Famous Celine Brand Market Prospects

The breakfast let Celine, the “Queen of the jewelry industry,” famous Celine brand to the world, as a fanatical admirers of Celine, Audrey Hepburn is a natural star, Celine hold as “the embodiment of beauty and love”. Celine now need to save again.

On November 29, the luxury retailer Celine companies release third-quarter net profit fell 30%. Under the influence of this bad news, Celine Premarket plunged 10%.

Just like a Celine signature blue, perhaps in addition to Celine to give it “love and beauty, romance and dreams”, the “blue” of depression seems to be more representative of Celine.

Net profit plunged 30%

After the financial crisis of 2008, Celine has also ushered in the spring.

The first half of 2010, Celine in addition to Japan beyond the Asia-Pacific region grew more than 27%, three times times the pace of global growth. This good performance, or even a commentary in the Wall Street Journal considered the entire luxury industry after the crisis began to pick up a wind vane.

However, later, when other luxury brands have recovery grow, Celine has suffered a cold winter.

In May 2012, according to Celine 2012 Ji Cai published report shows that at the end of April, Celine first Ji Chunli edged 0.5% annually to us $ 81.5 million, turnover during the period rose 7.6% to 819 million dollars.

In August, Celine announced second-quarter earnings, revenue growth for only $ 1.6% to $, 2% growth in net profit to us $ 91.8 million, up from $ 90 million in the same period last year. But gross profit margins declined from 59% to 56.3%.

And third-quarter earnings released at the end of November is staggering: third-quarter net profit fell 30%, well below market expectations. Net profit dropped to us $ 63.2 million from $ 89.7 million over the same period. Gross profit margin from 57.9% per cent over the same period. 4% revenue growth, increased to us $ 853 million from $ 822 million over the same period.

Looking at 2012 years ago third-quarter results are not hard to find: when Celine in the revenue growth rate has always hovered in the single digits, incremental struggle suddenly plunge in net profit, and gross profit margin also steadily decline.

Asia-Pacific performance falling

Can be seen from published third-quarter earnings this year, 3% Celine in the Americas sales growth in the first quarter of this year to us $ 38.6 million; US $ 17% sales growth in the Asia-Pacific region; Japan 15% sales growth to $ 14.2 million; 3% sales growth in Europe to us $ 8.8 million. Company Chairman and Chief Executive Michael j. Kowalski said, America’s sales were lower than expected in the first quarter.

Different from other European brands, Celine’s home base in the United States, United States market sales more or less occupied half of Celine. It is unfortunate, 3% growth rate less than expected in the first quarter, second-quarter decline 1% (US $ 434 million) performance of the national people’s Congress have people drop glasses, falling sales of its flagship New York store and even 9%. The third quarter, global same-store sales growth 1%, where Japan had same-store sales decline in Asia 4%.

Celine group summed up the performance decline was higher-than-expected tax rate, continued weakness in the economy, effects and high cost of precious metals and diamonds. But this does not seem convincing.

Because Celine published before 2012 in the semi-annual report, last year’s outstanding contributions by Celine’s Bulgari, Celine’s watches and jewellery sales last year jumped to 133% per cent euros, without Bulgari, only 13% of high jewellery and watch sector growth.

The other hand, the luxury pricing strategy is different from ordinary consumer goods, its cost is calculated as: raw material cost + processing + value + luxury brand marketing public relations costs + cost + tariffs and Government tax rate = actual sales prices, here are the most important luxury brands in the cost value, while the raw material and processing cost is relatively low.

Shrinking store only Cartier one-tenth

When the luxury market in China as new nuggets when Highlands began in 2001 China Celine is aware of it, especially in China in 2007 set up wholly-owned foreign subsidiary, with independent teams. In 2010, the 27% growth over the same period, China’s performance in the second quarter of the year, Michael j. Kowalski said the next 3 years plans to open 25-30 new stores in China, and will continue to expand its investment in two or three cities.

Two years later, Celine’s new store in China increased by 10, only 22 per cent, while its rival Cartier shops in China up to 224, is 10 times times Celine.

Other brands have aggressively entered the Chinese jewelry market, Celine is old in the channels and marketing, progress has been slow. Zhou believes that this leads to Celine in terms of brand awareness in China is very low compared to other brands, except to say that on the dating market, Celine is also has its own a certain reputation.

“In this market, who can effectively do marketing, effective ground floor sales channels, the effective use of media resources, will be able to determine its final market results in China. “Zhou told financial weekly newspaper reporter, she believes that if Celine has also continued to present market strategy, its market share will dwindle.

From the product point, Celine adhere to their “traditional and classic” policy, not introduced a product for a particular market or region, has not launched a high-end custom service, this seems to relate to other luxury goods “flatter” contrary to the policy of China.

However, Celine, alarm bells have sounded!