Adding to the enormous pressure on prices facing retailers and vendors, China is now no longer the go to country for cheap manufacturing. This is for several reasons. One is that their factories are now much busier than last year and they can now be choosier about what prices they agree to. Two is the currency value changes that are not in favor of the Dollar or Euro. Three is the stance that the government has taken. They do not want to be the source of cheap labor that they have been. They are looking to increase their share of the high-tech and quality apparel and fashion production and are very willing to say goodbye to the low-end business that they built their economic strength on. Vietnam and Bangladesh are now the countries where opening price point product is being produced and their factories are filling up quickly.
Net-a-porter announced that they will launch a stand-alone site dedicated to better men’s fashion in January. This will be the second new business. They started Outnet, an off price site for women’s wear in April 2009. Net-a-porter was purchased by Compagnie Financiere Richemont (Cartier, Van Cleef & Arpels, Chloe, Dunhill, Montblanc) for 350 million pounds ($511 million) this past April. Annual sales for Net-a-porter were about $175 million last year, and it’s expected that the men’s site would generate 20% of the women’s volume.
Talbots announced that same store sales rose 2.4% for the first quarter and that the loss was narrowed from 44 cents a share last year to 8 cents a share this year. But its forecast for the second quarter was not bright and the stock fell sharply. Behind those numbers though is the reality that the upgrade of their merchandise has not been as rapid and sharp as analysts and the consumer was hoping. Additionally, Retailsails hears that there is a senior executive managing the new design team that is causing a lot of friction and dissension in the ranks.
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