Weekly Shop Report
Who's on the up and up and who's still struggling to survive. The results may surprise, or confuse, you.1
Oh this pesky recession. It drained the life out of the retail therapy business leaving Americans in search of shallow esteem boosts heartbroken…and broke but also surprisingly aware of happenings in southern Manhattan. As expected, the more lavish the luxury, the worse that company fared in the first half of 2009. Bottom lines continued to drop and for companies like Hermes, LVMH and Tiffany & Co., meaning the first half of the fiscal year was anything but profitable. LVMH was down 23% and rumors that Bernard Arnault contemplated separating the signature LV’s from the premium bubbly ran rampant while Francois Henri-Pinault (think Gucci, think YSL) rubbed his palms together and laughed evilly – muahaha, muahaha, muahahahahahaha.
In the land of opportunity, Tiffany & Co. remained positive siting industry control, new product development regulation and cost control as reliable strategies. Despite these efforts, the little blue boxes couldn’t immediately get Tiff out of the red. Tiffany & Co. expects total year sales to be down 10%. Hermes swears that this time they really hit their bottom line! But in store sales are up – thanks East Hampton! – everywhere but Japan, which confused us because aren’t emerging markets supposed to save lux retail. Or is Japan the only Asian country not “emerging?”
Oh and be sure to get your swine flu vaccinations! Why? Because as long as swine flu stays contained, you can travel. Internationally, retailers hope that during your travels you purchase Hermes scarves…and belts and shoes and perfumes and such. Duh. No seriously, the company’s CEO, said he anticipates “globalization” will boost luxury sales, especially his own, as long as the swine flu doesn’t re-rear it’s ugly head.
L’Oreal should be celebrating their 100th Anniversary! But, they were also down 3.6%. CEO John-Paul Agon says their strategy, according to the WSJ report, relies on unprecendented cost-cutting as well as the creation of a non-advertised, lower line product. By selling less expensive wrinkle erasers and smell well sprays and saving money on marketing costs, L’Oreal hopes to satisfy consumers’ need for a product they can actually purchase and their need to, er, make money.
Then yesterday, a week after everyone was reporting on the luxury versus normal dichotomy, the WSJ reported: “The whole luxury sector has bounced back.” Wow. The whole luxury sector? Again proving that we still don’t quite have a grasp of this whole recession thing. But as we know from our reliable, trustworthy financiers, the numbers don’t lie! Coach is up 40%, Ralph Lauren 43%, LVMH and Richemont (Cartier, Monteblanc, etc.) apparently samezees. So they aren’t selling the bubbly? Phew. Whose responsible for the bounce back? WSJ says a mixture of greedy Americans and Asians with money. Because rich Asians aren’t greedy, right?
In any case, retail was up 1.1% last week, and that is a fact. Baby steps here people. Baby steps.
http://www.ft.com/cms/s/0/7d53b85c-2f60-11de-a8f6-00144feabdc0.html — http://online.wsj.com/article/SB125139884831864295.html — http://www.wwd.com/business-news/#/article/business-news/tiffany-earnings-up-297-percent-2251187?navSection=business-news
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