"Light Luxury" Market Weakness, Brand Performance Decline Can Not Extricate Themselves

High profile "light luxury" products began to go downhill for a variety of reasons, falling into decline in performance and unable to extricate themselves.

Light luxury brands are also beginning to feel bad.

Kate Spade: announcing a reduction in endless promotions

According to the earnings report, Kate Spade 2015 lost a net loss of $55 million 200 thousand in the first quarter.

The New York stock exchange recorded a Kate Spade& Co. share down 10.4% to 29.16 dollars on Thursday, due to bad earnings reports.

In the short term, Kate Spade will continue to face a further squeeze in profits.

In this regard, the company adopted measures to reduce brand participation in promotional activities, so as to maintain brand value for a long time. The company believes that this is a step in brand building and a multi-channel approach to quality sales, and is also a very important part of the company's strategic growth.

Michael Kors: rapid expansion leads to slower growth

In recent years, with the popularity of brand fashion handbags and watches, the popularity of Michael Kors continues to rise, but the recent growth rate has slowed down, and the company's expectations for the future are also negative.

It is reported that in the past year, Michael Kors shares fell 34%.

According to Morgan Stanley's recent report, MK is the only independent retailer so far in the securities business that has not exceeded five years in the context of the overall strength of the apparel industry.

Its products are no longer the best single product.

Many of its problems can be attributed to one mistake: rapid expansion.

The brand currently has 4133 stores worldwide, including brand stores, department stores and discount stores.

In 2013, the number of stores was only 2913.

The scale of the store has shocked the industry, and has also brought great harm to the brand. In the capital market, Michael Kors has also been questioned by investors and is not optimistic about its mode.

The three quarter earnings report of Coach, a high-end fashion brand in the US, showed its net profit plunged 53.8% compared to the same period last year, while all indicators declined.

It is noteworthy that sales growth in the Chinese market has also slowed sharply, increasing by only 8%, which is not the same as the overall growth of 25% in the fiscal year.

The most important market in North America, the total sales volume decreased by 24% from US $648 million to $493 million in the same period last year.

In North America, direct sales fell 23% in the quarter and same store sales fell 23% year-on-year.

The sales volume of the same store decreased by about 11 percentage points owing to the reduction of official website promotion.

Sales in department stores also dropped by 30% over the same period last year.

It is reported that the decline of Coach's performance, like Michael Kors, stems from the high popularity of the brand. In other words, it is caused by the over exposure of the brand.

Ralph Lauren: profit in the US dollar

Ralph Lauren Corp. disclosure has been hurt by the US dollar's higher income and the net profit in the fourth quarter has fallen by 19%. However, the group also announced that it would increase the value of the repurchase value of US $500 million, and the gross profit margin of the quarter was 55.4%, which was 80 basis points lower than that of 56.2% in the same period last year, mainly due to the more intense discount environment.

Subject to the continued weakness of the Tod 's brand in Hong Kong and Macao markets, the Italy luxury group Tod' s Group SpA's first quarter profit fell by 17.3% over the first quarter, and the total sales volume of the quarter sales amounted to 257 million 700 thousand euros, slightly higher than the market expectations of 256 million euros, up 1.5% from 253 million 800 thousand euros a year earlier, mainly driven by the weaker euro, and the 3.1 decline in sales after excluding the exchange rate effect.

In the first quarter of the year, sales in the Greater China region plummeted 15% to 53 million 900 thousand euros after excluding exchange rate effects, while passenger and consumer spending in Hongkong and Macao had shrunk dramatically. However, the group pointed out that significant progress has been made in mainland China, which accounts for half of the region's business.

The drop in passenger consumption in Asia and the bad weather on the east coast of the United States recorded a 2.5% decline in sales in the Americas, falling to 20 million 900 thousand euros.

At the same time, the group expressed its dissatisfaction with the high rent in Hongkong's golden area and pointed out that the Hongkong property developers refused to accept the request of the retail brand for rent reduction.

China's anti-corruption and Hongkong anti mainland people have led to a decline in Hongkong's retail market.

Moncler: large shareholder Eurazeo reduced share price fell 3.2%

Strong first quarter results boosted Moncler SpA's new high of 18.11 euros in the near future. The group's largest shareholder and French private Holdings Company Eurazeo SA announced on Wednesday the reduction of 1/3 Moncler SpA shares.

The latest announcement by Eurazeo SA said it had sold 19 million 500 thousand shares of Moncler SpA shares through its subsidiary ECIP M S.A., accounting for 7.8% of the issued share capital of the latter.

After acquiring about 280 million euros, Eurazeo SA's shareholding ratio has dropped to 15.5%, but its three SpA seats of the Moncler SpA board will be fully retained.

The days of light luxury brands are really tough.