Fifth & Pacific group to sell its Lucky Brand and Juicy Couture brings the development funds for Kate Spade
Weekly financial reporter Lin Yingying / text
When the coach is in America gallop 53 years known as the “light and the title of” the Kate Spade Bags originator, Kate Spade (Kate Spade) was founded only 20 years. Themore the young brand has become the powerful competitors.
The strong growth of Kate Spade
Facing the rapid growth of Kate Spade, the most benefit is the inevitableAmerican garment manufacturing group Fifth & Pacific Cos.Inc. the groupduring the rush hour once owned more than 30 brands, creating a nearly $5000000000 of income. But from last year and this year’s semi annual reportreflected the group’s sales are not ideal.
The first half of this year, net sales of the Fifth & Pacific is $654000000,compared with last year a decrease of 37000000 dollars.
As its brand, Lucky Brand sales fell 2.4% to $109000000, same store sales increase 2%. Another brand Juicy Couture sales of $93680000, compared to 10.7%, the same period last year of $105000000, the same store sales fell 4%.
Only Kate Spade continued to grow strongly, the second quarter same storesales growth rate reached 27%, net sales rose 65.3% to $167000000, KateSpade now operates 97 stores, 42 discount stores and 39 franchise stores.
See the Kate Spade scores, Fifth & Pacific also finally see hope, and plans to sell its Lucky Brand and Juicy Couture, will be the development focus group on the Kate Spade brand business. Once the sale of Lucky Brand and JuicyCouture two brand, Fifth&Pacific Cos.Inc Kate Spade the only major brandsand relatively small jewelry brand.
Kate Spade is very successful in terms of accessories, and gradually extended to the commodity clothing and other lifestyle brand, CEO Craig Leavitt oncetold the media, the brand’s sales are expected to reach $2000000000 in 2016,finally broke through the $4000000000 mark.
And the sale of Lucky Brand and Juicy Couture can bring development funds and more development potential is Kate Spade brand, Kate Spade Outlet let the brand can reach more prospects for the development of comprehensive.
The maintenance of the image
Founder Katherine Noel Brosnahan in a short span of 20 years, will this initially in a fashionable and practical nylon handbags with brands have developed into handbags, accessories, shoes, infant clothing and supplies, stationery,and one set of lifestyle brand, and then to the bright and bold colors and lively and interesting life attitude is popular all over the world.
American New York ”light and” brand coach (Coach) shown in the latestearnings released last night, as of September 28, 2013, the first quarter of fiscal 2014 sales of $1150000000, down 1%; net profit last year from$845000000 fell 2% to $827000000; operating income also fell 3%. Notable is,in a downturn, the strong performance of coach in China market performancelast quarter, up 35% year on year growth is thriving, and stores the same store sales are up to two digit growth.
From the global market, coach is especially bad in North America and Japanmarkets. Because of the continuous force to rival Michael Kors, the world’s Kate Spade Bags largest coach market in North America has recently been was slowing trend.The quarter coach total sales in North America, from $784000000 last yeardropped 1% to $778000000, same store sales also fell 6.8%, for shipments of department stores also dropped slightly. The Japanese market factors rate plus fell 22%.
In the luxury goods industry has a wealth of experience, is now the organichome - founder and President of the Lu Xiaoming told the ”First Financial Daily” interview that: ”luxury entry-level market positioning products will continue to increase in future, suitable for middle class positioning products will continue to develop, and the growth rate might be like two years ago that thegrowth in luxury because these products are mining, real Chinese consumerdemand.”
In the last fiscal year, coach in China market total sales year-on-year growth of40%, while the other light luxury brands such as Italy leather Furla and USAleather goods and clothing brand Kate Spade also has a good performance,and are actively expanding Chinese area of business.
UBS Securities Analysis Report, public oriented luxury consumption is a long-term trend Chinese market.
In order to further explore the emerging market space and weak response tothe North American market, from the beginning of last year coach will actively Kate Spade Outlet promote the transformation of the brand. Not long ago, the brand officiallylaunched a comprehensive shoes product line, brand conversion plan coach isfrom the original focus leather brand to include footwear, clothing and other products lines, fashion lifestyle brand transformation.
Coach’s chairman and chief executive Lew Frankfort said, companies in emerging markets, men’s business and expand in the fashion categoryachieved good growth, which is in North America handbags and accessoriesbusiness market competition environment make the brand transformationmeasures.
Last fiscal year, coach into the new men’s business soon grew nearly 50%,while footwear product sales amounted to $250000000, at the same time,scarves, sunglasses, jewelry and other category sales accounted for more than 7%.
After Coach, Kate Spade, Michael Kors, and a American light luxury brandjoined the enclosure China middle-class market ranks.
“In Chinese market, we note that the polarization of brand is more serious. Like the traditional European luxury brands in this two years Chinese sales performance, Kate Spade Bags industry be obvious to people. While a relatively low-end brandwill be ordinary people pursued. But few of the mid-range brands such as Fossil. But in western countries, the luxury goods relatively less, in the end is the mainstay of the market brand.” Vice President Fossil China area AnnemiekBallesty (Bai Lidi) to the financial weekly reporter said.
Major suit watch behind the scenes manipulators
See the Fossil oval logo, can let a person feel very nostalgic, even some retro,drew inspiration from the last century 50′s car, automobile cinema, restaurantsand gas station Autolodge nostalgic symbol.
Fossil was founded in the Second World War ended, the Americans during the heyday of the happiness index. Fossil locates in the middle of modern andancient, so “modern vintage” has become a Fossil brand spirit.
Create Fossil draws inspiration from nature. Initially only a sketch, or workingmetal products sophisticated flea market on the handbag, or is torn pages,texture samples and color images. The effect on the Fossil brand’s global 250designers, everywhere can produce inspiration.
However, strong designer team let Fossil began as many brand design watches and jewelry, and then gives birth to watch manufacturing business. In 1997, FOSSIL Inc. signed a franchise agreement, the Emporio Armani brandname watches produced and sold all over the world. Then with DIESEL, DKNY,Burberry, Michael, Kors, Adidas and other brands to sign the same franchise agreement.
In 2002, FOSSIL again to breakthrough, signed a global franchise agreement with Emporio Armani, Emporio Armani jewelry exclusive design, production,marketing and sales rights. In the course of time, Fossil ”scenes hand” role ofaccumulation.
Bai Lidi told reporters: ”the design of Fossil and their cooperation with theluxury brand, we find the Fossil lever, which allows us to take a greater role inthe watch area. For example, we set up a strong design team, enhance ourproduction capacity etc..”
Of course, Fossil and major suit cooperation also produced more challenging for itself. As everyone knows, the luxury brand requirements for each piece of merchandise is very high. It also makes Fossil must be made more stringentrequirements to design their own products.
Take Michael Kors, Fossil is a design team to follow Michael Kors every season tonality to design accessories. Of course, characteristics and mode of each season is from MK to convey. Fossil design of all submitted toheadquarters for approval, to any design can occur after Fossil again through the production and distribution.
Fossil and many other brand, people can not help but cast doubt on thecontinued cooperation brand DNA. Bai Lidi explained: ”in the Fossil team, we have a group of designers to design specifically for the brand products of our cooperation. Keep long time thorough communication between designers andbrand, so watch design inspiration, color, and materials are derived fromcooperative brand original inspiration.”
The first, the future will force the second city
The development of Fossil is amazing, just 29 years, has been in more than 90countries around the world has more than 400 stores, established globalelectronic commerce network strong. But in the Chinese, it is the new arrivals.
In 3 years, Fossil will focus on Beijing, Shanghai first-tier cities. And the construction of the first flagship store China in Shanghai, in addition to the marketing network has spread to the Department store. Fossil has a total ofopening 10 stores this year, will occupy 8. So this year Fossil enclosure Chinafirst-tier cities market determination and strength.
Bai Lidi said: “in the next 18 to 24 months, we will enter the China second tiercity, straight battalion store more and more own brand.”
In America mentioned Fossil will think of watches, as mentioned Buberry will think of his coat, which they started the commodity.
“There’s a big market in American Fossil, it is definitely not a behind the scenes of the brand. The new Fossil strategy is to use the Fossil brand was established in China market, and not just in a backroom operator’s identity to appear on the market. More than by Emporio Armani, DIESEL Fossil.” Whitelead stress.
Interestingly, Fossil will store opened in the vicinity of a cooperation with the brand, the brand a Kate Spade Outlet smart location strategy, enhance brand awareness in the invisible.
Of course, although the Fossil in the speed of set up shop a year somewhat astonishing, but it’s also not be anxious for success: ”we in the mid 1990′sbegan to do leather, in USA we have clothing, but China market is still at the stage of development of the brand, we do not will to Chinese clothing.”Observation of Fossil in store display is not difficult to find, Fossil in Chinadevelopment will continue to be the main accessories.
Emporio Armani, DIESEL, Burberry and other brands to enter the Chinesemarket all the time far earlier than Fossil, Fossil from partners who learn a lot of experience: ”we think the Buberry market model is very good, the design is very good store, we can understand the design depth