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What soft earnings at Tiffany say about tourism from China

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There was something missing at the luxury jeweller Tiffany & Co. in recent months: Chinese tourists.

For the second time in a many months, a big seller of high-end goods noticed that a particularly crucial demographic of its shopping base had made itself sparse, damaging sales and stoking fears of worse to come.

On Wednesday, shares of Tiffany & Co. plunged 12 per cent after reporting weaker-than-expected sales in its third quarter. CEO Alessandro Bogliolo said that Chinese tourists have failed to show up, and open wallets up, with the same vigor that they had in the past.

Last month, the owner of Louis Vuitton noted the same phenomenon. Shares in that company were hit hard as well.

But Tiffany is considered a bellwether in the luxury sector and a number of big names, such as Ralph Lauren and Movado sold off Wednesday on concerns that things could get worse.

Tiffany’s third-quarter revenue rose four per cent to just above $1 billion US, yet industry analysts were anticipating a bigger boost. Part of the reason for the surprise was fewer tourists, particularly Chinese tourists, at stores in places like New York and Hong Kong.

“What we see is that Chinese tourists are traveling less,” said Bogliolo in a phone interview Wednesday.

Tiffany’s business in mainland China remains strong, he said.

Weakening Chinese economy

Bogliolo speculated that the deteriorating value of China’s currency is to blame.

The yuan, also known as the renminbi, or “people’s money,” sank to a 10-year low against the dollar at the end of October. It strengthened slightly this month, leading many to believe that Beijing has stepped in to stop its slide.

But others see broader issues at play, including a simmering trade war and the potential for a slowing global economy that is squeezing even the wealthy in China.

There are major strains in our political relationship with the Chinese government. It doesn’t put them in the mood to come to the U.S. to spend their hard earned dollars. –  Robert Burke, luxury retail consultant

“There are major strains in our political relationship with the Chinese government,” said Robert Burke, a luxury consultant in New York. “It doesn’t put them in the mood to come to the U.S. to spend their hard earned dollars. They do have the option to buy in mainland China.”

Developments at Tiffany put Burke on alert, and he said he’s closely monitoring other luxury goods companies for a similar trend.

Chinese consumers fuel luxury industry

Tourists from China are now responsible for a substantial chunk of sales at luxury stores in Europe and the U.S.

Burke estimates that as much 30 per cent of luxury goods sales globally are made to tourists from China.

What may have exacerbated fears Wednesday is that prevailing wisdom has held that consumer spending from China in the high-end luxury shops of the West would not only continue, but that it would grow stronger.

In a study published this month, the Bain consultancy said that Chinese consumers will fuel nearly half of global high-end sales by 2025.

Chinese shoppers will account for 46 per cent of global luxury sales of an estimated $412 billion US in just six years, Bain said in the study, which was prepared for Italy’s Altagamma association of high-end producers.

Even before the Trump administration ratcheted up the intensity of its trade dialogue with Beijing, there were signs that economic growth in China was slowing.

Chinese economic growth declined to a post-global crisis low of 6.5 per cent in the quarter than ended in September. A trade fight with the Trump administration is pressuring communist leaders to energize economic activity that has weakened since Beijing clamped down on bank lending last year as it tries to rein in surging debt.

The logo for Tiffany & Co. appears above a post on the floor of the New York Stock Exchange, Wednesday. Shares plunged after news of soft third-quarter earnings. (Richard Drew/Associated Press)

It’s too early to tell if the spate of weaker-than-expected sales for luxury merchants will continue, or if it’s a bump in the road.

There were some other signs of weakness at Tiffany, like comparable-store sales, which are watched closely by industry analysts.

Tiffany’s quarterly profit of $94.9 million US, or 77 cents per share, was actually a penny better than expected, according to analysts surveyed by Zacks Investment Research.

But the company stuck to its previously issued full-year earnings guidance of between $4.65 US and $4.80 US per share, which led some to suspect that shifting geopolitical agreements or a slowing global economy may soon become a bigger threat.

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The cost of renovating your bathroom in Toronto in 2021

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Home renovations can be a big task, especially bathroom renovations where you have to work with either an awkwardly shaped space, or one with lots of pipework and very little natural light.

Nonetheless, getting a bathroom renovation by Easy Renovation to change your existing bathroom layout, improve the ambience or add more natural skylights can be worth all the trouble. But determining how much a bathroom renovation would cost is important while setting a budget.

The pandemic has changed a lot of things with social distancing rules, working from home, and for some, being made redundant. Therefore, having a complete grasp of the financial implication of a bathroom innovation is very important.

Owning your dream bathroom can be made a reality and the good thing is, regardless of your financial situation, there are always available options. If you also decide to put up your property for sale in the future, a bathroom upgrade would be a great investment—as it would add significant value to the property. Your bathroom renovation project, like every home renovation, can either be very affordable or extravagant, but one thing is certain, you’re bound to have a more refreshed, stylish and modernistic space.  

Looking through detailed sketches of luxurious and expensive bathrooms can be quite tempting, especially when you’re on a budget. However, your bathroom can be equally transformed into something that looks just as modern, stylish and refreshing but without the heavy price tag.

Conducting a partial bathroom renovation means you only have to change a little part of your existing bathroom rather than tearing it down and starting from scratch. If you intend to carry out this type of bathroom renovation in Toronto, depending on the size of your bathroom, you can spend between $1,000 – $5,000. With a partial bathroom renovation, you can save money by tackling smaller problems that exist in your present bathroom—or you can just upgrade a few of its features.

Partial bathroom renovations are quite affordable and would leave your bathroom feeling new and stylish without being time-consuming or a financial burden—which is important considering the economic impact of the pandemic. Repainting the bathroom walls, replacing the tiles on the floor and in the shower area are examples of partial bathroom renovations which is the cheapest to accomplish.

A more expensive and popular bathroom renovation is the standard 3- or 4-piece renovation. This renovation type involves a lot more services that are not covered by a partial renovation budget. To execute a standard bathroom renovation in Toronto you need a budget of about $10,000 – $15,000.

Unlike with a partial renovation, you would have to make a lot more changes to various elements of your bathroom without the hassle of changing the overall design. You can easily restore your current bathroom into a modernistic and classy space that fits your existing style. Making changes to more aspects of your bathroom is quite easy since there is more room in your budget to accommodate it.

A standard 3- or 4-piece renovation includes everything in a partial renovation plus extras such as revamped baseboards, installing a new bathroom mirror, buying new lights, installing a new vanity, changing the toilet, and buying new shower fixtures.

If you’re one of those looking to make a complete overhaul of your existing bathroom, then the option of a complete bathroom remodel is for you.

Unlike a bathroom renovation, remodelling means a complete change of your current bathroom design and layout for one that is newer and completely unrecognizable. The possibilities when remodelling a bathroom are endless especially when you have a large budget of over $15,000. That way, you can get the opportunity to create the perfect bathroom for yourself.

In addition to all that’s available with a standard bathroom renovation, bathroom remodelling allows you to make bathtub to shower conversion, relocation of plumbing, relocation of the toilet, reframing the bathroom and even relocating the shower.

In conclusion, a bathroom renovation can be a very important upgrade to your home and depending on the features that you decide to include, in addition to the size of your bathroom, this would influence the total cost of the project.

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7 Tips For First-Time Home Buyers In Calgary

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Buying a house for the first time can be overwhelming to say the least. If you’re wondering what neighbourhood to go with, what you can afford, or even how to just get started on the process, let us take some stress off your hands! We’ve teamed up with Hopewell Residential to give you 7 tips to ensure the home you end up with is everything you dreamed of.

Hopewell Residential is a five-time Developer of the Year award winner, so their expertise is second-to-none in Calgary and beyond. Who better to learn home-buying tips from than the homebuilders themselves?

Create a checklist of needs & wants

This is a biggie. When you’re buying your very first home, you’ll want to weigh your needs vs. your wants. Ensuring you have what you love in your first home is a big, big deal.

What should you do? Easy. Set up a list of needs and a list of wants, but be pretty strict with yourself, and make sure you take your lifestyle into consideration. With the increase in remote work over the past year, it’s important to keep in mind that a home office or flex room might just be the key to maximizing at home happiness. Especially if you’re thinking you might be expanding your family later on, spare rooms and extra space is key (but more on that later!).

Or for instance, you might need a home in an area with a high walkability score, but you want to be close to certain amenities. Set yourself up with the right level of compromise and the number of homes that actually fit your ‘perfect’ idea will skyrocket.

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‘Don’t give up’: Ottawa Valley realtors share statistics, tips for homebuyers in ‘extreme’ sellers market

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The real estate market in the Ottawa Valley can be summed up this way: people from far and wide are in a buying frenzy, but there’s hardly anything to buy at the “store,” and the limited inventory is overpriced.

This “stampede” — as one realtor described it — will affect rural towns as residents grapple with finding affordable housing and agonize over their inability to purchase homes in their price range.

“We are seeing a lack of inventory in all price ranges,” said Laura Keller, a real estate agent from Carleton Place.

Helen Vincent, a Renfrew realtor, said she’s never seen a market like this in her 36 years of practice. “We postpone offers for four to five days in order to get all the buyers,” she said.

Multiple offers — between seven and 10 — became the norm, with cash offers and no conditions, as buyers faced bidding wars. “In Ottawa, they have up to 50 (offers),” she added.

“It’s very stressful. You’re going to get nine (people) ticked off, and one happy. So many people are disappointed,” Vincent said.

Terry Stavenow, an Arnprior realtor for 40 years, said that “the pent-up need took over with inventory going low. It made a stampede on everything that was available.“

“Brand new housing — it’s very much gone. Several building developers are rushing to get inventory. They usually don’t do construction in the winter months,” said Stavenow.

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