Ralph Lauren Shares Climb on Progress of Restructuring
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DAILY EDITION 11 AUGUST 2016 1 Michael’s Lab Going Premium Right Direction Michael Kors has turned its Under Armour unveils its JD.com cut its losses in New York Bleecker Street new higher-end collection, half and boosted sales by store into a new concept UAS, which will be 42 percent in the second called The Kors Edit. PAGE 4 presented during New York quarter. PAGE 3 Fashion Week next month. PAGE 8 Fashion. Beauty. Business. THE MARKETS Ralph Lauren Shares Climb On Progress Of Restructuring ● The company expects up to $400 million in charges for fiscal 2017 for its plan, with annualized savings of up to $220 million. BY VICKI M. YOUNG So far, so good. That was the view of Ralph Lauren and his chief executive officer Stefan Larsson on Wednesday about the restructuring at Ralph Lauren Corp., which both said is on track as the company aims to get leaner and reclaim the entrepreneurial culture that built the brand. Wall Street, which likes nothing more than a restructuring, seems to agree, sending Ralph Lauren’s stock up sharply after the firm reported first-quarter results that beat expectations even though the company registered a loss and compara- ble-store sales were down. CONTINUED ON PG. 7 BEAUTY Burberry, Pinterest Launch Cat Lashes ● The brand is banking on the social media site’s massive beauty audience to serve as the launch pad for the new mascara. BY RACHEL STRUGATZ Burberry is taking to Pinterest to launch its latest beauty product, aiming to capital- ize on the platform’s 38.5 million monthly unique viewers in the space. BEAUTY In tandem with the launch of Cat Lashes, the brand’s new mascara that launches today, Pinterest will begin to generate custom boards for users populated with Burberry Beauty content and product. It’s Burberry’s latest attempt at using social media to intro- duce a new product to consumers. “Beauty is huge on Pinterest, and we Diddy’s Back wanted to bring that to life in an innovative way that had never been done on our plat- Sean Combs shows a more sophisticated side with the launch form. It’s taking in [user] beauty preferences and giving them a new way to look at the cat- of his new fragrance, called simply Sean John, which he hopes egory through the lens of Burberry,” Radhika Prakash, creative and brand strategist at will be a hit following a misstep with his previous effort. Pinterest, told WWD Tuesday morning. She For more, see page 5. said Pinterest approached Burberry to forge a partnership over a year ago. Photograph by George Chinsee George by Photograph CONTINUED ON PG. 6 Canadian Real Estate Wait ‘til You See What’s There An Advertising Opportunity ISSUE: August 24 · AD CLOSE: August 10 · MATERIALS: August 15 FOR MORE INFORMATION, PLEASE CONTACT PAMELA FIRESTONE, ASSOCIATE PUBLISHER AT 212 256 8103 OR [email protected] 11 AUGUST 2016 3 RETAIL JD.com Halves Q2 Net Losses TOP 5 ● Gross merchandise value new merchants to its marketplace, though it would integration-related losses would be offset in the expect the new merchants to only achieve transac- long-term by the GMV that will be picked up from TRENDING increased 47 percent to 160.4 tion volume after at least six months of operation. the new acquisition, particularly in the fast-moving ON WWD.COM billion yuan, or $24.1 billion. “As a result the GMV [Gross Merchandise consumer goods categories that represent Yihaodi- Volume] from our marketplace business will see an’s core business. BY AMANDA KAISER AND CASEY HALL a significant slowdown in the second and third Meanwhile, the company said that JD Mall ceo SHANGHAI — Chinese e-commerce giant JD.com quarters of this year but we believe these measures Haoyu Shen will relocate to the United States later said Wednesday it halved its second-quarter net will improve our user experience and the integrity this year for family reasons. He will be taking on a losses to $37.96 million as revenues grew 42 per- of our platform,” said Liu. new role as president of JD International, effective cent to 65.2 billion yuan, or $9.8 billion. JD’s GMV for the three months ended June 30 immediately. This represents a slight moderation in growth increased 47 percent to 160.4 billion yuan, or $24.1 Shen’s new responsibilities will include oversee- compared to the first quarter, when revenue grew billion. In comparison, GMV in the first quarter of ing the company’s international and cross-border 47.3 percent, and the continuation of a trend for 2016 increased 55 percent on the year. business, including the aforementioned alliance slower growth from a higher base. JD.com saw 57 A major milestone for JD.com in the second with Wal-Mart. JD said Shen will continue to report percent year-on-year growth in the fourth quarter quarter was its $1.5 billion “strategic alliance” with to Liu, while management members previously of 2015 and a 62 percent year-on-year growth rate Wal-Mart, unveiled in June. The deal sees JD.com reporting to Shen will now report directly to Liu. in the first quarter of last year. acquire ownership of Wal-Mart’s China-based Yiha- JD.com’s ceo opened Wednesday’s earnings call As well as confronting a broader consumption odian online marketplace. In exchange, Wal-Mart by praising Shen’s record as JD Mall ceo. slowdown in China, JD.com has also discontinued received nearly 145 million newly issued JD.com “Working with me over the last five years Haoyu contracts with more than 22,000 merchants on its Class A ordinary shares, representing about 5 has made outstanding contributions to the com- marketplace in the first half as part of a long-term percent of the Chinese e-tailer’s total shares. pany. His new role will draw on his international strategy to boost marketplace quality. JD.com’s management expects to see system experience and we look forward to his future “These are lower quality merchants who, in the integration with Yihaodian completed in the third contribution,” Liu said. past, repeatedly violated some of our rules,” said quarter and anticipates an estimated 1 billion yuan, The number of users flocking to China’s chief financial officer Sidney Huang. or $150.7 million at current exchange, in related second-largest e-commerce platform continued “The vast majority of these merchants do have operating losses in the second half of 2016 due to to grow, with annual active customer accounts transaction volume so by discontinuing contracts operational and integration costs. increasing by 65 percent to 188.1 million in the 12 Ronda Rousey Shows Off with these merchants, we did suffer some financial The company said its overall losses from months ended June 30. losses in the process,” chief executive officer operations for the second quarter came in at 358.2 Huang also pointed out during the earnings call Curves in Buffalo David Richard Liu explained, adding that JD.com has million yuan, or $53.9 million. that JD.com’s free cash flow totaled 11 billion yuan, Bitton Fall 2016 Ads in the same period attracted a similar number of Huang said that the Yihaodian operational and or $1.66 billion, for the 12 months to June 30, an increase of 67 percent. ● Iconix’s denim brand aims JD.com “This strong cash flow is probably the best to grow its women’s business headquarters, validation for the underlying strength of JD.com,” with the UFC star, who not only Beijing, China. the cfo said. In terms of category breakdowns, food and models its new line of Hope jeans beverage proved to be the fastest growing segment but also hosts a social media of JD.com’s second quarter, followed by cosmetics sweepstake. and home wares. Apparel and footwear retained their position as the largest category on the platform overall, ● They Are Wearing: with Huang saying that merchants in this category Lollapalooza 2016 saw “well over 100 percent growth” in the second quarter. ● The 10 Best Looks From JD.com’s fiercest rival, Alibaba, releases earn- the Opening Ceremony at ings Thursday. the Rio Olympics 2016 ● The Blogger Will BUSINESS of self-serving business decisions, including the event in which Ross dealt with “a life-threatening See You Now opening of several unauthorized Kitson stores in injury which required a lengthy hospitalization and ● Resort 2017 Trend: Fraser Ross Sues Korea. recovery, the effects of which continue to plague and “Defendant Lee’s entire tenure at Kitson was affect” him, the lawsuit said. Embroidered Accessories replete with self-dealing transactions, improper Ross’ complaint alleges Lee knowingly took Former Kitson CEO and unauthorized salary and personal expenses, advantage of Ross’ declining health and used incompetent performance of his duties, hiring of Jeffer Mangels as a tool to exploit Ross and Kitson, ● unqualified employees with personal affiliations, including convincing Ross to turn down sales offers The Kitson founder accuses Global Stock Tracker the retailer’s former ceo of including his wife, and other illicit conduct....” the in 2013. The lawsuit also brings up the $15 million lawsuit said. secured loan Kitson received from Salus Partners As of close August 10, 2016 fraud and unfair competition Lee, a former executive at Forever 21, joined Kit- LLC, a deal it called “not necessary and not in the ADVANCERS in a complaint filed Tuesday. son in 2011. During his time at the helm of the bou- best interest of either [Ross] or Kitson.” tique retailer — which had a knack for attracting tour- The complaint makes a number of other allega- Ralph Lauren Corp.