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Wolverine Worldwide posts 7.3 percent fall in FY16 turnover

Reported revenue at Wolverine Worldwide of 2,494.6 million dollars was down 7.3 percent versus the prior year, while underlying revenue declined 4.9 percent. The company’s adjusted diluted earnings per share were 1.36 dollars and on a constant currency basis, were 1.52 dollars, compared to 1.45 dollars in the prior year.

"Our diverse portfolio of global brands, exceptional operating platform, and strong business model continue to fuel a powerful earnings engine, even when faced with the current retail environment," said Blake W. Krueger, Wolverine Worldwide's Chairman, CEO and President said in a statement, adding, "Revenue finished in line with our original outlook entering the year, and we delivered solid adjusted earnings.”

Fourth quarter and full year highlights

In the fourth quarter, reported revenue of 729.6 million dollars was down 2.9 percent but underlying revenue grew 0.1percent versus the prior year fourth quarter.

Reported gross margin for the quarter was 36.6 percent compared to 36.2 percent in the prior year and adjusted gross margin on a constant currency basis was 37.7 percent, up 110 basis points versus the prior year. Reported operating margin was 2.1 percent, compared to 1.9 percent and adjusted operating margin on a constant currency basis was 7.3 percent, up 140 basis points versus the prior year.

Reported diluted loss per share was 0.02 dollar, compared to earnings per share of 0.12 dollar in the prior year, while adjusted diluted earnings per share were 0.33 dollar and on a constant currency basis, were 0.36 dollar, compared to 0.33 dollar in the prior year.

For the full year, reported gross margin was 38.5 percent, compared to 39.1 percent in the prior year. Adjusted gross margin on a constant currency basis was 39.7 percent, up 50 basis points and reported operating margin was 6.4 percent, compared to 7.5 percent in the prior year. Adjusted operating margin on a constant currency basis was 9.3 percent, up 40 basis points versus the prior year. Reported diluted earnings per share were 0.89 dollar compared to 1.20 dollars in the prior year.

The company closed 101 stores during 2016 as part of its omnichannel transformation initiative.

Expects to report decline in 2017 turnover

The company said that it enters 2017 prepared to drive earnings growth despite expectations that the macroeconomic challenges will persist, the US dollar will remain strong, and the global retail environment will remain tepid with certain channels facing continued pressure.

For fiscal 2017, the company expects reported revenue in the range of 2.270 billion dollars to 2.370 billion dollars, a decline of approximately 9 percent to 5 percent. Underlying revenue is expected in the range of down 2.3 percent to growth of 1.9 percent, reflecting approximately 160 million dollars to 180 million dollars of impact from currency and store closures.

Reported diluted earnings per share are expected to be in the range of 1.19 dollars to 1.29 dollars and adjusted diluted earnings per share are expected in the range of 1.45 dollars to 1.55 dollars. On a constant currency basis, adjusted earnings per share are forecasted to be in the range of 1.53 dollars to 1.63 dollars.

Picture:Wolverine

Meitu selfie-app leader seeks to 'beautify the world'

Strolling a tree-lined Shanghai street with friends, Hu Dongyuan pulls out her smartphone and does what millions of Chinese women do daily: take a selfie, digitally "beautify" their faces, and pop it on social media.

Such virtual makeovers, typically involving lightening skin, smoothing out complexions and rounding the eyes, have propelled selfie-editing app Meitu to the top ranks of China downloads. With more than 450 million active China users, Meitu is now also gaining traction abroad, using its more advanced features to challenge Instagram and Snapchat, which depend largely on filters and stickers.

China has a world-leading 700 million mobile-Internet users, vast numbers of whom use such apps to fuss over their digital appearance. "It's the same as with clothing and makeup. They are all ways for people to better present themselves," said Hu, a travel agency employee, who likens Meitu to a cheap, non-permanent form of cosmetic surgery.

She added: "Everyone uses it as a kind of personal advertisement." Meitu, which means "pretty picture", launched a Hong Kong IPO in December that valued the company at 4.6 billion dollars at the time, despite consistently posting losses.

It was Hong Kong's biggest tech IPO in nearly a decade. Analysts call Meitu a potential test case of the global potential of Chinese apps, particularly those aimed at women, a powerful consumer force.

Millennial appeal

"(Meitu) has really appealed to the beauty concept of China's post-95s," said William Chou, an internet analyst for Deloitte China, referring to those born after that year. "Photo-sharing is a global phenomenon but China has climbed to the top of the world in this," he added. The selfie-editing craze highlights how Chinese lives are increasingly lived online, making a person's virtual appearance as important as their real one, said psychology professor Yu Feng of Xi'an Jiaotong University.

"Modern society has turned face-to-face communication into mostly internet communication," Yu said, and Chinese millennials are seizing the chance "to control themselves and their world". Meitu and domestic competitors like Camera 360 and Poco shrewdly cater to Chinese beauty preferences for lighter skin and rounder eyes -- key features allow easy modification of such attributes on screen.

Founded in the eastern city of Xiamen, Meitu initially provided photo-editing software for PCs, introducing its first selfie app in 2013. Its IPO prospectus said Meitu apps process half of the pictures posted on Chinese social media and were used to alter around six billion photos last October.

Its half-dozen applications, including one for altering video, are regularly among the top photo-app downloads in countries as diverse as China, Russia, Japan, India and Malaysia.

Business makeover

Chinese internet giants like Tencent and Alibaba have struggled to replicate their domestic dominance overseas. But Meitu said it had 430 million overseas users as of October last year, compared to around 500 million claimed by Instagram. Yet profits remain elusive. Meitu lost 2.2 billion yuan (320 million dollars) in the first half of last year.

"Meitu's big problem has always been that it came up with this killer app -- and the usage is unbelievable. It's crazy. But they never had a clear business model underneath it," said Jeffrey Towson, professor of investment at Peking University. Meitu did not respond to requests for comment. Hungry for revenues, it launched its own phones designed for selfie-taking in 2013.

It sold just 646,446 in the first 10 months of last year, however, a tiny amount in China's massive market. Phone sales nevertheless still make up more than 95 percent of Meitu revenue. It now promises to build an online "ecosystem" of apps and devices based on selfie-processing, which could include selling advertising space -- as Instagram does --and launching a fashion-focused e-commerce platform.

"Our mission is to make the world more beautiful. Our wish is to build a beauty ecosystem," the IPO prospectus said. Its shares have risen 16 percent since they debuted, closing Tuesday at 9.86 HK dollars. Deloitte's Chou said investors were ignoring Meitu's current losses in hopes it can pull off the planned business makeover. He explained: "For tech companies, the future is more important than the past." (AFP)

Photo: Meitu website

Esprit books profit in H1 but revenues drop 9.9 percent

Esprit Group revenue for 1H FY16/17 amounted to 8,323 million Hong Kong dollars (1,072 million dollars) against 9,315 million Hong Kong dollars (1,200 million dollars) in 1H 15/16, representing a decline of 9.9 percent in LCY, with development in the second quarter. Net profit reached 61 million Hong Kong dollars (7.86 million dollars) including a net tax credit of 74 million Hong Kong dollars(9.54 million dollars), compared with a net loss of 238 million Hong Kong dollars in the same period last year.

Financial performance by product and retail channel

Esprit Women and Edc, together representing 70.3 percent of the group’s revenue, recorded a decline in revenue of 5.6 percent and 6.4 percent in LCY respectively, with comparable retail sales (including eshop) declining by 2.6 percent and 1.4 percent, respectively.

Esprit Men recorded a revenue decline of 17.1 percent in LCY. Esprit said, due to the weak performance of men's division, the space allocated to their products in its retail stores is being reduced. The team managing Esprit Men's products has also been restructured and strengthened during the period under review.

Lifestyle and others recorded revenue of 1,424 million Hong Kong dollars (183 million dollars), a decline of 18.6 percent in LCY. This product group comprises mainly accessories, bodywear, shoes, and the sales and royalty income from licensed products such as kidswear, timewear, eyewear, jewelry, bed & bath, and houseware. The largest decline in revenue in this product group came from the kids division (-62.8 percent yoy in LCY) due to the licensing of this business to Groupe Zannier since January 2016.

Retail (excluding eshop) experienced 13.1 percent in LCY revenue decline in the period, larger than the reduction of retail sales space of -11.1 percent. However, the company said, despite the reduction of promotional activities and price markdowns, the level of sales per square meter was maintained stable in its full-price stores with 0.3 percent rise in LCY and the entire decline of sales productivity was caused by the off-price outlets with 14.9 percent decline in LCY. As for wholesale, the sales decline of 10.5 percent in 1H FY16/17 was significantly smaller than the corresponding reduction in sales space of -16.8 percent.

Revenue in Germany drops 6.3 percent

Germany recorded 4,140 million Hong Kong dollars (533 million dollars) revenue in 1H FY16/17, representing 6.3 percent decline in LCY. In terms of distribution channels, retail (excl. eshop), eshop, wholesale and the licensing business contributed 36.8 percent, 28.4 percent, 34.5 percent and 0.3 percent of Germany’s revenue, respectively. Germany Retail (excl. eshop) recorded revenue decline of 7.2 percent in LCY.

Germany Wholesale revenue declined by 6.4 percent.

Rest of Europe comprising countries in Europe, except Germany, in America and in the Middle East recorded revenue of 3,048 million Hong Kong dollars (392 million dollars) in 1H FY16/17, representing a decline of 10.8 percent. Rest of Europe retail (excl. eshop) recorded revenue decline of 12.5 percent in LCY, which compares favorably against the corresponding decline in retail sales area of15.3 percent. The significant space decline was attributable to net closure of 17 unprofitable stores and the closure of 31 concession counters in the Netherlands as a result of the bankruptcy of a local department store. Rest of Europe wholesale revenue declined by12.5 percent.

Asia Pacific (APAC) comprising mainly China, Australia and New Zealand, Hong Kong, Singapore, Malaysia, Taiwan and Macau recorded revenue decline of18.8 percent in 1H. Asia Pacific retail (excl. eshop) recorded a decline of 21.5 percent against 18.5 percent reduction in retail sales area. Asia Pacific wholesale (excl. eshop) revenue dropped 42.6 percent against a 44.6 percent decline in wholesale controlled space.

Esprit undertakes space reduction measures

The company said, as the group continues to right-size its distribution footprint, total controlled space (retail and wholesale combined) was reduced by 31,270 sq. mtrs. in 1H FY16/17, coupled with the 71,431 sq. mtrs. reduction in the previous six months.

Esprit believes that from a retail perspective, the closure of unprofitable stores is fundamental in order to improve the results of the group and to establish a healthier platform for future growth in this channel. So the company executed a net closure of 9,412 square meters of retail sales area during 1H FY16/17, coupled with the net closure of 25,806 square meters in the previous six months.

With respect to wholesale, the company said, this channel continues to face persistent structural pressure and it continues to see elimination of non-performing locations by the company’s partners. As a result, wholesale controlled space was reduced by 21,858 square meters in 1H FY16/17, which coupled with the net closure of 45,625 square meters in the previous six months.

For the period under review, the group recorded gross profit of 4,371million Hong Kong dollars( 563 million dollars), which results in gross profit margin of 52.5 percent, representing an increase of 2 percent points.

The Esprit board has maintained the dividend payout ratio of 60 percent of basic earnings per share. In view of a small net profit recorded by the Group for the six months ended December 31, 2016, the board has resolved not to declare an interim dividend.

In brief

Revenues drop 8,323 mn Hong Kong dollars
  • The company however recorded a net profit of 61 million Hong Kong dollars against net loss of 238 million Hong Kong dollars in the first half of 2015.

Picture:Esprit

Capco reports FY16 pre-tax loss of 240.3 mn pounds

In its preliminary results announcement, Capital & Counties Properties, known as Capco said that its fiscal 2016 loss before tax was 240.3 million pounds (300 million dollars) against last year's profit of 459.9 million pounds (574 million dollars). The company said, loss per share stood at 14 pence, compared to profit of 50.9 pence last year. Revenue rose to 127.4 million pounds (159 million dollars) against 114.9 million pounds (143 million dollars) a year ago.

Commenting on the company’s performance, Ian Durant, Chairman of Capco, said in a statement, “Capco has delivered good progress in 2016 with considerable activity and milestones achieved at both Covent Garden and Earls Court. Despite macro-economic uncertainty, London is one of the great cities of the world; desirable as a retail destination and residential location. We are confident in the strength of our two prime London assets and are well positioned to deliver long-term value creation for our shareholders.”

Financial highlights of fiscal 2016

Underlying profit before tax was 14.2 million pounds (17 million dollars), compared to 4.8 million pounds (5.9 million dollars) last year. Total net rental income grew 8.7 percent to 81.5 million pounds from 74.9 million pounds last year.

Equity attributable to owners of the Parent was 2.8 billion pounds (3.4 billion dollars) compared to 2.9 billion pounds (3.6 billion dollars) in 2015. EPRA NAV of 340 pence per share, decreased 5.9 percent. Total property value of 3.7 billion pounds (4.6 billion dollars), decreased 4.4 percent like-for-like. The company has proposed a final 2016 dividend of 1 pence per share providing a full-year dividend of 1.5 pence per share.

“Capco has made significant progress at its two central London estates during 2016. The strong demand for central London retail has continued in 2017 and Covent Garden has had a positive start to the year. We have increased the ERV target to 125 million pounds (155 million dollars) by December 2020, reflecting the positive prospects of the estate. Capco remains focused on its strategy to deliver long-term value creation from its two unique central London estates,” added Ian Hawksworth, Chief Executive of Capco.

Covent Garden attracts new retailers

Providing over 1.1 million sq. ft. of rental space in the heart of London’s West End, the Covent Garden estate represents 61 percent of Capco’s portfolio by value. The company said, 2016 was another year of significant progress for Covent Garden as the business continued to implement its leasing and investment strategy. The value of the estate increased by 6.4 percent on a like-for-like basis to 2.3 billion pounds and ERV of 96 million pounds (119 million dollars) improved 7.9 percent on a like-for-like basis.

Capco has transformed the Royal Opera House Arcade through its strategy of a luxury accessories and gifting focus. The Watch Gallery, the UK’s leading independent luxury watch retailer, and British lifestyle brand, Mulberry opened stores in the property this year along with latest entrants luxury British cashmere brand N.Peal and British eyewear brand, Tom Davies, which are due to open later in 2017. A number of premium beauty brands also rented space in the Market Building, including the luxury beauty boutique Tom Ford, fragrance brand Atelier Cologne, the first Armani Box London store and the beauty company Deciem. These new signings in the Market Building add to the existing strong line up of Chanel, Dior, NARS and Charlotte Tilbury.

The company said, Henrietta Street too continues to strengthen its retail offer, following an array of new signings including luxury men’s shoe brand, Cheaney and Parisian outerwear clothing concept K-Way.

Picture:Facebook/Covent Garden London

Tom Tailor FY16 sales rise 1.3 percent boosted by 'RESET' program

The Tom Tailor Group has said that it was able to achieve its forecast for the fiscal year 2016 with a Group EBITDA amounting to 10.3 million euros (10.8 million dollars) and an increase in sales of 1.3 percent to 968.5 million euros (1,021 million dollars). The company also added that it has realized the first positive effects from the ‘RESET’ cost-reduction and efficiency program.

"We are gradually shedding ourselves of the troubled past. This was associated with financial cuts in 2016, but we have already emerged out of the trough. The first positive impacts have already become tangible in the fourth quarter. This is evidenced by the slight improvement of the gross profit margin at Tom Tailor and Bonita, and the adjusted cost structure," said Heiko Schäfer, interim CEO and COO of Tom Tailor Holding in a statement.

Tom Tailor initiates cost cutting measures for growth

As a part of the company’s cost and process optimization program launched by the new executive board in October 2016, during the fourth quarter, the Group pulled back business from South Africa and either started or already completed around 250 of approximately 300 planned branch closures.

Additionally, the company discontinued Tom Tailor Polo Team and Tom Tailor Contemporary brands and in the summer of 2017, it plans to pull the Bonita Men brand out of the market. In 2017, the group will also withdraw from China, the USA, and largely from France.

In line with expectations, the loss for the year amounts to around 73 million euros (76 million dollars) pre-audit, which the company said, includes one-off expenses amounting to 80.9 million euros (85 million dollars) for the RESET measures.

The umbrella brand Tom Tailor achieved growth of 5.6 percent to 665.6 million euros (701 million dollars) with sales through its own stores and wholesale partners. The umbrella brand Bonita contributed 303 million euros (319 million dollars) to group sales.

Summary
Revenues up 968.5m euros
  • Group EBITDA amounted to 10.3 million euros for the year.
  • To drive growth, Tom Tailor plans to exit from countries such as China, the USA and France this year.

Picture:Tom Tailor

John Lewis weekly fashion sales rise 1.4 percent

Total sales at John Lewis for the week ended February 18, 2017, were 75 million pounds (93 million dollars), down 0.2 percent on last year. Fashion sales rose 1.4 percent year on year, and the company said its spring/summer range of our luxury, own brand range Modern Rarity proved very popular.

Sales of beauty, wellbeing and leisure products were up 11.2 percent as the company said, customers bought gifts for Valentine's Day. Electrical and home technology sales were up 0.4 percent on last year, driven by sales of communications tech products, which were up 6 percent.

Sales of home products were down 1.5 percent year on year, but sales of home accessories and gifts were up 8.5 percent as a result of customers buying presents for Valentine's Day. This week, the company would be launching US brand West Elm in its Southampton and Welwyn shops.

Picture:Facebook/John Lewis

Alibaba's payment affiliate Ant Financial will invest 200 million dollars in a unit of South Korean messaging giant Kakao, the companies said Tuesday, the Chinese firm's latest step to expand its global reach.

The investment in Kakao Pay comes less than a month after Ant bought ​ ​ US-based payments operator MoneyGram for around 880 million ​ dollars​ and struck a ​ ​ partnership deal with Thailand's Ascend Money in November. ​ ​ Ant is behind Alipay, which accounts for 80 percent of electronic payments ​ i​ n China where it is used for e-commerce at Alibaba online venues and a large number of mobile applications. ​

​ Ant is also involved in investment services and online banking. "South Korea is an important market for Ant Financial in its global expansion," said Douglas Feagin, president of Ant Financial International, in a joint statement with Kakao. ​

​ The companies said the investment was part of a larger strategic partnership to connect Ant's 450 million users worldwide with Kakao Pay, which currently has more than 14 million subscribers. ​

​ Kakao, best known for its mobile messaging service Kakao Talk, has more than 48 million users globally. It decided in January to spin off its mobile payment service Kakao Pay into a separate entity which offers services such as bill payment and remittance. Shares in Kakao soared 4.25 percent to 88400 won in afternoon Seoul trading Tuesday. ​ (AFP)

What Donald Trump Can Learn from LVMH’s Bernard Arnault

OPINION “What I love is to win. What I love is being number one…Business is very exciting. That moment when you’re about to do a huge deal and you’re not sure if it’s going to happen or not…”

You might think these words were lifted straight out of Trump’s 1987 book “The Art of the Deal” but they were spoken by Bernard Arnault in a 2015 interview with London’s The Telegraph. On paper, the two magnates have much in common.

With only three years difference in age, they have amassed a fortune and built a reputation as dealmakers. As CEO and chairman of LVMH, the largest luxury superpower, Arnault is the richest man in France with a fortune Forbes estimates at 41.6 billion dollars. The magazine also describes him as “one of the world’s ultimate tastemakers.” As the first billionaire President of the United States, that original global superpower, Trump’s fortune is estimated by Forbes to be 3.7 billion dollars. However in contrast to Arnault’s tastemaker title, Graydon Carter of Vanity Fair describes Trump as a “short-fingered vulgarian.”

Birds of a Feather

Both men met recently in NYC so there is clearly mutual interest there. Their Trump Tower tête-a-tête to discuss expansion of LVMH’s successful Californian manufacturing plant concluded with Trump calling Arnault “one of the great men.” (You might say they even similarly name their erections––architecturally speaking, that is: Arnault has an LVMH Tower in midtown Manhattan mere blocks away, which houses management of U.S. operations.)

The striking parallels can be traced back to their early career: Arnault upon graduation with an engineering degree joined his father’s company and began to steer it away from its core construction business and into real estate, specifically, holiday accommodation, eventually succeeding his father as president. Trump began working for his father, Fred, whose company built low-cost housing in Queens and Brooklyn before succeeding him and plunking down a Trump Hotel in every major international city.

The Family Business

Both are family men whose adult children are crucial to the running of their businesses. Trump’s daughter, Ivanka, occupies the role of his closest counsel, and sons, Eric and Donald Jr., are executives in the Trump Organization. Arnault’s son, Alexandre, was beside his father at the Trump Tower meeting and eldest daughter, Delphine, is one of LVMH’s top management.

What Donald Trump Can Learn from LVMH’s Bernard Arnault

Neither are technophiles. Trump according to many reports does not use email nor own a personal computer, preferring to tweet on his smartphone at night, and Arnault said in his interview with The Telegraph, “I’ve no email––just a phone, and I would never text, just call.”

But for all their similarities, it is what separates them that is most revealing.

International Star Power

Tall, lean, and tailored in midnight blue Dior Homme, Arnault shuns publicity, rarely gives interviews, and doesn’t court celebrity. Trump, lurching for the spotlight in limply-fitted navy with a dangling red tie possibly intended as a hasty nod to patriotism but hardly qualifying as dapper, is a former reality star who continues to boast about his ratings as host of The Apprentice and obsess over the size of his inauguration crowd versus Obama’s.

With a reported six bankruptcies to his name, a slew of law suits by and against him, and his divisive politics ensuring liberals boycott his hotels, business doesn’t run smoothly for Trump. Even his White House cabinet has been rocked by daily tumult such as the resignation of his National Security Advisor amid scandal, the senate’s rejection of his Secretary of Labor pick, media outlets banning Senior Counsellor, Kellyanne Conway, due to a perceived lack of credibility, and weekly parody of his Communications Director, Sean Spicer, by Saturday Night Live.

Arnault, since 1987 when he smoothly mediated conflict between the CEO of Moet Hennessy and the president of Louis Vuitton thereby positioning himself to become the merger’s largest shareholder, has built an empire of 70 brands, among them Dior, Celine, Veuve Clicquot and Bulgari. Each brand’s individual success is attributed to Arnault’s policy of allowing it to operate independently, and promote its own point of view and identity. Incidentally, two have even spoken out against Trump and his policies, Marc Jacobs and Kenzo.

What Donald Trump Can Learn from LVMH’s Bernard Arnault

Certainly there is no comparison between the assembling of a cabinet in three weeks versus an empire over thirty years, but as we already seem to be witnessing the wheels falling off the Trump Administration it might be time for some self-evaluation.

The Balance of Power

Arnault has earned the sobriquet of “a wolf in cashmere” for his steely appraisal and stealthy acquisition of the right brands for his stable. Trump’s Twitter meltdowns, bungled roll-out of controversial Muslim ban (subsequently described as “not a ban”), antagonistic dialogue with foreign leaders, and handshake that resembles an arm wrestling match call to mind a bull in a china shop.

Perhaps a comment about the importance of balance by Arnault to The Telegraph could prove enlightening to our new Commander-In-Chief, who chooses not to receive traditional security briefings because he says, “I’m, like, a smart person. I don't have to be told the same thing in the same words every single day for the next eight years.”

Over to you, Mr Arnault:

“Instinct and concrete facts. It’s imperative that both play a part; instinct is a dangerous thing and basing things solely on facts rarely works. You have to be just as mistrustful of straightforward rationality in business as you do a uniquely gut approach.”

What about the duty to our planet? Investments in education? These, unfortunately, seem to be areas of the Venn diagram in which the two leaders do not overlap. Donald Trump’s head of the Environmental Protection Agency, Scott Pruitt, denies the science behind climate change and has a history of attempts to get rid of the agency, even suing it fourteen times. Trump has also mentioned pulling out of the Paris Climate Change Agreement, reducing EPA regulations, and is an investor and supporter of the fossil fuel industry.

Drill for facts over fuel

Meanwhile on the other side of the vulnerable ocean this week, Bernard Arnault announced plans for a “major investment” focusing on sustainability in Central St Martin’s, the premier London design school which has furnished much of the talent within his fashion houses. A new CSM-LVMH director of sustainability and innovation will be appointed as the conglomerate works together with students to develop “new holistic solutions that balance the needs of people, planet and business.”

The concept of balance seems to be a recurring one in Arnault’s strategizing. Essentially he understands that we are all students learning how best to undo the damage already inflicted on the planet, and education and environmental best practices go hand-in-hand. But Trump’s prioritizing of drilling over data, his history of creating fake universities for personal gain and his selection of schools-for-profit Education Secretary, Betsy DeVos, suggest neither are particularly high on his agenda to Make America Great Again.

What Donald Trump Can Learn from LVMH’s Bernard Arnault

Artful Leadership

Monsieur Arnault is a patron of the arts whose brands epitomize luxury, never brashness, who plays classical piano in his spare time. LVMH has for years partnered with the Hyères International Festival of Fashion and Photography to award grants to emerging talent (Victor & Rolf are past winners) and is also behind The Young Fashion Designer Award. A respected art collector who owns works by Picasso and Warhol, he created in 2006 the Louis Vuitton Foundation dedicated to presenting contemporary art in a state-of-the-art building designed by Frank Gehry.

It remains to be seen how Trump’s presidency will affect arts funding but The Hill reports that the National Endowment for the Arts (N.E.A.) and the National Endowment for the Humanities (N.E.H.) would be eliminated entirely, and the Corporation for Public Broadcasting (C.P.B.)—which, in part, funds PBS—would be privatized.

Instant gratification may be behind Trump’s fondness for communicating in 140-characters. He admits to rarely reading but avidly watching television. However responses that offer long-term solutions for future generations to what he describes as “American carnage” that ensure “America will start winning again, winning like never before” require meaningful dialogue and analysis. Arnault’s message of informed and collaborative leadership is already resonating with the business minds of tomorrow: For the 11th consecutive year, LVMH has been voted by Universum, France, as Most Attractive Employer among students of business and management.

What Donald Trump Can Learn from LVMH’s Bernard Arnault

Time Will Tell

The oldest brand within LVMH is champagne-maker Château d’Yquem which can be traced back to 1593, a good 200 years before George Washington became the first president of the newly independent United States of America. Marrying one’s vision of a better future with respect for history and what’s already great about the country, is what will lead to long-lasting success.

President Trump, take note, the stakes have changed. There’’s more to the art of the deal than a handshake and photo op. That is, if you truly want to be “one of the great men.”

By contributing guest editor Jackie Mallon, who is on the teaching faculty of several NYC fashion programmes and is the author of Silk for the Feed Dogs, a novel set in the international fashion industry.

Homepage image: Albin Lohr-Jones / DPA, Ivanka Trump image: Brendan Smialowski / AFP, other images from LVMH and Donald Trump Facebook pages.

Van de Velde posts marginal rise in FY16 turnover

On a comparable basis including comparable season deliveries, Van de Velde said its consolidated turnover grew slightly from 206.7 million euros (219 million dollars) to 206.8 million euros (219.4 million dollars). The company said turnover on comparable basis grew by 1.2 percent at constant exchange but reported consolidated turnover declined by 1.1 percent from 209 million euros (221 million dollars) to 206.6 million euros (219 million dollars). The company’s reported turnover was stable at constant exchange rates.

Wholesale turnover up 4.4 percent, retail drops 15.6 percent

Van de Velde said that this turnover development on comparable basis consists of growth of wholesale turnover of 4.4 percent, with continued positive performance of both lingerie and swimwear, rise in pre-orders but stagnant back-orders stagnated and 5 percent growth at constant exchange rates due to weakening of the British pound.

The company’s retail turnover declined by 15.6 percent, driven by growth of retail turnover in Europe on a comparable basis at constant exchange rates by 3.7 percent (after closures of loss-making stores: 1.7 percent and after exchange rates: decline of 5.1 percent and the decrease in retail turnover in the US on a comparable basis at constant exchange rates by 20.2 percent (after closures of loss-making stores: dropped 29.9 percent and after exchange rates: down 29.7 percent).

REBITDA increases 2.6 percent, group profit down

On comparable basis (including comparable season deliveries), REBITDA rose by 2.6 percent from 60.4million euros (64 million dollars) to 62 million euros (65 million dollars). Reported consolidated REBITDA was 61.9 million euros (65 million dollars), which was at the same level as the previous year.

The company said, this development (on comparable basis) is primarily due to solid turnover growth of wholesale resulting in a higher gross margin, increases in fixed costs, mainly related to sales-driving costs (such as representatives, customer programs and marketing, expenses made to strengthen ecommerce and ICT as well as in training and development, recruitment and management costs were also higher due to the changes to the management committee and contribution to profit of the retail business at the same level as the previous year, despite lower turnover.

The recurring Group profit declined 18.1 percent, from 41 million euros (43 million dollars) to 33.6 million euros (35 million dollars) and the recurring profit per share decreased from 3.07 euros (3.26 dollars) to 2.52 euros (2.67 dollars).

For the financial year 2016, the board of directors will propose to the General Meeting of Shareholders the same dividend as in the two previous financial years, i.e. a total dividend of 3.5000 euros (3.71 dollars) per share (net dividend of 2.4905 euros. Of this amount, 1.3500 euros (1.43 dollars) was paid out as an interim dividend in November 2016 (net dividend of 0.9855 euros per share). After approval by the General Meeting of Shareholders, the final dividend of 2.1500 euros (2.28 dollars) per share (net dividend of 1.5050 euros per share) will be paid out as from May 4, 2017.

Picture: PrimaDonna Blog

VF Corporation reports flat revenue growth in FY16

VF Corporation said, revenue for the fourth quarter and full year was in line with last year. Fourth quarter of 3.3 billion dollars was up 1 percent currency neutral and full year revenue of 12 billion dollars, also up 1 percent currency neutral driven by continued momentum in our international and direct-to-consumer platforms, and Vans business.

“VF’s global business model, diverse brand portfolio and focused operational discipline helped the company deliver solid results in 2016 despite an inconsistent US marketplace,” said Eric Wiseman, Executive Chairman of the Board in a statement, adding, “We’re pleased with the improved quality of our revenue, which reflects continued growth in our international and direct-to-consumer platforms, and our strong gross margin and cash generation performance that enabled us to return a record 1.6 billion dollars to our shareholders.”

Financial highlights of the fourth quarter and FY16

Gross margin improved 90 basis points to a 49.1 percent on a reported basis, as the company said, benefits from pricing, lower product costs and a mix-shift toward higher margin businesses were partially offset by changes in foreign currency and the impact of restructuring charges. On an adjusted basis, gross margin increased 160 basis points to 49.8 percent. Changes in foreign currency negatively affected both reported and adjusted gross margin by 90 basis points during the quarter.

Earnings per share on a reported basis was down 33 percent to 0.63 dollar compared to 0.94 dollar during the same period last year. Adjusted earnings per share increased 3 percent to 0.97 dollar and excluding the impact of changes in foreign currency, adjusted earnings per share was up 8 percent.

Gross margin for the year, improved 20 basis points to 48.4 percent on a reported basis as benefits from pricing, lower product costs, and a mix-shift toward higher margin businesses were partially offset by changes in foreign currency and the impact of restructuring charges. On an adjusted basis, gross margin increased 40 basis points to 48.6 percent. The company said, changes in foreign currency negatively affected both reported and adjusted gross margin by almost 80 basis points in 2016.

Earnings per share on a reported basis was down 9 percent to 2.78 dollars compared to 3.04 dollars in 2015. Adjusted earnings per share for 2016 increased 2 percent to 3.11 dollars and excluding the impact of changes in foreign currency, adjusted 2016 earnings per share was up 7 percent.

Segment-wise financial highlights

Fourth quarter revenue for outdoor & action sports was up 2 percent to 2.1 billion dollars, while the segment’s revenue also increased 2 percent in 2016 to 7.5 billion dollars. Vans brand revenue for the fourth quarter was up 14 percent (up 15 percent currency neutral) driven by a mid-teen increase in the Americas business (up high-teens currency neutral); and in Europe a return to growth with a mid-single-digit rate increase (up low single-digits currency neutral); and more than 20 percent (up more than 25 percent currency neutral) growth in Asia Pacific. Revenue for the Vans brand for the full year was up 6 percent (up 7 percent currency neutral) and reached 2.3 billion dollars.

Fourth quarter revenue for The North Face brand was down 8 percent (down 7 percent currency neutral), which the company said were driven by the strategic decision to reduce sales to the off-price channel and the impact of bankruptcies in North America. Excluding these factors, The North Face brand would have increased at a low single-digit rate. On a regional basis, the Americas declined at a low double-digit rate; Europe increased at a mid-teen rate (up high-teens currency neutral); and, Asia Pacific declined at a low double-digit percentage rate (down mid-single-digit currency neutral). For the full year, revenue for The North Face brand declined 2 percent (down 1 percent currency neutral) to 2.3 billion dollars.

Timberland brand revenue was up 4 percent in the fourth quarter (up 5 percent currency neutral) including a low single-digit rate increase in the Americas region; a high single-digit rate increase in Europe (up low double-digits currency neutral); and, a mid-single-digit rate increase in Asia Pacific. Full year Timberland brand revenue was up 1 percent to 1.8 billion dollars.

Jeanswear fourth quarter revenue declined 5 percent (down 4 percent currency neutral) to 697 million dollars, while full year, global jeanswear revenue was down 2 percent to 2.7 billion dollars (flat currency neutral). Wrangler brand revenue was down 1 percent (up 1 percent currency neutral) in the fourth quarter with revenue in line with last year in the Americas business (up low single-digit currency neutral); a high single-digit rate decrease in Europe (down mid-single digits currency neutral); and, a 20 percent decline in the Asia Pacific region (down high-teens currency neutral). Full year revenue for the Wrangler brand was down 1 percent (up 1 percent currency neutral) to 1.7 billion dollars.

Fourth quarter revenue for the Lee brand was down 13 percent (down 11 percent currency neutral) including a high-teens rate decline in the Americas region; a high single-digit rate increase in Europe (up low double-digits currency neutral); and, a mid-single digit rate decline in the Asia Pacific region (down low single-digit currency neutral). For the full year, revenue for the Lee brand was down 3 percent (down 1 percent currency neutral) to 1 billion dollars.

Imagewear fourth quarter revenue increased 15 percent to 298 million dollars with a more than 20 percent increase in the Licensed Sports Group (LSG) business and a mid-single-digit increase in the workwear business. For the full year, revenue for imagewear was up 2 percent to 1.1 billion dollars.

Sportswear fourth quarter revenue declined 17 percent to 162 million dollars including a 20 percent decrease in Nautica brand revenue and a 2 percent decline in the Kipling brand’s North American business compared to the same period last year. For the full year, Sportswear coalition revenue was down 16 percent to 536 million dollars.

International segment sales up 5 percent in Q4 and 4 percent in FY

International revenue in the fourth quarter was up 5 percent (up 7 percent currency neutral). Revenue was up 6 percent (up 7 percent currency neutral) in Europe and up 6 percent (up 8 percent currency neutral) in the Asia Pacific region, including a 6 percent increase (up 14 percent currency neutral) in China. Revenue in the Americas (non-U.S.) region was down 1 percent (up 6 percent currency neutral). The international business represented 34 percent of total VF fourth quarter sales, compared to 33 percent in last year’s same period.

For the full year, international revenue was up 4 percent (up 6 percent currency neutral). Revenue was up 5 percent (up 4 percent currency neutral) in Europe and up 3 percent (up 6 percent currency neutral) in the Asia Pacific region, including a 4 percent increase (up 10 percent currency neutral) in China. Revenue in the Americas (non-US) region was up 2 percent (up 11 percent currency neutral). The international business represented 38 percent of total VF sales in 2016, compared to 37 percent in 2015.

Direct-to-consumer revenue was up 11 percent (up 12 percent currency neutral) in the fourth quarter driven by a mid-teen increase in the outdoor & action sports business and a mid-teen increase in the international business. The company’s e-commerce business continued its strong momentum with 21 percent revenue growth during the quarter. There were 1,507 VF-owned retail stores at the end of the quarter compared with 1,405 at the end of the fourth quarter of 2015.

For the year, direct-to-consumer revenue was up 8 percent (up 9 percent currency neutral) driven by a low-teen increase in the outdoor & action sports business and a low double-digit (mid-teen currency neutral) increase in the international business. Direct-to-consumer revenue was 28 percent of total VF revenue in 2016 compared to 26 percent in 2015.

Revenues in 2017 expected to rise low-single-digit

For the fiscal year 2017, revenue is expected to increase at a low single-digit percentage rate including about a two percentage point negative impact from changes in foreign currency. By coalition, revenue for outdoor & action sports is expected to increase at a low single-digit percentage rate (up at a mid-single-digit rate currency neutral); revenue for Jeanswear is expected to approximate 2016 levels; imagewear revenue is expected to increase at a low single-digit percentage rate; and sportswear is expected to decline at a high single-digit percentage rate.

International revenue is expected to grow at a low single-digit percentage rate (accelerating to a high single-digit percentage rate on a currency neutral basis). By geographic region, European revenue is expected to increase at a low single-digit percentage rate (up at a high single-digit rate on a currency neutral basis). In the Asia Pacific region, revenue is expected to increase at a mid-single-digit percentage rate (up at a high single-digit rate on a currency neutral basis). And, in the Americas (non-US) region, revenue is expected to increase at a high single-digit percentage rate (up at a low-teen rate currency neutral).

Direct-to-consumer revenue is expected to grow at a high single-digit percentage rate. Direct-to-consumer growth in 2017 includes the addition of about 50 stores and mid-single-digit comparable sales growth, including an expected increase of approximately 25 percent in e-commerce revenue. Earnings per share are expected to be down at a low single-digit percentage rate compared to 2016 adjusted EPS of 3.11 dollars (up at a mid-single-digit percentage rate on a currency neutral basis).

In the first half of 2017, the company expects revenue on a reported basis to decline at a low single-digit percentage rate (about flat on a currency neutral basis). VF expects earnings per share to decline at a mid-single-digit percentage rate on a reported basis (up at a low single-digit rate on a currency neutral basis). Revenue on a reported basis is expected to increase at a low single-digit percentage rate (up at a mid-single-digit rate on a currency neutral basis). Earnings per share are expected to increase at a low single-digit percentage rate on a reported basis (up at a high single-digit rate on a currency neutral basis).

VF’s Board of Directors declared a quarterly dividend of 0.42 dollar per share, payable on March 20, 2017 to shareholders of record on March 10, 2017.

Picture:Vans