2020年11月20日
行業報導 - 2020年11月20日
1、中日15國簽RCEP建超級經濟圈
經過長達8年的磋商，亞太區15個國家達成全球規模最大的自由貿易協定，抗衡美國脫離全球化所帶來的影響。中國、日本、南韓、澳洲、紐西蘭及東盟10國領導人，昨日透過視像方式簽署《區域全面經濟夥伴關係協定》（RCEP），中方指出，RCEP各成員國之間關稅減讓「以立即降至零關稅、十年內降至零關稅的承諾為主」，貨物貿易零關稅產品超過九成。
有份出席會議的中國國務院總理李克強表示， RCEP達成協議極具標誌性意義，是多邊主義和自由貿易的勝利。
零關稅產品超過九成
今次RCEP的組成意義重大，15個成員國合計的總人口（約23億）、經濟規模及貿易總額均佔全球總額約三成，由全球第二及第三大經濟體的中國和日本，以至新興市場國家都包括在內；而RCEP同時亦是中國與日本首次達成雙邊關稅減讓安排。協定旨在通過削減關稅及其他壁壘，降低市場准入門檻，20個章節包括貨物貿易、原產地規則、服務貿易、投資、電子商務及政府採購等【表】。
RCEP整體關稅廢除率達九成以上，接近《跨太平洋夥伴全面進步協定》（CPTPP；前稱TPP）水平，由於成員國經濟規模差距頗大，RCEP初始關稅減讓會按東盟最低收入國家的利益來衡量，跟CPTPP相比，RCEP沒有在知識產權、國有企業、勞工權益與環境保護等方面制定高標準，貿易自由化水平較低。有分析認為，中國將透過RCEP擴大地緣政治影響力，主導地區貿易規則。
各國領導人在共同宣言中表示，RCEP是一個由發達國家、發展中國家及貧困國家共同參與的史無前例的超級貿易協定，將為地區內的企業提供廣泛商機，加強成員國的經濟合作，並且協助克服疫情、復甦經濟；各國會盡快完成相關程序，爭取RCEP協定早日生效。
李克強：多邊主義勝利
李克強表示，當前國際形勢下，RCEP經過8年談判得以簽署，表明多邊主義和自由貿易是大道、正道，人們在挑戰面前選擇團結與合作，而不是衝突與對抗。商務部副部長兼國際貿易談判副代表王受文提到，RCEP有助中國擴大出口市場空間，滿足國內進口消費需要，有利穩外貿、穩外資。日本首相菅義偉指出，對日本而言，RCEP是首個包括中國及南韓的經濟夥伴關係協定。
據日本傳媒報道，中國原本對簽署大型經濟夥伴關係協定、制定知識產權及資訊流通等規範並不積極，但因中美對立關係激烈，急需一個沒有美國的貿易框架，因此願意在日本關稅上讓步。報道稱，成員國對日本產品的關稅廢除率方面，中國為86%、南韓是83%，其他國家由86%至100%；在中國頗受歡迎的日本產干貝、日本酒等的關稅將廢除，而電動車馬達及鋼鐵製品等也列為撤除關稅對象。成員國出口至日本的關稅廢除率方面，中國為86%、南韓是81%、其他國家則達88%。
中信銀行（國際）首席經濟師廖群認為，締結全球最大規模自由貿易區意義重大，美國特朗普政府意圖脫離全球化，亞太區15國合作提供更自由化措施，可互惠互利，尤其中美「脫鈎」（decoupling）導致外部環境面臨重大挑戰，RCEP能協助克服難關且帶來新機遇，對亞洲市場及中港兩地均屬好事。
趕美換屆前達協議增籌碼
廖群又說，美國民主黨拜登就任總統後，料對華態度更理性，惟中美衝突仍將持續；儘管中美為維持緊密互利關係未必會全面脫鈎，但貿易及高科技領域的摩擦難免，RCEP可彌補部分影響，並產生示範作用，以便往後進一步與東歐、非洲及拉丁美洲等地結盟，抗衡美國及其同盟勢力。而拜登往後或推動美國重返CPTPP，可是現階段未知其全球化進程能走多遠，RCEP的15個成員國有需要做好準備與之抗衡。
廖群說，不排除中國推動在美國政府換屆前達成RCEP協議，是希望中美談判時有更好的磋商基礎；15個國家應各有盤算，整體而言，RCEP有利於亞太區國家跟美國商討貿易安排。
資料來源：信報財經 (2020年11月16日)
2、滬打造「五個中心」 建雙循環戰略鏈接
【本報訊】中共總書記習近平考察上海後，上海市政府昨日（13日）公布發展方案，強化全球資源配置、高端產業引領等「四大功能」，加快推進國際經濟、金融、貿易、航運和科技創新「五個中心」建設，促進上海成為經濟「雙循環」戰略鏈接。
《上海市全面深化服務貿易創新發展試點實施方案》對8個方面提出22項任務、80項措施。方案已在本月6日正式實施，將在國家規定的3年時間內完成試點任務。
寬港專才資格評估 利跨境執業
方案提出完善管理體制，強化統籌協調機制、推動「放管服」改革、提高政務服務效能；擴大對外開放，深化服務業對外開放先行先試、推動自然人跨境執業，包括允許合格的境內機構直接投資、允許國際人才在該市提供服務、放寬港澳專業人才資格評估，部分在港澳的執業經驗視同內地經驗。
提升便利化水平，推動資金、人員流動便利化，讓數據跨境安全有序，在臨港新片區建立「本外幣一體化帳戶體系」、打造世界頂尖科學家社區；創新發展模式，推動長三角區域協同發展、發展數字貿易，建設新型互聯網交換中心、大型雲計算數據中心，培育一批數字貿易重點企業，推動數據資產商品化，形成大數據交易新模式。
方案提出，將合格境內機構投資者主體資格範圍，擴大至境內外機構在上海設立的投資管理機構，其中包括證券公司、基金公司。進一步擴大合格境內機構投資者境外投資範圍，允許合格境內機構投資者開展包括境外直接投資、證券投資和衍生品投資在內的各類境外投資業務。
另外，上海市發改委等6部委同日印發《燃料電池汽車產業創新發展實施計劃》，計劃在2023年前打造10間國際知名企業、建成30座加氫站、推廣汽車1萬輛，市場規模達千億級別。
資料來源：香港經濟日報 (2020年11月16日)
3、港廠商內地接急單現小陽春 東南亞發貨延緩 宅經濟帶動需求
中港第三季出口表現報捷，內地第三季出口按年增長10.2%，香港9月份整體出口貨值按年升9.1%，扭轉連續6個月跌勢。製造業界人士透露，歐美買家在疫情期間的買貨習慣改變，加上東南亞多國的抗疫措施拖慢工廠的生產期，故此部分急單會傾向在中國一條龍式生產再快速出貨，而「宅經濟」的消費需求突出，使廠商在疫情期間迎來小陽春。
內地外貿出口訂單突然回暖，信達企業執行董事、廠商會紡織及印染業委員會主席駱百強指出，內地製造業在今年首季因疫情而陷入停頓，但隨着肺疫受控後，生產進度基本已恢復穩定；相反，東南亞如泰國及越南等國則不時因疫情而實施封鎖措施，雖然工廠仍可以運作，但生產期由原來的3至4個月，拖長到4至5個月。
訂單生產期短貨量細
駱百強的公司主要生產服裝，主要銷售市場為美國，他稱，客戶在疫情後的採購模式改變，訂單要求壓縮生產期，而且貨量較少，「許多百貨公司擔心隨時因疫情而須關店，不敢買太多貨，多數是『試訂單』，即是多款式、量少，先試一試市場反應。」
這類「試訂單」要求生產期僅2至3個月，中國因具備較完善的供應鏈及穩定勞動力，正好迎合市場的變化。駱百強表示，其公司在內地及越南都有設廠，內地廠負責應付較急及複雜訂單，越南廠則主理其他恒常款式及生產期較長的訂單，因認為生產外移的趨勢會長期持續，故此不會改變在中國以外加設生產線的策略。
信達料暫暖 明上半年未看好
信達企業駱百強稱，業界原本預期全年生意跌三至五成，但第三季表現較預期好，聖誕訂單亦不俗，部分產品如睡衣、家居服、戶外運動衣及露營產品，在疫情期間的需求急升，相信可令今年生意跌幅收窄至三至四成。
他直言，出口訂單回暖只能短暫維持，對明年春、夏季訂單亦不樂觀，因疫情對歐美經濟的不確定因素始終存在。
中華廠商聯合會會長吳宏斌認為，因自動化生產逐步普遍，令買家期望壓縮生產期，此或成為製造業日後趨勢。惟他預期歐美市場出口訂單改善未必可長期維持，因該些國家仍受疫情困擾，商店亦須因封鎖措施而關店，經濟難做到全面復甦，建議業界可多留意內需及東南亞國家市場的機會。
資料來源：信報財經 (2020年11月16日)
4、互太紡織中期少賺9% 息22仙
互太紡織(01382)公布，截至9月底止中期業績，股東應佔溢利3.76億元，按年下跌8.85%。每股盈利0.27元，中期息派22仙。
期內，收入24.53億元，按年減少18.93%。
中期業績公告
https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1119/2020111900275.pdf
https://www1.hkexnews.hk/listedco/listconews/sehk/2020/1119/2020111900276_c.pdf
資料來源：信報財經 (2020年11月19日)
5、查理斯撐可持續時裝培訓
【明報專訊】無論是政府資助的創意產業機構、高級時尚品牌或大型時尚網店，都會不時舉辦比賽、資助計劃等，以扶持和發掘時尚產業新血，卻大多聚焦於設計師，而忽略最根本的工藝人員。
最近，The Prince's Foundation，即英國王儲查理斯推廣可持續的基金會，與Yoox Net-a-Porter Group共同發布了一個可持續的男女裝系列，分別由意大利及英國的The Modern Artisan培訓項目的學員設計和製作。該項目旨在加強紡織技術的培訓工作，協助英國及意大利的新一代工匠汲取專業技術，從而增強自信，在奢華時裝行業中發揮所長，製作品質上乘的服飾。
The Modern Artisan系列包括10款女裝及8款男裝單品，靈感源自達芬奇（Leonardo da Vinci）在藝術與科學融合的精神，設計都是具現代感的優雅經典服飾，造工細節講究；它同時亦屬Net-a-Porter的Net Sustain系列，即產品必須至少達到品牌定下的8大環保意識的其中一項，例如講究布料來源、製作方式、減少污染等。系列已於Yoox Net-a-Porter旗下4間網店：Net-a-Porter、Mr Porter、Yoox及The Outnet有售。
資料來源：明報 (2020年11月19日)
6、貿發局下月初網上舉辦五項活動 助中小企升級轉型走出逆境
為協助企業開拓商機，香港貿發局將於12月初在網上舉辦五大年度活動，包括「創智營商博覽」、「香港國際特許經營展」、「亞洲知識產權營商論壇」、「DesignInspire創意設計博覽」及「亞洲電子商貿峰會」，並以全新的數碼平台亮相。
第四屆「創智營商博覽」及第六屆「香港國際特許經營展」將於12月2至4日舉行，今年博覽以「驅動遙距新機遇」為主題，推出一系列內容豐富的網上研討會，圍繞「宅經濟」、新常態下的挑戰、提升企業生產力，以及迎接新商機等議題。
知識產權貿易及科研協作，是企業發展及應對轉變的重要一環。第十屆「亞洲知識產權營商論壇」將於12月3至4日舉行，以「開放式創新：轉變中推動協作」為主題，邀請約60位知識產權業界專家及商界領袖分享行內趨勢。今年論壇特別在開幕前一天新增InspoTalk圓桌會議系列，請來業界專家就著不同知識產權議題，例如疫情下的挑戰和機遇、與網絡紅人合作的知識產權策略等，和與會者互相交流。
環球電子商貿發展迅速，今年的「亞洲電子商貿峰會」將首度增至三日，定於12月9至11日網上舉行。峰會以「迎接數碼時代蛻變 掌握機遇」為題，提供一站式的數碼平台讓與會者探討電子商貿的最新發展趨勢，有近40位來自香港及世界各地的講者作分享。
至於DesignInspire創意設計博覽將於12月3至9日舉行，展示環球設計方案和創新意念，帶領業界及公衆在網上世界體驗以「Design for Good」為主題的設計。為期一星期的網上展將展示各種設計項目、獨特設計故事、互動體驗，以及一連串講座和工作坊，為業界提供各類型提升業務的創意方案。
資料來源：香港經濟日報 (2020年11月18日)
7、9 make-or-break retail turnarounds to watch in 2021
Companies in transformation and survival mode may be looking for normalcy. But the year ahead holds plenty of unknowns.
Much if not most of the retail world will be in turnaround mode in 2021.
Sales declines, profit losses, catching up to changing consumers — anyone who is not an essential retailer, or plays in the few categories that rose with the pandemic, can likely check those boxes.
Next year will be even more critical for those who were already trying to execute a turnaround before the COVID-19 pandemic upended the industry. And those that can't raise their revenue could end up in bankruptcy court. "Turnarounds aren't complete until the revenue line goes up," said Matthew Katz, managing partner with advisory firm SSA & Company. "That's the backdrop by which all of these are going to be judged."
The dramatic turns of 2020, and the question marks hanging over the year ahead, will complicate any turnaround, and even how retailers measure and define the process. Barring another nationwide shutdown or some other major calamity, many discretionary retailers will perform better in 2021 than in the first half of 2020. That throws a wrench into year-over-year and comparable sales measures, by which many turnarounds are judged.
"2020 as we know has been a really terrible year, especially the first part of the year," said Neil Saunders, managing director with GlobalData Retail. "So really, 2021 should be the time when retailers try to get back to normal." That makes comparisons against 2019 the key indicator for retailers in turnaround mode, and "any retailer that posts a decline in 2021 over 2020 is in real trouble," Saunders said.
But even 2019 sales could be a high bar. "For a lot of retailers, if they saw a significant drop in sales I'm going to look for them to get back a portion of it, but not get it back entirely to 2019 [levels]," said Dennis Cantalupo, CEO of Pulse Ratings. With apparel retailers, which saw some of the largest sales drops in 2020, Cantalupo said, "We're going to see some pretty significant positive same-store sales for most players in that category."
Using 2019 as a benchmark for a turnaround in some ways assumes that the retail industry will return someday to its pre-COVID-19 state — normality, in other words.
"You've had a decade of evolution in the last eight months. And so the look back into the rearview mirror in my mind isn't the healthiest way to think about this," said Katz, adding that retailers should focus on flexibility and a business model to meet the moment, and measure performance month over month and quarter over quarter. "In 2019 you were 85% store-based retail, a lot of it was in malls, Amazon was $100 billion smaller," Katz said. "We're in a totally different environment."
In some ways, it's not that different from the pre-2020 environment for retail, but the pandemic has sped up an already accelerated pace of change in the industry. "Almost every retailer is in a perpetual state of transformation, and that's actually a good thing," said Greg Portell, lead partner in Kearney's global consumer practice. "Because if you think about the speed with which consumers are changing, to keep up a retailer has to operate as if they're in transformation mode no matter their financial position."
A turnaround could mean something different when it comes to those retailers selling in categories that got a bump from the pandemic. "For the success stories coming out of 2020, the question in 2021 is going to be: Did they consolidate those gains?" Portell said. "Now that I have that threshold of volume, or now that I have that activity, or I was able to build up that capability, am I continuing to use it and develop it in a way that's going to produce results?"
It's also worth remembering that the change in the calendar year is only that. Many unknowns will carry forward into 2021. Will there be another stimulus package? Will the pandemic get under control? Will the economy come out of recession? Will consumer habits continue to change?
"The idea that 2021 is suddenly this year when everything clicks back into place — and we all breathe a sigh of relief and say, ‘Well, everything's gone back to normal,' — it's just very fanciful," Saunders said. "It's not going to happen like that at all, especially during the start of the year. There's a lot of potential disruption that we have yet to come, which I think makes retail planning very, very difficult. "
Against that backdrop, here's a look at some of the retailers working on critical turnarounds over the next year:
Macy's
Macy's rang in 2020 by posting sales declines during the holiday period as well as shrinking profit. For the second time since 2017, it vowed to do better and revamp its business for a customer that seemed to be leaving it, and the entire department store sector, behind.
And then a pandemic landed on the industry like a meteor strike. Retailers closed stores and did everything they could to preserve cash — furlough employees, draw on their credit revolvers, skip rent and cut investor dividends, among other things. Early in the crisis some analysts pointed to a potential liquidity shortfall at Macy's. In April, the retailer reportedly hired debt advisors, including the law firm Kirkland & Ellis.
Ultimately, the company raised more cash on the bond market and re-opened its stores, putting to rest liquidity concerns for now. But the road ahead is still long and full of uncertainty. The combination of declining mall traffic and economic downturn during the COVID-19 era has hurt department stores especially, Saunders said.
"Of course, a lot of them as well have very, very unfavorable economics. They operate large stores, they're very expensive to run because they have to be staffed, and they have a lot of exposure to inventory because they have to fill those stores," he said.
"It's the same story that's been playing out, which is how do you stay relevant with the consumer and provide that consumer with choice availability and service?" Katz said.
Nordstrom
When analysis firm RapidRatings ran a "stress test" on the retail sector this summer, to look at how various retailers would perform under projected conditions, Nordstrom showed one of the largest potential drops in risk assessment and financial health under a protracted revenue decline. S&P, meanwhile, has downgraded Nordstrom twice since the pandemic crisis began, most recently to BB+.
Like Macy's, Nordstrom was able to manage through the closures this spring by raising cash from its revolver and issuing new bonds. Moody's Vice President Christina Boni said at the time that the additional leverage on the company and commitment of assets to back the new debt reduced its financial flexibility.
Also like Macy's, Nordstrom has a difficult path back to normalcy, given its sector and its heavy dependence on fashion and formal apparel. "Nordstrom doesn't really have great exposure to many of the categories that are growing," Saunders said. "The homewares and furniture departments at most Nordstrom stores are tiny. It's a really small part of the offer. No one really thinks to go to Nordstrom for home. So they're not positioned in a growth area of the market."
That means Nordstrom's customers spend their money on home goods at other retailers, such as Williams-Sonoma and Crate & Barrel. "Nordstrom should try to get a slice of that action," Saunders said. "It desperately needs to do it now because fashion is not going to recover quickly, it's going to be one of the more sluggish-performing segments — not just this year but even into next year and maybe the year beyond, especially in formal and occasionwear."
The luxury department store has advantages, though. As Cantalupo points out, affluent shoppers tend to be the last group affected by economic downturns and the first to recover. Nordstrom also has made investments in its digital and omnichannel capabilities over the years.
"They to do a fair amount digitally, they have the full-line Nordstrom stores and they have Rack," Cantalupo said. "So they are kind of hitting it from three different directions."
Kohl's
Really, you could put the entire department store sector in the "needs to improve majorly" category. That includes Kohl's, which has historically outperformed its mall-bound, higher-priced peers. But COVID-19 hit it hard, after Kohl's was already struggling with stagnating sales in 2019. During Q1 of 2020, which included weeks of store closures, Kohl's racked up a loss of more than half a billion dollars. By Q2, profit was positive again but sales were still down 23.1%.
The discount department store's situation is by no means dire, but COVID-19 compounded the challenges for the chain, which has struggled to drive sales even with traffic-luring measures like handling Amazon returns, revamping its loyalty program and numerous brand partnerships. The retailer is hoping to gain momentum through a new apparel strategy including the addition of a private athleisure label and a partnership with footwear brand Cole Haan.
"It has an OK proposition, but it's not a brilliant proposition like, say, Target," Saunders said. "Kohl's also has a proposition that is more attuned to what consumers want, and that's probably more by chance than great planning. But they are more casual-based; they've done a lot with sports and athleisure, which is a growth area; they have relatively good homewares departments that they always have had; and they have a nice selection of what you would call quite contemporary products, which draws people in and which can drive some trade for them."
Brooks Brothers
Brooks Brothers belongs to a 2020 class of retailers that survived Chapter 11 and will be closely watched going into next year. Most of these retailers had sales and financial issues exacerbated by the pandemic, and were given a chance to reduce debt and their store base in bankruptcy.
Brooks Brothers filed for Chapter 11 in July, amid a rush of retail companies into bankruptcy court after being hammered by the closure period. Prior to filing, Simon Property Group sued the storied men's brand for $8.7 million in unpaid rent. Over the course of the bankruptcy, Simon would become one of Brooks Brothers' new owners along with Authentic Brands Group through their "Sparc Group" joint venture, which bought Brooks Brothers for $325 million and with a pledge to keep at least 125 stores open.
Those stores will operate in a sector that is likely to face protracted declines, with millions of workers still laboring from their homes rather than suiting up for offices and conferences.
"Brooks Brothers I think has an opportunity because it has always had a casual element" in its apparel offer, Saunders said. "It can pivot. It's obviously got new ownership, which is going to help, especially with things like property costs. So there is an opportunity, I think, for Brooks Brothers to reinvent itself."
Gap
Gap Inc. has more financial cushion than its distressed peers in the apparel space, but the brand has operated in uncertainty for years. Declines at Banana Republic and Gap's flagship banner have persisted, while Old Navy's enduring popularity has helped keep the company stable and Athleta has provided growth.
Last year brought organizational turmoil beginning when then-CEO Art Peck announced a plan to spin off Old Navy into a separate company, after years of talking about the benefits of Gap and Old Navy being together under one house. Many analysts remained skeptical.
In short order, Peck left the company abruptly last fall and the spin-off plan was officially called off in January of this year. Add a pandemic and global recession into the mix, and that leaves a lot of question marks hanging over Gap, which has never had a clear path out of the doldrums for its underperforming brands. It has already announced plans to close more than 200 Gap and Banana Republic stores, including the flagship store of its namesake brand, and indicated that there are more closures to come.
"Gap — which has defined itself on efficiency and consistency — the question going into a turnaround or transformation there is: What's the end goal?" Portell said. "If you're going to define yourself by being able to be on the cutting edge of fashion, that's a very different organization than if you're trying to become a reliable source of basics."
GameStop
When sales fell more than 27% during last year's holiday season, GameStop executives sounded a refrain that has become familiar. The gaming retailer's sales were getting hammered in a limbo period between hardware cycles. As the new Sony and Microsoft systems hit the market, there has been more optimism around the company.
But there are long-term challenges ahead, not least among them an existential crisis as games become digitized. Some have speculated GameStop could be headed the way of other media stores like Blockbuster, Tower Records and Borders if it can't reinvent itself for a new age.
"More and more more games are being bought digitally, and that doesn't help GameStop," Cantalupo said. "They're being creative and striking deals here and there. But it will be really interesting to see how much of the market share they're going to retain."
As it tries to figure out the new era, GameStop does have some weapons, including a loyal fan base. It also has a 60 million-strong gamer database on spending and behavior that is the largest cross-platform data set of its size, according to Jefferies analysts. In a digitized gaming world, that gives GameStop the potential to "create a high margin, ad-targeting platform to improve ad efficacy for vendors, publishers, and merch makers," the analysts said in a recent research note. Doing so could be worth $600 million in profit if GameStop can get even a fraction of the potential $30 billion market for gaming ad revenue, the analysts noted.
Bed Bath & Beyond
Going into 2020, Bed Bath & Beyond posted two straight years of sales declines and income losses, including a $613.8 million net loss for 2019. Just over a year ago, the retailer brought on Mark Tritton, former chief merchant of Target, as CEO.
Tritton was one of the architects of Target's turnaround, which helped restore the mass merchant to a position of growth and strength. Early in his tenure at Bed Bath & Beyond, Tritton cleaned house in the c-suite and started jettisoning non-core units to raise cash and strengthen the retailer's focus on its primary business. Most recently, Bed Bath & Beyond sold its Christmas Tree Shops banner and announced the launch of 10 new private labels, which will come with at least a $1 billion investment.
"Bed Bath & Beyond began their process of restructuring and revising pre-COVID," Katz said. "They had a plan in place and have been executing incredibly well against that plan."
"If you asked me a year ago, it was broken, and I don't think it was was on a trajectory to do very well," Saunders said. "The key thing there is Mark Tritton. I think he has made some very smart appointments. I think he's a very good merchant, and he understands retail."
Bed Bath & Beyond plays in some categories that have gotten a boost with the pandemic, as workers stuck at home invest in their living spaces and cook more amid the closure of restaurants and other entertainment options. The retailer's comparable sales in Q2 grew 6%.
Cantalupo noted that those numbers are below those of other homeware sellers, such as Wayfair and At Home. "They may have missed some of the opportunity that we've seen in the last couple of months, as everyone's gravitated towards home," Cantalupo said.
Also, as Saunders notes, homewares is a crowded space. "There's a really good opportunity for them to do some very creative things," Saunders said. "[Tritton] is going to have to take on retailers like Target, which has done very well, and online retailers like Wayfair."
Guitar Center
Guitar Center dodged a possible bankruptcy once in 2020, after the pandemic forced its stores to close, hurting both instrument sales and lesson revenue. After missing a bond payment, the musical instrument retailer cut a deal with bondholders that gave it some breathing room on cash interest payments. Guitar Center is now reportedly eyeing a possible bankruptcy as it tries to manage its debt load, left over from a private equity buyout, while navigating a pandemic.
"They've been in turnaround mode for a few years, and they've gone through multiple out-of-court debt restructurings," Cantalupo said. "So we're not sure if they're going to be able to do that again."
"There's a lot of parallels there with the story around Toys R Us," Portell said. "Toys R Us took a category such as toys and games, and turned it into a warehouse. So it was something that was fun. And you're selling something that's fun, and you create a transactional experience. So the question for a Guitar Center is, how do they reimagine the experience of music retail?"
J. Crew
Apparel icon J. Crew was a bankruptcy risk for years leading up to 2020, when the pandemic and ensuing store closures finally tipped it into Chapter 11. Things in bankruptcy went about as smoothly as they can, with the retailer emerging from the process months later with reduced debt and new owners.
A healthy balance sheet was probably a prerequisite to a turnaround for J. Crew, but it does not guarantee it, especially in an environment that is continually tough on apparel sales and only made worse by COVID-19's disruption to office work and other factors.
After emerging from bankruptcy, S&P gave J. Crew a B- rating with a negative outlook. S&P analysts said at the time that J. Crew "operating performance will remain weak in the next 12 to 18 months amid economic uncertainty, industry headwinds, and company-specific operational challenges despite its improved capital structure."
Source: www.retaildive.com (9 Nov 2020)
8、Macy’s CEO: We’ve ‘Successfully Managed the Channel Shift’
Macy’s Inc. narrowed its losses in the third quarter and topped consensus revenue estimates, while CEO Jeff Gennette touted the retail giant’s dexterity in managing the “channel shift” that has drawn shoppers away from stores and onto the web.
In a Nutshell: Macy’s managed to generate a positive EBITDA (earnings before interest, taxes, depreciation and amortization) one quarter sooner than expected, with its $113 million unadjusted performance indicating solid operational efficiency. Positive adjusted EBITDA was $159 million.
The department store retailer, which lefts its available $3 billion asset-backed credit facility untapped, finished the third quarter with $1.6 billion in cash. Gennette said Macy’s quarterly results “were driven by disciplined cost management, strong execution by our colleagues and an early start to the holiday shopping season,” and “reflect solid performance across all three brands—Macy’s, Bloomingdale’s and Bluemercury.”
Macy’s has rolled out its DoorDash same-day delivery partnership to all stores, and Gennette said customers have embraced fulfillment offerings including pickup inside stores or at curbside as well as delivery completed on the day an order is placed.
On an earnings call Thursday, Gennette said Macy’s has “successfully managed the channel shift” at play in retail that is drawing shoppers to digital commerce amid lockdowns and social distancing. The retailer, he added, has “shown we can flex categories and price points as customers’ needs change,” thanks to Macy’s teams closely monitoring customer feedback and parsing shopper data.
Gennette said Macy’s will reinvest in office-friendly attire once a timeline for a Covid-19 vaccine distribution becomes clear. The company is gearing up to test smaller, off-mall concept stores.
Newly named chief financial officer Adrian Mitchell said on the call that while the “supply chain opened up, bottlenecks remain.”
Net Sales: Macy’s said net sales for the three months ended Oct. 31 fell 22.9 percent to $3.99 billion from $5.17 billion, while store sales fell 36 percent compared to the year-ago quarter.
Among the highlights in the quarter, digital sales grew 27 percent versus year-ago figures for the same period, while digital sales were 38 percent of total owned comparable sales. Comparable sales were down 21 percent on an owned basis and down 20.2 percent on an owned plus licensed basis, due to continued recovery at the store level and the growth of digital. With the early start to holiday shopping, some sales that would traditionally occur in the fourth quarter were pulled forward into the third.
“Customers have shifted their spending to casual apparel and categories they can enjoy as they stay at home. Several of these categories, including home furnishings, jewelry and fragrance, have generated double-digit sales growth compared to last year,” Gennette said.
The company said gross margin for the third quarter was 35.6 percent, up from 23.6 percent in the second quarter. The gross margin rate for the third quarter a year ago was 40.0 percent. The sequential improvement was driven by disciplined inventory management, better sell through of full-price and clearance merchandise and lower clearance markdowns, Macy’s said.
The company also said inventory was down 29 percent from the year-ago quarter. “The company exited the quarter in a clean inventory position,” Macy’s said.
For the nine months, net sales were down 34.9 percent to $10.57 billion from $16.22 billion .
Earnings: The net loss was $91 million, or 29 cents a diluted share, against net income of $2 million, or one cent, in the year-ago quarter. On an adjusted basis, the diluted loss per share was 19 cents.
Wall Street was expecting an adjusted diluted loss of 79 cents on revenue of $3.86 billion.
While the company hasn’t been providing either sales or EPS guidance for the year, it expects comp sales to be down low- to mid-20’s for the fall season. Digital sales are expected to see a low- to mid-teens increase for the full year. Macy’s also expects adjusted EBITDA to improve sequentially in the fourth quarter from the third quarter, while capital expenditures are eyed at $450 million.
For the nine months, the net loss was $4.10 billion, or $13.20 a diluted share, against net income of $224 million, or 72 cents, in the year-ago period.
CEO’s Take: “Looking to Holiday 2020, we know this year is different. We are committed to bringing the joy of the season to America as we do every year. From next week’s Thanksgiving Day Parade to reimagined family gatherings, we will help our customers and their families celebrate in style. We have the right gifting assortment with newness from value to luxury, and our expanded fulfillment options allow customers to shop safely and conveniently, in store or online,” Gennette said. “We continue to watch the resurgence of Covid-19 and its potential impact on our business. Our teams are executing well and have shown the flexibility and agility to adjust plans and provide a great omnichannel experience to our customers.”
Source: www.sourcingjournal.com (19 Nov 2020)
9、M&S and Uniqlo Offer Holiday Style for the Age of Social Distancing
This winter, retailers Marks & Spencer and Uniqlo are collaborating with popular brands like British fashion label Ghost London and Finnish lifestyle design company Marimekko for limited-edition capsule collections.
Though holiday dressing usually calls for heaping doses of glitz and glamour, the global coronavirus pandemic will restrict social gatherings this season, leaving shoppers with little use for over-the-top frocks. M&S and Uniqlo respond to this new reality with collections that marry style with simplicity, whimsy with wearability.
The M&S collection of limited-edition dresses was designed in-house by Ghost London, a go-to favorite of Kate Middleton. Items in the capsule feature unique floral and star print designs created exclusively for the dress edit. Eye-catching fabrications feature throughout, woven in the high-quality viscose and finished with Ghost’s unique garment dye process, for a luxe silk-like finish. Ruffles and shirred detailing sit alongside peter pan collars and puff sleeves for “confident, feminine styles that are easy to wear and elevate the everyday,” the retailer said.
Of the capsule’s 10 dresses, three will also be available in kid’s sizes, all designed to coordinate back to the womenswear offering. The 10-piece capsule launches Thursday on M&S’s e-commerce site.
The styles “further elevate our dress offering this season and feature versatile designs that are extremely flattering, easy to wear, and can be dressed up or down, taking you through winter and beyond,” Maddy Evans, head of womenswear buying at M&S, said in a statement. “A confident, feminine aesthetic underpins the collection, celebrating modern silhouettes, luxurious fabrics and beautiful prints, synonymous with Ghost, and which we know our customer will love.”
Launching Monday, Uniqlo’s holiday capsule collection “celebrates a feeling of meaningful togetherness,” according to its collaborator Marimekko. The capsule continues in the vein of earlier limited-edition Uniqlo x Marimekko collections, combining Marimekko’s colorful and joyful prints with the Japanese retailer’s high-quality and functional LifeWear.
Inspired by northern weather and winter life, the collection features a selection of cozy ready-to-wear items for women and children in “iconic” Marimekko prints by Annika Rimala and Maija Isola. The collection will be available in the majority of Uniqlo markets around the world.
Source: www.sourcingjournal.com (19 Nov 2020)
10、Cambodia Garment Czar: ‘We Are Accepting Quite Ridiculous Payment Terms’
Cambodia, which has been a growing base for manufacturing apparel in Asia, has weathered the Covid-19 crisis well, with roughly 300 cases and zero deaths as of the time of publication. The industry, however, was hit by the cancellation of orders as the Western world went into lockdown. Exports in Cambodia’s garment sector dropped by 5.4 percent to around $3.78 billion in the first half of this year from more than $4 billion in the same period in 2019, according to the ministry of labor and vocational training.
There have been other setbacks, as well. Torrential rains and flooding in October put on hold the work of more than 80 garment factories, while in August, European Union sanctions took away the preferential treatment under “Everything But Arms” (EBA)—the trade arrangement for Least Developed Countries—due to “serious and systematic concerns related to human rights ascertained in the country.”
The Asian Development Bank has recently changed its forecast for Cambodia from a 5.5 percent contraction in gross domestic product in 2020 to a 4 percent contraction, and expects the growth to rebound to 5.9 percent in 2021.
Ken Loo, secretary-general, Garment Manufacturers Association in Cambodia (GMAC), spoke to Sourcing Journal about some of the important issues facing the industry, including the expected wage increase in 2021.
Sourcing Journal: Coming close to the end of the year, how have factories in the garment sector in Cambodia survived Covid-19?
Ken Loo : We currently have 600 active members, these are all exporters in the apparel industry as well as in the travel goods industry. Of these, 505 are apparel factories. This year data from the ministry of labor is that 95 factories closed, but also at the same time new factories have opened—58 new members—so the net decrease is of about 40 factories.
Every year factories open, and factories close. This number is bigger than previous years and we will assume it is in part because of Covid-19.
SJ: How far have the floods in October impacted production at factories?
KL: An approximate 80 garment factories were affected by the floods. This includes factories that had some form of flooding, but also those that could not function because of the roads around the factories being flooded and workers could not come to work.
It was due to an exceptional amount of rainfall because of a typhoon in the South China sea, so that flooding issue is over.
SJ: Did you find a substantial change in business at the factories in the last few months? Has more business from other countries shifted to Cambodia?
KL: Our exports were down in May, June, July—but late August and early September the exports have picked up a little. This is in line with what happened globally as most Western countries went into lockdown and towards the third quarter started to open up again and retailers and brands started to reposition with business picking up again.
The situation regarding Covid -19 in other countries has also affected us in a positive way, because what we see is that there are orders moving from Myanmar into Cambodia because the Covid situation in Myanmar is worse than Cambodia.
But having said that, prices are still no good, we are accepting quite ridiculous payment terms.
SJ: At the same time, there was the withdrawal of the preferential situation with the European Union in August?
KL: It definitely makes the situation harder. It is a partial withdrawal, but we still enjoy duty free tariff lines on 80 percent. But with this, some manufacturers are going to find it harder to compete and they will have to see whether they start to produce other products, whether they find other buyers, or find other solutions.
SJ: Factories are now working at almost 80 percent capacity?
KL: Yes, factories are working but the factory owners may not necessarily be making any money. We are accepting orders at a loss, and if you ask why are we doing it–the point is that if we don’t have orders then we lose more. In this way, at least we get to feed the workers and less amount is lost than stopping work altogether.
SJ: Yet, a lot of workers lost their jobs over the past months.
KL: About 60,000 workers lost their jobs due to factory closures. So yes, labor has certainly been affected. Most factories are located within 50 kilometers of Phonm Penh so it is a mixture of migrant workers and workers from the provinces.
SJ: Are you still looking at an increase in labor wages for 2021?
K.L.: At this time the minimum wage is $190. From January 1, 2021 it will go up to $192. There is an annual review of the labor wage but the adjustment depends on the actual situation.
SJ: Does the fact that Cambodia has active trade unions make it easier for labor/factory owners?
KL: Trade unions doesn’t necessarily mean problems for factory owners. Some trade unions are trouble makers, they have their own agenda, etc. Obviously, others are much more constructive.
Source: www.sourcingjournal.com (13 Nov 2020)
11、Francesca’s to Close 140 Stores as Bankruptcy Still on the Table
Women’s specialty apparel retailer Francesca’s is set to close 140 of its roughly 700 mall-based stores by the end of January.
The chain raised the specter of a bankruptcy filing in May when it posted fourth-quarter results, warning that widespread temporary coronavirus store stores weighed heavily on its operations. The Houston-based company had skipped rent payments in April, but was set to resume paying landlords in July. A month later, Francesca’s said that if it couldn’t obtain the required financing, its “liquidity and ability to continue operations could be materially adversely affected.”
In September, the company posted second-quarter results and said it was officially pursuing strategic alternatives, including bankruptcy court protection. While the company hired FTI Capital Advisors to help with evaluating its financial options, Francesca’s stated Monday in a federal filing about the store closures that bankruptcy was still very much on the table.
“The Company’s strategic plans are not yet finalized,” said Cindy Thomassee, executive vice president and chief financial officer, in Monday’s Securities and Exchange Commission filing.
Source: www.sourcingjournal.com (17 Nov 2020)
12、Apparel Did Well in Walmart’s Rosy Q3
Walmart Inc.’s strong third-quarter results bested Wall Street estimates, and strong October sales position the mass merchant for a solid fourth quarter and holiday season.
In a Nutshell: President and CEO Doug McMillon noted consumers’ accelerating shift to e-commerce during Tuesday’s quarterly conference call.
“Our e-commerce and omni-penetration continues to rise,” he said, adding that the shift to online has been “accelerating the trend by two or three years.” McMillon doesn’t expect that to change even after the Covid pandemic is over.
“Our customers want to be served in a number of ways, and we’re poised to save them money,” he added.
McMillon expressed optimism about 2021. “The back half should start to look more normal. [We see] momentum in a number of key areas. We’re in control of our destiny—we know what customers want,” he told investors.
Walmart has been focusing on improving in-stock inventory levels, which McMillon said is better than what it was in the prior second quarter, and now 2,500 stores are helping to fulfill online orders. “We can quickly flex this number during holiday,” he said, noting that the ability to do so would help ease the pressure on e-commerce fulfillment centers.
Noting the current political climate, McMillon said it’s “imperative that elected officials in Washington work together” to get the help that many small businesses need. He also congratulated President-elect Joe Biden on his election victory and said Walmart looks forward to “working with both houses of Congress.”
McMillon admitted that supply chain are stressed by demand, depending on where consumers live and the coronavirus infections rate in their area.
In the third quarter, Walmart saw strong increases and repeat rates on orders, said chief financial officer Brett Biggs. While the delayed back-to-school season drove a slow start to the third quarter, Biggs said “sales picked up in September, and momentum picked up in the third quarter.” Home and sporting goods performed well, while grocery sales were also strong. “We continued to see trip consolidation and bigger baskets in [the third quarter],” he added.
Walmart is making meaningful progress in getting higher in-stock levels for some categories for the fourth quarter. “We expect a good holiday season,” Biggs told analysts.
Judith McKenna, president and CEO of Walmart International, noted that the recent divestitures in Argentina and Japan were completely in line with the company’s the strategy based on strong local businesses powered by Walmart. “We continue to focus on our priority markets in India, China, Mexico and Canada,” she said.
Net Sales: Total revenues for the quarter ended Oct. 31 rose 5.2 percent to $134.7 billion from $128.0 billion, which included a net sales gain of 5.3 percent to $133.8 billion from $127.0 billion.
For Walmart U.S. operations, net sales rose 6.2 percent to $88.4 billion from $83.2 billion as comparable sales, excluding fuel, rose 6.4 percent. Walmart International saw net sales rise 1.3 percent to $29.6 billion from $29.2 billion. Sales at Sam’s Club was up 8.3 percent to $15.8 billion from $14.6 billion, and comp sales were up 11.1 percent, excluding fuel.
Apparel, online sales and marketplace all performed well in the quarter.
“Walmart posted yet another in a long string of stellar quarters, with performance strong across all facets, resulting in operating income up a substantial 22-plus percent despite Covid and online-related costs,” Charlie O’ Shea, Moody’s vice president and senior credit officer, said. “Online continued its explosive growth, with 79 percent impressive especially in light of the strength in comparable store sales at both US stores and Sam’s Club, continuing to reflect the effectiveness of Walmart’s multi-channel strategy.”
He added that with holiday in full swing, “[W]e expect Walmart to continue its tradition of being one of the true pace-setters, and the efficiency with which it has integrated its two channels will serve it well as promotional activity kicks up.”
For the nine months, total revenues rose 6.5 percent to $407.1 billion from $382.3 billion, which included a 6.6 percent increase in net sales to $404.2 billion from $379.3 billion.
Earnings: Net income jumped 56.2 percent to $5.14 billion, or $1.80 a diluted share, from $3.29 billion, or $1.15, in the year-ago quarter. On an adjusted basis, diluted earnings per share was $1.34.
Wall Street was expecting adjusted diluted EPS of $1.18 on revenue of $132.23 billion.
For the nine months, net income was up 45.3 percent to $15.6 billion, or $5.48 a diluted share, from $10.7 billion, or $3.74, in the same year-ago period.
CEO’s Take: “This was another strong quarter on the top and bottom line. Our associates continue to impress during this challenging year. They are working together to serve customers and communities in new, relevant ways and we’re very proud of them. We think these new customer behaviors will largely persist and we’re well positioned to serve customers with the value and experience they’re looking for,” McMillon said.
Source: www.sourcingjournal.com (17 Nov 2020)
13、U.S. Cotton Trust Protocol Joins Cotton 2040 Sustainability Platform
The U.S. Cotton Trust Protocol has been invited to join the Cotton 2040 coalition.
Convened by sustainability nonprofit Forum for the Future, Cotton 2040 is a partnership that brings together representatives from standards, producers, brands and retailers, and existing industry initiatives to build on and accelerate collective action to scale up and overcome barriers to sustainable cotton uptake.
The U.S. Cotton Trust Protocol is a new system for responsibly grown cotton that provides annual data for six areas of sustainability aligned with the United Nations Sustainability Goals. This year-over-year data allows brands and retailers to better measure progress toward meeting sustainability commitments.
The Trust Protocol also will be included in Cotton 2040’s “CottonUP” guide, a toolkit to help sourcing directors make sustainable decisions. The CottonUP guide to sourcing sustainable cotton aims to address one of the main barriers for companies looking to start sourcing or increase the amount of sustainable cotton they source.
The guide highlights the business case and main sourcing options for sustainable cotton, provides guidance on creating a sourcing strategy and on working with suppliers, and shares case studies from companies that have already navigated the complex challenges of sourcing more sustainable cotton.
“We are pleased to see the U.S. Cotton Trust Protocol recognized by Cotton 2040 and listed on their CottonUp guide,” Gary Adams, president of the U.S. Cotton Trust Protocol, said. “The Trust Protocol is a unique tool for brands and retailers, and we will continue to partner with them in their efforts to demonstrate progress toward sustainability goals.”
Cotton 2040’s interactive CottonUp guide recognizes the U.S. Cotton Trust Protocol as a sustainable cotton standard alongside BCI, CmiA, Fairtrade, myBMP, organic and recycled cotton.
“The apparel sector is under huge pressure to reduce its social and environmental impact, and increasing demand for more sustainable fibers is key to securing future supply,” Sally Uren, CEO at Forum for the Future, said. “The CottonUP guide addresses a long-standing need in the industry for clarity around cotton sourcing options, providing brands and retailers with the resources to help them go further, faster. It can be a key enabler for systemic change in the industry, and could be a blueprint for other commodities in the future. We’re happy to include the Trust Protocol as a new sustainability standard.”
Cotton 2040 envisages a sustainable global cotton industry that is resilient in a changing climate, uses business models that support sustainable production and livelihoods, and where sustainably produced cotton is the norm.
Choosing Trust Protocol cotton will give brands and retailers the critical assurances they need that the cotton fiber element of their supply chain is more sustainably grown with lower environmental and social risk. Brands and retailers will gain access to U.S. cotton with sustainability credentials proven via Field to Market, measured via the Fieldprint Calculator and verified with Control Union Certifications.
Source: www.sourcingjournal.com (18 Nov 2020)