Tapestry, Estee Lauder among luxury brands affected by China shutdown

Luxury brands hit by Covid shutdown in China

On Thursday, Tapestry and Estee Lauder forecast full-year earnings below estimates, underscoring the hit global luxury goods companies are taking from COVID-19 lockdowns in China.

Major Chinese cities have imposed tough restrictions this year as part of Beijing’s zero covid policy, leaving companies that have substantial exposure to the country with heaps of unsold goods as cautious consumers stay away from neighborhoods crowded traders.

Tapestry and Estee Lauder join Gucci owner Kering, Ray-Ban maker EssilorLuxottica and Ralph Lauren in reporting sales success in China, a key growth market for high-end fashion companies.

Estee, which makes MAC lipstick and La Mer skincare products, derives more than a third of its revenue from China, while handbag maker Coach Tapestry generates around 20% of its sales in the region, according to analysts.

Tapestry, which also owns Kate Spade and Stuart Weitzman, said it was starting to see a recovery in demand in China, with sales expected to fall 15% in the first quarter from a 32% drop in the fourth quarter.

A fleet of ships is heading to Europe with diesel

A fleet of ships carrying diesel, one of the world’s most important fuels, is heading to European markets facing energy security threats from high temperatures, soaring gas prices and Russian disruptions.

Five vessels carrying nearly 3 million barrels are set to move from Asia to Europe so far in August, according to preliminary data from Vortexa. This is the maximum in five months on a barrel per day basis. Shipments from the Middle East to Europe are also expected to increase.

Growing flows of diesel – used in industries, transport and for electricity – to Europe are the result of market disruptions caused by higher prices in the center of Amsterdam, Rotterdam and Antwerp (ARA) compared to Asia, traders said.

China’s faltering economy and a seasonal lull in demand in India also contributed.

Europe is grappling with a historic drought that is causing water levels on the Rhine to drop. The waterway that connects the ARA hub oil reservoirs to consumers in inner Europe is currently impassable for most barges, creating a supply bottleneck that could lead to drawdowns in their stocks that will need to be replenished before the ‘winter.

The amount of time The American public shifted to watching TV online has overtaken cable for the very first time. Subscribers to services like Netflix and Hulu accounted for 34.8% of all television consumption in July, research firm Nielsen said Thursday. This edged out cable TV at 34.4%. The diffusion was far from 21.6%. Audiences watched an average of 190.9 billion minutes per week of streamed content in July, Nielsen said. That topped the April 2020 tally, when people were stuck at home during the pandemic.

The number of Americans Filing of new jobless claims fell last week and prior period data was revised down, suggesting labor market conditions remain tight despite a slowdown in momentum due to rising interest rates. The Labor Department’s weekly jobless claims report on Thursday, combined with strong industrial production in July and underlying growth in retail sales, eased recession fears.

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