Vivian Hendriksz

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Friday, July 21 2017

Business Intelligence London - The fashion industry may be an ever-changing industry, but one aspect has remained constant over the past decade - the influence of fast-fashion retailer Zara. The man behind the world’s leading fashion company Inditex, Amancio Ortega, transformed the industry’s mass-market model for good with the launch of his famed fast-fashion chain and secured his place as the wealthiest man in the industry. Currently ranked as the richest man in the fashion industry, and the 4th wealthiest man in the world, Ortega holds a net worth of 71.3 billion US dollars in 2017 - which is close to 30 billion US dollars more than the second richest man in fashion, Bernard Arnault.

FashionUnited’s Top 10 Wealthiest People in Fashion 2017

Known as the man behind luxury goods group LVMH, Arnault is also an avid art collector, as well as CEO of the company and the wealthiest man in France, with a net worth of 41.5 billion US dollars. The success of both these entrepreneurs underlines the potential success offered by the industry’s lower-end and higher-end of the market. But which other business men and women have made their fortunes in fashion? Who saw their net worth rise, and who saw their worth decline in 2017? FashionUnited takes a closer look at the top ten richest people in fashion, and their net worth over the years in the charts below, based on FashionUnited’s Top 100 Index, published on June 26, 2017.

The Top 10 Wealthiest People in Fashion in 2017

The annual Net Worth of the Top 10 Richest People in Fashion 2017

Photo left to right: Amancio Ortega, by http://www.signalng.com/ [CC BY-SA 4.0 ( http://creativecommons.org/licenses/by-sa/4.0)], via Wikimedia Commons

Bernard Arnault, by Jérémy Barande / Ecole polytechnique Université Paris-Saclay, via Wikimedia Commons

Prachi Singh

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Friday, July 21 2017

The Hermes Group's consolidated revenues amounted to 2,713 million euros (3,161 million dollars) in the first six months of 2017, up 11 percent at current exchange and 10 percent at constant exchange rates. The company said, group's stores posted an 11 percent increase in sales, in all the geographical areas and growth was also sustained in the second quarter with 9 percent rise at current exchange and 8 percent at constant exchange rates.

Hermes reports sales growth across geographies

During the first six months, the company said revenue rose in all the geographical areas worldwide. Sales in Asia excluding Japan increased 14 percent, driven particularly by continental China. Japan posted a 3 percent revenue rise, despite the strengthening of the yen. Sales in America improved 9 percent, while Europe reported a 7 percent increase benefitting from store openings and extensions in Rome in October, and London and Munich in March. France, Hermes said posted a good increase in group stores.

12 percent sales growth in leather goods and saddler, the company said, was sustained due to the collections and the diversity of models. The development was supported by the sustained pace of production and the increase in capacities at the three new sites in Charente, Isère and Franche-Comté. In June, the group opened two new production sites, the Maroquinerie de Normandie and the Ganterie-Maroquinerie in Saint-Junien.

The ready-to-wear and accessories division posted 10 percent sales rise, driven by the success of the ready-to-wear collections as well as jewellery accessories and shoes. The silk and textiles business line saw 6 percent sales increase.

The perfumes division witnessed sales growth of 8 percent, while the revenues of watches business line decreased by 1 percent, penalised by a still challenging market, but showed a slight upturn in the second quarter. Other Hermès business lines improved 13 percent, which encompass jewellery, Art of Living and Hermès table arts.

Picture:Hermes website

Vivian Hendriksz

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Friday, July 21 2017

Business Intelligence It is no big secret that Amancio Ortega, the man behind fashion giant Inditex, is the richest man in the fashion industry. Currently ranked as the 4th richest man in the world, the Spaniard is worth 71.3 billion US dollars - 15.3 billion US dollars more than Mark Zuckerberg, founder of Facebook, according to Forbes's Billionaires list. Ortega has managed to hold onto his ranking as the wealthiest man in the global fashion industry for a number of years, thanks to the runway success of his fast-fashion model Zara.

But Ortega is certainly not alone in carving out a fortune in fashion. Take Bernard Arnault for example, the man behind luxury conglomerate LVMH. Arnault saw his overall net value jumped from 33.9 billion US dollars in 2016,to 41.5 billion US dollars in 2017, thanks to the acquisition of couture house Christian Dior. In fact, there has been an increasing number of individuals making a fast buck - or quick billion - in fashion over the past year. But which fashion entrepreneurs have seen solid boost in their fashion emporiums and net value over the last year? We take closer look at three leading people in fashion, who saw a significant increase in their net worth in 2017, according FashionUnited’s Top 100 BI list, published on June 26.

Anders Holch Povlsen - Bestseller

First up we have Anders Holch Povlsen, who is the owner and CEO of leading fashion retail group Bestseller. Known for its wide array of high street fashion chains, such as Jack & Jones, Vila and Vero Moda, the international family-owned company owns 20 individual fashion brands. Bestseller is present in more than 70 markets across Europe, the Middle East, North America, Latin America, Australia and India. Currently operating 2,700 branded chain stores across 38 markets around the world, in addition to 15,000 concessions, Bestseller rapidly expanded from the single store Povlsen parents opened in Ringkobing, Denmark in 1975.

Povlsen’s increasing net worth is linked to Bestseller growing sales, which reported a turnover of 3.5 billion US dollars in FY 2015/16. However, Povlsen also holds significant stakes in online fashion retailers Zalando and Asos, which continue to perform well. Bestseller remains the largest shareholder in British e-commerce platform Asos, holding a 29.16 percent share, in addition to a 10 percent stake in German Zalando. In addition, Povlsen also owns more than one percent of all the land in Scotland, through Wildland, a non-profit organisation the entrepreneur set up in order to purchase natural land and protect it.

Michel Leclercq - Decathlon

Michel Leclercq, founder of Decathlon, is another significant riser on this list. Leclercq first opened a small sportswear store in 1976, under the name Decathlon. Since then the sportings good chain has grown into one of the world’s biggest athletic retailers. With more than 900 stores around the world, Decathlon employs 60,000 people in 27 countries. The retailer, which offers a wide array of athletic wear, equipment and outdoor gear, opened its debut store during the boom in sporting federations and clubs, in the car park of the Auchan shopping centre in Englos.

Decathlon has seen a steady increase in sales since 2009, as consumers continue to invest in health, fitness and overall well-being. Therefore, it should come as little surprise that Decathlon reported a turnover 11.5 billion dollars before tax for FY16. In addition, Leclercrq, who holds a 40 percent stake in Decathlon, is the cousin of Gerard Mulliez, the patriarch of the famous French retail dynasty, so his success in the industry should come as no shock. Leclercq and his immediate family own 40 percent of the sporting goods company, while the extended Mulliez family hold another 40 percent.

Bernard Lewis - River Island

Bernard Lewis, the man behind Chelsea Girl, better known today as River Island, has enjoyed a 27.7 percent increase in his net worth over the last year. Lewis first started out in the industry selling knitting wool from The Wool Shop from an East London bomb site. He went on to launch his own store, under the name Lewis Separates, before rebranding under the name Chelsea Girl in 1965, and later on in 1988 as River Island.

Counting more than 350 stores around the world, with franchises in Europe, Asia and the Middle East, the high street fashion chain has managed to successfully tap into millennials shifting needs and keep pace with the changing trends. River Island achieves more than 1 billion US dollars in annual sales, and is overseen by Ben Lewis, Bernard Lewis’s nephew who first started out working in the company as a store manager in 1990. Ben Lewis has served as River Island CEO since 2010.

Honourable Mention: Sefik Yilmaz Dizdar

Sefik Yilmaz Dizdar, the man behind Turkey’s LC Waikiki deserves an honourable mention, as 2017 marks the first time he has been listed in FashionUnited’s Top 100 list. A manufacturer and retailer of ready-to-wear fashions and home items, LC Waikiki has set itself an admirable goal - to become one of the three most successful brands in Europe by 2023.

Founded by French designer Georges Amouyal and his partner in France in 1988, Yilmaz Dizdar and his partners, which include billionaire Mustafa Kucuk, acquired the fashion-lead business in 1997. Afterward, Yilmaz Dizdar and his partners decided to develop their own store chain to sell their products. Since then LC Waikiki has expanded to count over 750 stores in 36 countries including the Middle East and Southeast Asia, generating more than 2 billion US dollars in sales last year. Mustafa Kucuk's brother, Vahap Kucuk, is CEO and spokesman of LC Waikiki.

Homepage photo: via Pexels

Prachi Singh

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Friday, July 21 2017

Second quarter net sales at Skechers increased 16.9 percent to 1.026 billion dollars, which the company attributed to a 6.4 percent increase in the company’s domestic wholesale business, an 18.6 percent increase in the company’s international wholesale business, and a 28 percent increase in its company-owned global retail business, which included comparable same store sales increases of 7.1 percent. Gross profit for the quarter was 488.3 million dollars, or 47.6 percent of net sales, compared to 416.3 million dollars, or 47.4 percent of net sales, for the same quarter last year.

“Second quarter net sales exceeded our expectations setting another record quarter, and making the first half of 2017 a new record with sales surpassing 2 billion dollars,” said David Weinberg, COO and CFO of Skechers in a media statement.

Review of the second quarter results

Earnings from operations were 86.3 million dollars or 8.4 percent of sales, a decrease of 14 percent over the second quarter of 2016. Net earnings decreased 19.7 percent to 59.5 million dollars, and diluted net earnings per share were 0.38 dollar.

The company said, general and administrative expenses for the second quarter increased 62.1 million dollars to 305.3 million dollars due to Skechers’ focus on long-term global growth, including 22.3 million dollars associated with the Company’s 68 additional domestic and international retail stores—31 of which were opened in the second quarter, and 26.2 million dollars to support its international growth, of which 16.9 million dollars was due to increased costs in China, 3.6 million dollars for the transition of its South Korean distributor to a joint venture, and 2.4 million dollars in Japan.

Highlights of the six month financial performance

Net sales for the fist six months, were 2.099 billion dollars and gross profit was 964.8 million dollars or 46 percent of net sales, and earnings from operations were 210.7 million dollars or 10.0 percent of net sales. Net earnings were 153.5 million dollars and diluted net earnings per share were 0.98 dollar per share.

Commenting on the positive trading, Robert Greenberg, Skechers Chief Executive officer, said: “In the international markets, we achieved double-digit growth in many countries worldwide—including Germany, Chile, India, China, and Australia. Skechers retail stores around the world now include 1,870 international stores of which 1,691 are third-party-owned locations. At quarter end, our total Skechers retail store count was 2,305, and included the opening of several key locations—Tokyo’s popular Shibuya district, the new Century City Mall in Los Angeles, a super store in Ontario Mills in Southern California, a store in New York’s SoHo, among others—and the relocation of our store on San Francisco’s Powell Street.”

Expects global sales to boost Q3 results

Based on these key indicators, the company believes it will achieve net sales in the third quarter in the range of 1.050 billion dollars to 1.075 billion dollars, which would represent a third quarter sales record, and earnings per share of 0.42 dollar to 0.47 dollar. This projection includes flat sales increases in the Company’s domestic wholesale business, and double-digit increases in its international wholesale business, and its global company-owned retail stores.

“Based on our global meetings in May and June, and our on-going domestic key account meetings at our corporate offices, plus our July sell-throughs, we believe that the record sales we experienced in the first six months will continue in the second half,” added Greenberg.

The company expects its capital expenditures for the remainder of 2017 to be approximately 35.0 million to 40 million dollars, which includes corporate office upgrades and an additional 35 to 40 company-owned retail store openings and several store remodels.

Picture:Facebook/Skechers

Angela Gonzalez-Rodriguez

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Wednesday, July 19 2017

Inditex CEO Pablo Isla has unraveled the keys to the future of the world's largest fashion retailer: "solid, sustainable and integrated" growth that revolves around a business network model that integrates traditional stores and online sales.

On Tuesday, Inditex held its General Shareholders' Meeting, an opportunity that the CEO of the company took advantage of to explain the group's sustainable growth strategy, a strategy that starts with Inditex's conception as a corporation that "generates social and environmental value".

During his speech, Isla highlighted the "solid and sustainable growth" of the company in 2016 and defined Inditex as a company dedicated to its people and creative talent and supported by an integrated model of physical and online stores.

A good example of Inditex's growing interest in further refining its sustainability-based growth model is its 'Closing the Loop' program for the reuse and recycling of textile products. This initiative has enabled the collection in one year of more than 7,100 tons of garments, footwear and accessories through containers in stores, offices, and logistics centers.

In addition, the shareholders who met at the company's headquarters in Arteixo approved the group's performance in 2016. Last year, Inditex surpassed the 7,200-point mark in 93 countries, operating its online stores in 41 markets.

Inditex pays dividend 13 percent higher than a year ago

The group's revenue reached 23,310 million euros, driven by growth in all regions in which the group operates. The profit amounted to 3,160 million euros.

Inditex will pay its shareholders a dividend of 0.68 euros per share, equivalent to 2,117 million euros depending on the current number of shares entitled to receive it, up 13.3 percent year-on-year. Dividend has risen 89 percent in the last five years.

Thus, the founder and main shareholder of Inditex, Amancio Ortega, will be paid 1,256 million euros as dividends of the company, compared to the 1,108 million euros that he received for this same concept last year.

Photo:Inditex Web, Spain