TheChek News Flow

Retail sales and industrial production beat August forecasts but home prices continue to slide

China’s retail sales and industrial production grew faster than expected in August, official data showed on Friday, in a rare boost after policymakers stepped up stimulus measures to support the world’s second-biggest economy.

The data release also highlighted challenges in the property sector, where new home prices in big cities edged lower after a period of heightened investor concern over spillover effects from developer defaults.

Industrial production rose 4.5 per cent year on year in August, while retail sales, a gauge of spending that had remained consistently weak, added 4.6 per cent. Both measures exceeded analyst forecasts, as well as growth rates in July of 3.7 and 2.5 per cent, respectively.

China’s economy has struggled to rebound after three years of strict anti-pandemic measures were lifted at the start of the year, as a property sector slowdown, collapsing trade and low consumer demand hit confidence.

Other aspects of Friday’s data release underscored the challenge for Beijing to reach its 5 per cent annual growth target, the lowest mark in decades.

Fixed-asset investment softened to a 3.2 per cent rise in the first eight months of the year, compared with a 3.4 per cent rise to the end of July, while new home prices in 70 major cities fell 0.3 per cent month on month. Property investment is down 8.8 per cent over the January-August period.

China’s benchmark CSI 300 index of Shanghai- and Shenzhen-listed stocks briefly rallied following the data release before retreating to close down 0.7 per cent.

Policymakers have unveiled a series of stimulus measures in recent weeks to boost growth and prop up the property market and currency. The People’s Bank of China on Thursday cut the reserve requirement ratio for banks by 0.25 percentage points to 7.4 per cent, in effect adding liquidity into the financial system.

Zhiwei Zhang, chief economist at Pinpoint Asset Management, said the ratio cut sent a signal “that there is a sense of urgency to boost growth”, adding that he expected further policy moves in coming months.

The central bank said on Friday it was keeping interest rates on its one-year medium-term lending facility unchanged at 2.5 per cent. Last month, the PBoC issued an unexpected cut to the rate, which affects loans to financial institutions, by 0.15 percentage points as part of wider easing measures.

Big cities in recent weeks have also begun removing price restrictions on home purchases, including reducing minimum mortgage interest rates and downpayments, in a sign of mounting pressure to address a two-year property cash crunch that has weighed on construction activity and local government finances.

Recent trouble at Country Garden, formerly China’s biggest private developer by sales, which came close to defaulting this summer, has raised concerns about contagion from the property market into the wider economy and financial system.

On Friday, Sino-Ocean, another Chinese developer, suspended repayments on all of its offshore borrowings “in response to mounting liquidity pressures” including “a rapid decline in contracted sales”.

The positive industrial production and retail sales figures added to signs of tentative improvement in recent data releases.

Consumer prices in China turned negative in July before edging back into positive territory in August, while exports and imports declined less sharply than in July last month by 8.8 and 7.3 per cent, respectively.

The government also announced last month it would cease publication of youth unemployment data after it hit record levels.

The Savile Row tailor of Ghanaian heritage addresses the lack of diversity in the design world, as he unveils his first-ever collection of interiors and furnishings at London Design Festival from Saturday to Sept. 24.

MILAN — Ozwald Boateng, the veteran Savile Row tailor known for his colorful bespoke patterns and intricate designs, is about to inject his flair into the design world. During the London Design Festival, which kicks off Saturday, Poltrona Frau will present a new collaboration with the British menswear designer, marking his first-ever collection of interiors and furnishings.

The new capsule collection consists of furniture, accessories, textiles and wallpaper, combining Poltrona Frau’s artisanship with Boateng’s culture and African aesthetics and British tailoring expertise.

One can’t help but recognize that this is a landmark not only for Boateng, who has helped pave the way for African diaspora creatives in the U.K. and beyond for decades, but also for the high-end design world, which lacks diversity in top positions

“There’s much hope for greater openness… There’s an explosion of Black creativity right across the board from film to photography to art and to music. [In the past] if you were born in Africa, you never had a cultural voice that resonated globally,” the designer told WWD in an interview. Testament to Britain’s cultural progress, Boateng celebrated a design landmark earlier this year, with the debut of the first new uniforms for British Airways in-flight and ground workers in nearly 20 years. The last designer to dress the staff was Julien Macdonald.

Born to Ghanaian parents in London, Boateng began his career on Savile Row in the late 1980s and was credited with rejuvenating the profession of tailoring when he opened his first shop in 1995 at the age of 28. From 2003-2006 he was creative director for menswear at Givenchy and was awarded an Order of the British Empire by Queen Elizabeth II in 2005. A firm believer in the value of the African diaspora and and the African continent’s potential, Boateng was also key in the formation of the Made in Africa organization, dedicated to bringing innovative ideas to Africa while advising governments on infrastructure, innovation and development finance.

“Creativity is about creating beautiful pieces, that move your spirit, right? When you do that, that cuts through all levels of bias, you know? And so that’s basically what this collaboration is demonstrating,” he continued.

Italian firms — especially in the fashion world — have been under fire for a lack of diversity that misrepresents the nation’s actual cultural fabric. Specifically Italian firms do not typically divulge employee data that could potentially hold them accountable for not hiring enough citizens of Italian-born residents who hail from diverse backgrounds.

For Poltrona Frau, the collaboration with Boateng is as much about being open-minded as it is about incorporating his decades of expertise into the fold.

“As Poltrona Frau continues to expand its horizons, first in the world of art and now fashion, we welcome the mastery, talent and unique perspective of Boateng, who has beautifully melded his expertise in English tailoring and exploration of African patterns with our own tradition of Made in Italy design,” remarked Poltrona Frau chief executive officer Nicola Coropulis.

This summer, the U.S. based design-forward brand CB2 made a statement that resonated when they boldly decided to embrace African creativity, launching a collection of works designed exclusively by Black artists and designers around the globe — from the streets of Paris and Lagos to the shores of the Caribbean. Elsewhere, Virgil Abloh, before his death, partnered with luxury furniture brand Cassina and home decor company Alessi.

The U.K. native pointed out that designing furniture isn’t so much of a departure from designing suits, given his expertise in fabrics, though stepping into Poltrona Frau’s headquarters and meeting their artisans was an awe-inspiring experience, recalling the first time he encountered their machine which determines how many times a couch or chair can be sat on. “It blew my fuses… a mad amount!”

The centerpiece of the collection is a contemporary reimagining of Poltrona Frau’s iconic Chester sofa, which was originally designed in 1912, with rolled, pleated armrests and quilted finish and inspired by the Edwardian Chesterfield sofas Poltrona Frau founder discovered on voyages to England. Today, it is reintroduced with Boateng’s signature flair, embossed leather inspired by traditional kente cloths, brightly woven fabric typically worn on formal occasions.

Similarly the Vanity Fair armchair was fashioned in velvet fabric and printed with his Tribal pattern in several bold hues like red, yellow, purple, blue, green and black. In addition, vases, candles, tabletop accessories and even a Mancala game, typically played in Africa for millennia, enrich the collection with a sense of authenticity. It was also a tribute to his Ashanti roots, as his parents are from the city of Kumasi, a city in the Ashanti region. Fabrics like the kente, he explains, are so much more than fabrics, they have a “spiritual dimension” and a “fabric worn by kings” for centuries.

For a designer who has dressed A-list megastars like Mick Jagger and Spike Lee and emboldened a generation with his unique African approach to tailoring — why furniture and why now?

“It’s interesting because over the decades of me designing, it’s always been about this relationship with me and interiors and furniture because of my use of fabrics, my design [expertise] of textiles, which is something I’ve really built my name on. And because I’m a stickler for quality, it was always about finding the right partner execution.”

The group has altogether invested more than 200 million euros to address growing humanitarian and environmental challenges.

PARIS – L’Oréal Group has launched a 15-million-euro endowment fund focused on communities facing the biggest disaster risks.

“We have noticed, like everybody, in the last years more and more climate change-related disasters,” Alexandra Palt, chief corporate responsibility officer at L’Oréal Group and chief executive officer of the Fondation L’Oréal, told WWD. “We know that it will become even more frequent [and severe] in the next years.”

She was speaking just after the devastating earthquake in Morocco and flooding in Derna, Libya, took place, claiming thousands of lives.

Estimates show that disasters driven by climate have increased five-fold over the past 50 years and represent 50 percent of all natural catastrophes. Up to 3 billion people live in areas that are exposed to such disasters, and that number is expected to rise by 1 billion by 2050.

L’Oréal’s new fund, to be unveiled at Climate Week NYC that runs from Sunday to Sept. 24, is created to reach vulnerable communities via partnerships with local disaster relief organizations and non-governmental organizations.

The Climate Emergency Fund will concentrate on organizations that “prepare” to help reduce the impact of climate disasters before they occur and that “repair” to reestablish key infrastructures and services after there’s a disaster.

The first two organizations to receive backing from the new fund include The Solutions Project and Start Network.

The Solutions Project is a U.S.-based NGO that funds and amplifies climate justice solutions created by Black people, Indigenous people, immigrants, women and communities of color.

“We cannot just think that climate disaster is going to touch the poorest in the poorest countries, but also the poorest in richer countries,” said Palt. “It’s always people who are either poor, discriminated or excluded who will be those who suffer most from climate change.”

Start Network is an alliance of more than 80 NGOs across five continents.

“They work a lot on innovation, and early and rapid financing in order to support people when they are in a crisis, to really provide early and effective responses when the crisis strikes,” said Palt.

“It is clear that while climate emergencies are global in nature, some communities are at far greater risk of near-term climate disasters and must develop resilience to these looming crises before they strike,” said Christina Bennett, chief executive officer of Start Network, in a statement.

“In partnership with L’Oréal and local organizations rooted in their communities, we will enable these communities to prepare and protect themselves, with the tools and know-how delivered by local teams familiar with their circumstances and well-placed to help them rebound more quickly,” she said.

L’Oréal’s Climate Emergency Fund is not currently undertaking a call for proposals, but continues itself to identify innovative solutions, Palt said.

She explained there is a learning curve in finding the solutions, as the frequency and severity of climate-related and natural disasters has escalated.

The fund is part of a larger ecosystem L’Oréal has put in place to help burgeoning humanitarian and environmental challenges. The group also has launched the L’Oréal Fund for Nature Regeneration, the Circular Innovation Fund and the L’Oréal Fund for Women.

“We have a lot of experience with innovative solutions in the philanthropic space,” said Palt. “All these funds try to create new models that can bring answers and responses to the new challenges.

“What we have seen in in our activities and experiences is that we need new ways of financing and intervention,” she continued. “And so we will be once again direct our fundings to local small community stakeholders. It will be either through local networks or bigger organizations who are connected with these local stakeholders.”

The idea is to develop solutions for communities so they can react and act themselves.

“That’s what we have done through the L’Oréal Fund for Women,” said Palt.

She said the Climate Emergency Fund will complete L’Oréal’s philanthropic endeavors, which have a total investment of more than 200 million euros.

“Of course, all this does not change or slow down any of our own environmental transformation,” said Palt. “But we also think that we have a responsibility to contribute externally.”

The brand will open in Luxembourg and another French outpost next month as it continues full steam on its European growth strategy.

PARIS — Uniqlo has reopened its Paris flagship with a focus on customer service and flow, while playing up the location’s historical roots as a theater and the company’s new partnership with the Paris Opera.

Following nine months of renovation, the new look was timed to the debut of Clare Waight Keller’s highly anticipated first collection for the brand, a new partnership with the former Chloé and Givenchy designer.

The rue Scribe location is bookended by a Zara on Boulevard Haussmann and another just on the other side of the opera house, and it sits catty corner from an H&M. Taku Morikawa, chief executive officer of Uniqlo Europe, maintains these aren’t competitors, as Uniqlo’s strategy is steady basics.

“We’re not a fast fashion player at all, by the way. We don’t do fashion, we are about redefining components for everyday wear,” said Morikawa. Instead the focus is on design, function and quality. “That’s our very atypical mindset. It’s not just, OK, follow the fashion trend. That is not what makes sense to Uniqlo.”

Bringing Waight Keller on board certainly ups the brand’s fashion street cred, which is framed as a long-term partnership, alongside Christophe Lemaire, Inès de La Fressange and JW Anderson, which was refreshed this year through a collaboration-within-a-collab featuring tennis champion Roger Federer.

The company was not seeking a famous designer, Morikawa told WWD, but rather someone that would fit into the philosophy of elevated basics for the brand. Hints from the partnership collections will also infuse the regular product mix.

If they are not making a pure fashion play with Waight Keller, what it will do is help establish the brand’s womenswear. Uniqlo is looking at the category as a key growth driver. “Men’s has been stronger here in France, so this is a really good point for us — a very, very big chance to penetrate into the women’s market and to provide an emotional product.”

In the flagship redesign, they moved the women’s department and placed it center stage. The new spot demonstrates the brand shift, not just in Paris or Europe, but the idea is to strengthen womenswear across all markets. “In this case, product is very important, but also the shopping experience and appealing stores alike,” he said of attracting female customers with enhanced store layout as well as customer service.

That service includes a “Japanese hospitality mindset,” he said, with special training for employees across the European Union and the opening of a tailoring and repair bar. The brand has trialed the concept at other locations with success. There are six employees manning this station to attach vintage buttons or Sashiko stitching patches, for example.

It’s part of the brand’s flagship strategy to play up the neighborhood where it sits; with the Paris location it has the grandest of neighbors in the Opera Garnier. That inspired the in-house design team to highlight the building’s 19th century staircase and arched windows, as well as add a soaring skylight and additional views on the historical building. They opened up a storage space that hid some of the architectural gems, such as an old marble fireplace that now sits in the middle of a series of dressing rooms.

The company recently used the same design strategy on its Covent Garden store in London, which opened last April.

The interiors continue to be in line with the Japanese brand’s functional and modular aesthetic, and it’s also upping its tech specs, adding 28 self-checkout stations, which now outnumber the eight traditional machines. There are a total of 34 dressing rooms divided between two floors.

France is the company’s biggest market in Europe with 26 stores, and it’s about to open a new outpost in the alpine town of Annecy. Luxembourg is next on the list for expansion, with both scheduled to open before the end of the year.

The pandemic was a learning experience for the French market. Tourists were largely shut out, but they were able to gain valuable local customer insight from this period and hone the product mix. Still, the company is keenly aware that the Paris outpost is located in one of the most highly trafficked tourist spots in the world.

“There is a very obvious combination of locals living in Paris, in this particular area, and we are also seeing a huge amount of tourists that are coming. This is a super important location next to the department stores,” he said. While there are seven additional Uniqlo stores in Paris, Morikawa sees the Opera location functioning as a hub.

They have also partnered with local artists and brands, including Sanae Nicolas, Cuvée Noire, Le Chocolat des Français and Tom Ducarouge.

Morikawa said that European growth is a major focus for Uniqlo and parent company Fast Retailing.

“We are now standing at a good position in the market [with] meaning to the customer,” he said of growing brand awareness in Europe. “We definitely want to accelerate opening stores in new markets and new cities.”

There are currently 70 stores in Europe, which does not include Russia, where the company’s operations remain suspended despite rumors it was offloading its assets earlier this year. That strategy remains in a holding pattern for now, he said.

Physical stores are an important channel to connect with customers in new markets, with a small store strategy in place.

“We aim to open many stores. Definitely, in the next few years, it will drive the expansion of our business, then there will be more channels to connect to the customer,” he said. “The purpose is not just to increase sales, increase the number of stores, [but to] provide a good concept, product and customer service and the company stands for itself.”

The brand opened its first store in Poland at the end of last year. “We now realized that this is a big opportunity,” he said, with new eyes on eastern Europe. The company is in the process of learning the differing codes of the local countries there and plans to open new stores in the region.

Uniqlo’s international division’s Q3 revenue was up 38 percent year-over-year in the three months to May 31, as reported in the latest financial results from parent company Fast Retailing. “Uniqlo Europe generated large rises in revenue and profit on the back of strong sales of core products,” the company said.

“I can say that it is not just [driven] by opening new stores,” said Morikawa, without divulging numbers. “A very important point is like-for-like sales.”

Online accounts for 20 percent of the European business. “It’s growing, but for us it’s not only a specific focus on the e-commerce business [but the] physical store is super important because we can provide the good atmosphere for the customer to clearly understand what Uniqlo is, and [give] an experience that you can only provide from a physical store.”

That’s why the expansion focus lies in the footprint.

“It’s a very good time to accelerate the business. But it’s not just to achieve expansion [and] open a number of stores, increase sales, increase the profitability — that’s very important — but a more important point is how we deliver the Uniqlo company itself,” he emphasized.

“This should be our big concept and target in EU. So based on that, we need to create a new strategy, not just to achieve status and increase popularity, because otherwise, we might be misunderstood [as a fast-fashion brand]…It’s not just about sort of achieving our sales targets. It’s about having a long-term strategy. It’s about building that respect.”

François-Henri Pinault donnera un fastueux dîner ce vendredi 15 septembre rue de Sèvres, dans les locaux austères de l'hôpital Laennec qui abritent le siège de Kering. Plus de 150 "amis de la marque" se retrouveront dans l'aile dédiée à Balenciaga au sein de l'ancien hospice. Des fidèles de toujours, comme Bernard-Henri Lévy et Arielle Dombasle, Alain Minc ou encore Mercedes Erra, la patronne de BETC, seront présents. Des représentants du monde de l'art — Christoph Wiesner, directeur des Rencontres d'Arles, Florence Bourgeois, directrice de Paris Photo, ainsi que Thierry Frémaux, délégué général du Festival de Cannes — croiseront aussi des stars comme Vincent Lindon, Mélanie Laurent, Carla Bruni, Isabelle Huppert ou encore Charlotte Gainsbourg.

La soirée sera l'occasion de fêter les dix ans du nouveau nom du groupe familial, ex-Pinault-Printemps-Redoute (PPR) rebaptisé Kering en 2013. Et de commencer à prendre la lumière médiatique avant l'autre rendez-vous très attendu du 22 septembre à Milan : le premier défilé de Sabato de Sarno (LLA du 07/02/23). Ce jeune directeur artistique, inconnu même d'un public initié, est chargé de donner un nouvel élan à Gucci, qui représente à elle seule 70 % des résultats de Kering.

Au-delà des sacs et fanfreluches du podium, un autre spectacle se tiendra au premier rang. Le PDG de Gucci, Marco Bizzari, remercié en juillet après neuf ans à la tête de la marque et 18 ans dans le groupe, assistera à son dernier défilé. Tandis que Jean-François Palus, le fidèle bras droit de François-Henri Pinault, contemplera pour la première fois le "catwalk" en tant que nouveau PDG de la griffe par intérim. Son arrivée marque le début d'une reprise en main musclée.

Car le grand patron, FHP comme tous le surnomment, a en effet choisi de siffler la fin de la récré. Son groupe qui semblait se laisser vivre comme une belle endormie ces dernières années, s'est réveillé sous le double effet de l'entrée du fonds activiste Bluebell à son capital et de résultats de plus en plus décevants chez Gucci. La griffe italienne a vu ses ventes progresser de 1 % au premier semestre 2023, quand Hermès et la branche mode de LVMH progressaient respectivement de 22 % et 20 %. Pire, si l'on compare les premiers semestres de 2019 à 2023, Gucci a connu une croissance de seulement 9 %, contre 105 % pour la branche mode de LVMH.

Premier signe du réveil, l'héritier Pinault a bouleversé sa gouvernance pour reprendre le contrôle de ses marques qui vivaient jusqu'ici comme autant de baronnies quasi indépendantes. Gucci en est l'exemple le plus flagrant. Certains cadres au siège n'hésitent pas à parler de boîte noire tant Marco Bizzari y régnait en maître, sans autoriser le groupe à y mettre son nez. Dès la fin juillet, Jean-François Palus, jusqu'ici numéro deux de Kering sous le titre de directeur général délégué, a donc été envoyé sur place en missi dominici par son vieil ami de HEC, François-Henri Pinault.

Sa mission : remettre au carré la maison de la via Mecenate à Milan, passer au crible son fonctionnement, analyser toutes les économies de coûts possibles et surtout faire le tri dans les équipes. Un grand ménage vient de commencer avec le départ de Suzanne Chokachi, une Américaine entrée chez Gucci, il y a 25 ans. Elle y œuvrait depuis un an sous le drôle de titre de vice-présidente de la marque et des clients.

L'autre mouvement de taille en matière de gouvernance est le retour d'une fonction dédiée à la surveillance transversale des marques. Francesca Bellettini reste PDG de la griffe Yves Saint Laurent (YSL), dont elle a multiplié le chiffre d'affaires par six depuis dix ans. Mais elle devient également directrice générale adjointe du groupe en charge de toutes les maisons.

De quoi renouer avec les années Gucci Group. À l'époque, c'est Robert Polet, un ancien d'Unilever qui chapeautait ce pôle luxe de PPR avant que les maisons, déjà en recherche d'indépendance, n'obtiennent sa peau. Cette fois, Francesca Bellettini, stratège passée par Gucci puis Balenciaga avant YSL, a la confiance de François-Henri Pinault. Et elle sera épaulée par l'autre homme fort du groupe, Jean-Marc Duplaix, qui passe de la direction financière à un poste de directeur général adjoint en charge de toutes les fonctions opérationnelles, dont la très lourde logistique.

Autre réveil de l'été : Kering a renoué avec les acquisitions. Il était temps, après des années à rater ses cibles, volontairement ou non (LLA du 15/11/22). Cette fois, François-Henri Pinault a sorti le carnet de chèques sans complexe. Les parfums haut de gamme Creed ont été acquis fin juin pour un prix représentant 23 fois leur EBITDA (indice mesurant la rentabilité d'une société). Après avoir regardé Estée Lauder rafler Tom Ford, Kering s'offre enfin avec cette petite marque toute la structure marketing et commerciale nécessaire pour dupliquer dans le secteur de la beauté de luxe, ce que le groupe a réussi dans les lunettes avec Kering Eyewear, passé de zéro à un milliard d'euros de chiffre d'affaires en huit ans.

Valentino a aussi coûté bien plus cher que les multiples annonces fin juillet. La griffe italienne a été achetée, selon les annonces officielles, à 16 fois son EBITDA. Mais la nouvelle norme IFRS16 permet de placer les loyers en amortissement et gonfle ainsi artificiellement le résultat opérationnel de 205 à 350 millions d'euros pour 2022. Sans ce petit tour de passe-passe, le multiple d'achat passerait en fait à 27 fois !

Kering a dépensé 1,7 milliard d'euros pour s'offrir 30 % de Valentino et n'en sera sans doute propriétaire que dans cinq ans. D'ici là, toute la valeur qu'elle fera prendre à la marque par son expertise enchérira le coût final d'acquisition. Et avec une marge opérationnelle de seulement 10 % (contre 30 % en moyenne dans le luxe), il sera tentant de la faire grimper.

Comme ses 11 nouveaux collègues du board de Kering, Maureen Chiquet, nommée administratrice indépendante le 18 juillet, aura bientôt tout loisir de réfléchir à cet épineux dilemme. Cette grande prêtresse de la planète luxe, directrice générale du concurrent Chanel pendant neuf ans, est une recrue prestigieuse à même de rassurer les analystes financiers sur la gouvernance. Son agenda ne lui permet pas d'être présente au grand dîner de ce soir. Elle recevra néanmoins en avant-première comme tous les autres invités le livre "Kering, de granit et de rêves", qui retrace les soixante ans d'histoire du groupe et sortira début octobre. De quoi prendre un peu de recul.