Prada Profit Falls Less Than Expected as Cost Cuts Balance Asia. PARIS, France — Prada SpA reported first-half profit that beat analysts’ estimates as efforts to contain costs helped mitigate declining sales in Asia.
Net income fell 23 percent to 188.6 million euros ($213 million) in the six months through July, Milan-based Prada said Tuesday in a statement. Analysts predicted 175.4 million euros, according to the median of six estimates compiled by Bloomberg. Too many new stores and not enough new products have hurt Prada as demand for luxury goods slows in greater China following a clampdown on extravagance. In a bid to reignite sales and reverse a slump in its share price, the company introduced the Inside bag in July, with prices starting at about 2,000 euros.
Prada has also slowed this year’s expansion, pledging to open about half the number of stores it did last year. “The global economic environment is still volatile and recent instability in Asia has not helped ease the situation,” Prada said. Older Millennials' Luxury Spending Climbs. NEW YORK, United States — The creations of New York fashion designer Jason Wu, a favorite of first lady Michelle Obama, sell for thousands of dollars apiece.
Items like his Diane Mini Shoulder Bag, which retails for $1,495, and Wu's Camel Hair Capelet Trench Coat at $3,995 have always been well out of reach for most of the 32-year-old's fellow millennials. The generation of those 18-35 has been hard-hit by the U.S. economy. Many are struggling with too much debt to spend heartily. But there may be a turnaround as the 75 million millennials pivot their tastes from mass-market retailers like Aeropostale to upscale haute couture, at least among older millennials. According to Forrester Data, a division of Forrester Research Inc, older millennials (ages 27-35) started to splurge in 2015, suddenly spending twice as much as younger millennials (ages 18-26). The median amount spent on the most recent luxury good item purchased by older millennials was $180 in early 2015. Can Luxury Brands Weather the China Storm? NEW YORK, United States — China may be experiencing an unprecedented economic storm but senior executives at the world's largest luxury conglomerates have been quietly working to avert disaster.
The big groups are taking action to buffer themselves against the fluctuations of the domestic Chinese luxury market, while making sure they capitalise on the rise of the outbound Chinese tourist shopper. In addition to reconsidering pricing strategy, exploring e-commerce and closing or refurbishing underperforming stores, the major luxury groups — including LVMH, Kering and Richemont — are boosting their smaller portfolio brands in China.
It may be wise for the big groups to let their "big logo" brands move forward on inertia, while putting real effort behind "newer" brands. In so doing, they could save big by foregoing costly marketing events (deemed by some insiders as largely pointless) and reducing investment in traditional ad campaigns. Why Gap is in a tight squeeze - BBC News. In 1997, hip-hop artist LL Cool J starred in a 30-second Gap advert.
It was during a particularly rosy era for the brand, whose sales by 2002 would more than triple to $13.8bn (£8.8bn) annually. "Jeans popping in every mall and town and city," LL Cool J rapped in the TV spot, referencing the retailer's hugely popular denim offerings. At the end, he closed with: "How easy is this? Fall into the Gap. " But easy street has been hard for Gap to find recently. Management missteps, a strong US dollar and lacklustre designs have hurt the once-dominant retailer, as has competition from fast-fashion brands. Rivals such as H&M and Forever 21 offer a wider array of styles at lower prices.
Gap shops' July sales numbers reflect these challenges, with same-shop sales falling 7%. UK house price inflation ticks up, says ONS - BBC News. Annual UK house price inflation picked up slightly to 5.7% in the year to June, official figures show.
The rate was a small increase on May's figure of 5.6%. The Office for National Statistics (ONS) said that prices went up in all areas, apart from Scotland. The rise is against the longer-term trend, which has seen house price inflation gradually falling since it peaked at 12% last September. The average price for a house or flat rose to a record high of £277,000. The ONS figures showed that across the UK, annual house price inflation varied widely in June: Prices in Northern Ireland saw the biggest increase, rising 9%In England, prices were 6.1% higherPrices in Wales rose 0.8%In Scotland, prices dropped 0.6% One reason for the continuing rise in prices was strong demand coupled with weak supply, the ONS said. That was particularly true in Northern Ireland, where prices are still well below the pre-downturn peak in 2007. It appealed to the government to build more homes. American Apparel Raises ‘Going Concern’ Doubts as Losses Mount. LOS ANGELES, United States — American Apparel Inc. said it may not be able to sustain operations as a going concern for the next 12 months, even after the clothing chain increased its credit line.
A group of lenders, including hedge fund Standard General, replaced its $50 million credit facility with a larger $90 million one, the Los Angeles-based retailer said on Monday. The company said last week that Standard General intended to take this step.