China News Brief
    February 13, 2024

    Valentino opens store in Shanghai; LVMH Prize shortlists Chinese designers; Yang Mi stars in Loewe collection campaign.
    The vibrant red hue of Valentino's new pop-up in Shanghai references Chinese New Year and Valentine’s Day. Photo: Shutterstock

    Valentino opens store at Hongqiao airport#

    On February 2, Valentino and DFS Group opened  a standalone Valentino concept store and a “Red Rhythm and Spring V Lounge” pop-up at Shanghai Hongqiao International Airport. The boutique offers Valentino‘s menswear and womenswear collections, while the pop-up showcases V Logo handbags. The store‘s design reflects Italian hospitality with a muted color palette and marble façade, while the pop-up’s vibrant red hue references Chinese New Year and Valentine‘s Day.

    LVMH Prize shortlists Chinese designers#

    The semi-finalists for the 11th LVMH Prize for Young Fashion Designers, organized by the LVMH Group, have been announced , including four individuals (three groups) who are Chinese designers: Chia Hung Su from Taiwan, Derek Cheng and Alex Po from mainland China, and Yayi Chen Zhou from overseas. The LVMH Prize for Young Fashion Designers primarily targets designers under 40 worldwide, requiring applicants to have launched and sold at least two seasons of women‘s or men‘s clothing collections. A record-breaking number of over 2,500 candidates from around the world applied for the 2024 award, with 20 emerging brands from 18 countries ultimately qualifying for the semi-finals.

    Yang Mi stars in Loewe collection campaign#

    Loewe released  its 2024 Spring/Summer women‘s wear collection campaign on February 8. The campaign, lensed by photographer David Sims, features global brand ambassador Yang Mi, global brand ambassador Taylor Russell, and newly appointed brand ambassador Lim Ji-yeon.

    Temu airs Super Bowl ad#

    Temu launched  its second advertisement during the 2024 Super Bowl, following its debut the previous year, accompanied by a substantial $15 million in coupons and giveaways. With three ads during the game and two post-game spots, Temu‘s advertising push aligns with its strategy of rapid market expansion, prioritizing market share over immediate profitability. Temu‘s focus on value, gamification, extensive product range, and close supplier relationships has propelled its growth. Since its US launch in 2022, Temu has expanded to over 15 countries and boasts significant user growth.

    Kering said to ditch Farfetch#

    Kering has reportedly  severed direct ties with Farfetch, though its brands may still be available on the platform through third-party retailers. This decision follows Neiman Marcus Group‘s announcement of abandoning plans to integrate its Bergdorf Goodman webstore and app with Farfetch Platform Solutions, indicating a setback for Farfetch after a multimillion-dollar partnership agreement with Kering in 2022. Although Kering has not made a formal statement, remarks from its finance chief suggest a decline in e-commerce sales as a proportion of the group‘s total revenue, possibly due to decreased spending among luxury consumers amid global economic challenges.

    Tod‘s on cusp of going private#

    Tod‘s SpA’s founding family, partnering with L Catterton, is making  a 1.4 billion euros ($1.54 billion) bid to take the luxury brand private, supported by LVMH. L Catterton‘s offer of 43 euros ($47.3) per share, an 18 percent premium, aims to revitalize Tod‘s amid industry shifts. The Della Valle brothers plan to retain 54 percent ownership, with L Catterton acquiring a 36 percent stake for 512 million euros ($563.2 million) and LVMH maintaining 10 percent. This move, emphasizing agility and growth, includes brands like Roger Vivier and Hogan and deepens ties between Tod’s and LVMH. The delisting could allow Tod‘s to invest heavily in promoting its brands while cleaning up distribution away from the scrutiny of public markets. Following the announcement, Tod's shares surged 18.37 percent on Monday.

    Coty posts strong revenue growth in China#

    In the second quarter of the 2024 fiscal year ending December 31, 2023, Coty Inc. achieved  a net income of $1.73 billion, up 13 percent YoY, surpassing Wall Street‘s previous forecast of $1.68 billion. With Burberry Goddess perfume continuing to break records, revenue from the high-end beauty department grew by 17 percent this quarter, with double-digit growth in makeup revenue for brands like Kylie, Burberry, and Gucci. Lancaster continued to perform well in skincare. Revenue from the group‘s mass beauty department also grew by 7 percent. Geographically, Coty achieved growth of 10 percent, 16 percent, and 15 percent in the Americas, EMEA, and Asia Pacific markets respectively, with double-digit growth in revenue from its high-end beauty business in mainland China and more than triple growth in Hainan Island.

    China propels Longchamp‘s revenue#

    In 2023, Longchamp witnessed  a significant 44 percent increase in revenue compared to the previous year. This growth was driven by all distribution channels and markets, with mainland China being the primary driver, experiencing an 84 percent sales increase. Despite not focusing on frequent store openings, Longchamp inaugurated seven new shops in China in 2023, taking its store count to 40 in the country.

    Pandora sales in China decline#

    In 4Q 2023, Pandora reported  a 12 percent increase in sales, reaching $1.56 billion, with total sales for the year hitting $4.06 billion. While the US business accounted for nearly 30 percent of total revenue, Europe saw 5 percent growth, driven mainly by the German market with a 39 percent increase. However, sales in China declined by 13 percent, prompting the company to focus on regaining growth in that market.

    Hong Kong office market under pressure#

    On February 8, Swire Properties released  its Q4 2023 operational data. In Hong Kong, the overall office occupancy rate dropped by 3 percentage points to 93 percent compared to the previous year. In mainland China, occupancy rates remained steady and retail sales increased notably. Retail sales at Sanlitun Taikoo Li in Beijing grew by 30.5 percent, at TaiKoo Hui in Guangzhou by 15.4 percent, at Indigo in Beijing by 26.6 percent, at The Temple House in Chengdu by 32.9 percent, at Xingye TaiKoo Hui in Shanghai by 28.8 percent, and at Taikoo Li Qiantan in Shanghai by 78.8 percent. Additionally, It is projected that the sales at TaiKoo Hui in Guangzhou for 2023 will surpass 12 billion RMB ($1.92 billion), with luxury brands like LV, Hermès, and Chanel contributing over 5 billion RMB ($800 million).