Founders Domenico Dolce and Stefano Gabbana told La Stampa newspaper that after the pandemic, the fashion industry will need to adapt to the new lifestyles of customers, with fewer fashion shows and more online shopping.
Losses have already begun. The group posted sales of €1.38 billion ($2.3 billion) in the year that ended in March 2019.
“The creative side of the company works; the productive one will restart at full regime only when there won’t be social distancing anymore,” the duo said.
The COVID-19 crisis has kept customers at home and forced retailers to shut stores, putting a sudden crushing halt to a decade of spectacular growth for high-end brands.
Global sales of luxury goods are expected to slump by 50 to 60 per cent in the second quarter of the year, Reuters said.
Uniqlo gradually gets back to business
Casual clothing chain Uniqlo has reopened more stores in the past week and plans to resume business at more shops in coming days as governments ease coronavirus restrictions, its owner Fast Retailing has announced.
The company, which temporarily closed 311 stores in Japan a month ago, said only 215 out of 813 stores in Japan were still closed, and that more would reopen in the coming days, Reuters reports.
Around 290 out of 1433 Uniqlo stores outside Japan were still closed, compared with more than 400 closed in early April, the company said.
The company’s 22 Australian stores reopened on Monday, May 11, with limited operating hours.
Amazon asks for tougher gouging laws
Online retailer Amazon has written an open letter to the US Congress, asking it to pass a law against price gouging during times of national emergency such as hurricanes or the current pandemic.
Amazon says it has already removed more than a half million items from stores, suspended nearly 4000 selling accounts in the US store, and given information to US federal prosecutors and state attorneys about sellers that Amazon suspects put excessively high prices on products in high demand, such as the infamous US$400 bottles of hand sanitiser.
But the company says it can’t fight this alone because of highly inconsistent laws and standards from state to state, and even if Amazon kicks the seller off its platform, it often faces no legal penalties.
“As The Verge pointed out, “Unsurprisingly, Amazon’s proposed legislation would ensure that only the party that sets the price – like, say, a bad third-party Amazon retailer – be held liable for the inflated price, not the storefront – ie, Amazon – that hosts that seller and facilitates the sale”.
Dada Nexus seeks US listing
Chinese online grocery firm Dada Nexus has filed for an initial public offering on the US Nasdaq exchange which is expected to raise some US$500 million ($774.5 million).
Dada, a joint venture company of Chinese e-commerce firm JD.com, operates JD-Daojia, a local on-demand retail platform, and Dada Now, a local on-demand delivery platform.
Funds associated with venture capital firm Sequoia Capital and JD Sunflower Investment are among its principal shareholders.
The company plans to use the proceeds to expand its business operations, including investing in technology and research and development, implementing its marketing initiatives, and growing its user base. It also plans to fund working capital needs and potential strategic investments and acquisitions, Tech in Asia reports.
IPOs have slowed in the US since the coronavirus pandemic began, however, another Chinese group, Kingsoft Cloud Holdings, posted a strong debut in recent weeks, raising US$510 million with shares up more than 25 per cent, Reuters reports.
Luxury players urged to merge
Hedge fund Mudrick Capital Management has asked the independent directors of troubled US luxury department store group Neiman Marcus to explore a merger with rival chain Saks Fifth Avenue, now owned by the Canadian Hudson’s Bay Company.
Neiman Marcus filed for bankruptcy early this month after widespread store closures in response to the COVID-19 pandemic resulted in plunging sales. Mudrick holds roughly US$5 billion ($7.75 billion) of its debt, according to Reuters.
However, analysts have been naysaying this idea since it was first proposed years ago, saying the two banners could end up engaging in a sort of sibling rivalry that helps neither.
“Saks and Neiman go head to head fighting for substantially the same customer,” Mark Cohen, director of retail studies at Columbia University’s Graduate School of Business, told Retail Dive when a merger was floated three years ago.
“So, what often happens is you get formerly hyper-competitive players who continue to be hyper-competitive and are a part of the same company.”