China News Brief
    February 12, 2024

    Armani names new brand envoy; Molton Brown eyes expansion in Asia; Lululemon, Hermès to hike prices.
    Emporio Armani named Chinese actress Zhou Yutong as its new ambassador for its women’s watch and accessories collections in China. Photo: Shutterstock

    Armani names new brand envoy#

    Emporio Armani on Thursday last week announced  Chinese actress Zhou Yutong as the new ambassador for its women’s watch and accessories collections in the Greater China and Asia-Pacific regions. Starting from the spring/summer 2024 season, the Chinese actress will feature prominently in advertising campaigns, showcasing the brand's watch and jewelry collections, as well as its eyewear collection.

    Molton Brown eyes expansion in Asia#

    Japan's Kao Corporation announced  recently that its luxury fragrance and personal care brand, Molton Brown, will collaborate with Southeast Asia’s luxury goods and lifestyle conglomerate, Valiram, to accelerate its global expansion. According to an official press release, Kao recently opened its first overseas flagship store for Molton Brown at The Exchange TRX, a luxury shopping destination in Kuala Lumpur, Malaysia. The company also stated its plans to further expand Molton Brown's omnichannel business in Malaysia and other Asian markets, including entering Singapore, Thailand, Indonesia, as well as Hong Kong and Macau later this year. Molton Brown registered a WeChat official account in 2020 and currently operates an online overseas flagship store on Tmall International.

    Fendi opens store in Zhengzhou#

    Fendi opened  a new boutique in Zhengzhou, on Thursday last week. Spanning two floors with an area of approximately 503 square meters, the store offers a full range of products including men’s and women’s ready-to-wear, leather goods, accessories, and footwear.

    Lululemon hikes prices in China#

    Lululemon plans  to raise prices in mainland China this year, with areas such as Macau and Hong Kong in the Greater China region not affected by the price increase. The price adjustment primarily targets women’s apparel, focusing on stable core products, while excluding footwear and men’s clothing for the time being. The price hike will be implemented in two tiers: a 30 RMB ($4.62) increase and a 130 RMB ($20) increase. Adjustments for products with a planned 30 RMB increase have already begun, while those with a 130 RMB increase will follow shortly.

    New York Fashion Week gets underway#

    The 2024 Fall/Winter New York Fashion Week began  on February 9 and is set to close on February 14. According to the official schedule released by the Council of Fashion Designers of America (CFDA) and IMG, the organizer of New York Fashion Week, nearly 100 brands are participating this season, presenting their collections through online/offline shows and appointment displays. Notably, seven Chinese/Chinese-American brands have been selected for the official schedule, including Jason Wu Collection, PH5 (Wei Lin and Mijia Zhang), Sandy Liang, Snow Xue Gao (static display), Anna Sui, Kim Shui, and Juzui by Anzheng Fashion Group (IMG schedule).

    Hermès posts strong 4Q results#

    On Friday last week, Hermès reported  strong performance for 4Q 2023 with sales increasing 17.5 percent YoY to 3.36 billion euros ($3.76 billion), surpassing analysts’ expectations. This growth was seen across all regions, including China. For the full year, sales surged nearly 21 percent to 13.43 billion euros ($15 billion). Notably, Hermès also plans to implement a global price increase of 8 percent to 9 percent this year to offset higher production costs. Following the financial report release, Hermès’ stock price rose by 3.7 percent, reaching a market value of approximately 227 billion euros ($254.24 billion).

    US, China propel Ralph Lauren’s profit#

    Ralph Lauren exceeded  profit expectations for the 14th straight quarter, driven by robust holiday demand in the US and a rebound in China, leading to a nearly 17% increase in its share price. Despite economic uncertainties, affluent American consumers showed a penchant for luxury goods during the holidays, driving up sales both in Ralph Lauren’s own stores and online. A resurgence in luxury demand in China further bolstered its performance, with sales surging by over 30 percent in that market. Third-quarter revenue surpassed expectations, climbing 6 percent to $1.93 billion, while adjusted per-share profit of $4.17 outperformed estimates.

    Tapestry raises profit guidance#

    Tapestry, the parent company of Coach, raised  its annual profit forecast, betting on strong sales of premium handbags and a recovery in demand in China, which echoed trends seen at other luxury retailers. Despite a softer start to the year in North America, Tapestry’s sales surged 19 percent in China and 11 percent in Europe in the second quarter, with increased spending from Mainland China tourists contributing to the growth. The company’s Coach brand saw a 6 percent rise in second-quarter revenue, driven by soaring sales of its Tabby handbags. Tapestry now expects adjusted earnings per share for 2024 to be between $4.20 and $4.25, up from its previous forecast.

    CNY travel up 27% YoY#

    Chinese travelers have resumed  their journeys for the festive season, as the number of trips within the country has surged by over a quarter during the Lunar New Year period. On Lunar New Year’s Eve, domestic passenger traffic increased by 26.7 percent compared to last year, with 195.24 million trips recorded across the transportation system. Highways saw the bulk of the traffic, with rail and air travel also experiencing significant upticks. Popular destinations included warmer southern provinces and snowy northern regions. Bookings for attractions and sightseeing tickets rose substantially compared to last year, indicating a resurgence in travel demand in China. Additionally, there was a notable increase in bookings for international destinations, particularly in Belt and Road Initiative nations.

    Xiaohongshu launches new filter#

    With Xiaohongshu’s new “Nearby” feature , prominently displayed on the app's homepage, users can now easily access an interactive map showcasing notes, group chats, and livestreams related to food, drink, and entertainment in their local area. This move marks a departure from the previous search filter system and signifies a deeper integration of online and offline experiences. As the local life services sector, which includes on-demand delivery and recommendations for dining, entertainment, and healthcare, is projected to reach $4.9 trillion (35 trillion RMB) by 2025 with significant room for growth, Xiaohongshu's expansion efforts, such as the introduction of a group buying function, are positioning it as a competitor to industry leader Meituan.