INNOVATION DRIVES FASHION FORWARD

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Sanya Duty-Free Mall Revenue Surpassed 10bln Mark, New Balance & Jordan Win Trademark Lawsuits | Luxe.CO News Brief, Issue 2 of 2020

April 27,2020

Brands

Hermès Reopens The Flagship Store in Guangzhou’s Taikoo Hui with Sales of $2.7 Million in One Day

Hermès registered sales of $2.7 million on the reopening day of its flagship store in Guangzhou’s Taikoo Hui Mall on April 11, a few days after the lockdown and COVID-19 restrictions were lifted. The single-day tally, believed to be the highest for a single boutique in China, offers a confidence boost for luxury brands who are eager to get tills ringing again after the coronavirus outbreak. The new Hermès store location at Taikoo Hui Mallspans some 5,500 square feet and was previously occupied by Prada. Before the reopening, Hermès closed its first store in Guangzhou, located in La Perle Plaza, the previous luxury hub of the city, and merged that team with its Taikoo Hui Mall store.

Hermès announced on Thursday 23 April that first-quarter sales for 2020 were down 6.5% (-7.7% at constant exchange rates) at 1,506 million euros. By contrast, other luxury groups such as LVMH, Kering and Moncler, which recently reported first-quarter reports, saw sales fall at least 15 percent from a year earlier. Moreover, second-quarter sales will be “significantly impacted” by the temporary closure of most of its network, Hermès said. (Source: WWD, Hermès)

Starbucks Launches New Plant-Based Menu in China

Starbucks said on Monday that it will roll out a new plant-based food and beverage menu in 4,300 stores in China this week. New partner suppliers include plant-based meat substitutes brand Beyond Meat, all-purpose plant-based pork analog brand Omnipork, and Swedish vegan oat drink brand Oatly. (Source: Reuters, Omnipork)

Photo Credit: Starbucks Corporation

Victoria's Secret Unveils Chinese Actress Zhou Dongyu As Its Brand Ambassador in Greater China

Victoria's Secret China announced that actress Zhou Dongyu is the new brand ambassador in Greater China. Victoria's Secret is looking forward to working with Zhou to inspire more women to have a positive and optimistic attitude and the confidence to pursue excellence.

Photo Credit: Victoria's Secret

Luxe.CO Editor Comment: The new collaboration is expected to bring better brand benefits to Victoria's Secret. The lingerie giant, which used to use angels and supermodels as its ambassadors, but who were nonetheless not well-known enough in China, was struggling. Choosing the award-winning actress Zhou Dongyu may lead the brand to "break the cycle". (Source: Victoria's Secret)

Listed Company

China International Travel Service Corp. Ltd. (CITS) Financial Report: Sales from CDF Mall in Sanya and Duty-Free Stores in Shanghai Airports Both Exceeded 10 Billion Yuan in 2019

According to the CITS 2019 Annual Report and 2020 Q1 Financial Report, sales of duty-free goods in 2019 reached 45.818 billion yuan.

Revenue at its main duty-free stores in 2019 were as follows:

  • CDF Mall in Sanya recorded revenue of 10.465 billion yuan, up 30.65 percent year over year, of which sales revenue of duty-free goods was 10.174 billion yuan, up 30.93 percent year over year.
  • Shanghai airports: 15.149 billion yuan (up 44.95% year over year)
  • Beijing airport: 8.589 billion yuan (up 16.25% year over year)
  • Hong Kong airport: 2.402 billion yuan (up 4.54% year over year)
  • Guangzhou airport: 1.922 billion yuan (up 117.46% year over year)

Photo Credit: CDF Mall in Sanya

In 2009, CITS achieved revenue of 47.966 billion yuan, up 2.04 percent year over year; attributed net profit of 4.629 billion yuan, up 49.58 percent year over year; and a deducted non-net profit of 3.829 billion yuan, up 21.79 percent year over year.

PEACEBIRD 2019 Annual Report: Sufficient Cash Reserves; 30+IP Collaboration

According to its 2019 Annual Report, PEACEBIRD’s total revenue reached 7.928 billion yuan, up 2.8 percent year over year. Net profit reached 552 million yuan, down 3.5 percent year over year, with the fourth quarter seeing the highest net profit of 345 million yuan (accounting for 62.5 percent of the annual net profit).

Online revenue reached 2.312 billion yuan last year, up 15.8 percent year over year, accounting for 29.52 percent of the total revenue. Among offline channels, revenue from direct-sale stores increased 5.56 percent to 3.369 billion yuan, while the revenue from franchised stores fell 10.44 percent to 2.149 billion yuan. By the end of the year, the total number of PEACEBIRD offline stores was 4496. The company has sufficient reserves, with a total value of 2.009 billion yuan.

In addition, in order to promote the charm of "Chinese Design", PEACEBIRD launched a "30+IP Collaboration" project collaborating with more than 30 brands. These include PEACEBIRD Women x Harry Potter, PEACEBIRD Men x Sesame Street, and MiniPeace x Frozen.

MARUBI 2019 Annual Report: Steady Growth In 2019, Focusing Online In 2020

Multibrand skincare company MARUBI achieved revenue of 1.80 billion yuan in 2019, up 14.28 percent year over year, with net profit attributable to the parent company of 515 million yuan, up 23.99 percent year over year, and net operating cash flow of 466 million yuan, down 9.90 percent year over year.

Due to the great impact of the COVID-19 pandemic on offline channels, the overall retail sales of cosmetics products in Q1 in China declined by 11.6 percent. MARUBI’s offline business, which accounts for 55 percent of sales, was also under pressure due to a large retail and dealer inventory. In terms of online business, MARUBI’s Tmall flagship store Q1 turnover grew by 30 percent, while the company's other brands HARUKI and PASSIONAL LOVER, which were still in the adjustment period, decreased 30 percent and 80% respectively.

Li-Ning Financial Report: In 2020 Q1, Offline Retail Sales Declined And Online Business Growth Slowed

Photo Credit: Li-Ning 2020 ss

Li-Ning recently announced the company’s latest operating status in 2020. Its financial report shows that in the 2020 Q1 (ending March 31), retail sales from Li-Ning outlets (excluding Li-Ning YOUNG) fell by 10 percent to 20 percent annually. In terms of channels, offline channels (including retail and wholesale) recorded a decline of 20 percent to 30 percent; retail channels recorded a decline of 30 percent to 40 percent; wholesale channels recorded a decline of 10 percent to 20 percent. However, its e-commerce business recorded growth of 10 percent to 20 percent.

Commercial Real Estate

Report on the Digital Transformation of China’s Shopping Malls

A report, jointly issued by a China Real Estate Association and RET, a consulting firm, points out that China's shopping mall industry is entering a stagnant phase. The disappearance of growth dividends is leading to intensified homogeneous competition, driving the industry towards a watershed of reform and rebirth. At the same time, the emergence of new digital technologies also provides more possibilities for the rebirth of the industry. Improvements to customer experience and operational efficiency, and innovation in business models through digitalization, will promote the revival of the industry. (Source: RET)

Intellectual Property Rights

New Balance Defends Its Rights in China, Sued And Won Damages Against Two Chinese Companies

Sports brand New Balance has won a six-year trademark invalidation lawsuit in China. The court issued two retrial judgments, holding that the two imitations "N" trademarks for which the Chinese sports company QIERTE applied for registration, which were similar to New Balance’s  "N" trademark, should be deregistered.

In addition, New Balance sued another Chinese sports company NEW·BARLUN for unfair competition. The Shanghai Pudong New District People's Court made a first-instance judgment on the unfair competition dispute case, requiring NEW·BARLUN to pay 10 million yuan in economic losses and 800,000 yuan in reasonable expenses, in addition to stopping the unfair competition behavior and making public statements to eliminate the impact. (Source: New Balance)

Qiaodan Sports Loses Its Trademark Case Against “Jordan+Graphics”

On April 8, the Supreme People's Court (SPC) issued a final ruling to revoke Fujian-based Qiaodan Sports’ trademark No. 6020578 “Jordan+graphics” on goods such as class 25 clothing, shoes, hats, and socks.

Since 2012, Nike, which owns the AirJordan brand, and NBA player Michael Jordan, have both filed trademark complaints against the “Jordan+graphics” brand registered by Qiaodan Sports.

Qiaodan Sports announced in a statement that it had won its lawsuits concerning 74 other trademarks registered for more than five years, and the ruling does not affect the normal use of the company's existing trademarks. (Source: Beijing Business Daily, Qiaodan Sports Statement).

| Editor: Maier

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