US retail sales unexpectedly rose in August, supported by online purchases that masked more mixed results at other merchants.

The value of retail purchases, unadjusted for inflation, increased 0.1 percent after a revised 1.1 percent gain in July, Commerce Department data showed Tuesday. Excluding autos and gasoline stations, sales advanced for fourth month.

Five of the report’s 13 categories posted increases, while others such as electronics and appliances, clothing and furniture fell. Receipts at gasoline service stations decreased, reflecting cheaper prices at the pump.

The retail sales report showed so-called control-group sales — which are used to calculate gross domestic product — rose 0.3 percent in August. The measure excludes food services, auto dealers, building materials stores and gasoline stations.

The figures indicate resilient household demand midway through the third quarter even as hiring and wage growth show signs of moderating. For Federal Reserve policymakers, the data also illustrate an economy on solid footing as they debate how much to lower interest rates on Wednesday.

In addition to cooler job growth, economists forecast the combination of elevated borrowing costs, the depletion of pandemic savings and a higher cost of living will eventually prompt American consumers to cut back.

By Augusta Saraiva

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US Retail Sales Rise More Than Expected in July

US retail sales rose 1.0 percent in July, surpassing forecasts and alleviating fears of a sharp economic slowdown amid a higher unemployment rate, which may impact expectations for a substantial interest rate cut.

Burberry’s new American boss says taking Britain’s best-known fashion brand down market is not in the cards.

Instead, Joshua Schulman said he wants to stay the course on elevating the brand but with a better balance on prices, speaking after his first London Fashion Week show since taking over as chief executive officer of Burberry Group Plc in July.

In effect, the former CEO of Michael Kors is seeking to address criticism that the UK trench coat maker’s effort to take the label up market was poorly executed, with new, unfamiliar products hastily introduced into stores at inflated prices, confusing customers about the brand.

Schulman’s stint at Michael Kors and Coach, considered affordable luxury brands, had prompted industry analysts to wonder if he’d take Burberry down market. Schulman will unveil his strategy for the brand in November.

The executive has taken charge at a difficult time for Burberry. In addition to an industry-wide slump in the fashion sector hit by falling demand in China and a slowdown in the US, the company has also been grappling with issues specific to it that have resulted in sliding sales and profit.

Earlier this month it was dropped from the FTSE100, ending a 15-year presence on the blue-chip benchmark after its capitalisation fell below the level required to keep its place. Shares have tumbled by more than 75 percent since a record high in April last year. The stock rose as much as 1.8 percent in early London trading on Tuesday.

Burberry designer Daniel Lee, who is under pressure to help the label produce products that appeal to the label’s core customers, unveiled his Spring/Summer 2025 collection in London Monday at the National Theatre.

The collection featured a mix of male and female models wearing different types of jackets and trenches, some revisited with collars that looked like an angel’s wings, in brown, grey as well as pale pink tones.

Jerry Hall, Blur frontman Damon Albarn, actress Olivia Colman, who played the late Queen Elizabeth II in “The Crown” as well as former professional football player Rio Ferdinand were among the front row guests.

Yorkshire-born Lee was appointed two years ago under former CEO Jonathan Akeroyd who sought to bring back Burberry to its British roots. Schulman said he still aims to leverage the Britishness of the label, known for its distinct beige checks.

When asked if the collaboration with Lee would continue, Schulman just said “Today’s show was beautiful,” without elaborating further.

By Angelina Rascouet

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Does Burberry Have the Wrong Strategy?

The British trench coat maker’s latest revamp has faltered. Some point to executional errors, but Burberry may need to rethink its strategy and become a ‘British Coach,’ writes Luca Solca.

Hermès International is a way for investors to shield themselves from a short-term downturn in the luxury-goods sector, according to BNP Paribas Exane analysts, who upgraded the Birkin bag maker to outperform for the first time.

Against a tough industry backdrop, “Hermès should continue to deliver significantly above-average top-line growth for longer, thanks to the defensiveness and visibility of its business model,” analysts including Antoine Belge and Melania Grippo wrote in a note.

Luxury stocks including LVMH, Gucci owner Kering SA and Burberry Group Plc have slid this year on concern about fading demand, partly linked to China’s economic slowdown.

By contrast, Hermès has held steady as its leather-goods unit benefits from long waiting lists and price increases, according to Exane, which has had a neutral rating since 2018. The shares rose as much as 1.5 percent in early trading.

Exane also cut earnings estimates and price targets for most other luxury stocks under its coverage, noting the sector faces “short-term pain.”

Swatch Group AG was downgraded to underperform from neutral, sending the Swiss watchmaker’s shares down as much as 0.9 percent on Tuesday.

By Joe Easton

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Hermès Outshines Rivals With Big Sales Jump

Sales at the French luxury group grew to €3.7 billion ($4.02 billion), a 13 percent organic sales rise that strips out currency fluctuations.

🇨🇳 China’s JD.com presents Asian brands at London Fashion Week. As the British Fashion Council’s official Asian online retail partner, the e-commerce major showcased brands Ellasay, Marisfrolg, Pure Tea and Hazzys at London Fashion Week. Caroline Rush, CEO of the BFC said the partnership will facilitate “smoother collaborations across borders [and] amplify [London designers’] exposure in the crucial Chinese market.” JD.com’s president of fashion Sherrin Kong said: “by leveraging our robust supply chain capabilities, we are excited to… continue our role as a gateway connecting the global fashion community with Chinese consumers.” [BoF Inbox]

🇺🇿 Uzbekistan crosses key threshold, moving up the cotton value chain. The Central Asian nation, which is one the world’s top 10 cotton producing countries, has started importing raw cotton to make finished products after it reached the point where it processed all the fibre it produces domestically. “Our reforms in this area have won the recognition of prestigious international organisations and the boycott on Uzbek cotton was lifted. We are continuing cooperation in this direction with the international coalition Cotton Campaign,” said Uzbekistan’s president Shavkat Mirziyoyev. [Fibre2Fashion]

🇨🇳 Typhoon Bebinca disrupts operations at Shanghai, Ningbo ports. Shanghai and has been hit by its strongest typhoon in 75 years, making landfall on China’s east coast early Monday, as reported by state media. This forced container vessels to avoid the two major ports. Before Typhoon Bebinca’s arrival, the Port of Shanghai experienced a 56 percent reduction in container vessel port calls from Friday to Saturday. This was followed by a more significant 95 percent decrease on Sunday. As of Monday, both Shanghai and Ningbo ports were operational but facing “heavily disrupted operations,” according to Seaexplorer. [Sourcing Journal]

🇮🇳 Jaimin Gupta acquires majority stake in Aarvee Denims and Exports. Jaimin Gupta, the founder of the men’s fashion brand Barcelona, along with other investors, has acquired a majority stake in Gujarat-based Aarvee Denims and Exports. Last week, Aarvee announced the approval of a share purchase agreement to sell 1.42 crore shares to Jaimin Gupta, Tarachand Agrawal, and Qmin Industries. [Economic Times]

🇮🇳 Beauty retailer Purplle clocks 43% rise in FY24 revenue to 680 crore rupees. The company’s consolidated net loss reduced by 46 percent, dropping to 124 crore from 230 crore rupees in the previous year. Total expenses climbed to 850 crore rupees in FY24, up from 738 crore a year earlier. [Economic Times]

🇧🇷 Brazilian cotton prices oscillate amid market challenges in September. Cotton prices in Brazil experienced fluctuations in the early part of the month due to ongoing challenges in reaching agreements on prices and batch quality in the domestic spot market, according to the Centre for Advanced Studies on Applied Economics (CEPEA). [Fibre2Fashion]

🇮🇳 PN Gadgil Jewellers raises 330 crore rupees from investors ahead of IPO. The company has secured the funds from anchor investors, including HDFC MF, Tata MF, Edelweiss MF, LIC MF, Invesco India, and Citigroup, by allotting 68.74 lakh shares to 25 investors ahead of the public issue opening on Tuesday. [Economic Times]

🇮🇳 Jewellery brand Trisu completes pre-seed funding led by All In Capital. The brand with headquarters in Gurgaon and a manufacturing facility in Jaipur has completed its first pre-seed funding round, led by early-stage venture capital firm All In Capital with participation from JK Tyres, Amaanta Group, and angel investors Himanshu Aggarwal and Sumer Sethi. [Economic Times]

🇨🇳 Germany considers introducing regulations to restrict Chinese e-tailers. German regulators are reportedly drafting regulations that could affect international e-tailers including China-founded ultra-fast fashion players like Shein, Temu and AliExpress to ensure a more level playing field between them and European companies. [Sourcing Journal]

🇹🇭 Prada names Thai actress Toey Jarinporn Joonkiat as brand ambassador. The Italian luxury brand has tapped the film and television star with more than 7 million followers to endorse its products. [BoF Inbox]

Swiss watchmakers urged the central bank and the government to support exporters by curbing the strength of the country’s currency as overseas sales slump.

“With inflation currently well below 2 percent, the Swiss National Bank has room to manoeuvre and act on the foreign exchange market,” the Federation of the Swiss Watch Industry and the Employers Federation of the Swiss Watch Industry said Tuesday. “An ad hoc and more reactive approach would also make it possible to reduce the volatility of the franc.”

The nation’s watchmakers are grappling with a drop in demand for costly timepieces. After record shipments by value in the past three years, watch exports dropped by 2.4 percent in the first seven months of 2024. Some brands and several components makers have resorted to government-supported work reductions to avoid permanent job cuts, Bloomberg News has reported.

With brands ranging from Rolex to Patek Philippe and luxury conglomerates including Swatch Group AG and Richemont that each own a slew of brands, the industry includes some 700 companies employing about 65,000 people. It’s a key pillar of the Swiss economy, where exports account for 55 percent of GDP.

The watchmakers are the second prominent Swiss industry lobby to call on the central bank for measures to weaken the franc. Early last month, technology manufacturers’ association Swissmem said the sudden appreciation in the currency is threatening a vulnerable recovery for overseas sales seen in recent months.

Two interest rate cuts by the Swiss National Bank have so far failed to prevent the franc from again approaching an all-time high against the euro that was last reached in the final days of 2023. Officials have repeatedly said that the currency’s strength was crucial in restraining Swiss inflation, which peaked at about a third of the eurozone’s highest level.

SNB officials will meet for the next rate decision on Sept. 26.

Subcontractors and makers of entry-level and mid-range priced watches are being hurt the most by the drop in demand, the watch trade group said. “The negative forecasts for the end of 2024 could prove highly problematic for some players in the sector.”

Faced with the sudden drop in demand, many watch companies have had to resort to short-time working, extended summer closures and job cuts, the industry group said.

Learn more:

The Luxury Watches Downturn, Explained

The Swiss watch sector’s slide appears to be more pronounced than the wider luxury slowdown, but industry insiders and analysts urge perspective.

THG Plc plans to demerge its technology platform and switch the listing of its core beauty and nutrition business in an attempt to boost the e-commerce company’s flagging share price.

The technology division known as Ingenuity provides online commerce services to other retailers. If spun off, it would leave THG with its beauty and nutrition arms, which it described as profitable and cash-generative in a statement Tuesday morning.

It follows a deal in June to sell its luxury brands, which include Coggles, to Mike Ashley’s Frasers Group Plc.

Shares in THG, previously known as The Hut Group, rose in early trading in London on Tuesday before falling as much as 4.9 percent. They have endured a bruising time on the stock market, falling about 90 percent since THG’s listing in 2020 that valued it at more than £5 billion ($6.6 billion).

Now THG, which owns brands such as Lookfantastic, plans to transfer its listing to a category that would allow it to be included in FTSE benchmarks. THG is currently part of a “transition” category following the introduction of new rules from the Financial Conduct Authority which came into effect in July.

The FCA is changing the UK’s listing rules in an attempt to boost the attractiveness of the City of London, amid fears of its dwindling status among global public companies.

THG wants to move to the equity shares (commercial companies) category, which would allow it to be considered for inclusion in the FTSE UK Index Series, raising its visibility.

Vocal Critic

Chief executive officer Matt Moulding has been a vocal critic of the London market, including coverage from journalists, and has said he regrets listing THG. Last year, the company bought free newspaper City A.M. in a deal that surprised investors.

Tuesday’s announcement came as THG released half-year results for the six months ending June 30, with total revenue falling 3.6 percent to £934 million.

Analysts from Panmure Liberum said the results were disappointing, “with nutrition profitability much softer than expected and beauty growth slowing despite a favorable market backdrop.”

They said the spinoff was potentially good news but added that it was unclear how the Ingenuity division, “which loses significant cash every year,” would be funded under the plans.

By Sabah Meddings

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Frasers Buys THG’s Coggles Website as They Unveil Partnership Deal

THG on Monday said it had sold sites including Coggles to Frasers as part of a partnership deal that also includes Frasers using THG’s technology in some parts of its business.