Business
Gucci Owner Kering Halts Spending in China on Coronavirus Fears
PARIS—Gucci-owner Kering has closed half of its stores in China and shelved new openings and advertising campaigns there as the coronavirus outbreak throws luxury brands into turmoil.
The French group, which also owns Saint Laurent and Balenciaga, remained upbeat about its longer-term prospects as it beat fourth-quarter sales forecasts on Feb. 12.
But like rivals, it said disruptions were inevitable from an outbreak that has emptied malls and shopping streets in China, which accounts for more than a third of luxury goods sales.
“We are seeing a sharp drop in traffic and sales in mainland China,” Chairman Francois-Henri Pinault said, adding shops in China that remained open, including in Hong Kong, were on reduced hours.
Kering is postponing store renovations and new openings, as well as reviewing product launches in China, Pinault added.
“We are reallocating inventory to other regions of the world to make sure we are not overstocked in China” he said, without giving an estimate for any impact from the virus on earnings.
Italian puffer jacket maker Moncler said this week shopper numbers at its Chinese stores had plunged 80 percent since the virus outbreak, while jeweler Pandora has said business in the country had ground to a halt.
Kering makes 34 percent of its sales in Asia Pacific, excluding Japan. Spending on its brands by Chinese customers, who have traditionally shopped with it overseas, has shifted overwhelmingly to mainland China, where the new coronavirus, COVID-19, originated.
Entire cities in the world’s second biggest economy are now shut off, flights have been cancelled and many countries are banning entry to visitors coming from China, exposing Kering and other high-end houses to a major sales hit.
The crisis has compounded a plunge in sales in Hong Kong due to months of pro-democracy protests. Kering’s fourth-quarter sales in the Chinese territory halved.
Nonetheless, group revenue rose 13.8 percent to 4.36 billion euros ($4.76 billion) in October-December, helped by demand in China prior to the virus outbreak. That equated to an 11.4 percent…
Business
Gordonstoun Severs Connections with Business Led by Individual Accused of Espionage for China
Gordonstoun school severed ties with Hampton Group over espionage allegations against chairman Yang Tengbo. He denies involvement and claims to be a victim of political tensions between the UK and China.
Allegations Lead to School’s Decision
Gordonstoun School in Moray has cut ties with Hampton Group International after serious allegations surfaced regarding its chairman, Yang Tengbo, who is accused of being a spy for the Chinese government. Known by the alias "H6," Mr. Tengbo was involved in a deal that aimed to establish five new schools in China affiliated with Gordonstoun. However, the recent allegations compelled the school to terminate their agreement.
Public Denial and Legal Action
In response to the spying claims, Mr. Tengbo publicly revealed his identity, asserting that he has committed no wrongdoing. A close associate of Prince Andrew and a former Gordonstoun student himself, Mr. Tengbo has strenuously denied the accusations, stating that he is a target of the escalating tensions between the UK and China. He has claimed that his mistreatment is politically motivated.
Immigration Challenges and Legal Responses
Yang Tengbo, also known as Chris Yang, has faced additional challenges regarding his immigration status in the UK. After losing an appeal against a ban enacted last year, he reiterated his innocence, condemning media speculation while emphasizing his commitment to clear his name. Gordonstoun, on its part, stated its inability to divulge further details due to legal constraints.
Source : Gordonstoun cuts ties with business chaired by man accused of spying for China
Business
China Dismantles Prominent Uyghur Business Landmark in Xinjiang – Shia Waves
The Chinese government demolished the Rebiya Kadeer Trade Center in Xinjiang, affecting Uyghur culture and commerce, prompting criticism from activists amid concerns over cultural erasure and human rights violations.
Demolition of a Cultural Landmark
The Chinese government recently demolished the Rebiya Kadeer Trade Center in Urumqi, Xinjiang, a vital hub for Uyghur culture and commerce, as reported by VOA. This center, once inhabited by more than 800 predominantly Uyghur-owned businesses, has been deserted since 2009. Authorities forcibly ordered local business owners to vacate the premises before proceeding with the demolition, which took place without any public notice.
Condemnation from Activists
Uyghur rights activists have condemned this demolition, perceiving it as part of China’s broader strategy to undermine Uyghur identity and heritage. The event has sparked heightened international concern regarding China’s policies in Xinjiang, which have been characterized by allegations of mass detentions and cultural suppression, prompting claims of crimes against humanity.
Rebiya Kadeer’s Response
Rebiya Kadeer, the center’s namesake and a notable Uyghur rights advocate, criticized the demolition as a deliberate attempt to erase her legacy. Kadeer, who has been living in exile in the U.S. since her release from imprisonment in 2005, continues to advocate for Uyghur rights. She has expressed that her family members have suffered persecution due to her activism, while the Chinese government has yet to comment on the legal ramifications of the demolition.
Source : China Demolishes Uyghur Business Landmark in Xinjiang – Shia Waves
Business
Yakult Unveils Restructuring Plans for Its China Operations | ESM Magazine
Yakult reorganized its China operations, dissolving the Shanghai subsidiary while opening a new branch. Manufacturing now consolidates at Wuxi and Tianjin plants, aiming for enhanced efficiency and growth.
Yakult’s Business Reorganisation in China
Yakult has announced a significant reorganisation of its operations in China, aiming to enhance competitiveness and sustainability. The company has dissolved its wholly-owned subsidiary, Shanghai Yakult, which previously managed manufacturing and sales functions. This strategic move is expected to streamline its operations in the Chinese market.
New Branch and Manufacturing Adjustments
Yakult’s head office in China has established a new branch in Shanghai, transferring the sales division from Shanghai Yakult to this location. As of December 6, the branch has started selling various products, including Yakult and its light variants. Meanwhile, the manufacturing plant in Shanghai has ceased operations, with production capacity now absorbed by the Wuxi and Tianjin plants to ensure efficient supply.
Commitment to Growth
The company remains steadfast in its dedication to the Chinese market and is optimistic about future growth. Yakult reassured stakeholders that the reorganisation will have minimal financial impact and aims to enhance efficiency. Founded in 2005 in Shanghai, Yakult China currently employs approximately 2,216 individuals, reinforcing its commitment to customer health and expanding operations.
Source : Yakult Announces Reorganisation Of China Business | ESM Magazine
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