Prada 9-mth net profit trebles as IPO plan looms - Fashion

* Net profit 156 mln euros
* Revenue 1.38 bln euros, up 31 pct yr-on-yr
* CEO says confident on "oncoming" development
By Antonella Ciancio
MILAN, Nov 24 (Reuters) - Italian fashion house Prada, which
may list on the stock market next year, said on Wednesday it was
confident about its immediate future after booming Asia sales
helped nine-month net profit treble.
The family run company, whose trend-setter designer Miuccia
Prada is known for her minimalist style, said net profit trebled
to 156 million euros ($209 million) in the nine months to
end-October.
"These data confirm that the retail network expansion is a
winning strategy; these excellent results let us confidently
look at the oncoming group's development," Chief Executive
Patrizio Bertelli said in a statement.
Prada, which has to float several times in the past decade,
has said it is considering a listing in 2011, with Hong Kong
among the market options.
The move would help free Prada from the burden of a debt
estimated at around 1 billion euros, partly a result of an
acquisition spree in the 1990s.
Sales rose 31 percent to 1.38 billion euros in the
nine-month period, with Europe and the United States
contributing to the growth.
Sales in Asia, including recovering Japan, grew 51 percent,
or 22 percent on a like-for-like basis, confirming the region's
pivotal role in Prada's growth over the last quarters.
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UPDATE 1-Buyout firms plan bids for Takko - sources - Fashion

* Apax, Bain, EQT, TPG eyeing fashion chain Takko-sources
* Takko owner Advent still considering IPO - source
* Business seen valued at about 1.25 bln eur
(Adds background, adds Bain)
LONDON/FRANKFURT, Nov 17 (Reuters) - At least four private
equity firms were expected to place first round offers this week
for leading German budget fashion retailer Takko, people
familiar with the matter said.
Apax Partners, Bain Capital, EQT and TPG [TPG.UL] are
preparing bids for the business, owned by rival buyout firm
Advent International, two of the people said. An initial public
offering is also under consideration, a third source said.
Bankers said discount retailers were typically valued at 10
times earnings before interest, tax, depreciation and
amortisation (EBITDA), valuing Takko at about 1.25 billion euros
($1.75 billion).
A growing number of price-conscious Germans have been
turning to discount clothing stores, helping to boost sales at
Takko, one of the country's largest and fastest-growing clothing
chains, to 900 million euros in the year to end-April.
An estimated 25 percent of German adults have purchased its
products in the last year, according to Advent's website.
Takko is the latest in a series of European companies owned
by private equity firms that are close to changing hands in a
so-called secondary buyout, or a return to the public market, as
owners look to cash out of their best performing investments.
Advent, which bought the business in 2007 from Permira
[PERM.UL] for 770 million euros, plans to sell or spin off the
business by early next year, a source said in August.

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Young designers invade Brussels with fashion trail - Fashion

BRUSSELS Oct 26 (Reuters Life!) - Brussels might not have the couture cachet of London, Paris or Milan, but a small group of avant-garde fashionistas is giving the Belgian capital an underground designer edge.
Using unusual and even surreal spaces such as thrift shops, a bakery, a bicycle repair shop and a former electricity power plant to show their work, the young designers and design students are giving Brussels a fashion buzz.
"In Brussels, what is unique is Brussels itself," said Veronique Heene, the coordinator of Modo Brussels Fashion Designers Trail, a bi-annual fashion and art exhibition.
"It's a small town. It's not a big, big town. It's a mix of culture, really an international city even if it's a small city, and many people are coming from elsewhere."
La Centrale Electrique, the first electricity plant in Brussels, is the starting point of the trail, which leads throughout the city's downtown and the funky Rue Dansaert district, taking in 60 exhibition spaces.
In the vast Centrale Electrique, at the end of a neon-yellow hall, a single mannequin stands decked out in electric-bright yellow neon. In an adjoining room, a crowd of mannequins are dolled up like sea creatures, one like a jellyfish, another a seahorse, still others like cascades of water and fire.
An ensemble near the entrance looks like a sequined dragon. It only uses two colours, green and gold, but the light reflecting off the sequins gives off a rainbow of colours.
Scattered along the route are boutiques and galleries displaying art, photographs, paintings, graphic designs and even studios for DJs to "show" their audio work, making the fashion trail a multimedia design experience.
Some exhibits and art spaces will be open just for a few days, while others will remain open for several weeks.
"The students try to go out of what you expect, and after that, they find a sort of liberty. After that, they can find their own style. They can find what they like, how they will work," Heene said of one design school's exhibit.
Stores along the route stay open late for the duration of the exhibition, receiving visitors who pay 8 euros for a ticket to follow the trail in whatever order they want.
"It's very special that this shop is open on a Sunday," said Kitty Sokal of Brussels, who picked her way through a flurry of venues.
Her first stop was the workshop of Christophe Coppens, which sells hats and other accessories, where Sokal picked up a funky black knitted hat.
"It's like something you put on a teapot," she said. "It's very warm -- it's creative -- and the textures are very nice. You see three layers, and if you feel, it's very soft."
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China's Communist Party birthplace holds fashion summit - Fashion

SHANGHAI (Reuters) - Shanghai, birthplace of China's ruling Communist Party and now home to shops selling Ferraris, Hermes and Louis Vuitton, will host Italy's high-profile fashion summit, attended by executives from the biggest luxury brands.
The Milano Fashion Global Summit, usually held in Milan, takes place in Shanghai Friday, organizers said.
China is expected to become the world's biggest luxury goods market in five to seven years, fueled by increasingly wealthy and brand-conscious consumers.
It is tipped to become the third-largest consumer market by 2015 as 75 million households join the middle class and total urban consumption hits 13.3 trillion yuan ($2 trillion), Bank of America Merrill Lynch has said.
($1=6.680 Yuan)
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LVMH says to buy stake in Hermes for 1.45 billion euros - Fashion

PARIS (Reuters) - French luxury goods group LVMH (LVMH.PA) said on Saturday it was buying a minority stake worth 1.45 billion euros ($2 billion) in family-controlled handbag maker Hermes (HRMS.PA) but would not seek to take over the group nor influence its strategy.
The move will see LVMH, which owns champagne brand Moet Hennessy and Louis Vuitton, eventually hold a 17.1 percent stake in Hermes, which is known for its high-end leather handbags and silk scarves.
"The objective of LVMH is to be a long-term shareholder of Hermes and to contribute to the preservation of the family and French attributes, which are at the heart of the global success of this iconic brand," LVMH said in a statement on Saturday.
LVMH said it had bought 15,016,000 shares of Hermes, or a 14.2 percent stake. Once it converts certain derivative instruments of Hermes shares, LVMH said it would hold a total of 18,017,246 shares, or a 17.1 percent stake.
Hermes was not immediately available to comment.
LVMH has chosen to invest at a time when Hermes shares are at record highs after a 65 percent rally since July.
The company has long been the subject of market speculation over whether some family members would sell their shares, altering the capital structure of the group or even making it a takeover target.
Management have reiterated the founding family's devotion to Hermes, in which they own a 70 percent stake.
It was not immediately clear whether LVMH bought its shares on the open market or from family members.
"LVMH fully supports the strategy implemented by the founding family and the management team... LVMH has no intention of launching a tender offer, taking control of Hermes, nor seeking board representation," LVMH added in the statement.
Hermes is widely regarded as one of few luxury companies that has continued to grow throughout the consumer spending slump, and it is has also been one of the top beneficiaries of upturn in demand as the economy recovers.
LVMH, the world's biggest luxury group, also sounded an upbeat note in its third quarter results about the economic recovery boosting consumer demand.
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Lebanese fashion designers reign supreme despite crisis - Fashion

BEIRUT (Reuters) - The top Western fashion designers suffered massively when purses around the globe snapped resoundingly shut during the financial crisis.
But Lebanese designers, who hail from a land where Fashion TV is the channel of choice at the swankiest bars, say they have managed to escape the brunt of the crisis because of two things -- affordable haute couture and rich Arab clients.
It's fair to say that Lebanon just doesn't do casual. High heels, form-fitting dresses and salon-styled hair are part of many Lebanese women's daily routine.
Renting a designer dress to wear at a wedding is far more acceptable, than, horror of horrors, opting to purchase a generic high-street gown.
So it's no surprise that the country's top designers became more famous for their elaborate, long, sequined and chiffoned collections than classical ready-to-wear lines. And their clientele keep coming back for more.
In fact Elie Saab, whose slinky, decidedly feminine dresses are a red-carpet favorite for many Hollywood A-listers, said his pret-a-porter lines suffered for a few months in the United States due to the crisis, and not his haute-couture lines.
"Lebanese designers have always been distinctive with their haute-couture, not pret-a-porter. What they present to the world is distinctive," Saab told Reuters.
Saab was speaking just before his first fashion show in Beirut in 18 years, where he showed his Autumn-Winter 2010/2011 ready-to-wear collection to mark the official opening of the opulent Beirut Souks shopping district in the city center.
But even that collection, already shown in Paris, was full of evening dresses frilled with lace, tulle and sequins in deep colours that he said were reminiscent of being in a "night-time forest."
Scarlett Johansson, Carey Mulligan and Emily Blunt have already been spotted wearing some of the collection's designs on the red carpet.
"If you go to a French fashion house, (for haute couture), the price is unnatural, it's as if they're saying 'we don't want to sell'. That's why haute couture is successful in Lebanon."
"It's the beauty of the piece ... and the prices are appropriate for women of the world," Saab said.
HAUTE COUTURE LUXE
Abed Mahfouz, whose dresses have been worn by Beyonce and Victoria Beckham, agrees.
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Recession creates new trend in fashion shopping - Fashion

NEW YORK (Reuters) - The U.S. recession has changed how people shop for fashion, with an eye for special pieces rather than trusty wardrobe basics, and top retail buyers say this trend is likely to last beyond an economic recovery.
As Mercedes-Benz Fashion Week begins in New York on Thursday, fashion directors from such high-end stores as Saks Fifth Avenue and Neiman Marcus say they will be on the lookout for eye-catching collections to wow customers.
After a dismal 2009, retail sales have improved every month for the past year, but consumer confidence has been slow to recover and is only half as strong as at the start of 2008. Consumer spending accounts for two-thirds of U.S. economic activity and is considered critical to the recovery.
"We have seen a change in the way that customers shop as a result of the economic climate that we have been in, and I see that trend continuing," said Colleen Sherin, fashion market director for Saks.
"Women are not necessarily looking for basics ... they're looking for wow pieces, something that inspires more of an emotional reaction," she said. "They are looking for value. They're looking for quality at a price."
Even classic, basic pieces such as a white shirt are being reinterpreted to appeal to customers, with perhaps a dramatic new collar or interesting cuff details, Sherin said.
More than 90 designers will show at New York Fashion Week's new headquarters on Manhattan's Upper West Side, up about 50 percent from the last two seasons in February and September. Countless more show in other venues around the city. The New York shows are followed by shows in London, Milan and Paris.
"SHE WANTS FASHION"
The semi-annual event generates more than $770 million a year in economic activity in New York, where fashion is the second-largest industry behind finance. New York is home to more than 800 fashion companies, employing 175,000 people, generating $10 billion in wages and $1.5 billion tax revenue.
Ken Downing, fashion director at Neiman Marcus, said while the outlook for the U.S. economy appeared to be improving, customers were still selective when buying fashion.
"She's being very thoughtful when she's purchasing," he said of shoppers. "Even at the most challenging moments in the economy, she was interested in trend.
"She's not interested in basics ... she wants fashion," he said. "The customer continues to respond to what is new and what she does not have in her wardrobe."
While designers are showing collections for next year's spring and summer that won't be available in stores for months, the industry wants to lure shoppers to spend now with a second annual "Fashion's Night Out" on Friday.
The retail initiative launched by U.S. Vogue editor Anna Wintour aims to get people shopping. Designers and department stores will to lure customers by holding in-store parties with celebrity guests and musical performances.
"The idea of 'Fashion's Night Out,' is really to create excitement in the shops," said designer Diane von Furstenberg, who is president of the Council of Fashion Designers of America. "We just want people to shop."
New York Mayor Michael Bloomberg said at a news conference opening Fashion Week on Wednesday that people always need clothes and that diversity in fashion means there was "an opportunity to be well-dressed no matter what your economic situation."
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HMV eyes stronger games market after World Cup hit - Fashion

LONDON (Reuters) - British music, books and games retailer HMV Group hopes rivals to the Ninetendo Wii will drive the games market in the key Christmas period after reporting a worse-than-expected plunge in first-quarter sales .
The departure of long-time Finance Director Neil Bright, who is highly regarded by analysts, and lingering concern over the strategy to become a broad-based entertainment group, offering live music and fashion alongside its other products, also hit its shares, which were down 11.3 percent at 59.17 pence at 0945 GMT.
Overall underlying sales at the group, excluding the new live music division, were down 10.6 percent, while sales in Britain and Ireland dropped 14.9 percent as the soccer World Cup took people's attention away from DVDs and books.
"Though they had warned that the AGM (annual general meeting) trading update today would be weak because of the impact of the World Cup, the news is still bad," said analyst Nick Bubb at Arden Partners.
Shares in the 89-year old group have far underperformed other retailers this year but had been gaining ground over the last three months, rising 14 percent against a 1 percent gain for the index.
Seymour Pierce's Kate Calvert cut her recommendation on the stock to "sell" from "buy," saying she was unconvinced by the new strategy and that the Live division would not be enough to offset the migration of HMV's core retail business to online.
Consumer confidence is still fragile in the United Kingdom. Department store group Debenhams said earlier this week it was cutting prices in a bid to attract wary shoppers and on Thursday, Argos owner Home Retail forecast a fall in first-half profit.
HMV hopes the benefits of its new strategy will be seen at the core Christmas trading period, when it makes all of its profit for the year.
Chief Executive Simon Fox told reporters new releases of motion sensor games consoles, like Playstation Move and Microsoft Connect, along with such games as Fifa 11 and Call of Duty Black Box, should help the market.
"The games market's been down about 15 percent over the period, but we expect it to get much closer to flat in the Christmas period as a result of these new products," he said.
FESTIVALS AND BOOKS
HMV added it was making progress in turning around its Waterstone's bookstores, with ebook sales up 70 and over 1 million books downloaded via the website.
"Since the World Cup, we've been in positive like-for-like territory," CEO Fox said.
However, he said the group had set its sights too high for its new High Voltage Festival, launched this summer and which suffered low attendance.
"Creating a brand new festival in a congested market is tough so our expansion plans for festivals are as much around existing brands and formats that are known to work," he said. HMV also announced the departure of Finance Director Bright, who is leaving after 14 years at the group for the role at leisure and travel group Holidaybreak.
Fox said he hoped to have a successor in place by the time Bright leaves at the end of 2010.
(Reporting by Victoria Bryan; Editing by Rhys Jones and Karen Foster)
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Supermodel Miranda Kerr says she's pregnant - Fashion

SYDNEY (Reuters) - Australian supermodel Miranda Kerr, who married actor Orlando Bloom in secret in July after a one-month engagement, has confirmed that she is pregnant.
Kerr, 27, who shot to international fame as a Victoria's Secret lingerie model, broke the news to the Spanish edition of Vogue magazine. She stars on the cover of the magazine's September issue.
"Yes, I am pregnant. Four months along," said Kerr, adding that it had been hard to keep the news quiet.
"I remember on one occasion in the early days (of my pregnancy) when it was still too soon to say anything and I had a dreadful time at one job," she said.
Kerr began dating Bloom, 33, star of the "Pirates of the Caribbean" and "The Lord of the Rings" movies, in 2007.
The couple's marriage was announced last month by upmarket Australian store David Jones, for which Kerr is an ambassador.
At that time Kerr thanked David Jones for letting her cancel her appearance in the store's spring/summer fashion launch for her wedding and honeymoon.
No one at David Jones was immediately available to comment on Kerr's pregnancy and what this meant for her contract with the store.
Kerr, who was raised in the Australian country town of Gunnedah, was ranked ninth on the Forbes' Top 10 Earning Models list this year after earning an estimated $4 million in the past 12 months.
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Yang slips under the radar on eve of title defence - Fashion

KOHLER Wisconsin (Reuters) - Twelve months after he produced one of the biggest upsets in golf to win the U.S. PGA Championship, the life of South Korea's Yang Yong-eun has finally turned full circle.
Yang was virtually unknown when he arrived at Hazeltine National last year but when he left a week later, he had the PGA trophy in his arms and the golfing world at his feet.
Not only did he become the first Asian man to win one of golf's four majors, he did it in the most dramatic fashion, achieving the once unimaginable feat of coming from behind to beat Tiger Woods in a head to head duel on the last day.
The reaction in his homeland was swift and he became an instant superstar and needed six bodyguards to protect him from the swarms of autograph hunters every time he walked around the streets near his home on Jeju Island.
But a year later, the attention, at least in the U.S., has died down somewhat and only a handful of reporters turned up to his news conference on the eve of his title defence.
"It's been a year since my PGA win, so maybe I'm kind of out of the spotlight a little bit," he said through a translator.
"For the past year, I haven't been doing that great and maybe people think that I may not win this one again. So in that respect maybe that's why I kind of am flying under the radar."
Despite his low key arrival at Whistling Straits, Yang will be back in the focus for the next two days at least when he reunites with Woods and Vijay Singh after they were grouped together.

� Continued...
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When some of the most influential figures in emerging markets finance spoke to a group of Reuters editors, they were asked about top picks for growth beyond the so-called BRIC countries of Brazil, Russia, India and China.� Blog�
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It has debt levels to die for and huge amounts of oil, but economically it’s lagging and political concerns remain. Speakers at a Libyan trade and investment forum this week saw the North African country as a mixed bag.� Blog�
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Africa is providing a lot of fine material for the London theatre these days.� Blog�
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WRAPUP 2-Zumiez July same-store sales beat, Hot Topic misses - Fashion

* Zumiez July comps beat Street view
* Hot Topic July comps fall short of estimates
* Zumiez raises Q2 outlook
* Hot Topic sees Q2 loss of $0.14
* Hot Topic shares down 4 pct, Zumiez down 1 pct
(Adds details, analyst comment, updates share movement)
By Shradhha Sharma
BANGALORE, Aug 4 (Reuters) - Teen apparel retailer Zumiez
Inc's (ZUMZ.O) July same-store sales topped estimates, while
that of Hot Topic Inc (HOTT.O) fell short of analysts'
expectations as it sold fewer higher-ticket items and increased
promotional spending.
Zumiez, which sells clothing and equipment for skaters,
snowboarders and the like, saw robust sales for its
accessories, footwear and at its men's and boy's categories,
the company said on a pre-recorded call.
Warmer weather also helped drive more traffic to Zumiez
stores, but a boost from the crucial back-to-school shopping
season will only be seen in August, Wedbush Securities analyst
Betty Chen said.
U.S. consumers are expected to delay back-to-school
shopping into August this year as well in the hopes of finding
good bargains, which could hurt July numbers for a lot of other
teen apparel retailers that are slated to report comparable
sales on Thursday.
"(The hot weather) drove a little bit more of mall traffic
and compelled people to buy some wear-now clothes -- like
T-shirts and shorts, especially since a lot of these items were
on sale," Chen added.
Same-store sales rose 9.4 percent in July, compared with
analysts' estimate of an increase of 8.5 percent, according to
Thomson Reuters Data.
Total July sales at Zumiez jumped 15 percent, prompting the
company to raise its second-quarter outlook.
Zumiez now sees a quarterly loss in the range of 2 cents a
share to 3 cents a share, up from its previous expectation of a
loss of between 7 cents a share and 10 cents a share.
Bundling promotions -- where consumers get a discount for
purchasing a specific number of units from a designated
category -- also lifted July same-store sales at Zumiez, MKM
Partners analyst Linda Tsai said.
But Zumiez's bundling promotions, a major business driver till
now, could be pressured with other retailers raising the bar on
their promotional offers, Wedbush analyst Chen said.
The Thomson Reuters Same-Store Sales Index is expected to
post a 3.1 percent rise in July 2010 comparable sales,
reversing last year's fall of 5.1 percent, and making July the
11th straight month of improving sales.
However, Hot Topic failed to live up to expectations,
posting a 9 percent drop in same-store sales, much wider than
analysts' estimate of a 2.6 percent fall.
Citing lower-than-expected sales, the retailer also
forecast a loss of 14 cents a share for the second quarter.
On a pre-recorded call, the company said sales for
accessories and fashion apparel slumped 9 percent and 24
percent respectively in July.
Comparable sales at its Torrid stores fell 7.2 percent.
Hot Topic continues to expect consolidated inventory to be
down in the low single digit percentage range at the end of
this quarter, the company said on the call.
The company, which sells rock 'n' roll-inspired apparel and
accessories, was a great success last year when it began
selling "Twilight" related merchandise.
However, as the movie gained popularity, other retailers
have done the same, eating into Hot Topic's exclusivity, and
with time, the unique-quotient has died down.
Watch Fashion Online

WRAPUP 2-Zumiez July same-store sales beat, Hot Topic misses - Fashion

* Zumiez July comps beat Street view
* Hot Topic July comps fall short of estimates
* Zumiez raises Q2 outlook
* Hot Topic sees Q2 loss of $0.14
* Hot Topic shares down 4 pct, Zumiez down 1 pct
(Adds details, analyst comment, updates share movement)
By Shradhha Sharma
BANGALORE, Aug 4 (Reuters) - Teen apparel retailer Zumiez
Inc's (ZUMZ.O) July same-store sales topped estimates, while
that of Hot Topic Inc (HOTT.O) fell short of analysts'
expectations as it sold fewer higher-ticket items and increased
promotional spending.
Zumiez, which sells clothing and equipment for skaters,
snowboarders and the like, saw robust sales for its
accessories, footwear and at its men's and boy's categories,
the company said on a pre-recorded call.
Warmer weather also helped drive more traffic to Zumiez
stores, but a boost from the crucial back-to-school shopping
season will only be seen in August, Wedbush Securities analyst
Betty Chen said.
U.S. consumers are expected to delay back-to-school
shopping into August this year as well in the hopes of finding
good bargains, which could hurt July numbers for a lot of other
teen apparel retailers that are slated to report comparable
sales on Thursday.
"(The hot weather) drove a little bit more of mall traffic
and compelled people to buy some wear-now clothes -- like
T-shirts and shorts, especially since a lot of these items were
on sale," Chen added.
Same-store sales rose 9.4 percent in July, compared with
analysts' estimate of an increase of 8.5 percent, according to
Thomson Reuters Data.
Total July sales at Zumiez jumped 15 percent, prompting the
company to raise its second-quarter outlook.
Zumiez now sees a quarterly loss in the range of 2 cents a
share to 3 cents a share, up from its previous expectation of a
loss of between 7 cents a share and 10 cents a share.
Bundling promotions -- where consumers get a discount for
purchasing a specific number of units from a designated
category -- also lifted July same-store sales at Zumiez, MKM
Partners analyst Linda Tsai said.
But Zumiez's bundling promotions, a major business driver till
now, could be pressured with other retailers raising the bar on
their promotional offers, Wedbush analyst Chen said.
The Thomson Reuters Same-Store Sales Index is expected to
post a 3.1 percent rise in July 2010 comparable sales,
reversing last year's fall of 5.1 percent, and making July the
11th straight month of improving sales.
However, Hot Topic failed to live up to expectations,
posting a 9 percent drop in same-store sales, much wider than
analysts' estimate of a 2.6 percent fall.
Citing lower-than-expected sales, the retailer also
forecast a loss of 14 cents a share for the second quarter.
On a pre-recorded call, the company said sales for
accessories and fashion apparel slumped 9 percent and 24
percent respectively in July.
Comparable sales at its Torrid stores fell 7.2 percent.
Hot Topic continues to expect consolidated inventory to be
down in the low single digit percentage range at the end of
this quarter, the company said on the call.
The company, which sells rock 'n' roll-inspired apparel and
accessories, was a great success last year when it began
selling "Twilight" related merchandise.
However, as the movie gained popularity, other retailers
have done the same, eating into Hot Topic's exclusivity, and
with time, the unique-quotient has died down.
Watch Fashion Online

WRAPUP 2-Zumiez July same-store sales beat, Hot Topic misses - Fashion

* Zumiez July comps beat Street view
* Hot Topic July comps fall short of estimates
* Zumiez raises Q2 outlook
* Hot Topic sees Q2 loss of $0.14
* Hot Topic shares down 4 pct, Zumiez down 1 pct
(Adds details, analyst comment, updates share movement)
By Shradhha Sharma
BANGALORE, Aug 4 (Reuters) - Teen apparel retailer Zumiez
Inc's (ZUMZ.O) July same-store sales topped estimates, while
that of Hot Topic Inc (HOTT.O) fell short of analysts'
expectations as it sold fewer higher-ticket items and increased
promotional spending.
Zumiez, which sells clothing and equipment for skaters,
snowboarders and the like, saw robust sales for its
accessories, footwear and at its men's and boy's categories,
the company said on a pre-recorded call.
Warmer weather also helped drive more traffic to Zumiez
stores, but a boost from the crucial back-to-school shopping
season will only be seen in August, Wedbush Securities analyst
Betty Chen said.
U.S. consumers are expected to delay back-to-school
shopping into August this year as well in the hopes of finding
good bargains, which could hurt July numbers for a lot of other
teen apparel retailers that are slated to report comparable
sales on Thursday.
"(The hot weather) drove a little bit more of mall traffic
and compelled people to buy some wear-now clothes -- like
T-shirts and shorts, especially since a lot of these items were
on sale," Chen added.
Same-store sales rose 9.4 percent in July, compared with
analysts' estimate of an increase of 8.5 percent, according to
Thomson Reuters Data.
Total July sales at Zumiez jumped 15 percent, prompting the
company to raise its second-quarter outlook.
Zumiez now sees a quarterly loss in the range of 2 cents a
share to 3 cents a share, up from its previous expectation of a
loss of between 7 cents a share and 10 cents a share.
Bundling promotions -- where consumers get a discount for
purchasing a specific number of units from a designated
category -- also lifted July same-store sales at Zumiez, MKM
Partners analyst Linda Tsai said.
But Zumiez's bundling promotions, a major business driver till
now, could be pressured with other retailers raising the bar on
their promotional offers, Wedbush analyst Chen said.
The Thomson Reuters Same-Store Sales Index is expected to
post a 3.1 percent rise in July 2010 comparable sales,
reversing last year's fall of 5.1 percent, and making July the
11th straight month of improving sales.
However, Hot Topic failed to live up to expectations,
posting a 9 percent drop in same-store sales, much wider than
analysts' estimate of a 2.6 percent fall.
Citing lower-than-expected sales, the retailer also
forecast a loss of 14 cents a share for the second quarter.
On a pre-recorded call, the company said sales for
accessories and fashion apparel slumped 9 percent and 24
percent respectively in July.
Comparable sales at its Torrid stores fell 7.2 percent.
Hot Topic continues to expect consolidated inventory to be
down in the low single digit percentage range at the end of
this quarter, the company said on the call.
The company, which sells rock 'n' roll-inspired apparel and
accessories, was a great success last year when it began
selling "Twilight" related merchandise.
However, as the movie gained popularity, other retailers
have done the same, eating into Hot Topic's exclusivity, and
with time, the unique-quotient has died down.
Watch Fashion Online