• Olivier Moingeon

W05 - Asos, Ralph Lauren, Michael Kors, Ferragamo, Tapestry, Estee Lauder, Tumi, Pinterest

1. British online retailer ASOS finalized the acquisition of 4 brands from the bankrupt Arcadia Group. For 265 million pounds, Asos acquired Topshop, Topman, Miss Selfridge and HIIT brands. Asos will acquire these brands' inventories for an additional 30 million pounds, but it will not acquire the stores. 50 stores employing 2,000 people have already closed, and 70 more stores employing 2,500 people are expected to close in the future. 300 people from the corporate office will transfer to Asos.

The strategic objective for Asos is to strengthen their multi-brand platform strategy, and leverage these brands' assets, such as international warehouse infrastructures and local online experiences. Asos will also accelerate the US development through a partnership with Nordstrom. This transaction is expected to generate a double-digit return in the first full year, thanks to ASOS ability to drive growth for these brands, as well as the low operating costs once the integration onto the ASOS platform is completed.


2. Capri Holding, which owns Michael Kors, Versace and Jimmy Choo published their 3rd quarter earning results for the period October to December 20202, and they made a profit for the 2nd quarter in a row!

Overall, the group’s revenue reached 1.3 billion dollars, which is a drop by 17% vs 2019, but a continuous improvement vs prior quarters. Net income was a positive 179 million dollars.

ECommerce sales increased by 65% and China delivered a double digit growth. I feel like I am repeating this sentence every single week.

If we look at the individual brands performance, Michael Kors generated 986 million dollars in revenue, down almost 19% vs last year. Versace revenue was flat at 195 million dollars. Finally, at Jimmy Choo Revenue fell 26%.

Capri Holding also reported that their customer database increased by double digits, which validated their efforts to attract new customers.


3. Ferragamo published their 4th quarter 2020 and reported a sales decline of 20%, in line with expectations. Full year sales reached 1.1 billion dollars, which is a 32% decline vs 2019. The strong rebound in China was not enough to offset the negative impact of Lockdown measures in Europe or the poor performance in wholesale and travel retail channels.

Ferragamo has been hit hard by the pandemic and rumors of a sale are resurfacing. The board of directors has been changed and the profile of the new board members seem to indicate that the ferragamo family will be less involved in running the business.


4. Ralph Lauren reported worse than expected results for its 3rd fiscal quarter with sales of $1.4 billion dollars, down almost 19% vs prior year. The company also announced that their upcoming 4th quarter, ending in March 2021, would miss expected targets, as the brand continues to suffer from lockdowns in major markets like Europe and Japan.

Following these results, Ralph Lauren announced they would reduce their North American corporate office real estate by 30%, reduce the size of some offices in Europe and asia, and close up to 10 stores globally, renegotiate rents and finally cut 15% of its workforce. With these measures, they expect to save $200 to $240m annually.

The bright spot came from digital, which increased by 20% and the performance of their recently launched virtual stores in Beverly Hills, Paris and New York, which experience 8 times more traffic online than in the physical world. The company also launched Ralph Lauren Vintage, selling unique one of a kind apparel and jewelry.


5. Estée Lauder published their fiscal 2nd quarter results, ending in December, and reported better than expected results, with net sales of $4.85 billions which is an increase by 3% vs prior year, whereas the overall prestige beauty industry declined by 19% according to a recent NPD report. Estee Lauder’s results were driven by strong sales in skincare, asia, online but also in travel retail, which is more surprising. At the brands level, La Mer and the Estée Lauder brand both enjoyed double digit growth. The overall skincare category grew by 25% with great performances also coming from Clinique and Dr Jart, whereas NPD reports that the overall prestige skincare industry declined by 11%. Estee Lauder did report a strong decline in Makeup, down 26, whereas the industry is down by 40% according to NPD. Makeup has been hit hard by the pandemic as consumer habits changed and that product category historically relies heavily on brick and mortar.

Finally, across their brands, Estee Lauder reported that their online channels enjoyed a double or sometimes triple digit growth, thanks to new features such as livestreaming, live video, live chat and virtual try-on.

Estée Lauder’s executives are continuing efforts to improve omnichannel capabilities, by mapping out the consumer journey and meeting her throughout the purchase decision touch points.



6. Tapestry, which owns Michael Kors, Kate Spade and Stuart Weitzman, reported that their holiday quarter results exceeded forecasts. Sales declined 7% to reach $1.7 billion dollars, and net income increased by 4% to reach $311 million. Its online business grew at a triple-digit rate from the previous year to represent one-third of global sales and nearly half of revenue in North America. During the holiday season, all brands were able to reduce their promotions and sell products at full price. The group’s effort to acquire new customers paid off as it added 1.5 million new customers across all 3 brands.

Sales in China increased by 30% year on year and they reached record sales during Alibaba’s annual single day event. As they enter the 2nd half of their fiscal year, Tapestry’s execs are confident that customer demand will keep rising and that they will end the full year at a 7% growth rate.


7. Nordstrom launched an ephemeral 2nd hand resale service this week called See you Tomorrow. The American department store started selling pre-owned apparel, shoes and accessories both online and in its New York store this week. The brands include Off-White, Adidas, Isabel Marant or Burberry. The product selection is made of returned or damaged products from Nordstrom’s inventory, but the department store also offers to buy back customers’ used clothing, shoes, jackets and accessories, which will be cleaned and repaired as needed before being sold. Nordstrom pays as much as 60 percent of an item’s resale value, in the form of a gift card. The program is called See You Tomorrow, and while the online shop has already closed, after a week of existence, the shop is still open in New York. Let’s see if it becomes a more permanent fixture of their offer, in a bid to attract a younger clientele. Nordstrom also announced a partnership with the second-hand clothing site Goodfair. They will launch monthly online vintage drops. The first Goodfair collection for Nordstrom sold out immediately and included about 50 products. They define vintage as anything that was created before 2000.

Finally, Nordstrom also issued some guidance for the current year and they expect sales to rise by 25% vs 2020, with eCommerce representing more than half of that. To do so, it will focus on growing its off-price brand, Nordstrom rack, its top 20 cities which represent 75% of its business and finally it will continue to develop its online business.


8. Another example of omnichannel retail came this week with the Luggage brand Tumi opening their first virtual store. This online experience is accessible only to shoppers from Asia Pacific and Middle East. As you can imagine, the online store has the beautiful rendition of a physical store and is loaded with digital features: products can be seen in 3D and Augmented Reality. Shoppers can take photos of their experience via Tumi’s Magic Mirror, and play mini-games by connecting their Instagram and WeChat applications. They can also connect with sales associates if they have questions or wish to place orders.


9. Pinterest is expanding their make-up virtual try-on capabilities with the launch of an Augmented Reality try-on tool for eyeshadow!

Pinterest is allowing try-on with 4,000 shades from brands like Lancome, YSL, Urban Decay and NYX Cosmetics.

This new feature is the 2nd foray into virtual try on, after Pinterest launched a similar experience with lipstick a year ago. Users can now try on more than 10,000 lipstick shades across 48 million pins from a massive portfolio of brands including Estée Lauder, NARS, Lancôme, Nix or Urban Decay.

The benefit for beauty brands is to create an interactive shopping experience to increase sales. If shoppers like what they test, they can directly purchase the item within the Pinterest app.


10. Finally, an interesting news coming from the world of print media. Allure magazine will open a brick and mortar store in the fall of 2021. The 2,900 sq ft space will offer an “immersive retail experience” with a curated product offering, augmented reality try-on features, smart mirrors and regular in-store events such as masterclasses.

It will be a first retail experience for the magazine but not a first commercial endeavor as they have been running a subscription box since 2012. Allure recently reported having 25 million readers and that traffic on their website increased by 20% year on year, with time spent increasing by 25%.

4 views0 comments