Thursday, May 27, 2010

Value & fashion appeal are key parts of formula, Mr Price CEO

Mr Price Group delivers strong results in tough conditions. South Africa experienced negative GDP growth from the fourth quarter of 2008 and tentatively emerged from the recession in the third quarter of 2009. Despite the difficult trading environment, the group has continued to capture market share as measured by the Retailers’ Liaison Committee (RLC) and achieved sales growth of 10.0% to R9.5 billion. Comparable sales, which include sales of expanded and relocated stores in like-for-like locations, increased by 8.2%.

CEO and Deputy Chairman Alastair McArthur said “Our business model is not built simply on low prices. Value and fashion appeal are key parts of the formula and we strive to delight our customers with our fashionable products at everyday low prices. Past performance has shown that as long as we execute well, the strategy is sound, both in good and poor trading conditions.”

Good fashion interpretations and merchandise calls resulted in lower markdowns with the gross profit percentage increasing from 39.0% to 39.9%. Expenses were well controlled and weighted average space growth was 4.5%. Operating profit increased by 19.9% to R991.5 million and the operating margin increased from 9.6% to 10.5% of retail sales. Net finance income was positively affected by increased cash balances, despite the repo rate decreasing and contributed to profit after net finance income increasing by 20.6%.

Core headline earnings per share, which is a reflection of true trading performance, grew by 21.0%, while, after accounting for the once-off effect of the unbundling of the export partnerships, headline earnings per share were up 9.9%.

The Apparel chains increased sales and other income by 13.1% to R6.9 billion and operating profit by 18.3% to R980.3 million. The operating margin increased from 14.0% to 14.6%. Mr Price once again delivered an excellent trading result, having now gained market share for 48 consecutive months and grew sales by 15.9% with profits well ahead of the previous year. Miladys’ annual sales were down 1.3%, with profits lower than the previous year but the chain showed an improved performance in the second half. Mr Price Sport increased sales by 19.1% to R437.0 million and exceeded internal profitability targets.

The Home chains’ performance continued to be hampered by consumers’ lower expenditure on discretionary home purchases. Sales and other income increased by 3.3% to R2.8 billion and operating profit by 21.5%. The operating margin increased from 3.1% to 3.7%. Mr Price Home recorded sales of R1.9 billion, an increase of 2.6% and gained considerable market share in the second half of the year. Operating profit improved due to an increased gross profit percentage and tight expense control. Sales in Sheet Street increased by 4.9% to R846.4 million with profits in line with the previous year.

The cash flows associated with 83.9% of sales being for cash has resulted in the financial position strengthening, and the group ended the year with cash resources of R1.2 billion. ”Remaining a predominantly cash retailer has also been a fundamental part of the model,” explained McArthur.

Sound inventory management and lower capital expenditure contributed to cash flows from operating activities improving by 30% and exceeding R1 billion for the year. Aided by Project Redgold, stock turn improved from 5.5 to 5.9 times and gross inventories were R71.8 million lower than last year.

There was a continued aggressive focus on credit management and risk processes in response to tougher economic conditions. An improved collections strategy, coupled with a conservative credit granting philosophy resulted in the company maintaining its leading position with regard to the state of its credit portfolio, as highlighted by benchmarking services to which it subscribes. Net bad debt amounted to 3.7% of credit sales or 7.0% of the debtors’ book and the provision for impairment is 9.1%.

As a consequence of the group’s current cash balances, its cash-generative business model and the board’s confidence regarding future performance, the dividend cover has been reduced from 1.9 to 1.6 times. Accordingly, the final dividend has increased by 36.6% to 126.8 cents per share, with the annual dividend being 173.0 cents per share, an increase of 30.1%.

Both the economy and consumers’ disposable income remain under pressure. Although interest rates are at a 30-year low and inflation has decreased to within target range, cost pressures exist in relation to electricity, rates and fuel. “Consumer confidence is increasing, but this is not yet reflected in South African retail sales data and the expected slow pace of the recovery will mean another tough trading year lies ahead,” said McArthur.

The group is cautiously optimistic given the success achieved in the second half of the year by initiatives undertaken to improve performance as well as the recovery prospects of the divisions hardest hit by the recession. The group will continue to look for trading space opportunities and in order to maintain its historical track record of sales growth, will give consideration to new business concepts and opportunities, including acquisitions should the business fit be right.

Said McArthur: “Trading beyond South Africa’s borders represents an exciting growth opportunity for the group. We have had great success with a franchising strategy in Africa and are now considering different models in countries with large potential, including joint ventures and corporate stores which will allow more rapid expansion, better control and improved profitability. We are also dealing with multiple logistics challenges in the various regions. We are proceeding with confidence but are taking care to minimise the risk that comes with international operations.”


Burton For McQueen

SARAH BURTON, the late Alexander McQueen's right-hand design aide, has been named creative director of the London-based fashion house.

Sarah Burton is new creative director at Alexander McQueen
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Sarah Burton, photographed by David Burton

Burton - who grew up in Manchester and graduated from Central Saint Martins in 1997 - worked with McQueen for sixteen years. Having joined the brand in 1996, she has worked as head of womenswear design since 2000 and was credited with completing the designer's autumn/winter 2010-11 collection in time for Paris Fashion Week in March, following his suicide less than a month earlier.

The collection received rave reviews from retailers and the fashion press.

"The creation of modern, beautifully crafted clothes was at the heart of Lee's vision. I intend to stay true to his legacy," commented Burton on the announcement.

Gucci Group affirmed they would continue the company in McQueen's name shortly after his death, stating that the designer had set the "building blocks of the brand" that would allow the business to thrive.

Jonathan Akeroyd, president and ceo of Alexander McQueen said: "We are delighted that Sarah has agreed to take on the role of creative director. Having worked alongside Lee McQueen for more than 14 years, she has a deep understanding of his vision, which will allow the company to stay true to its core values."

Burton's appointment will help strengthen the future of the company, which continues to press forward - with plans to launch a men's underwear collection under license to Italy's Albisetti SpA in June.

"Sarah is extremely talented and under her creative leadership we are ready to enter a new phase in the brand's history," said Akeroyd.

Robert Polet, president and ceo of Gucci Group added: "Sarah has a real talent, a close understanding of the brand, and the vision necessary to take it forward. We will be giving full support to Sarah and the team in the coming years."


Cardiff designer’s big break at Graduate Fashion Week

IT launched the fashion careers of Stella McCartney and Burberry’s Christopher Bailey.

Now a young Welsh designer is hoping Graduate Fashion Week will make her the next hot young thing.

Jessica Nicol’s work has already caught the eye of industry insiders and will hit the catwalk in Europe’s fashion capital next month.

The 21-year-old womenswear designer from Cardiff will send six of her creations down the runway at London’s Earls Court on June 8.

Miss Nicol said: “Some of the world’s best-known fashion designers launched their careers there and it’s an amazing opportunity to have my collection seen by some of the most important people in the industry. I’ve always wanted to do this ever since I can remember.”

The prestigious event in the annual fashion calendar has also launched the careers of John Galliano and Hussein Chalayan.

Miss Nicol, a final-year fashion student at Manchester Metropolitan University, has based her collection on the notion “that ghosts from history haunt the modern world”.

She said: “I examined quotes from Walter Benjamin and phantasmagoria – looking at ghost shows from the early 19th century.

“My final collection is inspired by the notion that ghosts from history haunt the modern world and uses layers, volume and historic elements. I’ve also been experimenting with vacuum forming to create hands that erupt from smooth surfaces.”

Miss Nicol is one of 18 MMU students attending Graduate Fashion Week this year.

Alison Welsh, the university’s fashion programme leader, said: “Graduate Fashion Week provides students with a unique opportunity to showcase their work and meet industry leaders. Only the best fashion students are selected so Jessica should be very proud of herself.”

Outfits from last year’s graduate catwalk show have since been worn by fashion icons like Lady GaGa and Marina and the Diamonds.

Miss Nicol said: “It would be amazing if someone like Florence and the Machine wore my designs, or Daphne Guinness.

“I could definitely see Lady GaGa in them actually.”

Miss Nicol’s interest in fashion was clear from an early age and like any keen fashionista was a regular in second hand and vintage shops while still in school.

Miss Nicol’s mother, Maggie, said: “Even as a little girl she was interested in fashion, and would make shoes, for example, out of strange materials. The interest in clothing came later really. She’s very ambitious.”

Miss Nicol lists Comme des Garcons and Viktor and Rolf, as well as the more “elegant and understated style” of fashion house Celine, as her main influences.

She said: “It’s every fashion student’s dream to show at Graduate Fashion Week and what I’ve been working towards for the past three years. Journalists and fashion scouts from across the globe attend the event and previous students have been snapped up by fashion houses including Donna Karan, Gucci and Calvin Klein. I can’t wait, so that my mum and friends can come along and see my work.”

Miss Nicol’s former textile teacher at St Telio’s Church in Wales High School, Rachel Hennessy, said: “Jessica had very good illustration skills, and she always kept up to date with fashion trends.

“I remember her work well. Even though I teach so many students, hers definitely stood out.”

Source: Media Wales Ltd. WalesOnline

Fibre2fashion partners with WRAP to spread message of social compliance

Worldwide Responsible Accredited Production (WRAP) announced that Fibre2Fashion, the world’s largest B2B platforms for the global Textile-Apparel and Fashion industry, has become its new partner to promote social and environmental compliance in the industry.

“We are pleased to have partners working with us, companies that are creating e-business platforms that include WRAP certification in their supplier profiles,” WRAP’s President and CEO Steve Jesseph said, “When we attend trade shows and industry events, we are often approached by buyers who tell us they only want to do business with responsible companies – who can demonstrate that they are in compliance with generally recognized international labor and environmental standards".

He added by saying, "Over the past 10 years, WRAP has grown to become the leading certification program for labor-intensive consumer products manufacturing. Based on the growth of e-business and the demand for compliance certification by buyers, these partnerships clearly demonstrate that one can ‘do well by going good’”.

Mr. Venkat Subramanyan, Executive Director, Fibre2fashion quotes that “ is glad to associate with WRAP. Today the challenges lie in identifying the right kind of suppliers with whom buyers can do business globally and Fibre2fashion is instrumental in identifying such quality suppliers and connecting them with ease to the buyers.” Mr. Venkat also added that “We look forward to promote the social compliance cause globally within the apparel manufacturing community.”

Steve Jesseph added, “We encourage you to visit WRAP partners and see first-hand the benefits of working on new and exciting business platforms.”

About Fibre2Fashion:
Established in 2000, Fibre2fashion is an ISO 9001:2001 company. It is amongst the world’s largest B2B platforms for the global Textile-Apparel and Fashion industry, unbiased and committed to serving the demands of the entire value chain.

Fibre2fashion is not only an e-trade platform facilitating the sourcing & marketing requirements, but also a provider of first-hand information on various aspects of textile, apparel and fashion industries, 24/7, globally.

Fibre2fashion also helps small, medium and large business houses from across the globe to
capture and increase their market share by providing cost effective and innovative brand promotion solutions for reaching to the largest international target audience in the shortest time.

About WRAP:
Headquartered in Arlington, Virginia, WRAP is an independent, non-profit organization dedicated to the certification of facilities engaged in lawful, humane and ethical manufacturing throughout the world.

Source: Fibre2fashion

Poppy's designs to hit the catwalk

A BUDDING fashion designer from Coleraine has caught the eye of industry insiders.
Designs by Poppy Warwicker-Le Breton (22), from Carthall Manor, are set to hit the catwalk in Europe's fashion capital next month.

Womenswear designer Poppy, a final year fashion student at Manchester Metropolitan University (MMU), has been selected by a panel of external judges to send six of her stunning creations down the runway at Graduate Fashion Week at Earls Court on June 8.
BUDDING DESIGNER...Designs by Poppy Warwicker-Le Breton from Coleraine, which will be on the catwalk at Graduate Fashion Week next month.  CR22-387s
BUDDING DESIGNER...Designs by Poppy Warwicker-Le Breton from Coleraine, which will be on the catwalk at Graduate Fashion Week next month. CR22-387s

This prestigious event in the annual fashion calendar has previously launched the careers of John Galliano, Hussein Chalayan, Stella McCartney and Burberry's Christopher Bailey, to name but a few.

Poppy says: "It's every fashion student's dream to show at Graduate Fashion Week, and what I've been working towards for the past three years.

"Some of the world's best known fashion designers launched their careers there, and it's an amazing opportunity to have my collection seen by some of the most important people in the industry.

"Journalists and fashion scouts from across the globe attend the event and previous students have been snapped up by fashion houses including Donna Karan, Gucci and Calvin Klein. I just can't wait!"

Describing her designs, Poppy added: "I enjoy blurring the boundaries between art and design to create statement garments that could stand alone as pieces of art.

"My final collection features large, round silhouettes that echo sculptures by Barbara Hepworth and Henry Moore, organic fabrics such as Welsh wool and cotton drill and a neutral colour palette of white, cream, vanilla and black. I've also used a number of hand construction techniques, such as finger knitting wool and shaping all my garments by hand and touch."

Poppy, who previously attended Coleraine High School, would like to undertake a Masters to develop her skills in knitwear and print further.

She also hopes to gain further experience within the fashion industry following her graduation and dreams of one day setting up her own label.

Source: Coleraine Times