Zara excels, H&M stagnates, GAP crashes

Zara can cope with the rising cotton and oil prices better than H&M and Gap can. While Gap has released a profit warning and H&M only achieved a minimal (2%) growth, the Spanish brand saw its owner Inditex grow a huge 11% over the past quarter.


Inditex leads the way in 2011

The main victim of the ever rising raw material prices is American GAP, whose profit warning last week predicted a drop in profits of 22% this year. Swedish H&M's turnover did grow by 2%, but that was not enough to match the predicted 5.4%.


With 27.6 billion Swedish crowns (3.03 billion euro), H&M's monthly turnover was 80 million euro shy of what the analysts had estimated. The news from Spain is significantly better: Inditex's net result for this financial quarter reached 332 million euro (well better than expected), while their turnover soared to 2.96 billion euro (+11%).


Higher costs, higher salaries: lower margins

Inditex too suffered from the rising costs and saw its bruto margin drop from 59.9 to 58.8%, but the situation for the two others is far worse. Especially the rising salaries in China are causing these bad results – while Inditex produces mainly in Europe and Northern Africa, where salaries have grown less than in China.

Another factor is threatening all three chains: the European and American consumer, hit hard by the global crisis and inflation, is spending less – and this reinforces the influence of higher prices for raw materials and energy. Again, the Spanish empire, who have just announced the opening of a Zara web shop for America, is better off: it has a strong presence in markets like Eastern Europe, that are still growing fast.


» Read more


20% growth for s.Oliver in 2010 "best result ever"

German lifestyle group s.Oliver has realised one if its biggest growths ever: by breaching the 1 billion euro barrier for its 2010 turnover, the group grew 19.8% last year. The group called the 1.07 billion euro turnover “one of its most successful achievements ever”.


Big grow in wholesale, huge growth in retail

Owing to a new shop concept and several new stores on key locations, the retail activities generated 443 million euro – up to 35% of the group's total. Notable successes were the new flagship stores in Oldenburg and Freiburg, the 'vintage' store in Stuttgart and the very first accessory shop in Frankfurt. In total, s.Oliver opened 30 own stores and 49 franchise stores last year.

The group's main activity remains wholesale, despite the huge growth of its own retail and the 'slower' growth of wholesale (still a very respectable 10.85%): the latter generated slightly over half of the yearly turnover (537.8 million euro). Franchising is far behind with only 85.4 million euro of yearly turnover.


Home sweet home, Belgium main foreign market

Home market Germany remains the biggest country for s.Oliver, but export rose to 27% of the group's sales. Belgium is the main foreign market – followed by the Netherlands, Austria and Poland. The group started a separate division for Hungary last year, as well as a joint venture for Slovenia and Croatia.

2011 will be another year of major expansion for s.Oliver, focussing on Eastern Europe and Asia. 36 new shops have already been opened this year, raising the total to 183 own and 312 franchise stores. The group employs 6470 people in over 30 countries.

» Read more


Puma adopts revolutionary eco-friendly account

While almost every company in the world talks about “corporate social responsibility”, only very few companies really take another step. Puma on the other hand has announced that it is adopting one of CSR's most radical ideas: the “triple bottom line”. While a normal, “single bottom line” only totals the financial profits and losses, the “triple bottom line” includes two other criteria: social impact and environmental footprint.


Following the "dean of CSR"

Puma is one of the first companies in the world (parent holding PPR proudly states “the very first one”) to adopt an “Environmental Profit and Loss” account to make its social and ecological actions visible in its financial accounts. Its aim to include not only numbers that matter to the stakeholders, but also those that matter to the workers and the planet closely resembles the “triple bottom line accounting” proposed by British CSR authority John Elkington in 1988. The “dean of the CSR movement” stated to be very pleased with Puma's move towards social responsible action. 


Extra debt: 94.4 million

In a first phase, Puma will include CO2-emissions (e.g. by cows used for leather production), the use of water (for cotton growth) and the damage done by chemicals; the three add up to a debt to the planet of 94.4 million euro in 2010.  A second phase would include other environmental issues like waste disposal and use of land, but also social aspects like honest wages and working conditions. On the plus side of the “second and third bottom line”, Puma wants to include the creation of jobs and charity projects. 


Encouraging other companies to join

For proponents of corporate social responsibility, this new system is a milestone: the 'E P&L' finally allows to assign a monetary value to the environmental impact of corporate decisions: a very important tool to convince shareholders and managers of the “good cause” using hard data. PPR hopes that other companies soon will follow its example: “Puma and PPR want to be a catalyst for others to join an industry-wide engagement. We hope that other companies too would integrate into their business models the true costs of their reliance on ecosystem services.” Jochen Zeitz, chairman  of Puma, also states that “PPR will encourage and collaborate with the industry to adopt this tool”. 


Ambitious goals for 2015

Apart from raising awareness and setting a good example, Puma's goal for the next four years is reducing its use of energy, carbon and water by 25% and raising the proportion of sustainable packaging to 100%. The big cat will also address all its suppliers to help them in this quest.

» Read more


Pierre Cardin looking to sell fashion empire

French couturier Pierre Cardin is looking to sell his fashion empire to anyone willing to pay a ludicrous amount for it. The 88 years old 'living legend' has no heirs. Analysts estimate the group's worth in the 200 million euro area. 


“I know I will be gone in a few years time”, Cardin told the Wall Street Journal, “but the business needs to continue. I want to prepare that transition, and remain as creative director. That would be excellent for the brand's image.”


Pierre Cardin claims to have 450 employees, but only has one shop left. The group's worth lies mostly in royalties from products all over the world that proudly boast the names of Pierre Cardin or his restaurant Maxim's, and in his real estate in central Paris and southern France. 


10 million x 100 x 1000 = ?

How high the ludicrous amount is, is not entirely certain: according to the Wall Street Journal, Cardin wants 10 million (euro) per country and per country, so “10 million multiplied by 1000 products, multiplied by 100 countries is one billion euro.” It is unclear however if Cardin made a mistake in calculus (the result should be one TRILLION euro), a mistake in translation (as in the European “long scale”, the result is indeed “un billion euro”)... or simply a joke. Whether one billion or one trillion, the amount exceeds by far both the analysts' guesses of 200 million and Cardin's earlier ask price of 500 million  - which remained unanswered.


Iconix interested, Louis Vuitton is not

French press agency AFP mentions American interest from Iconix Brand, while the two main French luxury groups (LVMH and PPR) would not be interested in a takeover. They “want to control their own brands, which is not possible in Cardin's licensing policy. 


In 2009, Cardin already sold 32 licences for the Chinese market for 200 million euro to Jiansheng Trading Company and Cardanro. 


» Read more