News

JB Hi-Fi is broadening its product categories as it agrees to acquire a controlling interest in E&S Trading Co, which offers kitchen, laundry, and bathroom products.

The consumer electronics retailer agreed to an initial acquisition of 75 per cent of E&S for cash consideration of $47.8 million on a cash-free,debt-free basis. JB Hi-Fi has the option to buy the remaining 25 per cent in September 2029.

“E&S has a highly complementary premium product offering, which will appeal to a new customer base, and a commercial construction market focus, making it a strategically compelling addition to the JB Hi-Fi Group,” said Terry Smart, JB Hi-Fi’s CEO.

E&S has 10 showrooms in Victoria and online, and a showroom in ACT due to open this month.

Rob Sinclair, whose family founded E&S in 1962, will remain as the company’s MD after the acquisition.

“JB Hi-Fi’s deep understanding of the homemaker sector and extensive experience in the appliance industry make it an ideal partner for our business,” said Sinclair.

The acquisition announcement comes as JB Hi-Fi reports a decline in net profit and sales in the last fiscal year.

Its net profit fell 16.4 per cent to $438.8 million as sales eased 0.4 per cent to $9.6 billion in the year to June 30.

JB Hi-Fi Australia’s sales climbed 1 per cent to $6.61 billion while its New Zealand sales jumped 12.3 per cent to NZ$327.9 million.

However, The Good Guys’ home appliance chain’s sales fell 4.8 per cent to $2.68 billion.

The group’s earnings before interest and taxes slumped 15.8 per cent to $647.2 million.

Kogan‘s revenue declined amid lower gross sales in the last fiscal year – but the company has marked a milestone, exceeding 500,000 members of its First subscription program for the first time.

The online retailer’s revenue fell 6.1 per cent to $459.7 million as Kogan.com’s sales slid 6.4 per cent to $313.2 million and its New Zealand Mighty Ape division’s revenue tumbled 5.4 per cent to $146.5 million.

Full-year gross sales fell 4.8 per cent to $808.9 million.

In the fiscal fourth quarter, revenue slightly rose by 0.2 per cent to $105.6 million while gross sales fell 1.4 per cent to $1894.1 million.

“Cost of living pressures are driving customers to Kogan.com and we’re working harder than ever to ensure we save our customers a lot of money,” said Ruslan Kogan, Kogan CEO.

“While Kogan First subscribers are saving a lot of money shopping online, they are also recognising that if their essential services like phone plan, electricity or NBN isn’t with Kogan.com, then they’re probably paying too much.”

The company ended the fiscal year with over 502,000 subscribers, up 25 per cent.

Sacha Laing, the former boss of youth fashion retailer General Pants Co, has been named the new chief executive of Adore Beauty, succeeding Tamalin Morton.

Mr Laing, a former David Jones executive who has more than 25 years of industry experience, will take over the top job on October 1 after Ms Morton departs at the end of September.

His previous role was running Richard Facioni’s Alquemie Group, which owns General Pants, Ginger & Smart, SurfStitch, and has a store licensing deal with Lego.

Adore chairwoman Marina Go said Mr Laing’s extensive retail experience aligned with the beauty retailer’s strategy and would be invaluable in driving growth.

“He is an accomplished retail leader and brand manager, with significant experience across e-commerce, retail operations, private label development, product management, loyalty, as well as marketing and communications strategy,” Ms Go said in an ASX statement.

Mr Laing said he would continue to focus on accelerating Adore’s plans, including adding standalone Adore Beauty shops, further expansion of its private label brands and the integration and expansion of the newly bought iKou business.

On July 19, Adore said it had recorded sales in the 2023-24 financial year of $195.7 million, up 7.4 per cent, and an earnings before interest, tax, depreciation and amortisation margin at the lower end of its prior guidance of between 2.2 per cent and 2.5 per cent.

At the time, Ms Morton said Adore had delivered 1.6 per cent growth in active customers last year, meaning repeat shoppers who had bought in the past 12 months.

Adore shares are down more than 30per cent this year, but were up about 1 per cent in afternoon trading on Monday.

Mr Laing led the turnaround of the General Pants business and the sale of the company to Alquemie in 2022. Scott Evans was appointed chief executive of Alquemie in March, just weeks after stepping down from ASX-listed Mosaic Brands, of which Mr Facioni is also chairman.

Mosaic – whose brands include Katie’s, Miller’s, Noni B and Autograph – is having its own disruptions as it migrates to a fully integrated logistical supply chain and distribution system. Delays in getting fresh inventory for the key Mother’s Day trading period crunched earnings and sales in the fourth quarter, it said in June.

That same month Mosaic’s long-serving chief financial officer Luke Softa resigned, and director Jackie Frank left. Erica Berchtold, the former CEO of online retailer The Iconic, took over the top job at Mosaic from Mr Evans in April.

Mosaic uses about 100 suppliers for its various brands, but two large Chinese suppliers complained on social media they had allegedly not been paid for products already delivered to Mosaic.

One supplier, Cayci Pan of Ningbo Xifukai Garment Co which has 150 staff specialising in manufacturing ladies’ fashion, said in a LinkedIn post she is allegedly owed $1.23 million which had been delayed for two years.

Ms Pan and Mr Facioni both declined to comment when contacted by The Australian Financial Review.

Luxury conglomerate Kering has reported profits “lower than expected” after its revenue dropped 11 per cent to US$10.6 billion in the half-year financial results.

The group’s sales decline is largely attributed to poor performance at Gucci, which accounts for almost half of its sales and two-thirds of its profits. 

Gucci’s revenue declined by 20 per cent to  $4.8 billion, down 18 per cent compared to the previous period. Meanwhile, its operating income totalled $1.2 billion, with an operating margin of 24.7 per cent.

The company said performance in each region aligned with the prior quarter, including a continuing marked decrease in Asia-Pacific. 

Kering’s other luxury labels, Yves Saint Laurent and Bottega Veneta, also faced revenue challenges. 

Yves Saint Laurent’s earnings in the first half of this year were $1.4 billion, a 9 per cent decrease compared to last year. The label said its performance in the Asia-Pacific “deteriorated”, except in Japan, where the company said it showed a “sequential improvement”. 

Meanwhile, Bottega Veneta reported revenue of $836 million, remaining unchanged from last year and increasing by 3 per cent compared to the same period.  Retail sales rose 7 per cent; however, its wholesale revenue was down 19 per cent.

Because of “uncertainties” in the luxury market, the company anticipates a 30 per cent drop in operating income compared to the second half of last year.

Kering chairman and CEO Francois-Henri Pinault said the company is working diligently to improve the conditions for a return to growth. 

“Our houses pursue their investments to enrich their offer, intensify the impact of their communications, and reinforce the exclusivity of their distribution,” he added.

“While the current context might impact the pace of our execution, our determination and confidence are stronger than ever.”

Administrators are closing in on a deal to sell U.K.-based ethical health and beauty retailer The Body Shop after the high street and mall cosmetics chain went into administration in February with over 80 stores shuttered, the closure of its U.S. business and the loss of around 500 jobs.

A takeover team fronted by the former chief executive of upscale retailer Molton Brown, Charles Denton, has been officially lined up to complete a rescue takeover deal as administrators announced that they had agreed to an "exclusivity agreement" after "a competitive bidding process".

The agreement has been entered into by a consortium led by investment platform Auréa group, with Auréa itself led by British millionaire Mike Jatania as well as a former senior executive at Swiss investment bank UBS.

It owns brands including plant-based cosmetics firm Herbivore Botanicals, natural haircare brand Scandinavian Biolabs, plus Decypher, which produces and sells foundation makeup. Jatania previously ran Lornamead, which owned personal care brands including Lypsyl, Woods of Windsor, Yardley and Harmony haircare. He sold the business to Li & Fung for about $200 million over 10 years ago.

Administrators Hopeful Of Deal

A joint statement from the administrators for The Body Shop International, FRP Advisory, and Auréa group said: “Following a competitive bidding process, the joint administrators of The Body Shop International have now entered into an exclusivity agreement with a consortium led by Auréa group…While the deal is not yet complete, we believe the combined experience of the consortium, together with the existing management team, represents the best outcome for creditors and will ultimately ensure the long-term success of The Body Shop."

The Warehouse Group has confirmed receipt of an unsolicited proposal from Adamantem Capital Management to acquire the company for NZ$1.50 to NZ$1.70 per share.

The Warehouse Group founder Stephen Tindall, The Tindall Foundation, and trustees associated with Tindall support the proposal and will remain invested in the company through reinvesting a portion of their consideration in Adamantem Capital.

The reinvestment will result in the founder shareholders to own up to 50 per cent of the acquirer.

The group noted that there is no indication yet from Adamentem Capital that any shareholder has committed to vote in favour of the offer.

In order to proceed, the proposal must secure 75 per cent of votes of shareholders in each interest class entitled to vote.

The Warehouse Group, however, said that no action from shareholders is required at this time.

The company has appointed Jarden New Zealand to advise on the proposal and its subcommittee intends to appoint an independent expert to evaluate the offer’s merits.

LVMH sales growth slowed in the second quarter as Chinese shoppers reined in spending on high-end fashion at home, even as demand in Western markets slightly picked up.

Sales at the world’s biggest luxury group and owner of labels Louis Vuitton, Tiffany & Co. and Hennessy, grew to 20.98 billion euros (US$22.8 billion), a 1 per cent rise on an organic basis, which strips out currency effects and acquisitions.

That compares to a 3 per cent rise year-on-year in the first quarter, and double-digit growth in 2023 when consumers in key market China splurged on luxury goods as they emerged from pandemic lockdowns.

The report from sector bellwether LVMH, which is Europe’s second-largest listed company, worth around $368.8 billion, follows profit warnings from smaller labels Burberry and Hugo Boss last week.

Though LVMH sales undershot expectations for revenues of $23.4 billion, according to an LSEG poll based on six analysts, it was seen as largely priced in.

“All in all, this shouldn’t be an insurmountable problem, given the minimal size of the miss and the significant pullback the LVMH share price has suffered since the initial post 4Q23 reporting euphoria,” said Luca Solca, analyst at Bernstein.

LVMH shares have been volatile since the luxury slowdown emerged, and are down about 20 per cent over the past year, amid worries that middle-class shoppers in the world’s No. 2 economy are pulling back on purchases due to a property slump and job insecurity.

LVMH offered “no nasty surprises”, said Piral Dadhania, RBC analyst.

Its sales in Asia, excluding the Japanese market, fell by 14 per cent in the second quarter, worsening from a 6 per cent drop in the first quarter.

Sales in Japan, where tourists are taking advantage of the weak yen, continued to grow.

LVMH CFO Jean-Jacques Guiony said that it was difficult to provide an outlook on the Chinese market, but added that “the Chinese customer is holding up quite well”.

“We still see a lot of China travellers, particularly into Japan, which says something about the appetite of mainlanders for our brands, which shows no sign of fading away,” Guiony told analysts on a call.

Business with US and European customers is “slightly better”, he added.

The surge in sales in Japan is, however, exerting significant pressure on margins, he added, with lower costs and prices compared to China.

Operating profit for the first half was $11.55 billion, with an operating margin of 25.6 per cent, down from 27.4 per cent a year ago.

That compared to expectations for $12 billion and a 26.2 per cent margin, according to consensus provider Visible Alpha.

The group’s fashion and leather goods division, which includes the Louis Vuitton and Christian Dior brands and accounts for nearly half of group sales and the bulk of operating profit, grew 1 per cent, slowing slightly from the previous quarter’s 2 per cent rise.

Gucci-owner Kering reports first half results on Wednesday and Hermes reports on Thursday

Household spending fell 0.5 per cent in June compared to the prior month, according to new data from the Australian Bureau of Statistics (ABS).

This follows consecutive rises of 1.0 per cent in May and 0.8 per cent in April.

ABS head of business statistics Robert Ewing said this is the first month where the spending indicator includes seasonally adjusted data for selected categories. 

“This new data shows households spent less on services in June, but more on goods compared to May,” he said.

Lower spending on recreational and cultural services, hotel accommodation, and dining out contributed to the 1.8 per cent drop in services spending, which was partially offset by a 0.5 per cent rise in spending on goods, as households took advantage of end-of-financial-year sales.

Despite the month-on-month fall, household spending is up 5.3 per cent in through-the-year and calendar-adjusted terms. This is driven by miscellaneous goods and services (up 10.8 per cent) and health (up 7.8 per cent), while clothing and footwear made a resurgence with a 3.1 per cent lift through-the-year to June.

The lift in clothing and footwear for June follows a 1.9 per cent fall in May and a 4.3 per cent fall in April. 

However, in original, volume terms in through-the-year spending to the June quarter, clothing and footwear spending is down 3.7 per cent - the second-largest fall behind alcohol and tobacco spending, which fell 12.8 per cent.

Australian fashion business Mosaic Brands has confirmed it will report a trading and statutory loss for FY24 amid operational issues.

Subject to finalisation and review, Mosaic anticipates a $5 million to $10 million loss in operating earnings before interest, tax, depreciation and amortisation and an operating profit loss (EBIT) in the range of $15 million to $20 million.

According to the company - which operates nine fashion businesses including Rivers, Noni B and Millers - the operational issues shared in its recent trading update continued to impact the group for the balance of FY24. This includes a logistical overhaul, where the business migrated to a fully integrated logistical supply chain and distribution system with a newly appointed global partner.

“The resulting working capital pressures caused by these operational issues, and their consequential impact on stock intake and trade, are being actively managed by Mosaic, working closely with the support of its major lenders,” Mosaic reported. 

“While the FY2024 accounts continue to be finalised in advance of the full-year announcement later next month, the group confirms it will report a trading and statutory loss for FY2024.

“The group continues to anticipate a recovery in the first half of FY2025 as it works through and resolves the above issues.”

Alongside operating profit challenges, Mosaic’s net cash inflows were around $6.6 million in the latest quarter compared to approximately $19.8 million outflows in the previous quarter. 

Mosaic noted that the seasonality of fashion purchasing in retail, typically the end of each of the March and September quarters, delivers net cash outflows and the December and June quarters deliver net cash inflows. 

Mosaic Brands operates a network of circa 700 stores and a number of online digital department platforms.

It’s taken six years, but Australia is about to experience an Amazon revolution in retailing and television.

A spectacular rise in the customer base of the online Amazon retail operation is a clear warning to non-food retailers around the country – adapt or suffer. And as I explained on Monday, free to air television is also threatened. Eventually, Amazon will extend its power to the food sector.

When Amazon launched in Australia in 2017 retailers were geared for a big challenge. But instead it was a fizzer and retailers did not take it seriously.

Morgan Research reveals that in 2023-24 Amazon’s Australian customer base soared a stunning 16 per cent, or 1.1 million to 7.9 million Australians. It is now bigger than the combination of Myer and David Jones, larger than Target and very close to JB Hi-Fi.

There is still a reasonable gap between Amazon and both Big W and Kmart, but if Amazon keeps rising at the current pace, that gap will soon be bridged. And while most of the customer bases of Amazon’s rivals are skewed towards women, Amazon is divided equally between males and females.

To date, Australia’s big retailers have not responded radically to the duplication in Australia of Amazon’s overseas strategies. But the Amazon customer jump is an alert that they face similar challenges to newspapers and television.

We saw newspapers forced to dramatically change the nature of their operation in the last decade. Now free-to air television is under threat from a string of streaming services led by Amazon Prime. Retailers are next, and for some it will be an unpleasant experience.

Just over half the Amazon customer base is enrolled in Amazon Prime television streaming service. Amazon Prime viewers who take advertisements will get delivery discounts for goods supplied by Amazon to their home, plus and other benefits. It’s an incredibly powerful marketing tool not available to Amazon’s retail rivals

The Albanese government has swung in behind Amazon and legislated that anyone running a parcel delivery business where parcels are being sent to homes for consumption by individuals, then their transport operation is free of all the complexities and lower productivity transport measures contained in the 700-page industrial relations loopholes’ legislation.

Of course other online retailers can also benefit from the “Amazon clause” but the legislation will be a major blow to “bricks and mortar” retailers whose transport costs to bring goods to retail stores will rise by about 10 per cent because efficient independent family owned truckies are being legislated out and replaced by myriad of rules which effectively delivers a legal cartel between the unions and the larger transport companies.

And Australia Post, which serves many online retailers, is not organised to differentiate between deliveries to commercial enterprises and homes, so may find it difficult to benefit from the Amazon clause.

Of course, Amazon’s independent contractor system will still be subject to the unfair contracts legislation.

The Morgan research shows that on average, Amazon shoppers are purchasing six items a year on the platform. Kmart customers who shop at Kmart on average 7.5 times a year. Three in 10 Amazon shoppers make a purchase seven or more times over the year.

The Amazon business started in books, and books (including e-books and audiobooks) still represent around 31 per cent of purchases. But clothing has risen to 19 per cent and games and toys to 14 per cent.

What should alarm JB Hi-Fi is that, according to Morgan Research, the combination of computers, tablets, computer accessories, software, small electrical goods plus phones and accessories totals around 25 per cent of Amazon purchases.

Encouraged by this penetration, Amazon has announced plans to move into the so-called “big box” retail – furniture and large electrical appliances. It is constructing a purpose built warehouse in Sydney, set to start in 2026.

This will intensify the attack on JB Hi-Fi and open up a frontal assault on Harvey Norman.

What differentiates Amazon from other online retailers competing with the “bricks and mortar” sector is Amazon Prime.

There is little doubt that streaming television has been the biggest force skyrocketing the Amazon retail customer base.

And if Amazon Prime achieves a major presence in sports television, then the 7.9 million customer base will explode. In due course, Amazon will consider going to the food business and areas that compete with Bunnings. Already 5 per cent of it sales are in pet food where Bunnings is also making a big thrust.

Australia’s retailers have always watched at streaming television as a foolish diversification, but the stunning rise in the Amazon customer base, delivered in part by Amazon Prime, will must cause them to at least watch at streaming television.

Most of the streaming services are international, but Australian retailers might consider a retail link up. Paramount, which controls the Ten Network, has made it clear that their global future is in streaming television. They could be interested in a deal. And of course the Nine network owns the Stan streaming service which now facing increasing competition from overseas majors.

I emphasise that I have no knowledge of any discussions, but that 16 per cent rise in the Amazon customer base will send the sword of fear through all Australian retailers as well as the television networks.

Country Road Group, the fashion retailer gripped by a sexual harassment and bullying scandal, has suffered a 13 per cent dive in its full-year same store sales, with the company dragged down by some of the worst trading conditions for discretionary retailers in years.

The South African owners of the Australian fashion house, Woolworths Holdings, have also revealed that trading worsened in the second half as costs blew out due to a weaker Australian dollar, with the company also booking a goodwill impairment against menswear fashion chain Politix.

The dour trading update issued to the Johannesburg stock exchange on Wednesday comes as Country Road Group – which owns labels Country Road, Mimco, Trenery, Witchery and Politix – was embroiled in a workplace scandal in May involving former executives, with the company also launching an externally led investigation into the handling of the matters.

Since the sexual harassment and bullying scandal was made public, two senior male executives have departed Country Road Group, while the highly respected boss of the Country Road label, Elle Roseby, has quit the retailer. There were no allegations made against Ms Roseby and she is believed to have decided to leave in the wake of the culture issues at the fashion group.

Now just as Country Road Group is searching for new executives and trying to repair its shattered reputation and corporate culture, it is facing a significant slowdown in sales alongside rising costs. It also comes as Country Road Group staff prepare for a restructure that will likely see job losses.

According to the trading update issued by Woolworths Holdings, Country Road Group sales declined by 6.8 per cent for the 53 weeks to June 30 and by 8 per cent on a comparable 52-week period and 13.1 per cent in comparable stores.

Trading in the second half was particularly volatile as sales declined by 11.3 per cent. This was against the previous year in which sales grew by 12 per cent following the strong post-Covid pent up demand in the first half.

“Retail trading conditions in Australia and New Zealand deteriorated further in the second half, with consumer sentiment at near-record lows and the prolonged cost of living crisis continuing to impact both footfall and discretionary spend,” Woolworths Holdings said in its trading update.

Notwithstanding the challenging macro-economic backdrop, the Country Road brand delivered positive growth for the period, it said.

Costs continued to be a problem for the Australian fashion house, however.

“Whilst the group has maintained its stringent focus on preserving gross profit margin and containing costs, we equally continue to invest behind our key strategic initiatives. This, coupled with the impact of a weaker trading environment, has resulted in negative operational leverage in both apparel businesses.

“This was particularly prevalent in Country Road Group which was further impacted by inflated import costs due to a weaker Australian dollar, and the business’s inherently higher fixed cost base.”

This includes a goodwill impairment booked against Politix, the menswear brand it bought in 2016.

“Furthermore, the reassessment of the carrying value of the Politix business in Country Road Group, has resulted in a non-cash impairment of goodwill which impacts the earnings per share for continuing operations and the total group.”

As Levi’s global head of product innovation for the past 13 years, Paul Dillinger has helped bring some of the brand’s most pioneering projects to life – from its Bluetooth-enabled Trucker Jacket to its plant-based 501s, which are virtually indistinguishable from the originals. 

It’s a far cry from the haute couture dressmaking techniques he learned while interning at Valentino in the ’90s. But Dillinger is not your average fashion designer. Driven by an insatiable curiosity, he has carved out a unique role at every company he has worked for. 

Here, he shares the moment he first knew he wanted to work in fashion, his advice for young people seeking an unconventional career path, where he goes for inspiration and the single most important professional skill in his toolkit. 

Paul Dillinger: I thought I wanted to work in muppets. Growing up as a little kid, I was constantly making puppets and dressing them. There was always an affinity towards cloth and the manipulation of fabric. But when I was 12 years old, I was watching “The Phil Donahue Show,” which was a daytime talk show in the United States, and he had on a fashion designer named Willi Smith, who had a line called WilliWear. It was the first time I had ever seen a fashion show, and I was just taken with it. I was like, “Mom, I want that, I want to be him.” 

Now, he died of AIDS a few months later. He was a Black, gay man in fashion, and my parents are academics. I remember saying, “I want to be him,” and that is maybe not what a psychologist wants for her son, but they got me a sewing machine, and I began practicing my pattern-making and sewing skills at 12. 

My college search was about finding the best school that had a fashion program. I felt that it was a discipline that needed more consideration than most undergraduate programs could give, so I felt I needed to go to graduate school, and that’s how I ended up doing the Fulbright course in Italy.

IR: Were you interested in denim from the beginning?

PD: No, I was interested in men’s sportswear. My first job out of college was at Federated Merchandising Group, [which is now] Macy’s. The available job was an assistant designer for young men and boys 8-20. That included their private label denim collection, so the first job I started working in denim was in 1996, and it’s been denim ever since. 

IR: You’ve taken a very interesting path as a designer. How did you end up focusing on product innovation, where you’re dealing with quite a lot of science and experimentation? 

PD: As an industry that has built its image on constant, rampant change, there’s actually very little change [in fashion]. There are a few little dials that we redial – colour, silhouette, and, to a degree, fit, but not that much. Many successful businesses are actually run on the same material year over year, and then it’s just redialing fit and colour. There’s actually very little room for real change within the industry. 

I’m an infinitely curious person and cannot handle that level of constraint. Any really important change that I want to affect in the world is going to take more than spring, fall, spring, fall. Any real change to improve things, which is what I want to do, takes more than one fashion cycle. And so every job I’ve been at, they’ve recognised that.

At Calvin [Klein], I got moved into this director of design and R&D role. At Martin + Osa, a division of American Eagle Outfitters, I got moved into a design and R&D role. Those roles have never existed; they’ve always been carved out for me after showing dedication to the company, an aptitude for R&D, and a commitment to quality. 

I didn’t come to Levi’s to be the head of design innovation. I came as the senior director of collections for Dockers, but I demonstrated the same set of principles: curiosity, commitment, loyalty and hard work. 

Every time I spend enough time at a company and demonstrate those characteristics, I get the cool job, which is working on meaningful change that takes more six months. 

IR: If you had a piece of advice for somebody who wanted to do what you do, what would you tell them?
PD: Do it – whether it’s sanctioned or not. If it’s meaningful, do it, whether you’re compensated or not. I’m constantly making [things] because I’m curious about improving the way things are made, and that happens to intersect with Levi’s needs and this role. 

You can tinker and mess around with stuff. The best ideas start scrappy in a basement. Then the question is, how do you amplify and execute, and how do you present that as part of your work? 

You’re probably never going to be interviewing for that [kind of] job, so you need to have a portfolio that shows you are capable of doing more than the job you’re interviewing for. Take the last four pages of [your portfolio] and put in something curious and bizarre that they don’t expect to see, whether you work in origami, or you’re passionate about pop-up books. 

Put the oddball thing in that shows you’re more than the bullet points that you’re interviewing for. That will introduce the idea in people’s heads that you might have some value beyond the job they’re hiring you for. 

IR: Where do you go for inspiration? 

PD: I do other things outside of this. Along with my friends, I’m co-owner of a cooperatively owned drag bar in San Francisco called The Stud. 

Music festivals are really important to me to observe – the small ones. There are oddball culture holes all over the place that you can go and find things. I was in Salt Lake City – a fantastic city, never would have thought it. Amazing scene, amazing artists, great galleries, great DJs. Before that, I went to this great music festival camp-out thing south of Pittsburgh. Just amazing creativity. 

I don’t go to Burning Man anymore, but all of it – just keeping your eyes open everywhere you go. I mean, there’s plenty of inspiration in this room. A lot of the equipment we have [at Levi’s innovation lab], I have in my apartment – I have a heat press, I have a serger, I have a sewing machine. I can’t constrain my desire to fiddle around with things to the work week. I do it constantly. Anywhere I go, I look for fabrics and then make something.

A friend asked me to [make] a wedding dress last year…I hadn’t made a dress in 27 years. So the question was, what I had learned as a Fulbright Scholar in Italy, interning at Valentino, with 27 years of neglect, how much do we remember, and how much skill can be retained?

I thought I’ll just start making dresses and see if I’ve forgotten everything. It turns out, we don’t forget things. We get better because the one skill that is most important for any of this work is patience. 

When we are learning how to do things when we’re in college, we have no patience. Instead of forgetting what I learned, what I had done is acquired patience over the 30 years since graduation, and it made all the lessons learned in graduate school suddenly have more value and meaning. 

I think that’s probably the most important professional skill. But it’s not one that business is well-positioned to leverage.

Luxury fashion company Hermes has posted a 15 per cent increase in sales for the first half, with double-digit growth recorded across all markets.

The company’s consolidated revenue for the January-June period reached €7.5 billion (US$8.1 billion). Japan led the growth with a 22 per cent increase in sales, while Asia (excluding Japan) saw a 10 per cent improvement.

In the Americas, sales rose 13 per cent. France recorded a 15 per cent increase, while sales in Europe (excluding France) were up 18 per cent.

In a more challenging context, all the regions continued to show remarkable momentum, with the exception of Asia due to an inflection in traffic in Greater China, the company assessed.

On the bottom line, recurring operating income increased by 7 per cent to €3.1 billion, and consolidated net profit edged up to €2.4 billion from €2.2 billion last year.

“The solid first-half results, in a more complex economic and geopolitical context, reflect the strength of Hermes’ model,” commented executive chairman Axel Dumas.

The company is expecting revenue growth in the medium-term despite the current environment.

Candle and fragrances retailer Dusk and Accent Group, the nation’s largest footwear retailer, which owns chains such as The Athlete’s Foot and Platypus, have warned of challenging trading conditions just a few weeks out from reporting season as investors grapple with a volatile environment for listed retailers.

But, despite both companies showing signs of strain from challenging conditions, and sales growth flat to slightly down, there was a “relief rally” in both shares with Dusk shares rallying 30 per cent and Accent up 10 per cent.

With reporting season to kick off within weeks, where some of the country’s biggest retail chains will report their full-year results as well as crucially provide further insight into trading since July, investors are crawling over any updates from companies.

Of particular interest will be the recent performance of discretionary retailers, such as Dusk and Accent Group, and if shoppers are saving their fatter take-home pay generated by July 1 tax cuts, spending it on candles and sneakers or using it to pay more immediate and important bills such as mortgages, rent and food and groceries.

The $48m Dusk, which has 151 stores across Australia and New Zealand as well as an online platform that generates around 14 per cent of sales, said on Thursday its sales growth did improve over the second half.

However, the retailer was still expecting total sales for fiscal 2024 to be 8.2 per cent below 2023, at around $126.3m, while its underlying earnings of $6.2m to $6.4m would be less than half the $16.5m in earnings reported in the previous year. In a trading update Dusk pointed to its improved sales growth since January, hitting positive sales growth of 0.4 per cent in the last five weeks of the 2024 financial year.

In the second half total sales were 5.8 per cent lower, against a decline of 9.7 per cent in the first half. “The improved sales performance in the second half reflects the implementation of various strategic initiatives which focus on product rejuvenation, tactical and disciplined promotional activity, and enhanced execution of our online channel in the later part of the second half following the website relaunch in June 2024,” the company said.

Dusk said its importance as a gifting destination was highlighted during the Mother’s Day week with total sales up 10.4 per cent as its refreshed product range resonated well with customers. The market welcomed the return to positive sales growth, sending Dusk shares up 30 per cent to 76.5c.

Accent Group, which has just under 900 stores and whose retail banners include Skechers, Platypus, Hype and Glue, said it expected a drop in earnings for fiscal 2024 and would shutter 17 underperforming Glue stores.

It said it expected group EBIT for the full year to be in a range of $109m to $111m against earnings of around $138m in 2023. The expected earnings range includes an additional charge in the second half of approximately $14.2m relating to Glue. The company has made a decision to exit 17 underperforming stores where required returns are not being achieved. Shares in Accent rose 10 per cent to $2.16.

“This will result in a Glue store business consisting of 18 stores which is expected to be profitable in fiscal 2025.”

Accent CEO Daniel Agostinelli said trading conditions across the group in the second half had improved, with like-for-like sales in the second half 4.1 per cent ahead of the previous year. For the full year, total like-for-like sales are up 1.7 per cent, he said.

The French-Italian eyewear giant has agreed to buy the streetwear juggernaut from VF Corp. for $1.5 billion in cash, adding another lifestyle brand to a stable that already includes Ray-Ban and Oakley.

EssilorLuxottica SA agreed to buy the streetwear label Supreme from VF Corp. for $1.5 billion in cash, adding another lifestyle brand to the French-Italian eyewear company’s stable that already includes Ray-Ban and Oakley.

Supreme was founded in New York by James Jebbia in 1994, selling clothes and footwear targeting skateboarding and urban trends. It has moved from being a cult favorite, with its distinct red and white logo, to a mainstream success and now has an online business as well as 17 stores in the US, Asia and Europe.

EssilorLuxottica shares traded 3% lower early Wednesday in Paris, trimming their year-on-year gain to 10%. VF was down 0.5% in premarket US trading.

Jebbia said he supports the sale to Essilor as it will allow Supreme to focus on its brand, products and customers.

Supreme’s growth has been fueled by so-called “hype” marketing, including limited-edition collaborations with partners ranging from watchmakers to musicians, and frequent “drops” of new products. Among others, it has tied up with Louis Vuitton and The North Face.

VF acquired Supreme in 2020 as part of a $2.1 billion deal with private equity firm Carlyle Group and investors including Goode Partners.

EssilorLuxottica was formed from the merger of two of Europe’s most prominent eyewear companies — Italy’s Luxottica and France’s Essilor. It is a global leader in the production and sale of prescription eyeglasses, sunglasses and contact lenses.

Separately, EssilorLuxottica also said it’s buying a majority stake of 80% in Heidelberg Engineering — a German company that specializes in diagnostic solutions, digital surgical technologies and health-care IT for clinical ophthalmology.

That agreement will boost EssilorLuxottica’s medical technology business, which sits alongside the fashion-focused arm selling sunglasses and accessories.

Australian consumers and businesses will pay more for everything from chocolate and sofas to mining equipment as shipping crises in the Red Sea and Asia fuel the worst freight delays since the pandemic and threaten to stoke local inflation.

The continuing threat of attacks on commercial ships by Yemen’s Houthi militants off the Horn of Africa has forced vessels to reroute around the southern tip of the continent in what shippers say has become a “new normal” that adds weeks to their journeys and contributes to the worst congestion at the Port of Singapore since COVID-19.

Adding to the massive bottleneck in Singapore is a rush of exports from China to the United States as companies try to get ahead of the prospect of new tariffs being imposed by a re-elected Donald Trump, shipping experts say.

Rerouting around South Africa is increasing journeys by two weeks, and adding to fuel costs for shipping companies while the logjam in Singapore is creating delays of more than a month for Australian consumers.

Average ocean freight rates for 40-foot shipping containers are up nearly 300 per cent in the past year including a 10 per cent jump in one week this month to $US5868, consultant Drewry says.

Independent economist Chris Richardson said the shipping crisis could pose a “spanner in the works” in Australia’s fight against inflation.

“At a time when the inflation fight on goods, as opposed to services, is looking in excellent shape in most places, this is a spanner in the works that we could do without.

“That spanner is a bit more relevant in Australia because our inflation fight is still a bit more touch and go.”

Anthony Scali, chief executive of Australian furniture retailer Nick Scali, said freight rates had increased dramatically while the company was also dealing with reduced shipping capacity for its imported goods.

“The big issue is the shipping lines just don’t honour contracts and hence the rates have more than doubled compared to your contract rates,” Mr Scali said. “Clearly this will cause importers and retailers to have to increase prices. Very inflationary.”

Minutes of the Reserve Bank of Australia’s June board meeting released last week showed new inflation data had “increased the risk” of an interest rate rise. ABS figures released last month showed annual inflation jumped to 4 per cent in May, from 3.6 per cent in April.

Operations manager at ESS Shipping Amanda Bradfield said farming and mining equipment, furniture and confectionery were among the long list of imported items from Europe stranded in Singapore.

“We’ve had containers sitting there for over a month, which obviously causes a lot of pressure here in Perth because cargo is arriving very late in our ports,” she said.

“Longer transit times means increased costs to the shipping lines, which in turn pushes the increased cost down to the end consumers.”

Asked about the port logjam in parliament last week, Singapore’s transport minister said while the port had managed to slightly improve its waiting times, it was unlikely that problems in the Red Sea were going to ease soon.

Minister for Transport Chee Hong Tat warned the situation could be compounded by an increase in container volumes as companies bring forward export schedules out of Asia.

Freight and Trade Alliance director Paul Zalai said the international shipping industry was now confronting a “new normal” by diverting around the southern tip of Africa. That ongoing delay paired with chaos in Singapore would result in higher prices for Australian consumers, he warned.

“It’s thrown those ports out of whack, those Asian ports, particularly Singapore, which is normally extremely efficient, has had significant delays,” he said.

‘Freight rates getting higher and higher’

Increasingly unreliable arrivals from Asia and Europe are also forcing more Australian companies to store more products locally, driving up costs, Mr Zalai said.

“We’re seeing freight rates getting higher and higher and a lot of importers now, with the uncertainty of getting freight here on time, moving away from the ‘just in time’ inventories and storing more and more onshore here in Australia,” he said.

“That, particularly in Sydney and Melbourne, is challenging because there’s limited warehousing, and again the pricing is going up.”

Costs of shipping ocean freight, which soared during the COVID-19 pandemic, had been declining until the Red Sea crisis, reducing shipping lines’ profits.

But shipping lines were then hit by extra fuel costs incurred from taking cargo around the Cape of Good Hope instead of passing through the Suez Canal when Houthi attacks on vessels started in late 2023, pushing freight rates up again.

In its quarterly results released in May, shipping giant Maersk blamed the situation in the Red Sea and Gulf of Aden for supply chain disruptions, which increased market rates and costs.

The company’s first quarter earnings before interest and taxes dropped from $US2.3 billion in 2023 to $US177 million for 2024. However, earnings improved by $US759 million compared to quarter four in 2023.

Meanwhile, French shipping and logistics company CMA CGM recorded a 36 per cent drop in EBITDA, down to $US1.9 billion, compared to the first quarter of 2023.

The company in May said its quarterly results had been shaped by a rebound in spot freight rates, due mostly to disruptions in the Red Sea, which was weighing on available shipping capacity amid a rebound in demand.

Australian Retailers Association chief executive Paul Zahra said shipping delays would prove a “lose-lose situation” for both consumers and retailers.

“We know that shoppers want convenience and any delays in shipping have the potential to impact future purchases, loyalty or brand image – all of which could have lasting negative impacts,” he said.

“For retailers, increased shipping costs put extra pressure on their business model, at a time when higher costs are already eating into margins and threatening the viability of some businesses.”

Andrea Baldo will replace Thierry Andretta, who is stepping down with immediate effect after almost a decade at the helm of the British luxury brand.

Mulberry has appointed Andrea Baldo as CEO, replacing Thierry Andretta who has led the British luxury brand since 2015. Baldo will be tasked with improving the company’s performance against a challenging macro backdrop when he joins in September; Andretta is leaving immediately.

Baldo was most recently CEO and executive director of Ganni, where he served from 2018 until April this year. He played a pivotal role in scaling Ganni as an international business, taking over from founder Nicolaj Reffstrup. Mulberry noted his focus on developing Ganni’s retail network, product innovation and a “sharpening of the brand identity to increase customer engagement”. Before Ganni, he was CEO of Coccinelle, general manager and board director of Marni and held leadership roles at Diesel.

“Andrea’s international fashion brand expertise, creativity and strategic thinking meant he was absolutely the right person for this role,” said Mulberry chairman Chris Roberts in a statement. “I’d also like to thank Thierry for his contribution to the business.”

Founded in 1971 in Somerset, England, Mulberry is known for classic leather bags such as the iconic Bayswater and Alexa, as well as accessories and womenswear. In recent years, the brand has hit a number of hurdles, including the removal of tax-free shopping for tourists in the UK, which forced it to close its Bond Street store in February 2023. (Many British brands and fashion insiders have complained about the move, and have urged the UK’s new Labour government to reinstate the scheme.)

The wider luxury slowdown has also taken its toll. Mulberry’s revenue declined 4 per cent for the year ended 30 March 2024, compared to the previous year. When the trading update was released in May, Andretta noted that “Mulberry has not been immune to the broader downturn in luxury spending experienced in recent months, particularly in the UK and Asia.” Fellow British heritage brand Burberry’s sales also fell 4 per cent in the year to 30 March.

Alongside bolstering its international presence, Baldo could help Mulberry to move forward its sustainability strategy — something for which Ganni has garnered a strong reputation. In 2020, Mulberry launched the Mulberry Exchange, a circular programme through which customers can trade their existing bags for credit towards a new one. Last September, Mulberry opened a pre-loved pop-up store in London, which also showcased its upcycling collaboration with Stefan Cooke. This focus on circularity has led to a spike in demand for pre-loved Mulberry bags.

“I am thrilled to join Mulberry at such a pivotal moment and to build upon the strong sustainability credentials of this iconic luxury brand,” said Baldo. “I look forward to leading the business and its talented team into the next chapter.”

Myer’s proposed acquisition of Premier Investments’ apparel brands would be a winner for shareholders of both companies, according to Citi.

The US investment bank says the combined group would benefit from Premier’s product expertise as well as better buying terms stemming from an increase in scale.

Citi analyst James Wang sees potential for a 5 percentage point uplift in Myer’s private label apparel gross profit margin, generating a $25m increase in earnings for Myer.

The total potential synergies could be at least $50m, he says.

In a strategic update last month, Myer saw opportunities to create “material value” for its shareholders including via renewed focus on enhancing and expanding private label and exclusive brands portfolio.

The department store operator is exploring a potential combination with Premier Investments’ Apparel Brands business to “accelerate strategic priorities”.

Premier has said there may be “meaningful opportunity” for both businesses from the proposal. Premier Investments owned 31.37 per cent of Myer shares as of April 18th.

With Myer’s private label apparel generating about $500m or 15 per cent of Myer’s sales in financial year 2023, Citi estimates the proposed combination would generate a $5m increase in earnings for every 1 percentage point of private label margin expansion.

“We think better supplier terms owing to greater scale of the combined group could see at least 5 percentage points of private label margin expansion or about $25m of earnings upside,” Mr Wang said. “The opportunity could be more material than this, however.”

He estimates Premier’s apparel gross profit margins are about 58 per cent versus only about 40-50 per cent for Myer. “The margin gap represents the potential upside,” he said.

As well as the $25m earnings uplift from private label margin expansion in apparel, Mr Wang sees $10m of synergies from the placement of Premier Investments’ products as “concessions” within Myer stores, and at least $7m of synergies from distribution centre consolidation in West Melbourne, head office and other cost reductions.

“Total synergies could be at least $50m if the transaction was to go ahead,” Mr Wang says.

“Premier represents a unique opportunity for shareholders to participate in growth opportunities from the international rollout of Peter Alexander, as well as potential earnings upside from various synergies through its holdings in Myer.”

The proposed tie-up of apparel brands would allow Premier shareholders to participate in upside from both international expansion of Peter Alexander and Smiggle, as well as domestic synergies.

It would also make Century Plaza, which is the private investment vehicle of Solomon Lew, the largest shareholder of Myer as well as Premier, with Century Plaza expected to be represented on the Board of Myer, the company said in its announcement last month.

Mr Lew has indicated he would also be prepared to take an active role as a non-executive director of Myer if the transaction proceeds.

“We think these aligned interests could allow the Myer team to focus on unlocking domestic synergies and growth opportunities, and for Premier to focus on driving international expansion in Peter Alexander and Smiggle,” Citi’s Mr Wang said.

A deal would be subject to agreement on transaction terms and would require approval by the Board and independent shareholders of Myer, as well as the Board and shareholders of Premier.

It would also be subject to the report of an independent expert as well as ASX, ACCC, ASIC and Australian Taxation Office engagement to the extent required.

An independent board committee, led by Myer executive chair Olivia Wirth, including all of Myer’s independent non-executive directors except Premier’s nominee director, has been formed to consider the proposed combination with Apparel Brands.

Myer shares fell 1 per cent on Monday to 76.5c, while Premier rose 0.2 per cent to $29.71.

Another Couture Fashion Week has officially wrapped up in Paris. This season's schedule, which began with Schiaparelli and Dior on Monday, saw the brands present their autumn/winter 2024 collections – and there were plenty of breathtaking gowns that we hope to see gracing the red carpet during the coming film festivals.

Below, we round up the highlights from the shows and presentations. Here is everything you need to see from couture autumn/winter 2024 – and for the front-row action, head here, with striking looks from Jennifer Lopez, Nicole Kidman, Keira Knightley and Cate Blanchett.

Armani Privé

This season, Giorgio Armani was inspired by pearls for his AW24 couture collection. "Serene in their beauty, pearls are associated with the moon, water, wisdom, purity and love," detailed the accompanying show notes, explaining that the designer was "sensing a widespread need for serenity and calm".

This influence was seen quite literally through pearl-strewn dresses and pearl-encrusted jackets, with the shimmering orbs "trapped on the surface or multiplied like dew drops", or through liquid, high-shine fabrics that mimicked their lustrous sheen.

Chanel

With Virginie Viard having stepped down and no replacement announced yet, this season's couture collection was put together by the in-house studio team, who paid tribute to the Palais Garnier, an opera house in Paris, which played host to the show.

"Playing a key role ever since its creation, in both the history of fashion and the house, this hotspot of performance and elegance, where everything is about glances, gazes and putting oneself on display, is today hosting the Chanel runway show," said the brand. "Sophisticated, luxurious, theatrical, the collection reveals itself in the outside corridors surrounding the auditorium, transformed for the occasion into red velvet opera boxes.

Dior

Getting into the sporty spirit of summer 2024, Maria Grazia Chiuri and her team decided to pay tribute to the Olympics (which is set to take place in Paris this month) with the couture AW24 collection. The collection nodded to all athletes who "from antiquity to the present day, have overcome prejudice and obstacles to ensure a level playing field in sports contests". The designer also explored the ties between performance and clothing and its relationship with a body in movement. There was plenty of classical-inspired drapery as well as silhouettes that represented power.

Schiaparelli

This season's Schiaparelli couture collection was entitled 'The Phoenix' and was an ode to the house's founder and "her singular gift for rebirth," explains creative director Daniel Roseberry.

"I was told recently that 'People don’t buy Schiaparelli, they collect it.' That kind of devotion is inspired only by a unique relationship between client and creation. This is what makes haute couture so special: it’s an expression of my vision for the maison today, one free from marketing and merchandising. But it’s also something else: a way for me to honour that relationship, one of the most intimate ones in the world — the one in which I give women the power to be reborn, again and again and again."

Balenciaga

Perhaps the most talked-about show of the week (thanks to that very fabulous front row), this season's Balenciaga collection was all about illuminating savoir-faire through original techniques and material innovations. There were references to streetwear, goth, skater and metalhead subcultures and how these interact with part minimalistic form and part reimagined glamor. "The relationship between fabric, form, the garment and the body is central."

Jean Paul Gaultier

This season, Courrèges' Nicolas Di Felice had the opportunity to design Jean Paul Gaultier's couture collection. Following in the footsteps of Simone Rocha and Olivier Rousteing, the designer took the iconic label and put his very own spin on the designs. The result was a whole host of beautiful sheer and revealing gowns, many of which nodded to the trademark JPG silhouette, and all of which will no doubt be seen on the red carpet soon

Tamara Ralph

"I am delighted to return to Paris for my 17th season of couture, which also coincides with the first year anniversary of debuting my namesake brand," said Tamara Ralph. "The past year has been an incredible journey, and I continue to feel honoured and grateful, knowing that I am doing what I love most and sharing this infinite passion with the world." The collection, entitled 'Lost In Love' was filled with her brand trademarks as well as elements to represent passion and sophistication, from heart red and rose details to shimmering gowns and lots of volume.

A major British outdoor and lifestyle clothing retailer is aiming to take on the Australian market with plans to open four new stores by the end of the year.

Mountain Warehouse will make its Australian bricks and mortar debut at Vicinity Centres’ DFO at Skygate in the Brisbane Airport precinct on July 15, positioning itself as a low-cost family focused alternative to Kathmandu, Macpac, Anaconda and The North Face.

The opening marks the beginning of ambitious expansion plans to bring the brand to stores in Australia, after operating an online presence for the past seven years, annually turning over about $10m.

In the second half of 2024 Mountain Warehouse will also open stores at DFO Moorabbin, DFO Essendon and DFO Uni Hill in Melbourne.

Mountain Warehouse currently caters for about four million customers a year – featuring men’s, women’s, and children’s clothing as well as footwear and equipment. About 30 per cent of its turnover is currently from online sales. The new Australian stores are part of a global rollout of 50 stores in 2024.

London-based founder and chief executive Mark Neale said Mountain Warehouse’s offering was different to its rivals and many products were up to 30 per cent cheaper than comparable goods sold by the opposition.

“Our offer is a bit broader than some of the other guys and its definitely better value for money,” he said. “That’s always been our positioning. It’s more of a family offer. We sell a lot of kidswear. Most of the other guys who you might think of as in our competitive space have pictures of guys with an ice axe hanging off a glacier. It’s about value for money. We have a pictures of a family taking their kids for a walk with their dog in the woods.”

Established in 1997, Mountain Warehouse will have more than 400 stores around the world by the end of the year, mainly in the UK, with about 50 in Canada, a small presence in the US and stores in Poland, Germany and Austria. New Zealand is currently its third-largest market with 24 stores.

For the year ending February 2024 Mountain Warehouse recorded sales of £386m ($738m) and a pre-tax profit £26.2m.

Mr Neale would not make any specific forecast about its new Australian business, which he said will have “the full offer” including a summer range of shorts, T-shirts, thongs and travel-related products such as backpacks.

“We will see how the four stores go and if they get off to a good start we’ll be looking at more next year as well as a distribution centre in Melbourne,” he said. “Six years ago we opened a store in Queenstown New Zealand and we didn’t know whether that would be one-of-one or one-of-many and it went well.

“In six years, including three during the Covid pandemic, we built it out to 24.

“There’s a lot more people in Australia than in New Zealand so we’d like to think we will do more than that.”