Retail in Asia


Capri continues to feel sting from softening luxury demand, Versace Asia sees growth

U.S. luxury firm Capri Holdings reported an 8 percent sales downturn to USD 1.22 billion in the fourth quarter, with sales dipping across its brand portfolio in Asia, except for Versace.

SEE ALSO: Coach owner Tapestry acquires luxury rival Capri Holdings

The owner of Versace, Michael Kors and Jimmy said total company retail sales declined in the mid-single-digits with revenues being impacted by softening demand globally for fashion luxury goods. In wholesale, revenue decreased in the high-teens driven by softer demand in the Americas and EMEA.

By brand, Versace revenue fell 3.6 percent to USD 264 million. Revenue in the Americas declined 1 percent, while revenue in EMEA decreased 11 percent, partially offset by a 6 percent uptick in revenues in Asia.

Jimmy Choo revenue fell 9.3 percent to USD 137 million, dragged down by a 14 percent decline in Asia sales. Revenue in the Americas fell 9 percent, while revenue in EMEA decreased 6 percent.

Finally, Michael Kors revenue decreased 9.7 percent to USD 822 million, coinciding with a 16 percent plunge in Asia sales, Revenue in the Americas declined 9 percent, while revenue in EMEA decreased 7 percent.

As a result of the soft sales, quarterly net losses widened to USD 472 million, or USD 4.03) per diluted share, compared to net loss of USD 34 million, or USD 0.28 per diluted share, in the prior-year period.

“Overall, we were disappointed with our results as performance in the fourth quarter continued to be impacted by softening demand globally for fashion luxury goods. In our retail channel, sales trends improved sequentially in the Americas and EMEA while trends slowed in Asia. In our wholesale channel, sales remained challenged,” said John Idol, chairman and CEO, Capri Holdings.

“Versace, Jimmy Choo and Michael Kors continued to resonate with consumers as evidenced by the 11.6 million new consumers added across our databases, representing 14 percent growth versus last year. This reflects the strong brand equity and enduring value of our three iconic houses. Looking forward, we remain focused on executing our strategic initiatives to deliver long-term sustainable growth across each of our luxury houses.”

The earnings update comes as Capri Holdings’ previously announced takeover by fellow American luxury firm Tapestry faces scrutiny from the Federal Trade Commission, with the U.S. regulatory body claiming the proposed USD 9 billion merger would create a monopoly in the luxury industry in North America.