Lululemon Turns a New Page with Wilson Out of the Captain's Chair

Posted by Sheila Shayon on December 16, 2013 10:14 AM

Despite a firestorm of criticism over a product recall, management shake-ups, and inappropriate comments from its eccentric founder, upscale athletic fashion retailer Lululemon Athletica recently reported increased profits and revenue in the third quarter. 

The Vancouver-based company most known for its yoga apparel said profits rose 15 percent to $66.1 million, or 45 cents per share, for the three-month period ending Nov. 3. Revenues climbed to $379.9 million from $316.5 million for the quarter, beating expectations of $374.6 million. But the company's recovery may come to a halt next quarter, with projections for same-store sales coming in flat—collateral from a year of struggle for the company. 

Perhaps a holiday blessing for Lululemon will be the pending departure of outspoken, controversial founder Dennis J. Wilson, known as Chip, who will be stepping down as chairman of the board, though he'll remain a member.

Wilson most recently ignited a firestorm after telling Bloomberg TV in November that "some women's bodies just actually don't work," for the company's famed yoga pants, the focus of a March recall that shed a spotlight on the company's flawed supply chain and quality control issues. Wilson's comments irritated an already inflamed sentiment that the company neglected plus-size women—an issue that it has yet to address.Continue reading...

brand challenges

Abercrombie & Fitch Finally May Find a Friend if Board Dumps Its CEO

Posted by Dale Buss on December 4, 2013 04:43 PM

Sometimes it seems like almost no one likes Abercrombie & Fitch anymore, and the chain's sliding sales and brand equity reflect that. Now there's an important someone who doesn't like Abercrombie CEO Michael Jeffries either.

Activist investor Engaged Capital has just asked the Abercrombie board to start looking for a replacement for the embattled Jeffries, whose employment contract expires Feb. 1, according to the Wall Street Journal. The fund also suggested that maybe the Abercrombie board might want to go ahead and sell the company to a private-equity buyer as "the best option for shareholders."

The new pressure comes at a difficult time for Abercrombie & Fitch, which may finally be jumping the shark. It posted nearly $12 million in losses for the nine months of 2013, with sales down more than 7 percent. And it's facing a hostile environment this holiday shopping season with such a heavily promotional edge to most apparel retailing.Continue reading...

fashion therapy

Esprit Takes a Page from Zara's Fast-Fashion Notebook in Brand Revamp

Posted by Mark J. Miller on December 2, 2013 03:47 PM

Jose Manuel Martinez Gutierrez jumped from the steady deck of Zara a year ago onto the struggling (some say sinking) deck of a competitor, Esprit, to try and lead the company back to a more stable place as it does battle against his former employer as well as H&M, Gap, and Uniqlo.

Part of his plan, apparently, was to bring former employees of Inditex, which owns Zara, to the company to help inspire change at Esprit. Accrording to Reuters, the 44-year-old Martinez has a 12- to 18-month plan to get the business back to where it needs to be to compete with fast fashion brands like Zara, with “upgrades to technology and distribution to help … new hires get clothes designed, manufactured and on the racks in three to four months from the current seven to eight month time frame.”

"Competition is very intense," said Aaron Fischer, head of consumer research at brokerage CLSA, according to Reuters. "Esprit has high brand awareness but it needs to convert foot traffic into sales—and that requires good products. Right now, their products are quite poor compared with their peer group."Continue reading...

corporate citizenship

To Improve Garment Industry Standards, H&M Says It Will Pay Its Workers a Living Wage

Posted by Sheila Shayon on November 26, 2013 12:37 PM

One year after the Tazreen factory fire in Bangladesh killed 112 workers, and seven months after the Rana Plaza factory collapse claimed over 1,200 lives, H&M, the world's second-largest clothing retailer, has announced a plan to ensure that workers making its clothing are paid a living wage.

The move is a first from the divided groups of European and North American retailers that have since been put in the spotlight following the factory disasters. While the separate groups—the mostly-European Accord on Fire and Building Safety and the North American-based Alliance for Bangladesh Worker Safety—have made some progress on ensuring factory safety and workers' rights in Bangladesh, the issue of compensation is still being debated among government and corporate officials. 

Within five years, the Swedish fast fashion giant said 750 of its most important suppliers, covering 60 percent of its goods, should be paying a fair living wage to 850,000 textile workers.

"Textile workers should be able to live on their wage," Helena Helmersson, Global Head of Sustainability at H&M, told the Wall Street Journal. "Wage revisions from the government are taking too long."Continue reading...

brand news

In the News: Coach, H&M, 23andMe and more

Posted by Dale Buss on November 26, 2013 09:22 AM

In the News

Just launched: Interbrand IQ - BRIC and Beyond

Coach moves into 'lifestyle' territory with opening of new flagship store in New York. 

H&M aims to pay living wage for garment workers.

23andMe ordered to "discontinue marketing" DNA tests by FDA.

Anschutz Entertainment ousts CEO of concert promoter AEG Live.

Books-A-Million unveils book publishing on demand.

Chivas Regal runs first-ever branded web-video series.

Diageo set to sell most of Whyte & Mackay brand. 

El Al launches low-cost airline 'Up.'

Godiva meets Chinese flavor demands.

Google tightens security to prevent government data snooping.

Hyundai's 2015 Genesis aims to burnish brand.Continue reading...


Holiday Ads 2013: Brands Tap Celebrities, Award-Winning Animators for Over the Top Ads

Posted by Sheila Shayon on November 20, 2013 07:12 PM

John Lewis’ 2013 Christmas campaign in the UK, a seasonal rite of passage, is “a £7m multi-media festive extravaganza,” animated by Disney's Lion King artists and costing £1m alone.

It’s just one example of how high (and early) the bar is being set for branded holiday ads this year as shoppers around the world, weary from escalating costs-of-living and economic challenges, plan to spend only $800 this holiday season on gifts, down from $854 last year

And so retailers are pulling out all the stops to get attention from consumers, hoping to draw them in with witty and charming ads and deep promotional discounts. UK advertisers alone are set to spend nearly $630 million on ads in the last three months of the year, while American brands got a head start, with Kmart airing its first holiday-related ad one-hundred days before Christmas. Indeed, advertisers seem to be heading back to the small-screen while maintaining a solid presence on social media to get the most out of holiday promotional efforts. 

And that has led some brands to go above and beyond. From Kmart's controversial "Show Your Joe" ad to Best Buy and Marks & Spencer's celebrity-heavy campaigns, brands are working hard to get the attention of shoppers. 

Here's some of the most extravagant holiday ads we've seen so far:Continue reading...


Here Comes COS: H&M Readies to Introduce Upscale, Artsy Sibling to US

Posted by Sheila Shayon on November 15, 2013 03:42 PM

Swedish retail giant Hennes & Mauritz is gunning for its “coolly-minimal younger sibling,” COS, to make big a splash in the US market after building up quite a fanbase in Europe, Asia and the Middle East. The brand will make its debut in the spring, joining fast-fashion phenom H&M. 

But the higher-priced, more artsy brand has no intention of settling for second place. According to H&M's head of business, Marie Honda, the high-fashion brand has the potential to be huge. After testing the waters earlier this month with a NYC pop-up shop at Opening Ceremony, the upscale, minimalist and cosmopolitan COS brand will target US ities "that have an international feel," Honda told Women's Wear Daily

Come spring 2014, the brand plans to launch US e-commerce and open its first store in April in NYC's Soho neighborhood. 

It’s a strategic shift for H&M, which launched in the US market as a trendy and cheaper alternative to Gap, Zara and Forever 21, and for whom American stores deliver the most revenue after Germany.Continue reading...

brand news

In the News: Sony, Volkswagen, Adidas and more

Posted by Dale Buss on November 15, 2013 07:58 AM

In the News

Sony puts US fans in a lather with PlayStation 4 launch at critical time for company.

Volkswagen recalls 2.6 million vehicles worldwide and says UAW vote at its plant wouldn't affect US expansion plans.

Adidas goes with NBA "BIG logo" and short-sleeved jerseys for Christmas Day promotion.

A.G. Lafley shuffles P&G executives as one moves to Google.

Alexander McQueen collaborates with Damien Hirst

Berkshire Hathaway takes big stake in ExxonMobil.

Cisco earnings miss portends broader changes in industry.

Compuware gets shareholder pressure to put itself up for sale.

Comcast plans to start selling films.

Dolce & Gabbana appeal tax evasian conviction. 

Eminem taps brand partners to promote new album.Continue reading...

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