial, production and logistic processes, recognized an extension of the transition phase into the financial year 2018, that characterized 2017. The company said that the board is not able to confirm the medium-term ambitions presented to the market on February 3, 2017.

In an Investor Day Presentation, outlining the medium term growth targets, the company had said that it expects to achieve topline growth twice the market rate along with improved gross margin and EBITDA.

For the nine month period to September 30, 2017, the company posted total revenue of 1,005 million euros (1,884 million dollars), a 0.9 percent decrease against 9M 2016. The gross profit also decreased by 5.1 percent to 645 million euros (759 million dollars), while EBITDA decreased by 25.1 percent over the period, to 162 million euros (190 million dollars).

Picture:Ferragamo website

Target acquires same-day shipping with acquisition of Shipt for $550 million

There has always been an ongoing battle between the major retailers such as Target Corp. and Wal-Mart versus online company Amazon. While all three companies are vastly successful, it seems that Target has decided to take Amazon head on by acquiring a new platform for faster, more efficient shopping.

This past Wednesday on December 13, Target announced its acquisition of Shipt. The company is known for online same-day delivery services through its platform. Target bought the company for 550 million dollars in cash, according to a statement released by the company. The retailer will use its network of stores along with the program in order to help its community of shoppers acquire same-day delivery and to increase overall customer satisfaction.

Target acquires same-day shipping with acquisition of Shipt for $550 million

Target acquires new same-day shipping for faster, efficient shopping

“We laid out an ambitious strategic agenda in early 2017, which included a focus on giving our guests a number of convenient ways to shop with Target, whether it’s ordering online and picking up in one of our stores, driving up to pick up an order, or taking advantage of services like our new Restock program. With Shipt’s network of local shoppers and their current market penetration, we will move from days to hours, dramatically accelerating our ability to bring affordable same-day delivery to guests across the country,” John Mulligan, executive vice president and chief operating officer for Target, stated according to Target.com. “By the 2018 holiday season, we will be servicing every major market across the country with same-day delivery, and Shipt’s service-oriented approach aligns well with Target’s commitment to delivering an exceptional shopping experience for our guests.” This is one way that Target has been working to bring same-day delivery services to its customers by the beginning of next year. According to a press release from Target, the service will be offered from more Target stores in all major markets before the next holiday season in 2018. The same-day delivery service will include most of Target's merchandize including apparel, groceries, home, electronics, essentials and more. The entire program will fulfill all stores by the end of 2019.

“We are very excited to partner with Target, one of the most loved retailers in the country with a reputation for supporting local communities. Partnering with Target and the national scale they provide allows Shipt to further accelerate our growth, bringing our service to more people, in more markets across the country,” Bill Smith, Shipt’s founder and CEO, said in a statement. "We’ll continue growing our marketplace and membership base, working with a variety of retailers to drive scale and efficiencies. We look forward to introducing Target guests to the convenience of our same-day delivery services, with the level of personal attention only Shipt can provide."

Due to the acquisition, Shipt will be a wholly owned Target subsidiary and will continue to run its business independently. In the future, Shipt also plans to expand its partnerships with other retailers offering its same-day service. For Target, the transaction is subject to customer closing conditions and will close before the end of calendar year 2017. The acquisition will be immaterial to Target's near-term financial results, while the company is still expected to accelerated in digital and total sales over the medium term.

Photo Source: Target

Ganni sells majority stake to L Catterton

Danish contemporary fashion label Ganni is set to expand in Europe, the US and Asia after consumer-focused private equity firm L Catterton acquired a 51 percent stake in the fashion brand for an undisclosed amount.

Ganni was founded in 2000 and has become a label loved by influencers and editors for its easy-to-wear style staples. Based in Copenhagen, the label came into its own when chief executive Nicolaj Reffstrup and his wife, Ditte Reffstrup the label’s creative director took control of the brand in 2009 from founder Frans Truelsen.

The brand, which is one of the fastest growing brands in the global apparel space, utilises social media especially Instagram with its #GanniGirls hashtag, and is expected to generate around 45 million dollars in sales in 2017, with revenues forecast to grow by 50 percent in 2018.

Ganni sells majority stake to L Catterton

Nicolaj Reffstrup, Ganni’s chief executive, said: “Partnering with L Catterton is a hugely exciting opportunity for us to further build on the solid foundations that were laid since 2009. This comes exactly at the right time for Ganni and will drive us forward in the next few years as we’ll get access to the knowledge and network of both L Catterton and LVMH.

“Ganni attracted a lot of interest from various investment firms, but we chose L Catterton as we felt we share the same vision for the brand. We firmly believe that L Catterton will strengthen our business with their unparalleled expertise in brand building and their deep understanding of how a global fashion brand operates.”

Ganni sells majority stake to L Catterton

L Catterton invests in contemporary label Ganni

With investment from L Catterton, which is backed by luxury conglomerate LVMH, the Danish brand is expected to expand in Europe, the United States and Asia, and will expand upon its current 21-store portfolio across Denmark, Sweden and Norway. In addition, it is also reportedly set to open offices in London and New York, to sit alongside its headquarters in Copenhagen.

Eduardo Velasco, partner of L Catterton, added: “We are thrilled to partner with Ganni and its outstanding management team. With its distinctive fashion style and its sound digital strategy, Ganni is ideally positioned to continue its impressive international growth story.”

L Catterton has previously investing in a number of contemporary fashion brands including Sandro, Maje, and Claudie Pierlot, ba&sh, Pepe Jeans, Gant, Charles and Keith, Gentle Monster, Rhone and Giuseppe Zanotti.

Images: via Ganni website

Reformation raises 25 million USD in Series B funding round

London - Reformation has raised 25 million USD (18.6 million pounds) in a Series B funding round led by investors Stripes Group and 14W together with Imaginary Ventures, the venture capital firm established by Dame Natalie Massenet, founder of Net-a-Porter, and Nick Brown. The LA-based sustainable fashion label aims to use the funds raised to fund the brand's physical expansion scheme, according to Business of Fashion.

The move comes after Reformation successfully raise 12 million USD in a Series A funding round in 2015, which was used to open more stores, expand the brand's manufacturing capabilities and streamline Reformation' s technical systems for deliveries. Since it first launched in 2009, Reformation has grown into a vertically integrated direct-to-consumer business, operating its own factory in Los Angeles.

The label has expanded over the years to count a number of stores across the US in addition to its global online store. Although 80 percent of its sales stem from its online store, its founder Yael Aflalo aims to use to the funding to open more stores featuring new concept, offering customers the opportunity to browse through it collections in person. Reformation opened five new stores this year featuring its new format, which feature touch-screen monitors where customers can browse collections before selecting garments they wish to try on which are brought to individual dressing rooms by sales associates.

“With every few stores, we are going to be introducing new features and new operations,” said Aflalo to BoF. “One of our big initiatives for next year is ‘buy anything anywhere,’ and that requires a pretty strong technical foundation.” In addition to using the funding to grow Reformation's store count, the brand also aims on investing in its sustainable manufacturing capabilities and programs in place at its factory, which produces approximately 60 percent of its products. “We have a bigger team there now, researching and investing in new fibers and expanding our compliance processes, making sure we have visibility into where the materials are from,” she says.

FashionUnited has contacted Reformation for additional commentary.

Photo: Courtesy of Reformation

Myer reports further drop in sales

Myer has said in a statement that as indicated at the company’s AGM on November 24, 2017, trading at the start of the all-important second quarter had shown no improvement on the first quarter. Since the AGM, the company added, sales continued to be below expectations and reflect ongoing challenging retail conditions characterised by reduced foot traffic, widespread industry discounting and subdued consumer sentiment. For its first quarter, the company’s total sales were down 2.8 percent and comparable store sales were down 2.1 percent, compared to the previous corresponding period.

Commenting on the trading, Myer Chief Executive Officer Richard Umbers said in a statement: “Trading during the past two weeks has been significantly below our expectations and the year to date run rate, and while there is an additional weekend of pre-Christmas trading this month, we do not know what the sales impact of that will be. There has been continued strong performance in our online business with sales up 62 percent in the first four months despite cycling a particularly strong previous corresponding period in the lead up to Christmas 2016. While this strong growth has not been sufficient to offset the subdued trading in some stores, we take confidence from this performance as indicating that we are investing in the right areas.”

Myer continues to witness difficult trading period

Despite investing heavily in marketing and traffic-driving initiatives, Myer’s total sales to the end of November were down 2.3 percent and down 1.8 percent on a comparable store sales basis. Sales during the first two weeks in December have also weakened further and were down 5 percent on the previous corresponding period.

“While the last two weeks of trading have been disappointing, I am in no doubt that the commitments made at the recent Myer Strategy Day to further focus on omni-channel and productivity are the correct priorities. As I said at the AGM, I am an impatient person and I am driving the executive team to unlock value more quickly. During the next 12 weeks, I will be continuing my incoming Chairman’s review of all aspects of the business including MYER one, omni-channel, merchandise, marketing, customer service, property and a cost review to commence immediately,” added Myer Chairman Garry Hounsell.

Myer expects first half NPAT, pre implementation costs and individually significant items to be materially below the previous corresponding period. Given the recent sales volatility and considering the magnitude of sales expected in the coming weeks, Myer said, it does not have a reasonable basis to provide a specific profit range for the half or full year at this time.