Uniqlo Faces Slight Decrease But Opens New Store in Singapore
Fast-fashion retailer from Japan, Uniqlo, has been setting standards when it comes to fashion, right along with European fast-fashion retailer H&M. As we’ve noted, their moves into North America have been very good and while most retailers are suffering, here are two brands that have generally thrived as more consumers look for trendy pieces fast and reasonable prices.
However Uniqlo did take a hit in the second quarter ending July 31, 2009 with same store sales decreasing by 4.2%. Part of this, Uniqlo explains, is the prolonged cool rainy season that effected summer goods sales.
Uniqlo still plans with it’s opening of a second store in Singapore, the ION Orchard Store on Friday, August 7 in the shopper-friendly area of Orchard Road in central Singapore. Their other Singapore store which opened in April continues to do a booming business. Singapore has become a new destination for many brands and retailers in the last year despite the global economic hardships.
Uniqlo has stores now of course in Japan, along with the UK, China, Hong Kong, USA, South Korea, and France. They plan to open a total of 8 stores in Singapore in the next 3 years and then expand further into Southeast Asia.
Volcom Beats Expectations But Lowers Outlook
Remember, the new financial reporting trend is to say things are “good” if a company beats expectations from analysts but still has lower sales than last year. That said Volcom’s 2nd quarter report that came out July 30, 2009, was “good” even though total consolidated revenue dropped from $72.5 million to $54.2 million from last year. It’s good because it beat Wall Street estimates, but it’s still a hefty drop especially if compared with last year and the year before. Electric, which is owned by Volcom, also decreased from $6.4 million to $4.7 million.
This is what Volcom CEO Richard Woolcott had to say, “Despite the continued macro economic challenges in the second quarter, our focus and drive to maintain the strength of the Volcom brand is resolute and propelled by our high quality and innovative products. Our global presence is stronger than ever, and that, coupled with the sound management of our balance sheet, uniquely provides us with the solid foundation to position our company as a leader in the action sports industry.”
This feels like one of those statements that doesn’t really say much.
As such, their 3rd quarter financial outlook anticipates the ongoing sluggish global retail environment and expects consolidated revenue to be $82 to $85 million instead of predicted $93 million.
Quiksilver Closes Financing
It’s been a tough couple of years now for Quiksilver as we’ve been reporting (here%uFFFDs our recap with data on youth culture preferences for the brand from 2000-2009) but it appears that now, they’ve figured out some key financing solutions and they are complicated. On August 3, Quiksilver announced that it had closed its deal with its European banking partners to consolidate its Euro debt obligations resulting in a 4-year deal in 170 million Euros in loans and a credit line of 58 million Euros.
In addition, Quiksilver closed on July 31, 2009, its first transaction with Rhone, a private equity firm for a 5-eyar secured loan of $150 million, and with Bank of America and GE Capital for a 3-year, $200 million loan.
According to Robert McKnight, CEO and President of Quiksilver, “With the European commitment in place and the funding from Rhone and our US bank group in hand, we can now fully concentrate our efforts on streamlining the business and making great products within our three great brands -Quiksilver, Roxy, and DC.”
Check out our other story on Quiksilvers’ collaboration with The Standard Hotel and boardshorts via vending machines.
Just in! Adidas Falls 93%
At press time, we got word that Adidas dropped a whopping 93% in their second quarter profits. Most of this came from the difficult economy and currency effects of the Euro and Russuian ruble in particular.
Herbert-Hainer, the chief executive of Adidas, which is the 2nd largest sportswear company behind Nike and based in Herzogenaurach, Germany, said “The impacts of the economic downturn and repercussions on consumer spending certainly continue to influence our performance in the 2nd quarter.”
However Adidas does think they%uFFFDve hit their bottom and things will improve.