The largest US department store operator, whose flagship building in Manhattan is a major tourist attraction, blamed a bigger-than-expected decline in tourist spending for the shortfall, along with weak demand for its own-brand women’s sportswear and for warm weather apparel.
Total tourist numbers have fallen sharply partly because of the higher US dollar. And the trade war with China has caused a 2.8 per cent drop in the number of Chinese citizens visiting the US in the first six months of the year, Reuters reports.
The trade war is expected to hurt Macy’s – along with most retailers – as it will be hard to resist price rises as costs start to climb.
Yahoo Finance sees Macy’s current numbers – shares down 60 per cent so far this year – as “terrifying” as the once-impregnable fortress has revealed itself to be “just another retailer”.
Discounting costs Luckin Coffee
Chinese startup Luckin Coffee has turned in a bigger-than-expected loss as costs ballooned on store openings and heavy discounts aimed at competing with Starbucks took their toll.
Luckin opened its doors early last year and listed its shares in May. It opened 593 new stores in the June quarter, for a total of 2963, about 1000 fewer than Starbucks. By year-end, Luckin aims to have 4500 stores.
Despite the loss, the company is satisfied with its progress as it aims to become the largest coffee network in China. It says that revenue grew 700 per cent during the quarter.
“We are pleased with the performance of our business as we continue to execute against our long-term growth plan,” chief executive Jenny Zhiya Qian told Global Coffee Report magazine.
JD sales rise 23 per cent
Chinese e-commerce giant JD exceeded revenue expectations in the June quarter, as net sales rose 23 per cent to 50.28 billion yuan ($10.6 billion).
The company has cited forays into the convenience-store sector and supermarkets, as well as the harnessing of artificial intelligence in its advertising and logistics operations for the improved result, as it tries to be less reliant on its core online retail platform for growth.
Net income reached 618.8 million yuan ($129.8 million), a significant turnaround from the 212.4 million yuan ($44.6 million) net loss of the same period last year.
The company’s logistics business broke even during the quarter.
Discussing the results during an analyst briefing, a senior executive said the company was now turning its attention to lower-tier Mainland China cities for growth, hoping to broaden its customer base. That strategy has been working for JD’s archrival Alibaba.
Chinese lean on brand ambassadors
Chinese brand ambassadors of fashion labels from Coach to Givenchy have severed ties with the companies over products which they say have violated China’s sovereignty by identifying Hong Kong and Taiwan as countries.
The brands are the latest to get into hot water over political issues in China, which has been more assertive in its territorial claims and how it expects foreign companies doing businesses in China to describe them.
Italian luxury label Versace and its artistic director, Donatella Versace, apologised last Sunday after one of its T-shirts, depicting the territories of Hong Kong and Macau as countries, was criticised on Chinese social media.
Jewellery retailer Swarovski has also apologised for implying Hong Kong is not part of China following the resignation of its Chinese brand ambassador, Jiang Shuying.
Coach’s China ambassador, supermodel Liu Wen, said on Weibo that she had severed her endorsement deal with the New York-based label over a similar T-shirt, which also listed Taiwan as a country even though Beijing says the self-ruled island is a renegade province.
“I apologise to everyone for the damage that I have caused as a result of my less-careful choice of brand!” she said in a Weibo post that was “liked” hundreds of thousands of times.
Steinhoff aims to slim down
Scandal-hit Steinhoff says its only hope for survival is to sell off assets to become a retail-focused holding company, as it fights to recover from 2017’s $10 billion accounting fraud and share price crash.
At the South African company’s first public investor presentation since the scandal broke, Steinhoff said it had already sold a number of assets that did not align with its recovery plan.
It said also had refinanced some €9 billion ($14.7 billion) of debt in its overseas operations which include brands such as Poundland in Britain and France’s Conforama, after pushing the deadline date back repeatedly.
Reuters reports that the company is now up to date with its financial reporting and expects to publish an unaudited quarterly update for the three months ended June 30 on August 29.
H&M backs social enterprises
As pressure mounts to end throwaway consumerism, H&M, the world’s second-biggest fashion retailer, says it will sell homewares made by two social enterprises – businesses that aim to do good as well as make a profit – in H&M Home and Arket stores in five European countries from late August.
Products will include lampshades made with banana leaves and artisan-crafted trays and baskets, with a view to job creation and providing help for people and communities that are struggling.
Critics, however, say that for a fast-fashion retailer like H&M, whose growth depends on selling more and more stuff, to embrace environmental campaigns is just greenwashing.
Japan sales fall for 7-Eleven
Japanese convenience-store chain 7-Eleven has suffered its first year-on-year downturn in more than nine years.
The decline in monthly sales throughout the chain has been attributed to heavy rains and the hack of its 7Pay e-payment platform last month, which prompted customers to use rival services.
Sales chainwide dropped 1.2 per cent last month, with a 5.6 per cent decline in same-store customer traffic. The inclement weather has also affected sales of particular items such as drinks and ice cream.
7-Eleven’s same-store sales receded 3.4 per cent this month, while the number of franchises grew 2.7 per cent to 20,990 stores.