Posts Tagged 'luxury retail'

Retail IPO Profile: Michael Kors

After 30 years as a private company, ‘accessible’ luxury lifestyle brand Michael Kors plans on selling shares to the public on Dec. 14th.

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In a registration statement filed on Friday, the company said it will sell 41.7 million shares (plus an over-allotment of 6.3 million) in an initial public offering at $17-19$ per share, trading on the NYSE under the ticker symbol ‘KORS’ and valuing the company at up to $3.63 billion.

Though initially the company was known for its luxury women’s sportswear lines sold at high-end department stores, it has successfully expanded beyond apparel into accessories (including handbags, small leather goods, eyewear, jewelry and watches) and footwear. Accessories accounted for 62.3% of total sales in FY 2011 and grew at a 57.6% CAGR over the last 3 years.

Michael Kors is among the fastest-growing retailers in the world, with total year-over-year revenue growth of 61.0% in the first six months of FY 2012 and 58.1% in FY 2011, with a 3-YR CAGR of 37.0%. Trailing 12-month revenue topped $1 billion.

see below graphic for summary or click here for full profile and analysis

Retail IPO Profile & Analysis: Michael Kors
With a huge retail expansion Michael Kors has grown its branded store base from just 23 in March 2007 to 221 as of the end of November Continue reading ‘Retail IPO Profile: Michael Kors’

Monday Retail Reads

  • Restaurant Industry Outlook Gained Strength in March as Same-Store Sales, Customer Traffic Levels Continued to Improve (National Restaurant Association)
  • Is E-Commerce the Shopping Center Industry’s Friend or Foe? (National Real Estate Investor)
  • As he mulls taking Hudson’s Bay Co. public this year, the U.S. owner of the iconic department-store retailer is turning his attention to a risky but potentially lucrative specialty-store expansion (Globe & Mail)
  • PPR, the French luxury goods group that controls Gucci and Puma, said on Monday that it had agreed to buy the sports accessory and clothing company Volcom for $607.5 million (DealBook)
  • Facebook’s ‘Like’ button becomes force in e-commerce (San Jose Mercury News)
  • Macy’s Biggest Bargain: Its Shares – After enduring an arduous restructuring and a vicious recession, the storied retailer is standing tall under CEO Terry Lundgren (Barron’s)
  • The Tastemakers: How Generation Y is helping to save luxury brands (Stores Magazine)
  • Starbucks Hits No. 3 Despite Limited Ad Spending: How Coffee Chain Reversed Struggles and Stormed Past Fast-Feeder Rivals (Advertising Age)
  • Retailers Inventing New Ways to Shop Online: Sites That Send Shoppers What They Might Like (NY Times)
  • Consumer Spending on DVDs Drops 10% in 2011 (Hollywood Reporter)

Movado Exits Retail, but Real Problems Remain

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Movado announced that they are closing 26 of their 27 regular price boutiques in an effort to streamline their business and focus on wholesale and retail outlets. They are keeping their Flagship store in Rockefeller Center in New York as the only shop selling regular priced product, while they have 31 outlet stores. The closing of the 26 stores will result in a decrease in revenue of about $30 million a year, but the retail operation has been a drag on profits and the hope is that this will help right the ship. The company had a loss of $55 million in 2009 on revenues of $378 million compared to a small profit of $2 million on $461 million revenue for 2008 and a profit of $61 million on $560 revenue for 2007.

Retailsails believes the problems go beyond retail though. While it is true that the luxury watch/jewelry sector suffered more than other businesses in the recession, Movado has additional issues to deal with. Their own brands are well-known and well-regarded, but the styling is a bit tired. Additionally, and most importantly, the two top trends for the past several years have been big and oversized or expensive limited edition mechanical, and Movado missed the boat on both of those. As for their licensed labels, the names are better than the actual merchandise.

They have been slow to address these concerns, and have also been slow to cut costs commensurate with the revenue drop. The cost of sales for the 5 years from 2005-2008 were consistently between 38-40%. In 2009 it jumped to 51%.

They did report an increase in sales for the most recent quarter of 16.7% which hopefully is a sign of things to come. But, they still have to show improvement on product development and marketing to be viable. Movado markets their own watch brands under Movado, Concord, Ebel and ESQ and also has licenses for Coach, Hugo Boss, Juicy Couture, Lacoste and Tommy Hilfiger.

February Same-Store Sales Strongest in More than 2 Years

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Despite unseasonably cold temperatures nation-wide and record snowstorms across the Northeast, retailers managed to post another month of solid same-store sales gains in February. While typically one of the lightest months of the year in terms of volume, and no doubt in large part due to extremely easy comparisons to a year ago, February’s strong performance nonetheless suggests consumer spending is gaining momentum off of depressed levels.

Preliminary results show total sales increased 6.0% from a year ago to $28.9 billion for the 30 retailers we track, while same-store sales were up 3.9% compared to a 3.4% drop in the year-ago period. This is the sixth straight gain after 12 consecutive months of declines, and the best showing since November 2007.

RetailSails Monthly Store Sales Index Continue reading ‘February Same-Store Sales Strongest in More than 2 Years’

The Members-Only Online Sample Sale Phenomenon

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“Sample Sale” A phrase that can create feelings of excitement and fear simultaneously in any seasoned shopper. The long lines and crowded spaces, impulse buying, fighting over the last pair of size 7 Jimmy Choos. The adrenaline rush we get, similar to that of a gambler or lottery player, is what retailers and designers want you to feel, and bank on to sell their items. In these kinds of situations, all rational decision-making goes out the window on the quest to own a luxury item that is out of our reach…until now.

With the rapidly changing landscape of the retail marketplace, the traditional physical sample sale is becoming somewhat extinct. As shoppers increasingly turn to the web to do their buying and the recession takes its toll on retail earnings, retailers and designers left with excess inventory and lacking the ability to tap into their usual thrill-evoking in store shopping techniques, have had to come up with creative new ways to manipulate us into buying their leftover merchandise online. The result: the phenomenon of members-only online sample sale sites offering designer brand clothes and goods for a fraction of the cost.

Sites like Gilt Groupe, Ideeli, and Rue La La have become household names, and while retail sales continue to look grim across the board, these membership-only sale sites have been recording huge growth in members and revenues. Beyond the Rack, a private sample sale site in business less than 9 months, has raised $4.5 million in funding and is seeing 4 million monthly unique visitors, with revenue growing over 50 percent per month. This company is on pace to do $30 million in volume this year alone. Continue reading ‘The Members-Only Online Sample Sale Phenomenon’

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