Luxury brands are expanding their presence in the flagship Hong Kong mall of the K11 Group, as the high-end real estate arm of billionaire Henry Cheng’s New World Development Co. bets on a rebound in the city’s premium retail sector to help ease property-market woes.

The expansion at K11 Musea in Hong Kong’s prime shopping hub Tsim Sha Tsui includes store upgrades by labels such as LVMH’s Loewe and Kering SA’s Saint Laurent and Balenciaga, as well as a new store by Prada SpA, the group said in a statement to Bloomberg News.

Other brands planning a revamp of their stores include Italian fashion house Brunello Cucinelli SpA, Cie Financiere Richemont SA’s Van Cleef & Arpels, and Swiss watchmaker Audemars Piguet Holding SA. Collectively, the upgrades will double the footprint of the seven luxury labels in the mall to more than 30,000 square feet, K11 said.

The statement confirms an earlier Bloomberg report about Prada’s new store at K11 Musea.

The K11 mall’s luxury pivot offers one of the first clues to New World’s turnaround plans after the developer, which has been grappling with higher debt levels than its peers, issued a warning last month of an expected loss of up to HK$20 billion ($2.6 billion) for the financial year ended in June.

A significant part of the decline reflects slumping property values as Hong Kong struggles with one of its worst real estate market routs due to high interest rates and a broader economic slowdown.

Major landlords in the financial hub are pinning their hopes on luxury giants and their appeal to high-net worth customers who are among the least affected by the downturn. Global brands, many of which downsized in Hong Kong during its Covid-19 isolation, are also re-evaluating the city, lured by rents in the core shopping districts that have plunged as much as 90 percent from the pre-pandemic levels.

“We are excited that many leading luxury brands are expanding at K11 Musea, especially in the context of current Hong Kong retail sector,” said Richard Cheung, executive vice president of the K11 Group, in the statement.

The K11 brand malls have been a key growth driver for New World’s investment property sector. In the six months ended December, Musea recorded a 41 percent increase in sales from the year before, mainly driven by luxury spending, beauty care and cultural activities, according to New World’s financial report.

The brand, launched by New World chief executive officer — and Henry’s eldest son — Adrian Cheng, leans heavily into arts and culture elements for its properties. Musea is peppered with artwork displays and has hosted several high-profile events in recent months, including Louis Vuitton’s first ever fashion show in Hong Kong last year and an exhibition this summer of beloved Japanese cartoon character Doraemon.

The month-long exhibition contributed to a 40 percent rise in average tourist spending at Musea, with foot traffic up 30 percent during the opening weekend, New World said in a newsletter in July.

By Shirley Zhao

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On Thursday, the British Fashion Council (BFC) announced that CEO Caroline Rush will step down from her position from June 2025, ending a 16-year run.

The search for her successor will begin immediately, led by management consultancy Egon Zehnder. In the meantime, Rush will continue to lead the organisation.

The executive joined the BFC in 2009, moving into the CEO role from the PR firm she founded. During her tenure, the council’s revenue has more than doubled. But Rush has also navigated significant challenges, including Brexit, the Covid pandemic and the luxury downturn.

BFC chair David Pemsel praised Rush’s “dynamic and agile” leadership whilst “navigating some of the most challenging times for the industry.” Pemsel will extend his term as chair to the end of 2025 and lead the search for Rush’s successor.

Rush is responsible for pioneering numerous initiatives, such as the BFC Foundation, born out of two charities she launched. Since 2020, the Foundation has donated £4.3 million ($5.7 million) to support designers and their businesses.

“After 15 years in service to the industry, I am ready for a new challenge. Having built the organisation’s resources back to better than pre-pandemic levels, it is in a great position to continue its essential and incredibly important work with new leadership and a new chapter,” Rush said in a statement.

Next has said international tastes in fashion are “converging” as tech platforms expose consumers to international trends, boosting the retailer’s overseas sales and helping it close in on £1 billion in annual profits for the first time.

The fashion and homeware retailer forecast its annual profits at £15 million more than previously expected, at £995 million — up from the £918 million recorded in 2023 — after overseas sales rose by 23 percent in the six months to July, offsetting a near 1 percent decline in sales of Next-branded clothing in the UK.

The company said that the “global reach” of tech platforms including Netflix, YouTube and TikTok were “exposing people to international fashion trends in a way they never have been before”, and improving international delivery networks were also encouraging “consumers to try clothes from other countries, and retailers to adapt their ranges that cater for overseas tastes”.

“It appears that international tastes in clothing are converging more rapidly. This convergence is not uniform and is more pronounced in some territories than others,” the retailer said, adding that there remains a “marked difference between different cultures and climates”.

Simon Wolfson, the chief executive of Next, said the business was “at the start of a new phase” with more than half of its sales and profits now online and rapid growth in sales of non-Next brands, some of which the group now owns.

Non-Next brands now account for 17 percent of overseas sales and the group said it had been experimenting with expanding wholly owned labels including Cath Kidston, after it bought the brand name out of administration last year, and Love & Roses.

The group has signed a partnership deal in India with the local operator Myntra to develop online and retail stores and will expand a deal with the US department store chain Nordstrom, where it is now selling childrenswear, and also expects to find similar partners in Japan, China and Australia.

Next also plans to improve the way it works with shipment hubs in the Middle East and Europe to help better serve shoppers in those territories.

The plans were announced as Next revealed that full-price sales rose by 4.4 percent in the six-month period, boosting total group sales by 8 percent and pre-tax profit by 7.2 percent to £452 million.

Next said that full price sales over the six weeks after that period had “materially exceeded our expectations” and were up by 6.9 percent as better weather helped boost trade.

Sales in the second half of the year are now expected to rise by 3.7 percent, up from 2.5 percent.

If Next were to hit £1 billion of profits for the first time, it would join only a handful of UK retailers that have done so, including Tesco — and Marks & Spencer in a previous era. The upgrade to its profit expectations lifted Next’s shares by 5.5 percent to an all-time high of £109.10 in early trading.

By Sarah Butler

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Next Raises Guidance as British Retailer’s Sales Soar Abroad

The company’s increased its pre-tax profit forecast for the year to $1.3 billion.

What a difference a year makes.

During September 2023′s London Fashion Week, Burberry Group Plc dominated, renaming Bond Street underground station as “Burberry Street” and taking over a traditional London café. It even snapped baker and national treasure Mary Berry in the venue, Norman’s.

Twelve months on, and the picture could not be more different. Burberry has issued three profit warnings and parted company with chief executive officer Jonathan Akeroyd. It was recently ejected from the FTSE 100 index. With its shares trading at a 15-year low, its market capitalisation has shrunk to about £2 billion ($2.6 billion) from almost £10 billion in March 2023.

The company put its best foot forward at its show in London on Monday, overseen by creative director Daniel Lee. However, it was much more low key than previous events — held at the National Theatre rather than a custom-built marquee — indicative of the fact that Burberry is set to become a very different kind of luxury company.

Under Akeroyd, it aimed to be the British LVMH Moet Hennessy Louis Vuitton SE. Led by new CEO Josh Schulman, it could be more like Ralph Lauren Corp.

Schulman is poised to set out his strategy in November. But the catwalk gave us a few clues. The show was heavy on outerwear, suggesting that he will return to Burberry’s traditional heartlands of coats and jackets, particularly its classic trenchcoat, where the company still has luxury positioning. This focus would make sense as Burberry has a better chance competing with the likes of high-end down-jacket-maker Moncler SpA than with leather-goods powerhouse Louis Vuitton.

There were far fewer bags on the runway, indicating that ambitions here may be more modest after several years of Akeroyd seeking to drive the company’s growth through accessories.

Speaking after the show, Schulman said he wanted to stay the course on elevating the brand over the long term, but with a better balance on prices. High fashion styles are likely to be accompanied with more affordable items to win back core shoppers who have deserted it. This model of stretching from runway to more accessible lines, as well as operating outlet stores, is reminiscent of Ralph Lauren Corp., whose shares have been one of the few to buck the downturn in luxury.

But yet another repositioning for Burberry is not without challenges. Pricey coats and cheaper items elsewhere risk confusing the customer.

Selling more premium, rather than super-luxe products, can also be tricky. Tapestry Inc.’s Coach, which operates in the more-accessible segment, has done a good job turning around its fortunes, with Gen-Z friendly products such as the Tabby bag, but its revival did not happen overnight. Less wealthy shoppers remain under pressure. It’s worth remembering that Ralph Lauren’s success has actually come from moving upmarket. And Burberry also generated about 40 percent of its sales from Chinese consumers before the pandemic, so the luxury downturn in the country is another headwind.

Then there is the question mark over whether Lee will remain as lead designer. A less luxurious Burberry would be a different proposition to the company he joined.

One ray of hope is the reunion tour from the band Oasis, which championed Burberry in the ‘90s. In photos doing the rounds again, frontman Liam Gallagher is pictured wearing the brand’s trademark check. The accord between the Gallagher brothers is also spurring the rise of the #Britishcore TikTok trend.

Akeroyd’s strategy was all about Burberry’s Britishness. While Schulman, an American, looks likely to ditch many elements of his predecessor’s plan, he should emphasise this heritage further. So far, Burberry’s turnaround has lacked buzz. A return of Britpop could be just what it needs.

Liam’s son Lennon Gallagher is already a face of the brand, and was at the show, but Burberry should embrace Oasis fever even more.

Moncler’s Stone Island, another favourite of the band in their heyday, has signed up Liam Gallagher to be a star of its autumn winter campaign. Burberry outfitting the brothers for the forthcoming tour, for example, would be a smart move.

If such efforts fail to revive the company, then a takeover looks like the only hope. But here, the picture isn’t clear cut either.

Tapestry is a natural buyer, but it is battling the Federal Trade Commission’s efforts to block its $8.5 billion purchase of Capri Holdings. If this deal doesn’t close, then Burberry might be a consolation prize. The brand, which before its recent slump had about £600 million in net cash excluding lease liabilities, could also be appealing to private equity, which could overhaul the company away from the glare of public markets.

Then there’s Mike Ashley. His Frasers Group Plc owns upmarket boutique Flannels, and he has previously taken stakes in Hugo Boss AG and Britain’s Mulberry Group Plc — both not too far off from Burberry. Given the sharp decline in the share price, and the fact that with a holding he would be able to strong-arm Burberry into supplying Flannels with its best products, Ashley would also be a logical investor. But so far, he has failed to show any interest.

Without Cool Britannia coming to Burberry’s rescue, or a bidder checking in, shareholders risk looking back in anger, yet again.

By Andrea Felsted

The UK’s advertising watchdog has written to 17 “well-known” fashion brands advising them to review how they market sustainability claims amid an ongoing crackdown on greenwashing.

The Competition and Markets Authority concluded an investigation into companies including Boohoo and Asos earlier this year, requiring the retailers to clarify their green claims. Its latest salvo of warnings came with the publication of a compliance guide designed to help the sector ensure its sustainability marketing fits within the requirements of the law.

The letters highlight areas of concern, focused on vague or general claims that could mislead consumers. Some examples include labelling products as “recycled” when only a small proportion of recycled materials was used to make them and marketing collections or ranges as in some way sustainable without clearly stating the criteria used for such a designation.

The CMA said it has not launched enforcement action against the brands it has cautioned and declined to name them.The warnings came with a sting: a reminder that incoming regulatory changes mean the CMA will soon have the authority to fine companies up to 10 percent of global revenue if they break consumer law.

“Whether one of the 17 that got a letter or not... every business in the fashion sector should take note of the guide,” the CMA’s interim senior director of consumer protection Hayley Fletcher said. “Now is the time for businesses to reflect and get it right.”

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Asos and Boohoo Forced to Clarify Green Claims

Major UK fast fashion retailers will change the way they promote the environmental credentials of their clothes after being accused of greenwashing by a UK watchdog.