Self Saving Strategy Of Luxury Goods Under "Falling Down"

Whether it's "singles day" or "double eleven", the electricity supplier ushered in the most vigorous year in this cold winter, and for mainland China

Brand, the "ice" of sales performance made this winter chill.

Judging from the recent three quarter earnings reports released by many luxury companies, the decline in performance has become the mainstream of the industry.

 

Burberry Asia Pacific operating bad market value evaporated 700 million pounds

British luxury brand Burberry recently announced that sales in the first half of fiscal year 1% increased by September 30th, due to the sluggish sales environment in mainland China and Hongkong. After the announcement, Burberry shares fell 12.5%, and the market value evaporated 700 million pounds.

Burberry Asia Pacific region is running poorly. Sales in mainland China and Hongkong have dropped by about 20% and 5% respectively.

Burberry said that the brand has "taken prompt measures" to reduce expenditure, minimize the adverse effects of the downturn in the luxury consumer market, and made detailed plans to improve sales in the second half of the year.

 

Escada is in a difficult position and its performance has declined sharply in China.

In its prime, Escada was the most famous high-end in the world.

One of the brands, but the company gradually declined, and filed for bankruptcy protection in 2009 years. After that, Mittal Mittal, the founder of India iron and steel giant Mittal, acquired the troubled company, and Megha Mittal is currently chairman and CEO of Megha.

Escada has not released detailed financial data for several years.

Escada recently has problems and plans to lay off 200 people to ensure the competitiveness of the company in the luxury industry.

At present, the women's clothing brand has nearly 2000 employees worldwide, most of whom are in the headquarters of Escada in A Shi Heim (near Munich).

According to the German newspaper Die Welt, the performance of Escada in Russia and China has declined sharply in the past few months.

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Louis Weedon deteriorated in the third quarter of the Asia Pacific region.

Louis Vuitton is the most popular luxury product for Chinese consumers, and one of the first luxury brands to enter the second tier cities of China.

However, in the three quarter of this year, Louis Weedon

Sales of leather goods business are barely equal to the previous ones.

Jean-Jacques Guiony, chief financial officer of LVMH group of Louis Weedon, said to the Chinese market: "if there are two shops in the second tier cities in China, we may close one of them."

 

Gucci losses remain Asia Pacific revenue fell to 17%

Recently, Gucci parent company Kering announced its third quarter earnings report. In the 3 months ending September 30th, the group's revenue was 2 billion 895 million euros (about 20 billion 520 million yuan), an increase of 12% over the same period last year.

Among them, Gucci, Balenciaga, YvesSaint Laurent and other luxury brand sales compared with the same period last year, an increase of 3.1%, of which direct store contributed revenue power.

Sales of sports and lifestyle led by Puma increased by 3.4% compared to the same period last year.

However, Gucci is still losing money.

The revenue generated by Gucci in the third quarter was 924 million euros (about 6 billion 530 million yuan), accounting for 31.9% of the group's total revenue, an increase of 8.6% over the same period last year.

However, excluding currency interest rates and other factors, Gucci rose by -0.4% compared to 17% in Asia Pacific region.

The decline in Hugo Boss results from the slowdown in China's economic growth.

The German luxury brand HugoBoss reduced sales and profit expectations in fiscal year 2015.

China's economic growth has slowed down, while US tourists' spending on shopping has decreased, resulting in losses in the third quarter.

In the third quarter, HugoBoss sales fell 1% to 744 million euros compared with the previous year. Excluding special fees, the profit before tax, depreciation and amortization (EBITDA) decreased by 8% to 168 million euros compared with the same period last year.

It is reported that Hugo Boss, famous for its fine men's formal dress, is coming in the field of women's wear and accessories.

At present, Europe's performance is basically the same as expected from the regional perspective, but sales in China are decreasing. Meanwhile, the weak tourism consumption in the United States has restrained sales growth.

Lack of PRADA performance improvement remains weak in Asia Pacific market

In the whole luxury industry, in order to fight against the decline and the number of tricks, PRADA appears to be particularly low-key, lack of performance improvement.

As of July 31, 2015, the net profit of PRADA group increased 4% to 1 billion 823 million euros compared with the same period last year.

The Asia Pacific market is still weak, showing a similar negative trend in the first quarter of the year.

In the first quarter of fiscal year PRADA, there was only a 0.6% increase in the Asia Pacific region, with only 5% growth in the Asia Pacific market in the first half of this year.

 

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Luxury brand self rescue strategy

1, closing stores to reduce the cost under the line.

With the sharp drop in sales, luxury stores will continue to boom.

Most luxury brands will shut down some stores in China's two or three tier cities this year. Many luxury brands say they will suspend new stores in China this year.

2, discount promotion promotes popularity.

Through discount, luxury goods regrouped popularity, and consumers queued up at the front door of discount stores in all parts of the country.

Another calculation of luxury goods is that consumers who come to buy discounts can enter shops to see new products. Although they have no advantage in price, this free advertisement is not willing to miss.

3. enhance brand and consumer attachment and affinity

The idea that the price of overseas luxury goods is lower than domestic has been deeply rooted in the hearts of the people. It will not be shaken too much because of the aggressive price reduction of luxury brands in China.

Perhaps luxury brands should re-examine their marketing strategies. In China, they should pay more attention to enhancing brand and consumer attachment and affinity. At least, Chinese consumers will choose their own brands when shopping abroad.