Weekly News Wrap: Alibaba deems last year 'most severe' in decades; Zomato plunges as share lock-in period ends
And Japan’s Sankyo Seiko to purchase a French luxury fashion house.
Alibaba faced its “most severe” external environment in decades in its last financial year, CEO Daniel Zhang said on Tuesday, as the e-commerce giant faced a number of headwinds from regulatory scrutiny to a COVID-19 resurgence.
“Over the past year, we were deeply impacted by the tremendous uncertainties brought about by the capricious nature of the COVID-19 pandemic, the new expectations of the Internet sector in China, and high frequency of international geopolitical conflicts,” Zhang wrote in a letter to Alibaba’s shareholders.
“This may be the year in which changes in the external environment have been most severe in decades. In response to these big and impactful changes, our guiding principle has been ‘be confident, be flexible and be ourselves.’”
During the company’s financial year from 1 April 2021 to 31 March, Alibaba posted its slowest revenue growth on record and its share price collapsed by more than 50%.
READ MORE: Alibaba Group to apply for primary listing on HKEX
Shares of Indian food delivery company Zomato fell more than 14% to a record low on 25 July, as a one-year share lock-in period for promoters, employees and other investors expired following the 2021 listing.
Zomato made a stellar debut on July 23, 2021, in the Mumbai market, but its shares have lost more than 60% of their value since then on concerns about valuations and as global growth stocks cratered. read more
"Investors are concerned about the sell-off through employees and promoters," said Prashanth Tapse, vice president of research at Mehta Equities.
Investors are also not comfortable with the acquisition of Blinkit, he said, adding that the fundamentals of the company were still good.
Including Monday's losses, Zomato shares have lost nearly 30% since the company announced its deal to buy local grocery delivery startup Blinkit in June.
Privately-held French fashion house Leonard, known for its stylized orchid prints, is being sold to its long-time partner in Asia, Japan-based Sankyo Seiko, the company said.
The move marks the end of family ownership for the luxury label, which was founded in 1958, and symbolizes the struggle of smaller, independent European houses to maintain relevance in a fast-shifting and a highly competitive retail landscape dominated by large, global groups such as LVMH and Kering.
Plans are to further expand Leonard, which sells dresses costing upwards of $1,196.52 (EUR1,170) as well as accessories, in Asia, drawing on its presence in South Korea to push further into Japan and Taiwan, according to the statement.
Financial details of the deal were not given.
The label will maintain its spot on the Paris fashion week calendar and its spring summer 2023 collection will be the first show under the directions of the new owner, a retailer and apparel producer and importer that has worked with the house for 50 years.