(wwd)Wal-Mart Charts New Course
"It’s hard to nudge an 800-pound gorilla in a different direction, but Wal-Mart U.S. appears to be doing just that. With same-store sales declining for the last four consecutive quarters and traffic decreasing, Wal-Mart needs to develop — and execute — new retail concepts if it is to grow beyond the rural and exurban markets that it has almost saturated in the U.S. To be sure, chasing trendy fashion isn’t in the cards for a chain whose apparel business is a chronic underachiever. When vice chairman Eduardo Castro-Wright relinquished his job as chief executive officer of Wal-Mart U.S. on June 29, he set in motion a management shake-up that will bring fundamental and cultural changes to the $400 billion retailer. Bill Simon, who succeeds Castro-Wright, seems to share the belief of Wal-Mart Stores Inc. ceo Mike Duke that the world’s largest retailer should return its focus to core competencies — moving enormous quantities of goods around the world as cheaply and efficiently as possible, rather than the more creative and style-driven marketing and merchandising. “The new ceo [Duke] is directing the company more toward logistics and operations and not marketing,” said Bill Dreher, a retail analyst at Deutsche Bank. Castro-Wright, who retains the vice chairman title, became president and ceo of global.com and global sourcing, allowing him to relocate to California, where his wife is recuperating from a heart transplant. He has been described as an innovative thinker and was the architect of the store remodeling initiative Project Impact and its transformational merchandising and marketing programs." read more
(wwd)Prada Gets $455M Loan
"Prada SpA has negotiated a three-year loan agreement of 360 million euros, or $454.8 million at current exchange, which will be used to refinance a long-standing debt and to propel the company’s retail growth, its top priority. Prada is eyeing an initial public offering for the fourth time, possibly as soon as the first quarter of 2012. The timing coincides with the expiration of a 450 million euro, or $568.5 million, debt, which will partly be written off by this fresh loan, secured at lower interest rates. The brand’s goal is to generate more than 70 percent of consolidated turnover from directly operated stores next year. The brand has 280 units in 76 countries. The new loan is a move that will help both the banks and Prada, said Armando Branchini, vice president of Milan-based consulting firm Intercorporate. “Prada is currently undergoing a very positive sales growth, and I believe that by 2013 the return of the company’s retail investment will outdo this loan, especially with today’s cost of money,” he said. “Having more sales points will also make Prada more palatable for the IPO.” Prada spokesman Stefano Cantino said it was premature to say how the loan would be divided. Regarding store openings in the pipeline for this year, there are 30 new ones planned, with a focus on Asia-Pacific. “We are also strengthening our presence in Europe with openings in Frankfurt, Prague, Berlin and Lisbon,” Cantino said. Prada SpA reported operating profit in the first quarter ended April 30 rose almost sixfold, given a boost by strong retail sales in the U.S. and the Far East. Earnings before interest, taxes, depreciation and amortization increased to 64 million euros, or $86.4 million." read more
(wwd)Burberry Sales Rise 31 Percent in First Quarter
"Fueled by sales of non-apparel and outerwear, Burberry revenue rose 30.6 percent to 282 million pounds, or $420.2 million, from 216 million pounds, or $321.8 million, in the first quarter ended June 30, the company said Tuesday. Figures have been calculated at average exchange rates for the three-month period. The first quarter revenue figure does not include Burberry’s Spanish operations, which are to be discontinued as of the fall 2010 season. Beginning with the spring 2011 collection, Burberry will sell its global collection, rather than the locally-produced one, in Spain. Including Spanish operations, sales in the three-month period would have increased 27.1 percent to 291 million pounds, or $433.6 million, from 229 million pounds, or $341.2 million. “The clear momentum in the business and our robust financial position together reinforce our confidence to increase investment for the future, while continuing to enhance the brand,” chief executive Angela Ahrendts stated. She added that the company would open 20-30 stores in the current year, mostly in the Americas and Asia Pacific regions." read more
(bloomberg)Harrods Sees Profit From Islamic Fashion as Qatar Takes Control
Fashion designer Hind Beljafla makes abayas to match the Gucci shoes and Hermes handbags of high- spending women in the Gulf. Now these women can buy her elegant versions of the black Islamic robes, which obscure the contours of a woman’s body, when they head to London this summer to escape the Arabian Peninsula’s sweltering heat. Harrods started selling abayas by Beljafla’s DAS Collection in June, a month after Qatar’s sovereign-wealth fund bought the landmark store. “Muslim women are like any women around the world: they love fashion and love shopping,” Beljafla, 24, said in a July 1 interview in her Dubai store. Together with her 26-year-old sister Reem, she uses splashes of color, embroidery and even leather and metal studs on the plain black abaya. Fashion houses in Milan and Paris are waking up to the commercial potential for Muslim women’s clothing that respects religious values and sets new standards for style. The global Muslim fashion industry would be worth $96 billion if half of the world’s 1.6 billion Muslims spend just $120 a year on clothing, according to French Fashion University Esmod in Dubai. Gas exporter Qatar ranks among the world’s wealthiest nations, with a gross domestic product per capita of $121,000, while Saudi Arabia sits on a fifth of the planet’s oil reserves.
John Galliano was among 21 designers who participated in a Paris show in June 2009 at Hotel George V, owned by Saudi Prince Alwaleed Bin Talal. The made-to-measure abayas displayed there, worth up to $10,000, were donated to buyers, including members of the Saudi royal family. Saks Fifth Avenue, which hosted the event, then put designer ready-to-wear abayas on sale for as much as $12,000 at its stores in the Saudi cities of Riyadh and Jeddah. The abayas are displayed alongside designer evening gowns on the women-only floor of a shopping mall in Riyadh’s glass skyscraper, the Kingdom Center, owned by Alwaleed. At the top end of the market, Saudi princesses sometimes buy 15 to 20 evening gowns for as much as $20,000 each after ordering Saks to bring a selection of the latest Paris and Milan collections to their palaces, store manager Mohammed Nafisa said. They want abayas by the same designers to match. “They normally buy an outfit to be used only once at an evening reception,” which is an all-female gathering, he said. Saudi Arabia, which follows a strict interpretation of Islam, forbids mixing in public between men and women unrelated by family." read more