Global Brands Group sales among best in class
Global Brands Group sales rose 15 per cent in the second half year.
That’s a figure CEO Bruce Rockowitz believes puts the Hong Kong brand licensee and manager second only to Under Armour in business performance in the current lacklustre global economy.
Sales soared 49 per cent in women’s and men’s apparel, its gross margin stretching from 39.9 per cent to 41. 7 per cent.
It’s biggest category – childrenswear – recorded a 10.3 per cent sales increase and an improvement in gross margin from 34.8 per cent to 36.3 per cent. Footwear and accessories sales rose 3.4 per cent and its brand management business, its smallest division at present, improved by 52.8 per cent. That business will benefit from a significant boost when the company launches its first Katy Perry-branded products, a footwear range, in early 2017, targeting consumers in the US and Europe.
“We’ve had a very strong year in relation to the market,” said CEO Bruce Rockowitz at a results presentation in Hong Kong late Thursday. “We’re two years into the spin-off [from Li & Fung Group] and we’ve done a lot of heavy lifting. Our top line is exceptional compared to the market.
The momentum we have so far is in spite of the market and in spite of the [US] election which put a lot of uncertainty out there.
“Our revenue is up 15 per cent , driven by organic growth, and with no acquisitions.”
Hong Kong will underperform
Rockowitz says Asia remains a small market for the group, which is developing it with David Beckham and the Spyder brand and in the children’s sector.
“Asia remains promising given an expanding middle class, despite China’s growth rate slowing.
“Hong Kong is different to the rest of the world because we are tied to China and tourists from China to here. I think the Hong Kong market will still be underperforming for the rest of the [fiscal] year.”
He said high rents were affordable when business is good – “which it is not right now”.
Within Asia, Korea is performing strongly.
“Korea is a place where you can develop great design and great DNA of brands.”
Spyder is performing well there, with GBG expecting to have 100 stores trading by the end of March.
Global Brands Group now holds licenses of varying terms but up to 30 years in its core categories. In kidswear, its brands include Disney, Calvin Klein, Tommy Hilfiger, Under Armour and Nautica. In men’s and women’s fashion Spyder, Juicy Couture, Jones New York, Joe’s Jeans, Buffalo Jeans and David Beckham. In footwear, Calvin Klein, Cole Haan, Michael Kors, Kate Spade and GBG’s own brands including Aquatalia and Frye. It’s fast-growing brand management group formed a joint venture with Creative Artists Agency in July propelling it instantly into the world’s largest company in the space. Brands include Katy Perry, David Beckham and Jennifer Lopez.
High hopes for Katy Perry
Rockowitz believes securing the Katy Perry brand management will bring huge benefits to GBG, suggesting US$20 million in sales in the first year of the partnership. Perry has 100 million followers on Twitter and is revered across the northern hemisphere and Asia. The company will launch the footwear collection in February-March 2017 after revealing it to the trade last August.
It will be distributed to leading US and European retailers initially, with Asian consumers having to buy it online or wait until two or three seasons ahead before their regional launch.
“Neither of us want to grow too fast and get it wrong. The products are in line with Katy’s image. Retailers are excited, but consumers haven’t seen it yet.”