Resort 2011 Trend:The Long Way
Whether slender or swirling, resort’s ankle-grazing dresses have a decidedly breezy air. See WWD's collection of long silhouettes for Resort
Consumer sentiment fell for the second straight month in July, a potentially bad omen for the back-to-school selling season. The Conference Board’s Consumer Confidence Index dropped to 50.4 for July, down from 54.3 in June and 62.7 in May. Economists were expecting a milder decline to 51. Shoppers were more negative in their take on current economic conditions and in their outlook. “Consumer confidence faded further in July as consumers continue to grow increasingly more pessimistic about the short-term outlook,” said Lynn Franco, director of the group’s Consumer Research Center. “Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves. Given consumers’ heightened level of anxiety, along with their pessimistic income outlook and lackluster job growth, retailers are very likely to face a challenging back-to-school season." The Present Situation Index fell to 26.1, from 26.8 in June, and the Expectations Index pulled back to 66.6 from 72.7 a month ago. read more
(bloomberg)LVMH First-Half Net Income Rises
LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, reported first-half profit that beat analysts’ estimates as sales of fashion and leather goods accelerated in the second quarter. Net income rose 53 percent to 1.05 billion euros ($1.36 billion), the Paris-based company said today in a statement after the market closed. The average estimate of 10 analysts compiled by Bloomberg was 956.2 million euros. Second-quarter sales advanced 22 percent to 4.63 billion euros. Demand for luxury goods is returning as Chinese shoppers buy more high-end clothing and accessories, and U.S. and European retailers replenish inventories after the recession. Hermes International SCA, the French maker of luxury handbags and silk scarves, said last week that revenue may grow as much as 12 percent this year, excluding currency swings. “Visibility on results for the sector and particularly for LVMH should be quite good over the next 12-18 months,” HSBC analysts Erwan Rambourg, Antoine Belge and Sophie Dargnies wrote in a July 7 note. Demand for Louis Vuitton luggage and Hennessy cognac will remain “resilient” and currency fluctuations will offer a “substantial boost” to margins, the analysts wrote. They have an “overweight” rating on the stock. LVMH fell 2.77 euros, or 2.9 percent, to 92.26 euros today in Paris. The shares have gained 18 percent this year, giving the maker of Moet & Chandon champagne and TAG Heuer watches a market value of 45.2 billion euros.
“In the current recovery from the economic crisis, LVMH will continue to gain market share thanks to the numerous product launches planned before the end of the year, to its geographic expansion in promising markets and to its cost management,” the company said in the statement. First-half revenue increased 16 percent, or 14 percent excluding currency swings and acquisitions, LVMH said. On a local currency basis, sales gained 18 percent in the U.S., 21 percent in Asia and 11 percent in Europe, the company said at a press conference. Sales rose 27 percent in China. At the fashion and leather-goods unit, the company’s largest, sales climbed 18 percent, LVMH said. Watch and jewelry revenue advanced 28 percent, slowing from the first-quarter’s 33 percent surge, as restocking effects faded. Sales of wines and spirits gained 21 percent, while perfume and cosmetics advanced 12 percent, LVMH said. Revenue at the selective retailing unit, which includes Sephora and DFS, rose 14 percent. read more
Fashion retailer Forever 21's debut collection of maternity wear, Love 21, has some concerned that the brand is targeting (and thus condoning) pregnant teenagers. Love 21 is now available in a select locations in Arizona, Alaska, California, Utah and Texas, which also happen to be the U.S. states with the highest rates of teen pregnancy, according to a January 2010 report from the National Campaign to Prevent Teen Pregnancy. Forever 21 EVP Larry Meyer responded: "Forever 21 did not create, design or distribute Love 21 Maternity to target, or appeal specifically to pregnant teens. Any relationship between teen pregnancy rates and the locations of our stores is unintentional." While the "21" in the maternity collection's name echoes the parent brand, the flap also begs the question: so what if Love 21 appeals to moms-to-be of all ages? Don't teens deserve fashionable maternity wear, too? Take it from us: Staying fashionable while pregnant tends to increase the budget in tandem with the belly size, so Love 21's $8.80 cropped leggings and $19.80 cardigans would be welcomed by any mom-to-be. Controversy is nothing new for the brand, which was founded in 1984 by Don Chang, a South Korean immigrant. It has a track record of fashion designers balking at its copycat designs, prompting lawsuits from the likes of Anna Sui and Balenciaga. Chang's original retail moniker of Fashion 21 changed to Forever 21 when its range of trendy, moderately-priced clothes won favor with customers under 21, although it has expanded beyond teen apparel in recent years. Today, the retail chain bills itself as affordable, one-stop shopping for all, with men, kids and women's apparel sections, where high school and college-age shoppers can be found browsing the racks next to career women and moms. read more
Both retail stocks and the broader market slinked back into the black for the year Monday as investors retraced their steps following a sharp drop in the wake of Europe’s debt crisis and a drop-off in the U.S. consumer’s enthusiasm about spending. The S&P Retail Index rose 1.8 percent, or 7.51 points, to 415.68 Monday, giving the measure of overall retail stocks a 1.1 percent gain for the year. That means investors who bought into retail Monday morning fared better than those trading into the sector almost seven months ago. Retail stocks are still down 16.8 percent from their April high of 499.41. Of the 172 stocks tracked by WWD, The Bon-Ton Stores Inc. had the strongest showing for the second straight trading session with a gain of 11.5 percent to $9.83. Over the two days, shares of the regional department store firm shot up 23 percent despite no apparent developments at the company. Over the past week or so, investors have looked past signs the economic recovery will remain frustratingly tepid and pushed stocks higher on the strength of second-quarter results from big corporations. And they started off the week with some encouragement from the down — but not totally out — housing sector. Sales of new homes shot up to an annual rate of 330,000 in June, up 23.6 percent from May, according to the Commerce Department. The sales rate is still 16.7 percent below a year earlier but was somewhat better than economists were expecting. The Dow Jones Industrial Average advanced 1 percent, or 100.81 points, to 10,525.43 Monday. That puts the U.S. market up 0.9 percent for the year. For investors to do better than Wall Street in a major market, they would have had to travel to Frankfurt, where the DAX has posted a 4 percent rise since Dec. 31. Major indexes in London, Paris, Tokyo and Hong Kong are all down for the year. read more