A sharp sales slowdown in China and Hong Kong led UK's Burberry to miss forecasts for first-half sales growth and warn of an increasingly challenging environment for luxury sales.
The firm said accelerated actions to control costs were expected to minimize the impact on profit for its 2015-16 year and it expected to meet the average forecast of those analysts who have recently updated forecasts, which is GBP445 million (USD689.22 million). Burberry made GBP456 million in 2014-15.
Profits at Italian luxury fashion group Prada fell by almost a quarter in the first half of the year as sales in the Asia Pacific region slid.
First half net profits fell 23 percent largely because of a sales slowdown in Asia, particularly in Hong Kong and Macau. However, while the group's net income fell to EUR188.6m (USD213m), the result was still better than most forecasts.
Rivals Burberry and LVMH have also seen sales weaken in China as the economy has slowed, and as customers avoided ostentatious luxury in the wake of an anti-corruption drive by authorities.
Wholesaler turned retailer Pacific Brands will test consumer demand for Bonds underwear and Sheridan sheets by raising prices by up to 10 percent this year to protect profits as the Australian dollar plunges to six-year lows.
Pacific Brands chief executive David Bortolussi expects to lift profits and resume dividend payments this year after a bottom-line loss of AUD97.7 million (USD69.6m) in 2015 – the fourth loss in five years.
Rents are expected to fall as much as 40 percent this year in Hong Kong's bustling shopping district of Causeway Bay, until recently the world's most expensive retail street, hit by a slowdown in visitors, particularly cash-rich mainland Chinese.
Some landlords are seeking rents as much as 40 percent below last year's peaks, outstripping analysts' forecasts of drops of about 15 percent in 2015, but some retailers say the reduction might not be enough to offset weak sales.
Luxury overseas brands have discovered Australia in the past few years and are now accounting for a significant share of the retail market, in terms of sales and physical presence, which has put pressure on rents, according to agents.
Italian luxury goods company Prada SpA reported its first drop in annual net profit since it listed in Hong Kong four years ago, as growing retail sales in the Americas and Japan failed to offset declines in Greater China and Europe.
The company reported on Monday its 2014 net profit fell 28 percent to EUR450.7 million (USD489.8 million), slightly below forecasts, as overall annual sales dropped 1 percent. Asia-Pacific sales, which accounted for more than a third of the Milan-headquartered company's business, also fell 3.1 percent.
Chinese consumers – famous for their appetite for designer bags and gold-plated iPhone cases – are now shying away from flashy logos and displays of wealth as a government austerity campaign shames officials who buy them. But many Chinese appear to be flaunting their wealth under their clothes.
India’s Big Bazaar is now present in more than 100 cities in India. The last store to be opened by the retail chain last December was the Rourkelo sttore in Orissa.
In the last three months prior to the opening of its newest store, Big Bazaar also opened 17 new stores across the country, in cities like Jharsugda, Bhopal, Varanasi, and Bokaro.
Despite the slowdown in spending and the Chinese government's crackdown on luxury giving, consumer confidence remains high.
According to The China Luxury Forecast, released by Ruder Finn and Ipsos Group, 90 percent of the approximately 2,000 respondents plan to increase or maintain their spending on luxury goods, reports China Daily. However, luxury spending patterns in China are changing.
Losses have widened at Woolworths' home improvement joint venture with US retailer Lowe's despite their attempts to cut costs, boost sales and put a brake on new stores.
Figures released on Wednesday by Lowe's suggest that losses at the joint venture, which owns Masters, Home Timber & Hardware and Thrifty-link stores, widened to around AUD57 million (USD48.9m) in the three months ending October, up from a loss of AUD38.8 million in the previous quarter and a loss of AUD48.6 million in the first quarter of 2014.