December 2024
MARKETS
USA: Still Growing
US retail is still on a growth track. The slower growth that was seen in September and October is likely to get a boost now that the presidential election is over. Early consumer sentiment surveys have pointed to an uptick in optimism.
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UK: Better Than You Think
“Don’t read too much into the latest slowdown in UK GDP. The figures look volatile and consumer-facing services – a key barometer of economic health – have been growing more quickly and consistently over the summer,” said ING Bank.
UK retail sales grew by 0.6% in October, significantly weaker than September’s and less than half the three-month average growth rate, per the British Retail Consortium (BRC). The slowdown was attributed to consumers waiting for Black Friday sales.
The outlook for the UK is modest growth over the winter and a boost next year from the latest budget, though the health of the jobs market remains a key risk in 2025.
EU: A Delicate Balance
Household disposable income kept expanding at a healthy pace in the first half of the year, supported by expanding employment and continued recovery in real wages. By mid-year, the purchasing power of wages had recouped almost half of the loss caused by high inflation, per the EU Commission’s Autumn Forecast report released in mid November.
However, households were reluctant to spend – in part out of caution, but also because higher interest rates made saving attractive.
There are several positive signs right now, including that in October, the EU unemployment rate reached a new historical low of 5.9%.
Also, energy prices have leveled off, pushed down by weak global demand.
The EU has been the most agressive of the development markets in cutting interest rates.
CHINA: Government Policies Could Lead a Turnaround
China has still not recovered from the pandemic, but now the government is taking more steps to hopefully get domestic consumption back on a growth track.
China’s October retail sales rose 4.8%, its fastest pace in eight months, per data from the National Bureau of Statistic (NSB).
Analysts are cautiously optimistic that China is starting to inch its way out of its current economic slump. However, there is more emphasis on ‘caution’ than ‘optimism’ at this time.
BRANDS
Burberry Plots Out a Comeback
Burberry (UK) has outlined a new strategy as the group reels from a sharp quarterly loss.
The luxury firm, like the rest of the industry, has been grappling with slowing demand from the China market.
Strategic Error. Burberry had expanded its focus to areas like handbags and other accessories in recent years, while also failing to win over consumers as it tried to go upmarket and increase prices, per the Wall Street Journal.
New Strategy. Focus on scarves and the outerwear such as trenchcoats it is known for.
Musinsa Standard Win Market Share with Affordable Quality
Musinsa’s (S. Korea) private label brand, Musinsa Standard, is on track to hit an annual revenue of 100 billion won ($72.3 million) for 2024, thanks to its rapid expansion into the offline market.
Success Strategy. By catering to the growing demand for affordable, high-quality fashion amid rising inflation, Musinsa Standard is seeing strong growth, per industry reports. Essentials like tailored slacks priced between $15 to $20. This has positioned Musina Standard as the go-to brand for affordable basics.
Target Market. Teens and Twenties. Now attracting consumers in their thirties.
Leveraging Stores. Musinsa Standard is expected to achieve this milestone via offline sales alone.
Originally launched in 2017 as an online-exclusive brand, the brand recently made an aggressive expansion into major department stores and shopping malls, attracting a growing number of customers in their thirties.
Musinsa Standard’s 16 retail locations across the country recorded their highest-ever monthly offline sales in October 2024, totaling $8.54 million.
Lululemon Teams Up with Disney
Lululemon (Canada) has partnered with Disney (USA) for a limited-edition collection. The new 34-piece collection features exclusive versions of classic Lululemon performance styles and casual pieces with graphics from Disney’s archive, as well as a contemporary take on Mickey Mouse and Minnie Mouse.
Strategy. Inspired by both brands’ recognition of the importance of well-being through movement, practicing joy, and appreciating the fun moments in life. Available for both men and women.
Lee’s New Collaboration with Alpha Industries
Lee and Alpha Industries have launched a new global collaboration celebrating the brands’ shared history of workwear apparel and iconic American style.
The eight-piece Alpha x Lee capsule reimagines military-inspired designs and heritage details with a contemporary edge, featuring layered indigo and denim hues that bring workwear and utility styles to new heights.
Design Direction. The capsule draws on each brand’s authentic heritage while offering a modern twist on timeless style. The collaboration represents the unique intersection of military style and denim, a pairing with deep roots in American culture.
Retail Prices. Pricing ranges from $60 to $310.
Kolon FnC Accelerates China Expansion
Kolon Industries FnC, the fashion arm of South Korea’s Kolon Group, is ramping up its global expansion efforts.
Strategy. FnC plans to leverage its proprietary brands and technological capabilities to capture more market share in China for Kolon Sports.
Goal. By 2028, the company aims to increase the share of overseas revenue from the current 3% level to over 20%, equivalent to $215.83 million range. Kolon Sports is expected to generate $498 million in retail sales in China this year, according to CEO You Seog-jin. “By 2025, sales will likely exceed $641 million, reaching $712 million in 2026.
Partnerships. FnC plans to expand its intellectual property (IP) business, after its successful joint venture experience with Anta Group. The company is actively considering several IP acquisition proposals, as it aims to enhance its global footprint by acquiring and managing IP and expanding the overseas distribution of Korean brands.
International Lifestyle Brands Bank on China
Despite a slowdown in China’s economy, many mainstream international brands still see big opportunities in the market.
Strategy. Shift attention from short term sales and focus on building a foundation in the market for the brand. Study the market and consider how to adapt the product to local preferences. It’s more about positioning the brand for future growth – when the market recovers.
Short Term Gains. There are still plenty of consumers in China who can and will purchase high-end products for better quality and reliability. Spending may have slowed, but there are brands, including Lululemon, Uniqlo, Prada and others. It’s about getting the product right.
