Surging inflation and interest rate hikes have taken the shine off DTC brands.
“Without access to cheap capital and (all too often) without a credible plan to actually turn a profit, so-called growth stocks are by and large, adrift,” commented the Daily Upside.
FINANCE
Hugo Boss (Germany) reported Q3 sales rose 18% year-on-year to $925 million. Profits rose 8% to $91 million. Full year sales are forecast to hit a record $35 billion.
Victoria’s Secret (USA) is acquiring DTC lingerie brand Adore Me (USA) for $400 million in cash. The brand is known for its body positivity.
Next (UK) reported retail sales were up by 3.1% in the quarter ended Oct. 29. Full price sales were up 0.4%. Next maintained its guidance for full-year pre-tax profit of £840 million ($956 million), up 2.1% on the year.
Mamas & Papas (UK) reported that sales rose more than a third to £126 million ($143 million) in the year to March 2022. Pre-tax profits surged 466% to £6.8 million ($7.7 million) from £1.2 million a year ago.
- In the six months through September, sales rose 17% year-on-year.
Under Armour (USA) reported revenue grew 1.8% to about $1.6 billion in the quarter ending Sept. 30.
- Net income fell 23% to $89.6 million year-on-year (adjusted net income was $92 million).
- The company warned that full year revenue growth would be in the low single digits, down from the previous forecast of 5% to 7% growth.
Qurate Retail Group (USA) reported Q3 revenue fell 13% year-on-year. Sales at Zulily, its e-commerce division, fell 39%, but improved from Q2 where sales declined 45%.
- Zulily’s operating losses reached $403 million, 10 times above the same period last year.
- Qurate’s total operating losses exceeded $2.6 billion, from a $274 million profit last year.
Kering (France) is said to be close to acquiring Tom Ford (USA), per the Wall Street Journal, which said that previously Estee Lauder (USA) was eyeing purchasing the designer label.
Canada Goose (Canada) cut its fiscal 2023 sales expectations to around $882 million from $1 billion. The company cited weak sales in Asia-Pacific where it earned 20.3% of its Q2 revenue.
What executives are saying, market insights, financial performance – all in our INSIDE FINANCE November report. Read more
RETAIL
Simon Property Group (USA) said mall occupancy rose 1.8% year-on-year to 94.5% as of Sept. 30, as consumers returned to physical retail. Base minimum rent rose 1.7% to $54.80 per square foot.
Marks & Spencer (UK) is to begin to rent capsule wardrobes of 10 different outfits for up to a month. The retailer said it is touching on both the demand for more sustainable fashion, as well as consumers facing tighter budgets.
What executives are saying, market insights, store openings, new retail properties – all in our FASHION RETAIL November report. Read more
PODCAST
EdTech is Breaking Barriers to Make Education Accessible to Everyone
The fast growing field of EdTech is making it possible for people of all ages and circumstances to better themselves – thus helping to provide a solid path for poor nations to develop better educated populations.
It’s also supporting people in advanced nations to boost their skill sets and move up in their careers.
On this podcast Atul Temurnikar, executive chairman of Singapore-based Global Schools Foundation joins us to discuss some of the new developments in both technology and use cases.
You’ll Learn:
- How EdTech is changing the education landscape in both developed and emerging nations.
- His experience in helping to shape India’s education policy.
- How AI, data analytics and machine learning can empower teachers and enhance the classroom experience for students.
- And the world changing benefits of being able to provide people without financial means access to education.
RETAIL INSIGHTS
A Membership Model The Earns Dollars – and Makes Sense
Most retailers are feeling extreme pressure to find a formula that differentiates them from competitors and gets them out of the dreaded race-to-the-bottom price trap.
Costco is one of the few that is bucking the trend. But then nothing about this multibillion dollar company mimics anyone else on the playing field.
Every pundit predicted that Amazon was going to eat Costco’s lunch. It hasn’t happened.
In fact, Costco continues to report strong revenue with growth with October sales up 7.7% to $17.73 billion.
When everyone else was ramping up e-commerce, Costco leaned in on customer loyalty. That loyalty model is fundamental to its success. Read more
MARKETS
LinkedIn said adverts for remote jobs have declined for the fifth month in a row in September, signalling the work-from-home boom has passed its peak.
In the UK retailers are reporting resilient spending from middle-income earners.
U.S. holiday sales during November and December will increase between 6% and 8% from 2021, according to National Retail Federation predictions.
- Sales increase will be driven by higher prices.
U.S. consumer confidence declined in October, after gains in August and September, per Conference Board data.
- Its Consumer Confidence Index fell to 102.5 in October, down from 107.8 in September.
- The Present Situation Index — based on consumers’ assessment of current business and labor market conditions — fell to 138.9 from 150.2 in September.
The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—declined to 78.1 from 79.5.
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