Luxury brands increasingly focus on travelling shoppers

Luxury brands are stepping up the battle for travelling shoppers with more outlets at airports and on cruise ships, tapping into one of the fastest growing sections of the market that looks set to keep booming thanks to soaring numbers of Asian tourists. Revenues from travel retail, which also includes sales on airplanes, rose 9.4% in 2012 to Є43 billion, according to market research from Monarch Capital Partners and others. It should reach €50 billion this year and nearly double in size by 2020. "This channel is becoming more and more important," Bonno van der Putten, Managing Director of retail experts Monarch Capital Partners, said. "People are spending more time in airports where the shopping experience and environment has become increasingly entertaining." Lingerie and beauty product supplier Victoria’s Secret for example recently opened a couple new beauty and accessories stores across Europe. Victoria’s Secret and Monarch Capital co-operate these stores in partnership with other local travel retailer groups The new Victoria’s Secret stores aim to surround travellers in luxury and have modern façades with dynamic storefronts that boast an air of sophistication. The stores will also showcase both its brand identity and range of products with a “gallery of iconic black and white images and video walls broadcasting footage of the Victoria’s Secret Angels”, according to Victoria’s Secret The airport stores obviously will focus on a fashion-forward range of beauty products and accessories designed for the modern traveller. Shoppers looking for beauty products will find fragrances like the Victoria’s Secret Bombshell, the newly-launched Fabulous collection and other products. Travel-ready items such as signature lip glosses and body-care products will also be available. Monarch also co-operates other airport concessionaire operations among which the French luxury brands Hermes and Chanel, the latter, the world's 2nd-biggest brand behind Louis Vuitton by sales, and has boutiques in four Asian airports and one at London, whereas there are plans to open a boutique in Paris Roissy Charles de Gaulle airport and another in Dubai. Chinese tourists, who barely featured in luxury brands' customer statistics a little over a decade ago, now make up 29% of global luxury spending, according to market information That trend is set to continue, and forecasted is nearly half of all air traffic in the medium term will come from the Asia Pacific versus 37% now. Though most luxury brands raised prices, particularly in the €-zone and in Japan, to make up for currency moves, van der Putten estimates that over 2/3 of luxury spending by mainland Chinese was made overseas in 2013, due partly to local duties. According to Monarch Capital, Europe remains the cheapest market for handbags with prices 9% below those in Hong Kong and 28% below mainland China, while the yen's weakness has played in favour of luxury shoppers in Japan. Monarch Capital expects the Chinese travel market will grow at a compound annual rate of about 11% from 2012 to 2030. Chinese urban travellers took about 500 million domestic and outbound trips in 2012, spending about €200 billion, and it expects those numbers to increase to 1.7 billion trips and $1.8 trillion in spending by 2030. Hermes, which has 50 boutiques in airports around the world, is turning these into proper free-standing shops to better tap the booming market. Van der Putten says that this channel affects the customers that are more interested in luxury than the average and that travel retail represented a significant portion of Hermes's total sales. According to van der Putten is also L'Oreal, the world's biggest cosmetics group and maker of Lancome creams and Yves Saint Laurent lipstick, strongly committed to travel retail, creating a dedicated division to travel retail Sales from travel retail generate 15% of total revenues at L'Oreal's luxury division and 12% for rival Guerlain (LVMH). Perfume and cosmetics represent the biggest product category for travel retail with 28% of the market, ahead of wines and spirits with an 18% market share, fashion and accessories with 13.5% and then watches and jewellery with 12.2%. Monarch Capital’s retail division works with LVMH on plans to launch a new retail concept called Galleria, specially designed for travel luxury shoppers. It was already pointed out earlier that the global luxury and cosmetics product makers are there to get their piece of the cake in new and emerging markets, cutting their dependence on mature markets in Europe and the U.S, where they are facing a lower consumer spendings, depressed economic environments amid the general macroeconomic slowdown.

Chanel acquires tannery provider to secure luxury bag supplies; photo Djamila Celina Melcherts by Bonno van der Putten

Chanel acquires tannery provider to secure luxury bag supplies; photo Djamila Celina Melcherts Chanel has acquired its long-time lamb hide provider, the French tannery Bodin-Joyeux, in the latest purchase by a luxury brand of a partner that supplies top quality materials. Chanel, which belongs to the Wertheimer family, is the 2nd biggest luxury brand in the world, behind Louis Vuitton and ahead of Ralph Lauren, with nearly € 6 billion in estimated annual sales. Like rival Hermes, Chanel has been buying up partners to guarantee long-term supplies and control quality, from plant growers for its Chanel No.5 perfume to embroiderers such as Lesage for its couture collections. The trend toward vertical integration - control from the raw material to the shop shelf - gives luxury brands a competitive advantage, raises barriers to entry and helps them defend the high-quality image they want associated with their products. Bodin-Joyeux is the first tannery Chanel acquired, employing 100 people in central France. It is one of Chanel main suppliers of supple lamb leather, known for its silky feel and used to make the brand's popular 1,500-euro quilt leather bags. Chanel still relies on about 15 different tanneries and noted that the average price of high quality lamb leather was rising as people were eating less meat and demand kept growingand production is not growing. Prices of lamb skin had risen by about 25-30 percent in the past 3 to 5 years, about the same order as for calf leather. Chanel, which started buying up partners in the late 1980s, today owns several niche fashion suppliers including Lesage, the feather specialist Lemarie, the hat maker Maison Michel and the glove-maker Causse. Last year, it acquired the Scottish cashmere company Barrie Knitwear. Gucci-owner Kering, Hermes and LVMH have also been buying up tanneries in an effort better to control their supply chain. Recently, Hermes and LVMH even bought crocodile farms. Learn more: Bonno van der Putten Monarch Capital Partners

International lingerie chain Victoria's Secret keeps expanding: new store Dublin Airport in the Republic of Ireland

International lingerie chain Victoria's Secret keeps expanding: new store Dublin Airport in the Republic of Ireland The new Victoria’s Secret store has opened at Dublin Airport Terminal 2 – and more stores might follow in the city centre. The store will be retailing some of the brand's most sought-after beauty and cosmetic products. Products are also directed towards the jet-setting clientele, with accessories such as a branded passport holder. The interior of the shop is a design similar to the US stores, with black-cherry wall fixtures, as well as videos broadcasting images of the brand's beautiful Angels. Expanding with new retail stores and improving current business is good for Victoria’s Secret. The company never really stops tinkering with its shops and operations, whether that’s adding more square meters to stores or getting products rolled out faster. When the chain is able to pull several of those elements together – a process they call “market intensification” – the results have been impressive. With only 3 years of learning and testing, Victoria’s Secret wants to bring the package of improvements to more markets around the US. This “ market intensification” test began in 2009 with around 30 stores in the US. More space and product was added, new staff was hired and trained, and merchandise flow was improved. The results were impressive; the business was boosted by nearly 70% in stores. Thinking about that in particular markets over a three- or four-year period, it is clear there’s a lot of sales growth opportunity through selling more effectively. The intensification program is a step beyond general store expansions. Victoria’s Secret has added additional square metrage to 219 stores between 2007 and 2012 and with extra space going toward ventures like the Pink brand and, more recently, tangential categories like sport and loungewear. Victoria’s Secret currently has about 1,050 stores around the world.

Galeries Lafayette may soon open an outlet in Russia to tap into the country's € 5.0 billion luxury goods market.

Famous French top-end department store chain Galeries Lafayette may soon open an outlet in Russia to tap into the country's € 5.0 billion luxury goods market. Rumors of Lafayette's impending arrival were confirmed by several Russian retail expert firms like Monarch Capital Partners, who said the chain has been searching the city for retail locations. In 1995, Lafayette — which amassed 2012 sales volume of € 2.3 billion in some 250 stores across the globe — made an unsuccessful attempt to gain a foothold on the Russian market with a handbags store in Red Square's upmarket GUM shopping centre. Established in Paris in 1894, Lafayette attracts over 1 million customers to its outlets every day. In the running to become Lafayette's local partner may be Luxury goods retailer Mercury Group, which owns the lavish TsUM department store and Tretyakovsky Proyezd in central Moscow, according to Bonno van der Putten from Monarch Capital Partners, which specializes in bringing major foreign retailers to Russia. Lafayette will have to overcome a number of obstacles on to the Moscow market — where the country's demand for Luxury goods is clustered — such as the high cost of leasing commercial space and stiff competition. Big-brand fashions in Russia still cost about 50% more than they do in Paris or London The total Russian fashion retail market expanded 11% last year to about €45 billion, of which Moscow accounted for €6 billion, says Bonno van der Putten. Future growth and expansion will come from the regions with cities like St. Petersburg, Sochi, Yekaterinburg, and Samara. Van der Putten estimates that the fashion market in Sochi, home to the Winter Olympics in February, is set to grow as much as 10% a year, more than twice the pace of Moscow

#marketing #fanpower #privateequity #venturecapital #Funding #IPO #Tech #Newmedia #youngandminted #CEO #Startups #EDM #DJ #Seedcapital #entertainment #ADE13 #edc #tomorrowland #escapefromwonderland #kandi #playboy #edmlife #supermodels #vegas #miami #ibiza #house #music

Zulily shares on NASDAQ IPO through the roof; Big day for Pri... on Twitpic

Zulily shares on NASDAQ IPO through the roof; Big day for Pri... on Twitpic

Puma Cuts Forecast FY Earnings; Adidas Up

Puma Cuts Forecast FY Earnings; Adidas Up Puma, Europe’s 2nd-largest sporting-goods maker, lowered its full-year profit forecast, saying it will book one-time charges of about €130 million this quarter. The costs relate to the closing of a product development center in Vietnam and the transfer of international product teams to Herzogenaurach, Germany where the company is based, from London, Puma said in a statement Earnings for the year will be positive but significantly below those of 2012, said Puma, Previously, rival Adidas forecasted rising profits. Puma, which is closing stores, eliminating jobs and cutting product ranges to combat declining footwear sales, also reported Q3 earnings that missed estimates. Puma is still in a difficult transformation process. The shares are being supported by speculation that controlling shareholder Kering may seek a full takeover Q3 earnings before interest, tax and special items fell to € 80 million from €99 million a year earlier, trailing estimates of about € 81.5 million. A 1.4% decline in currency adjusted sales is in line with full-year guidance Currently Kering owns about 84% of Puma. The French company has been buying Puma shares bit by bit when they were available on the market Adidas reported a bigger gain in Q3 profitability than analysts had estimated and said the build-up to the 2014 World Cup in Brazil will start boosting revenue this quarter. Read more: and http://www.bloomberg.com/news/2013-11-08/puma-cuts-full-year-earnings-forecast-on-impairment-charges-1-.html

Investment Bank Rothschild to advise on Poundland’s flotation

Investment Bank Rothschild to advise on Poundland’s flotation

Retailer Poundland has lined up Rothschild to advise on its upcoming public offering, which is expected to value the firm at more than £700m. The investment bank, which declined to comment on the issue, is expected to bring in other advisers to work on the flotation in the next few weeks. The group is looking to double its British stores to more than 1,000 and expand in Europe, giving it a growth story to sell ahead of a stock market listing. The group opened 69 new stores in Britain and Ireland in 2012-13 and plans 50 new stores in 2013-14, having already opened 30. Stronger equity markets have helped revive new listings in Europe this year. Investors have clamoured to tap into the discount chain sector in recent times, as recession-stricken shoppers gravitate towards bargain purchases. Poundland, which was bought by private equity firm Warburg Pincus for £200m in 2010, posted record sales last year of £880m. Poundland and Warburg Pincus both declined to comment on their strategy yesterday. Poundland was founded as a single store in Staffordshire in 1990. See more at Learn more: http://youtu.be/1Lz_DYDyQIc and http://www.cityam.com/article/1383542635/rothschild-advise-poundland-s-flotation #marketing #fanpower #privateequity #venturecapital #Funding #IPO #Tech #Newmedia #youngandminted #CEO #Startups #EDM #DJ #Seedcapital #entertainment #ADE13