Fashion retail stocks such as Nike tumbled; Most of lululemon's new stores are opened in China; On Running adopts a single-CEO structure | Brand Weekly Report

Big News

New Tariff Policy Announced, North American Fashion Retail Stocks Plummet

North American fashion retail companies have received the first wave of impact after the Trump administration announced the "reciprocal tariffs."

During the pre - market session on Thursday, lululemon's stock price dropped by more than 10%, Ralph Lauren's by 7%, and the stock prices of Tapestry, Capri, and PVH Corp. fell by about 5%. These declines exceeded the nearly 4% drop in the S&P 500 index futures.

The footwear retail sector was also not spared. Sketchers' stock price dropped by 22% to $46.15, Crocs by 17% to $92.88, Nike by 13% to $56.50, and Deckers by 17% to $98.01.

US President Trump announced this week that higher tariffs would be imposed on Vietnam, Cambodia, and Indonesia, which are the locations of factories for many fashion footwear companies. Vietnam is the second - largest clothing exporter after China, and its products will face a 46% tariff. The tariffs for Cambodia and Bangladesh are 49% and 37% respectively. According to the Wall Street Journal, in 2024, Nike produced 50% of its footwear products in Vietnam, and 90% of the shoes of the Swiss running brand On were manufactured in Vietnam.

The United States is one of the largest consumers of clothing and footwear in the world, and it is a crucial market for both US and international companies. However, more than 98% of clothing and about 99% of footwear in the US are imported from outside the country. Therefore, almost every fashion item sold in the US will be subject to additional tariffs.

According to the North American Fashion Industry Association, US - made clothing, footwear, and bags have always accounted for only 3% of the total consumption in the domestic clothing market. "We've always been paying high tariffs, but it has had little impact on the localization of the manufacturing industry."

However, Nike expects the tariffs to only affect its profit margin in the fourth quarter. Chief Financial Officer Matthew Friend said in an earnings conference call, "We expect the gross margin in the fourth quarter to decline by about 400 to 500 basis points, including the restructuring expenses from the same period last year."

Although no retail stocks were spared, some analysts said that retail brands with wealthy customers are more likely to retain customers even when prices are raised. This analyst specifically mentioned two brands under Deckers, HOKA and On. However, the fate of listed luxury companies in the past year may indicate that the spending power of the "ultra - rich" is very limited and elusive.

The giants are already making preparations. LVMH started investing in factories in the United States during Trump's first term and currently has three factories in California and Texas. In January this year, LVMH President Bernard Arnault said he intended to further strengthen production in the United States.

On Adopts a Single - CEO Structure, Entering a Phase of Rapid Development

The Swiss sports brand On, which just celebrated its 15th anniversary, has witnessed a series of major personnel changes.

Co - Chief Executive Officer Marc Maurer will leave the company on June 30. Maurer joined On as Chief Operating Officer in 2013 and was promoted to CEO in 2021. After On completes the CEO transition, current Chief Financial Officer Martin Hoffmann will assume the role of single CEO on July 1, 2025, and will continue to serve as Chief Financial Officer during this period. Previously, On had always adopted a co - CEO system.

According to RetailDive, after his departure, On's founders will acquire Marc Maurer's 36% Class B shares, and the remaining shares will be discussed at the next annual meeting to determine whether they will be converted into Class A common stocks.

Needham analyst Tom Nikic said in a report, "This change is not caused by any fundamental problems within the company." He added, "We believe that Martin Hoffmann has gradually become the 'face' of the company, and it should be a good idea for the company to operate under his leadership."

In addition to the CEO change, On also announced several C - suite personnel changes in its press release. These include Craig Jones, who joined from Levi Strauss and will serve as Chief Supply Chain Officer; former Dyson executive Scott Maguire, who will become On's Chief Innovation Officer; and Spotify veteran Katarina Berg, who will be the Chief People Officer, effective August 1 this year.

On said in the press release that the addition of new members and the restructuring of the existing leadership team are preparations for the company to ultimately achieve "global brand influence." In fiscal year 2024, On achieved revenue of 2.318 billion Swiss francs (approximately 19.042 billion RMB) with a 33% growth rate. Among them, the direct - to - consumer channel grew by 40.3%, and the wholesale channel by 22.8%.

New Arrivals from Brands

Uniqlo Launches Mainland China - Exclusive Sunscreen Jackets and Advocates "Moderate Sun Exposure"

As the temperature rises, sunscreen has become a hot topic again. Recently, Uniqlo launched a "Mainland China - exclusive" cool - feeling sunscreen jacket. It uses original yarn for sun protection and claims to have a sun protection factor of USPF50+. The "China - exclusive" feature lies in its new micro - fitted and short - style design, which reminds people of products like the "hot girl outfits" and popular pants in 2023.

Together with this sunscreen jacket, Uniqlo also launched the advocacy of "sunbathe as comfortably as you can," which may be a slight correction to the trend of "extreme sun protection" in the past few years. On social networks, many netizens have said, "Sun exposure is very important for my physical and mental health," marking a transition from extreme sun protection to rational sun protection.

To relieve people's anxiety about sun protection both physically and mentally, Uniqlo has also introduced many sunscreen jackets suitable for different environments, hoping to provide people with maximum "security." For example, there are sunscreen jackets with mild waterproof functions and breathable sunscreen jackets more suitable for outdoor mountain climbing.

Uniqlo's "China - Exclusive" Sunscreen Jacket

Marketing Stories

Puma Joins the Running Shoe War, Another Sports Brand Connecting Running with Daily Life

Recently, German sports brand Puma released a 60 - second advertisement called "GO WILD." In the ad, a marathon runner, a mother jogging with a stroller, a heart - broken girl, and a man walking his dog all start running for various reasons. The background music is the classic "Because I Got High" by Afroman in 2000, but the source of pleasure has changed from the hallucinogen in the original lyrics to the endorphins brought by running.

Puma China's advertisement interprets the spirit of GO WILD basically in line with the original meaning.

This is Puma's largest - scale campaign to date. Richard Teyssier, the global vice - president of brand and marketing at Puma, said that the creative idea for this advertisement came from actual consumer insights. In a survey of more than 10,000 consumers in the past year, they found that the group seeking pleasure in running and using running as a source of self - expression and inspiration accounted for 42% of the total. "So this advertisement is universal and at the same time very unique," he said. Two weeks after its release, the advertisement had received 4 million clicks on YouTube.

Catching the trend of making running shoes a part of daily life, Puma decided to increase its advertising investment by 40% this year based on 2024. The media mix includes TV, outdoor advertising, and social media.

In the global sports shoe market share in 2022, PUMA ranked fourth, only after Adidas, Nike, and Sketchers.

what's more

Maogeping Releases 2024 Annual Report, Hong Kong Stocks Soar 10% in a Single Day

The gross profit margin of "the first domestic cosmetics stock" Maogeping is approaching that of Moutai. The company's 2024 financial report shows that it achieved revenue of 3.885 billion yuan, a year - on - year increase of 34.61%. The gross profit was 3.278 billion yuan, with a gross profit margin as high as 84.4%.

Maogeping's Hong Kong stocks ended two consecutive days of decline on April 1 and soared 10.14%. Maogeping went public in Hong Kong on December 10, and as of the time of writing, its stock price had increased by 85.8%.

H&M Accelerates Digital Exploration to Attract Gen Z and Gen Alpha Consumers

H&M is undergoing a digital transformation, perhaps the most radical one in the fast - fashion industry. This Swedish fast - fashion company officially announced the use of AI models to attract more young people's attention.

H&M's contract with trend icon Charli XCX will be extended until this summer. In August last year, while performing in London, Charli XCX promoted H&M's holiday collection. H&M published all the items the singer wore in an editorial review on its independent website The Studio, which is similar to a fashion buyer's magazine and also sells the higher - priced Studio collection.

Jenn Volk, the digital head at H&M, said, "Digital has always been our conversion - driving channel. But what we really want to study is how to use digital channels to inspire customers' brand stories as much as possible and bring the brand fun we feel into life in the digital experience."

Shiseido Integrates Chinese and Travel Retail Businesses, Managed by the China - Region CEO

To change the "dual - track system" of travel retail and domestic counters, Shiseido has taken the first step. The company announced that starting from March 31, 2025, it will implement a strategic restructuring: integrating its Chinese business and travel retail business into a unified management unit, and appointing China - Region CEO Toshinobu Umezu to oversee both business segments. Philippe Lesné, the president and CEO of Shiseido's travel retail business, will officially retire. For a long time, travel retail has been an important growth engine for high - end beauty brands. Taking Shiseido as an example, the travel retail business has long been among the top three contributors to the group's business, second only to the Japanese domestic market and the Chinese domestic market.

GAP President on Recovery: If You're Influential Enough, Sales Will Eventually Take Off

Richard Dickson, the CEO of American fast - fashion pioneer GAP, recently said in an interview that if a brand is influential enough (relevant), it will eventually generate revenue. The CEO, who took office more than a year ago, has implemented a very effective recovery plan for GAP, with the core being to rediscover the brand's "originality," including launching a series of advertisements and works with contemporary cultural curators, artists, singers, and idols. In fiscal year 2024, GAP turned a profit, with net sales of $15.1 billion, a 1% year - on - year increase.

lululemon Plans to Open 40 - 45 New Stores in 2025, Mostly in China

lululemon continues to seek growth through offline expansion. Recently, this Canadian sports brand announced that it will open 40 - 50 new stores in the next year, with 10 - 15 in North America and most of the stores outside North America in China. In addition, the area of lululemon's existing and new stores will be expanded by 10%, which will be beneficial for selling more product categories. "We hope the stores can serve as the center for the brand to communicate with the community and consumers," the current CEO told investors. In the last quarter, lululemon's revenue in China increased by 39%, but same - store sales only increased by 3%, with the North American market showing the most obvious decline.

(Reference: RetailDive, Business of Fashion, Wall Street Journal)