A return to ‘real life’ has been driving apparel sales in Q1 and early Q2, with rises seen in smart casual and even special occasion wear.
FINANCE
Asos (UK) expects to take a £14 million ($18.2 million) hit to its profits and a 2% reduction in growth, following its decision to stop trading in Russia. The company swung to a £15.8 million pre-tax loss in the six months to the end of February, compared with a £106.4 million profit a year earlier.
- Sales in the UK grew by 8% to £895.5 million ($1.1 billion) over the period, and by 11% in the US.
- Supply chain disruption had led to reduced availability of some products and had prevented it from selling some of its newest lines.
Asos said it had not yet seen an impact from rising inflation on consumer behavior or spending, but predicted this might change in the coming months as shoppers face higher energy bills and tax increases.
Rent The Runway (USA) reported Q4 revenue was $64.1 million, up 91% year-on-year, however net loss increased to $39.3 million, from $38.8 million a year ago.
- Active subscribers rose 110% to 115,240.
- Full year revenue was $203.3 million, a 29% increase year-on-year.
- Full year net loss was $211.8 million, as compared with $171.1 million a year ago.
- Fiscal 2022 revenue is forecast to be in the range of $295 million to $305 million, with Q1 2022 revenue in the range of $63.5 million to $64.5 million.
Designer Brands (USA) said it aims to hit $4 billion in annual revenue and a gross profit of 35% by fiscal 2026. To do this, the company plans to increase the revenue from its owned brands from 19% to nearly 33% – mainly through its DTC channels including DSW and The Shoe Company.
- In Q4 owned-brand sales increased 69% year-on-year, while private-label sales via DTC channels grew 98%.
Laura Ashley (UK) has signed a deal with IMG (USA) that will see the launch of a clothing range, as well as expansion into global markets.
- The multi-year partnership includes apparel, footwear, accessories, beauty, homeware items and hospitality offerings.
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ECOMMERCE
Thousands of Etsy (USA) sellers went on strike this week in protest over fee hikes that came into effect on April 11. However, Etsy has nearly 5 million sellers so the strike is more symbolic of sellers’ dissatisfaction with increasingly high fees, than actually disrupting business on Etsy this week.
MARKETS
US March retail sales of clothing and clothing accessory stores rose 2.6%, month-on-month. Core retail sales (excludes car sales, gasoline and restaurants) remain unchanged from February, but rose 4% year-on-year, according to the National Retail Federation.
US consumer sentiment hit a 3-month high in early April, per preliminary estimate of the University of Michigan’s Consumer Sentiment Index. The optimism is being driven by more jobs and higher wages.
US inflation was up 8.5% year-on-year in March, however the Core Consumer Price Index — which measures inflation but without including highly volatile food and gas prices — was 6.5%, up only 0.3% in March from February.
Warning signs of a possible recession: “‘Inflation shock’ worsening, ‘rates shock’ just beginning, ‘recession shock’ coming,” Bank of America chief investment strategist Michael Hartnett warned clients in a note last week.
UK employment growth returned to pre-pandemic levels in March, with the BDO index, 112.74 last month, a two-point increase over February.
- The index measures business sentiment among senior managers. Anything above 95 is considered to be growth.
- There’s concern that inflation could rise faster than wage increases.
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