Week in Review

July 31, 2022

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Week in Review | Jul. 31, 2022

A growing number of retailers are reducing Q4 inventories in an effort to avoid losses, even if that means potentially missing out if consumer spending turns around.

FINANCE

Missguided’s (UK) suppliers are expected to be paid less than 2% of the £30 million (US$36.5 million) owed to them by its main trading entity after the company collapsed in May.

Unsecured creditors, including suppliers, employees and taxes, are owed £46 million ($56 million) in total.
Suppliers to Missguided have filed an official complaint to the Insolvency Service over what they say was “a reckless approach” by the company’s private equity owners, according to The Guardian.

Prada (Italy) said sales in Asia Pacific fell 7% in H1, even as sales increased dramatically in all other regions and rose 22% overall for the brand. The company is considering a second public listing in Milan.

Skechers (USA) said sales rose 12.4% to $1.87 billion for the quarter ended June 30. Growth was primarily driven by an 18.3% increase in wholesale.

Net income fell 34.1% year-on-year.

LVMH (France) reported profits rose 34% to $10.5 billion for the first half of 2022. Sales jumped 28% to $37.3 billion.

Sales in Europe and the US have risen ‘sharply’ since the start of the year, offsetting lower levels of growth in Asia caused by Covid-19 lockdown measures in China.

Adidas (Germany) now expects revenue in Greater China to decline at a double-digit rate for the remainder of the year, given continued widespread Covid-related restrictions in the region.

Revenue for the year is now forecast at mid-to-high single digit growth, from a previous expectation of 11-13% growth.
The brand is also working to clear excess inventories through the end of the year, and those efforts will weigh on profits.

Walmart (USA) said Q2 earnings per share are expected to decline around 8 to 9%. Full year earnings are forecast to drop 11 to 13%.

Consolidated net sales growth for Q2 is expected to be 7.5%. For the full year net sales growth is forecast at 4.5%.

PODCAST

Where Leaders Often Fail – and How To Get Teams Back on Track

We’ve seen a rash of new theories, approaches and tactics that look at how we can build better leaders.

Yet oftentimes we fail to look at what gets in the way of people being effective leaders. And how we can support people in our organizations to achieve their leadership potential.

In this podcast Jack McGuinness, an executive team coach and co-founder of Relationship Impact, talks about helping organizations build great leadership teams.

What You’ll Learn:

Where leadership teams go wrong.
What is needed in leaders in order to help companies and teams navigate these complex times.
What he learned about leadership during his career in the military that is applicable to industry.

🎧 Listen to the podcast

RETAIL

Old Navy (USA), a division of Gap, said it will not raise prices on any of its denim products through the end of September. Denim is the brand’s third largest category.

Shopify (Canada) said that it is laying off 1,000 employees, or about 10% of its workforce, citing consumers returning to the old shopping habits (that would be shopping in stores).

Rent the Runway (USA) will allow Saks Off 5th customers to buy pre-owned fashions directly from the apparel rental retailer. A selection of items from Rent the Runway can be purchased on SaksOff5th.com.

MARKET

The Black Sea Grain Initiative, a deal struck between warring neighbors Ukraine and Russia last week and overseen by Turkiye and the United Nations, will play a key role in avoiding a global food crisis.

This is one of many factors necessary to help bolster consumer confidence, which is at record lows in most markets.

The International Monetary Fund has said the global economy is edging towards recession as the world’s three biggest economies are all stalling and inflation is higher than previously forecast.

Germany is on the brink of a recession, according to the Ifo institute. Its business climate index dropped to 88.6, its lowest in more than two years.