Yanai Tadashi criticizes low-price e-commerce, Nike aims to sell more low-price sneakers, Tom Ford launches new perfume | Brand Weekly Report
Big News
Tadashi Yanai Criticizes Low-Price E-commerce; Uniqlo's Profit and Revenue in Mainland China Declined in the Second Half of the Year
Uniqlo's fourth-quarter performance in mainland China did not achieve a reversal.
According to the performance report, Uniqlo's Greater China region achieved a 9.2% growth in the 12 months ending in August this year. Among them, in local currency terms, the mainland China and Hong Kong markets recorded revenue growth, but the operating profit declined. Although the sales situation was good in the first half of the fiscal year, the sales situation in the second half of the fiscal year was not good due to reasons such as low consumer willingness to spend, unfavorable weather, the product portfolio failing to meet customer needs, and a high comparison base in the same period of the previous fiscal year, resulting in a decline in revenue and a significant reduction in operating profit. However, the Taiwan market in China recorded a double growth in revenue and operating profit. The performance of the Greater China region throughout the year is basically the same as that of the third quarter.
Uniqlo mentioned in the performance report that it will carry out business reforms in Greater China in the second half of the year, including strengthening the demolition and new construction of stores, brand building, and the operation of each store. For example, according to the climate and living habits of different regions, the product composition will be changed by region for sales. Thanks to this, Uniqlo optimistically predicts that in the next fiscal year, the Chinese market will also achieve revenue and profit growth.
The products on low-price e-commerce have an impact on Uniqlo's development in the Chinese and even the global market. In the previous quarter, Pan Ning, the CEO of Uniqlo Greater China, rarely admitted that Uniqlo is being impacted by low-price products in China. According to the Nikkei News Network, Tadashi Yanai sharply criticized low-price e-commerce at this press conference. He said, "Although the speed is worth learning, anyone can do it. From the international standard level and morality, isn't (SHEIN's approach) illegal? It won't last long."
In other market situations, thanks to the control of discounts and the increase in consumption of inbound tourists, Uniqlo's Japan business division's profit and revenue both increased, and the performance level reached a new high in history.
The full-year revenue of the South Korea, Southeast Asia, India, and Australia markets is 540.5 billion yen (a year-on-year increase of 20.2%), and the operating profit is 97.6 billion yen (a year-on-year increase of 24.8%).
Nike's New CEO: Will Focus on the "Affordable" and "Running" Markets
Nike is officially launching an impact on On Running and others.
Recently, Nike's Chief Financial Officer Matthew Friend explained to the media the guidelines of the upcoming new Chief Executive Officer and discussed the two major breakthrough points in the future: "Running" and "The market under $100".
Matthew Friend admitted that Nike "lost its share in this channel" after withdrawing from the professional running channel more than four years ago and suffering market losses. He particularly named the rise of On Running and HOKA. "The importance of investing in the professional running channel and establishing a connection with it is far more than the commercial impact of increasing revenue, but it is about the running community," he said, meaning that in the future, Nike will not only launch more professional running shoes but also carry out more marketing activities in this field.
Regarding changes in the product portfolio, Matthew Friend said that the production of some once popular shoe models, such as Air Force 1, Air Jordan 1, and Dunk, will be reduced. He believes that over-selling so-called trendy shoes has made consumers feel tired. He said, "We are actively transforming the product portfolio," he added, "It takes time for such a comeback on this scale."
The Chief Financial Officer emphasized the importance of launching inexpensive products earlier this year - shoes priced at $100 and below will become Nike's focus.
For the more resilient Chinese market, Nike appointed Dong Wei as the Chairman and CEO of Greater China and the Global CEO of the ACG brand on the 11th. ACG is Nike's professional outdoor product line, with the full name All Conditions Gear, which provides reliable protection and performance in all conditions, locations, and terrains.
According to the data of Fashion Business Daily, Nike's sales in the first fiscal quarter decreased by 10% year-on-year to $11.59 billion, slightly lower than the analysts' expectation of $11.65 billion, and the net profit decreased by 28% to $1.05 billion. The gross margin increased by 1.2 percentage points to 45.4%, higher than expected.
Unilever's High-End Beauty Division Gets a New Leader with Rich Experience in the Luxury Beauty Industry
Unilever, whose beauty business has been lukewarm, is going to make an effort.
Recently, the Unilever giant announced that Mary Carmen Gasco-Buisson, the former Chief Marketing Officer and Executive Vice President of the Global Business Unit of the Danish jewelry brand Pandora, will replace Vasiliki Petrou, who left in July this year, as the Chief Executive Officer of the group's high-end beauty business division (Unilever Prestige).
In 2015, under the leadership of Vasiliki Petrou, Unilever established a high-end beauty business division. At that time, Unilever acquired the Dermalogica brand for approximately $1 billion, starting the layout of high-end beauty to compete against Procter & Gamble, which holds SKII.
In the following years, Unilever has continuously acquired high-end beauty brands to enrich its brand lineup. In the past two years, the growth rate of the high-end beauty business has been a highlight of Unilever's financial reports. In the first half of 2024, Unilever's Beauty and Wellness business became the fastest-growing department, with a year-on-year growth of 7.1%, exceeding the group's revenue growth rate.
Currently, Unilever's high-end beauty division includes Paula’s Choice Dermalogica, Murad, Hourglass, Dollar Shave Club, A.H.C, and Tatcha, etc., involving cosmeceuticals, luxury beauty, and professional makeup.
It is worth noting that in October this year, Unilever successively sold the two brands Ren and Kate Somerville on the grounds of their long-term poor performance. The divestiture of REN is more representative, meaning the decline of the once popular concept of pure beauty. REN also used the KOL strategy to enter the Chinese market, but it has never improved.
Marketing Matters
lululemon Invites You to "Be in a Good State Together" Again and Also Releases the Happiness Index Report
lululemon held the theme activity of "Be in a Good State Together" on World Mental Health Day on October 10. This is the fourth time the brand has held this series of activities. The theme of this activity is still to advocate for social attention to mental health and enhance happiness.
In order to cooperate with the theme activity, lululemon also released a "2024 Happiness Index Report", showing that the happiness index of mainland Chinese residents continues to lead the world. The happiness index of the male group is 74 points, lower than that of the female group at 85 points. The happiness index of the Gen Z group increased by 4 points compared to last year to 73 points, but it is still lower than other generations (80 points).
This time, Lululemon also joined hands with Graphic Rewilding to open the Star Art Museum in Shanghai. Graphic Rewilding is an art project initiated by Lee Baker and Catherine Borowski in 2021. These two artists from the UK have collaborated to bring large-scale, unconventional, and urban landscape-changing public artworks in global metropolises such as New York, London, and Milan, reconnecting urban communities with nature.
People in Shanghai from October 8 to 13 might as well make an appointment to participate in sports courses such as yoga, training, running, and Baduanjin.
New Arrivals, Brands
Tom Ford Launches a New Fragrance Black Lacquer, Also with a Strong Woody Scent
Tom Ford finally adds a new member to its own woody fragrance series. Recently, Tom Ford launched an oriental woody fragrance perfume named Black Lacquer. According to the fragrance review website Frangrantica, the top notes of this perfume are ink, ethylene, rum, and black pepper; the middle notes are ebony, elemi, peony, and apricot; the base notes are frankincense. According to the brand introduction, this perfume marks two unique innovations in modern perfumery. One of the innovations is the lacquer-like texture of the bottle, and the second is the original use of the Makassar ebony woody note. Makassar is a type of ebony and also a type of rosewood. This perfume echoes Tom Ford's classic Oud Wood and is suitable for use in autumn and winter.
What‘s More
Bosideng Invests in Moose Knuckles
Investing in "small but beautiful" outdoor brands still seems to be a good medicine for large clothing companies to alleviate growth anxiety. Recently, the investment institution Cathay Capital announced that it will join hands with the Chinese down jacket brand Bosideng to make a new round of strategic investment in the Canadian high-end down jacket brand Moose Knuckles. After the transaction is completed, Bosideng will become a key investor in Moose Knuckles, while Cathay Capital remains the controlling shareholder of Moose Knuckles. Currently, Moose Knuckles has carried out retail business in more than 30 countries around the world, with a total of 36 stores, and is sold through well-known retailers such as Harrods, Selfridges, Saks Fifth Avenue, and Holt Renfrew.
LVMH Sells Streetwear Brand Off-White
The decline of streetwear brands is still continuing. Recently, the French luxury giant LVMH Group announced the sale of the high-end designer streetwear brand Off-White, founded by the late former men's creative director of Louis Vuitton, Virgil Abloh. The buyer of this transaction is the brand management company Bluestar Alliance, and the specific transaction terms have not been disclosed. At the same time, Off-White's last exclusive store in China, located in Hubin Yintai in Hangzhou, also ended its four-year business and announced its withdrawal from the market.
Kim Jones Ends His "Part-Time" Role at FENDI and Focuses on DIOR
The changes of creative individuals in the fashion industry are still continuing. Kim Jones, who is responsible for the design of FENDI women's wear and DIOR men's wear, recently announced the end of his position at FENDI and will focus on his role as the design director of DIOR. Kim Jones began to be responsible for the design of FENDI women's wear and haute couture four years ago, but the industry generally believes that Kim Jones' performance in DIOR men's wear is significantly better than that in FENDI, and the collaborations with Nike and Stone Island are both from him.
Richemont Sells YNAP, and Its Former Rival Mytheresa Takes Over
Luxury groups are collectively getting rid of the "hot potato" of vertical e-commerce. After Kering divested Farfetch, Richemont Group recently announced that it will sell YNAP to the German luxury e-commerce group Mytheresa. The latter has achieved double growth in revenue and profit in the past year, in contrast to Farfetch, which burns money to expand its scale. After the acquisition is completed, Mytheresa will form a group with three unique e-commerce platforms, including: MYTHERESA, NET-A-PORTER, and MR PORTER. Mytheresa will also separate the discount e-commerce business (including YOOX and THE OUTNET) from the luxury department to build a simpler and more efficient operating model, thereby promoting revenue growth and improving profitability. Richemont Group expects to write down about 1.3 billion euros in YNAP's net asset loss for this transaction.
Reference: Hypebeast, Fashion Business Daily, Luxury Daily, etc.