Retail news that keeps industry pros in the know
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This week in fashion news: One retailer’s profits rise, while another conglomerate’s revenue drops.
Ralph Lauren exceeds profit estimates
Being a profitable fashion retailer these days almost feels like an anomaly. Fortunately for Ralph Lauren, it fits that description, beating profit estimates for Q1. Shares of the brand rose 4% after the company reported steady demand for its denim and polos in Europe and China thanks to demand for its denim and polos.
Why this matters: While many fashion brands are struggling, others, like Moncler and Adidas, have enjoyed rising profits in an unsteady economy. And although some labels have cited weakened demand in markets like China, for both Moncler and Ralph Lauren, the region has turned out to be a sales driver.
VF Corp revenue drops
North Face and Vans parent VF Corp has become the latest fashion conglomerate to report a drop in revenue in Q1, to $1.9 billion, a 9% YoY decrease. The company reported a 21% sales dip for its Vans brand, a “modest improvement” on the previous quarter’s 26% decrease.
Why this matters: It’s no secret that fashion conglomerates are having a hard time. Even heritage retailers like Burberry and Mulberry have recently reported weak sales, leading to executive reshuffles over the last month.
H&M won’t seek discounts from Bangladesh suppliers
H&M is forgoing discounts due to delays from suppliers in Bangladesh, which had to shut down factories as the country witnessed major protests that lead to Prime Minister Sheikh Hasina’s resignation. Although a curfew was lifted this week, the situation in the country remains unstable.
Why this matters: Bangladesh is the world’s second largest garment exporter after China. From H&M and Uniqlo to Zara, many fast fashion brands rely on factories there for swift and cheap production. The current disruptions are likely to impact not only retailers, but also the livelihood of the factory workers.