As January comes to a close, some of fashion’s biggest brands are reporting on their latest earnings and hinting at retail trends for 2017. Looking at three major retailers — all leaders in their respective categories of fast fashion, luxury and activewear — we’re seeing an industry in the throes of transformation, with younger fast-fashion brands continuing to overshadow the traditional giants.
H&M is stronger than ever — and coming for Zara.
Despite a tough year for European retailers, H&M Group reported better-than-expected profits (7.41 billion kronor, or $847 million, over an $805 million estimate) for the fourth quarter and hinted at bold expansion plans for 2017. With sales this month continuing to trend in a positive direction (accelerating to 11 percent from December’s 6 percent showing), the brand intends to open 430 new stores and introduce e-commerce into six new markets this year. It also plans to expand next-day delivery, currently offered in just five markets, hoping to better compete with the speedier shipments of rivals like Zara. Expect to hear more about H&M’s sister brands this year, too — around 80 of the new brick-and-mortar locations will be devoted to COS, Monki and Weekday. It will be interesting to see how these diffusion lines — more commonly created by higher-end brands, to mixed results — boost the company’s profile, if at all.
Coach has found its footing, for now.
Coach appears cautiously optimistic about 2017, after a year that involved scaling back its struggling North American wholesale business to refocus on higher-end offerings. The luxury handbag brand reported an overall profit of $199.7 million in its second fiscal quarter–up from $170.1 million in the same quarter the year before–and is banking on its newest face of the brand, Selena Gomez (who, not incidentally, remains the most-followed celebrity on Instagram), to help sustain that. Coach also has plans to invest more in topical in-store experiences and product personalization in the coming year.
Under Armour is floundering amidst the athleisure craze.
Under Armour’s disappointing fourth-quarter earnings caused shares to plummet more than 25 percent today, forcing the brand to reevaluate its overall strategy in an increasingly saturated market. Citing the athleisure boom as well as the weak North American wholesale business (compounded, in this case, by the bankruptcy of sportswear stores like Sports Authority and City Sports), chief executive officer Kevin Plank said the brand would return its focus to performance wear from its less popular basics line in the coming year. It wasn’t all bleak, however: International sales saw 50 percent growth, and sales of Under Armour’s footwear offerings exceeded estimates by 30 percent.