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In the first nine months of FY’24 ended Sep 30, 2024, luxury fashion house Prada Group increased its net revenues by 18 per cent Y-o-Y to €3,829 million (approximately $4,135 million) as against €3,344 million (around $3,621 million) generated in the corresponding period last year.
The brand’s sales rose by 15 per cent at foreign exchange (FX) rates and by 18 per cent at constant rates during the period. Its retail revenue increased by 15 per cent Y-o-Y to €3,425 million and by 18 per cent at constant rates, compared to €2,979 million in the same period last year. This growth was led by its brand Miu Miu whose sales grew by 97 per cent Y-o-Y, highlighting the brand’s growing popularity. Prada's wholesale revenue also increased by 8 per cent Y-o-Y and 9 per cent Y-o-Y at constant rates to €314 million.
Regionally, Prada’s sales grew in double-digits across the Asia Pacific, Europe, Japan, and the Middle East, with sales in the Americas growing at a modest rate. The brand’s sales in Asia Pacific grew by 12 per cent at constant rates to €1,139 million, while fueled by domestic and tourist spending sales in Europe grew by 18 per cent to €1,089 million. Japan registered highest sales growth in the Asia Pacific region with a 53 per cent rise to €466 million, while salesin the Middle East increased by 24 per cent to €154 million.
Patrizio Bertelli, Group Chairman and Executive Director, Prada, notes, the brand continues to to deliver above-market performance at both Prada and Miu Miu. Despite a challenging luxury market environment, growth opportunities abound with the brand remaining committed to strategic investments in retail, technology, and industrial capabilities.
Highlighting Prada’s consistent performance amid industry challenges, Andrea Guerra, CEO, says, the group’s brands maintain strong desirability and relevance thanks to their consistent identity, creativity, and sharp positioning. Prada and Miu Miu’s resilience and momentum not only showcase the group’s ability to navigate complexities but also reinforce its commitment to sustainable, above-market growth.
Gen Z and millennial shoppers are emerging as some of the most frequent visitors to UK retail stores, particularly in fashion, as per a recent research from physical retail analytics firm Retail Next. The research shows, around 40 per cent of UK consumers visit non-food stores weekly, with Millennials leading at 46 per cent for weekly store visits.
Surveying over 1,000 UK shoppers, the research reveals, over 28 per cent respondents were twice more likely to visit apparel stores weeklythan average UK consumers. Over 34 per cent of respondents reported visiting stores 1.7 times more frequently than average shoppers, while 25 per cent of Millennials also visited these stores weekly at a rate 5 per cent higher than the average.
Gary Whittemore, Head -Sales (EMEA & APAC), Retail Next, notes, embracing physical retail for reasons beyond social commerce, younger consumers are turning to in-store shopping as a way to enjoy authentic shopping experiences, connect with brands face-to-face, and engage with communities in real life, he explains. They are leading the store revival both in the UK and the US, choosing physical stores as their preferred shopping channel, he adds.
The research further highlights, 71 per cent of respondents sought greater support for these businesses in the recent Budget, with 75 per centurging the government to prioritise high street retailers specifically. Additionally, 70 per cent of UK consumers called for rate cuts for these physical retailers to help level the playing field with online competition.
Despite predictions of the High Street’s decline, physical retail continues to be a vital part of the shopping experience, with even online-first brands investing in physical spaces, adds Whittemore.
The newly developed ‘S-2m’ ring-spinning system, a refined version of the innovative “Supertraveller” system introduced in 1995, promises a leap forward in yarn production and quality. Created to address limitations in traditional ring spinning, the S-2m uses a rolling traveller that minimizes friction and significantly increases operational speeds, enabling greater machine productivity.
Unlike conventional spinning systems restricted by friction between the ring and traveller, the S-2m’s design facilitates smoother and faster traveller movement. This improvement allows spindle speeds of up to 24,000 rpm, pushing traveller speeds beyond 59 m/sec accomplished without added lubrication. Additionally, yarn quality is enhanced, as the traveller’s rolling action reduces yarn breakage, hairiness, and potential melting in synthetic fibres at high speeds.
The S-2m also offers cost savings: it reduces energy consumption and extends traveller life, resulting in lower operational expenses. The traveller replacement process is simplified, reducing machine downtime to just a few seconds. Modernized to fit onto existing ring-spinning machines, the S-2m is compatible with materials beyond steel, allowing the use of composite travellers with improved heat resistance and lower friction.
In testing, the S-2m successfully produced yarns of various fibres, including cotton and synthetic materials prone to melting in traditional systems. Productivity gains of up to 2.5 times have been noted in synthetic fibre spinning. The inventor has filed an international patent application and is seeking manufacturing partners to help bring high-quality samples of the S-2m system to market.
At ITMA ASIA + CITME 2024, the Karl Mayer Group showcased its technological innovations at both its Shanghai exhibit and a successful in-house show at its Changzhou facility. This event, held a day before the trade fair, marked Stoll’s debut of an in-house format for its Chinese clientele, attracting around 140 industry professionals in technical and management roles.
A highlight of the show was the unveiling of the Stoll TexLab, a comprehensive space designed for the flat knitting sector. The TexLab serves as a multifunctional hub where visitors can explore advanced Stoll technologies, test new yarns, and create experimental patterns. The space also features cutting-edge machinery, including the CMS 530 with gauge E20 for fine quality knitwear.
Stoll’s latest Trend Collection and various sample pieces generated significant interest, particularly in high-gauge machines and knit and wear technology. The event saw extensive discussions on digitalization, smart factories, and AI-driven production, reflecting future trends in the industry.
Rene Ludvigsen, Chief Sales & Product Asia at Stoll, noted positive responses and expressed intent to expand this format. New contracts and projects were secured, and Stoll gained insights into evolving market needs. While customers showed optimism, they highlighted concerns over price pressures. However, niche markets like cashmere and own brands are expected to maintain steady growth, with Stoll committed to supporting them with innovative machinery and solutions.
The Asia-Pacific Textile and Apparel Supply Chain Expo & Summit (APTEXPO 2024) will take place from November 13-15, 2024, at Singapore’s Sands Expo and Convention Centre. Co-organised by MP Singapore and CCPIT TEX, and hosted by the Singapore Fashion Council, the event will bring together over 300 leaders and innovators from the textile, apparel, and e-commerce sectors.
Under the theme ‘Re-engineering towards a Resilient, Adaptive and Sustainable Supply Chain,’ APTEXPO 2024 will feature discussions led by industry leaders like Kristen Nutt all from The Fashion Pact and Jonas Wand, CEO of Four source. Talks will focus on critical topics such as digitalisation, sustainability, and risk management.
Key highlights include insights into supply chain security trends, cross-border trade, and green procurement, with global brand representatives and fintech leaders examining challenges and investment opportunities in the region. A special focus on frontier technologies will showcase digital solutions to drive cost efficiency and sustainability in textile manufacturing.
APTEXPO 2024 will also provide investment briefings on the Asia-Pacific Textile Industrial Park, offering delegates insights into strategic opportunities in the regional textile sector. With backing from the ASEAN Federation of Textile Industries and the China National Textile and Apparel Council, the summit promises a collaborative platform for driving growth and resilience in Asia-Pacific’s textile supply chain.
Sharon Lim, President of the Singapore Fashion Council, emphasized that APTEXPO 2024 will play a crucial role in driving essential, purpose-driven change within the fashion industry. She highlighted the event’s importance in promoting long-term value creation across the sector.
Joining a movement against a controversial practice still used primarily in Australia, Spanish fashion retailer Mango has pledged to phase out wool sourced from mulesed lambs by 2030.
Known as mulesing, this process involves the removal of skin around a lamb’s buttocks and tail to prevent flystrike, a potentially fatal condition caused by fly larvae infestation. Over 80 per cent of the world’s superfine Merino wool is produced in Australia, where mulesing remains common.
With a revenue of €3.1 billion (A$5.1 billion) in 2023, Mango is now part of a group of 90 global brands—including Adidas, Zara, Patagonia, and Kathmandu—that have signed the Four Paws ‘Brand Letter of Intent,’ pledging to reject mulesed wool.
A global animal welfare organisation, Four Paws, has led advocacy against mulesing, emphasising the procedure’s cruelty. The group hopes, Mango’s decision will set a precedent in the fast-fashion sector, pressuring other brands to follow suit. Four Paws insists that pain-free alternatives are feasible and urges the Australian wool industry to end the practice.
Australia’s wool industry, however, is pushing back against the anti-mulesing campaign. Leading national body, Wool Producers Australia has criticised Four Paws’ description of mulesing as ‘live lamb cutting,’ calling it a ‘sensationalised’ term. Jo Hall,CEO, Wool Producers, argues, the phrase is misleading, emphasising that mulesing has long been recognised as an effective method to protect lambs from flystrike.
Four Paws has continued its campaign against mulesing, launching a global video titled ‘Be Their Voice,’ featuring Australian actress Danielle Macdonald and US actor Scott Evans to raise awareness.
In a letter to Prime Minister Narender Modi, Nana Patole, President, Maharashtra Congress, urged him to halt imports of cotton bales in the state, and instruct Cotton Corporation of India (CCI) to increase cotton procurement at the minimum support price (MSP), to support farmers and stabilise market prices.
The central government needs to intervene urgently to assist cotton farmers in Maharashtra, emphasizes Patole. Currently, cotton is being sold below its Rs 7,122 per quintal MSP at a price of around Rs6,500-6,600 per quintal. This is causing many farmers to hold onto their stock, he adds. The CCI also has unsold stock of 1.1 million in reserve.
In such conditions, importing cotton could not only disrupt the domestic market but also harm farmers, warns Patole. Cotton farmers are already struggling with low prices, a 12-18 per ent GST on agricultural equipment, and damage to crops from unseasonal rains affecting 1.9 million hectares this year, he notes.
The central government’s announced compensation remains unimplemented, according to Patole, who criticised the Pradhan Mantri Fasal Bima Yojana for favoring insurers over farmers.
Second-largest cotton producer in India, Maharashtra has over four million farmers involved in cotton cultivation. Despite its significant cotton output, the state is anticipated to have imported 2.2 million bales, raising fears offurther price drops.
While other luxury brands struggle, Hermès continues to defy expectations, posting strong third-quarter sales growth. What's their secret? The luxury sector is facing headwinds. A downturn in China, coupled with global economic uncertainty, has seen many prominent brands falter. Yet, amidst this turbulence, Hermès stands tall. The French maison, renowned for its iconic Birkin bags, reported an 11.3 per cent rise in third-quarter sales, reaching €3.7 billion. This performance significantly outshines rivals like LVMH, which missed expectations and Kering, which issued a profit warning.
Hermès thrives while others struggle
Hermès 11.3 per cent rise in Q3 sales, exceeded analyst expectations. This strong performance is a testament to the brand's enduring appeal, particularly amongst its ultra-wealthy clientele. In stark contrast, industry giants like LVMH and Kering are grappling with declining sales and dwindling consumer confidence, particularly in China. LVMH missed revenue expectations, while Kering issued a profit warning, highlighting the depth of the challenges facing the sector.
Table: Q3 sales growth top luxury brands
|
Brand |
Q3 Sales Growth (%) |
Stock Performance (YTD) |
|
Hermès |
11.3 |
+9% |
|
LVMH |
Missed expectations |
-15% |
|
Kering (Gucci) |
Operating income to halve |
-40% |
|
Moncler |
-3.30% |
There are several reasons for Hermès' remarkable resilience. First and foremost is its exclusivity and timeless appeal. Hermès's meticulously crafted products, like the iconic Birkin bag, are synonymous with exclusivity and timeless elegance. This enduring appeal ensures consistent demand, even during economic downturns. Furthermore, Hermès' classic designs transcend fleeting trends, ensuring enduring appeal.
Its strategic price positioning is another reason. Hermès caters to an ultra-high-net-worth clientele, a segment less susceptible to economic fluctuations. Their products, often considered investment pieces, retain value and desirability. While ‘aspirational’ buyers might be pulling back, Hermès' core customer base remains strong. Then there is the whole aspect of controlled production and scarcity as Hermès maintains strict control over production, creating an aura of scarcity and desirability. This strategy fuels demand and reinforces the brand's exclusive image. While renowned for its handbags, Hermès boasts of a diverse product offering spanning silk scarves, jewelry, ready-to-wear, and homeware. This diversification cushions the impact of slowing demand in specific categories.
Its focus on heritage and craftsmanship is another factor contributing to growth Hermès emphasizes its rich heritage and artisanal craftsmanship. This commitment to quality and tradition resonates with discerning consumers seeking enduring value. And despite the slowdown in China, Hermès continues to invest in the market, demonstrating long-term confidence in its growth potential. The recent opening of a store in Shenzhen and plans for a Beijing flagship demonstrates the brand's long-term commitment.
Interestingly, LVMH, the world's largest luxury conglomerate, felt the pinch of declining Chinese consumer confidence. Its fashion and leather goods division, home to Louis Vuitton and Dior, experienced a slowdown. In contrast, Hermès, with its focus on exclusivity and high-net-worth individuals, weathered the storm more effectively. This divergence highlights the power of Hermès' strategic positioning.
Lessons for other brands
The Hermès story offers valuable lessons for other luxury brands navigating the current turbulent landscape.
Cultivate brand heritage and craftsmanship: A strong brand heritage and a commitment to quality craftsmanship can create lasting appeal and customer loyalty.
Embrace exclusivity and scarcity: Strategic control over production and distribution can enhance brand desirability and maintain price integrity.
Focus on High-Net-Worth Individuals: Catering to a less price-sensitive clientele can provide a buffer against economic downturns.
Invest strategically: Maintaining a long-term vision and investing in key markets, even during challenging times, can ensure future growth.
Hermès' continued success amidst a challenging market underscores the power of a strong brand, strategic pricing, and a focus on exclusivity. As other luxury brands grapple with declining sales, Hermès serves as a shining example of resilience and adaptability in the face of adversity.
Polyester staple fibre (PSF) manufacturers in India have stabilized prices at Rs 93,000-Rs 95,000 per ton (around $1,105-$1,129) for Nov’24, after aRs1,000-per-ton hike implemented in mid-October. This is a result of the cost of purified terephthalic acid (PTA), a key input in the raw fiber declining slightly by Rs 400 per ton to Rs70,100 ($833.42) in the domestic market.
Despite these recent price adjustments, India’s PSF and raw material costs remain out of sync with global prices and crude oil trends. Indian manufacturers argue that elevated domestic raw material prices are limiting their competitive edge, particularly in export markets for garments, fabrics, and yarn. The cost structure, influenced by higher domestic pricing for PSF and PTA, poses a challenge for Indian exporters aiming to match international rates.
Highlighting the difficulties faced by Indian manufacturers, RKVij, President Emeritus, Textile Association of India (TAI) and Secretary General, Polyester Textile and Apparel Industry Association (PTAIA), says, the price gap between domestic PTA and imported PTA prevents Indian companies from offering competitive rates for exports. While domestic PTA is priced at Rs70,100 per ton, imported PTA, largely from China, is available at Rs66,500 ($790) per ton.
As of November, domestic PSF prices remain around Rs100,500 ($1,194) per ton, although discounts bring effective rates down to Rs 93,000-Rs 95,000. In comparison, imported PSF from China is priced slightly lower, at Rs 90,000-Rs 91,000 ($1,070-$1,081) per ton, making imports more attractive for some manufacturers.
Additional raw materials in the polyester value chain, Monoethylene glycol (MEG) and MELT, are priced domestically at Rs 58,800 ($699) and Rs80,290 ($954) per ton, respectively. The prices of MEG rose by Rs300 per ton, while MELT prices dipped by Rs340. However, due to licensing requirements under the QCO, imported MEG is often more competitively priced. Moreover, MEG is only a minor component in MELT production, further complicating cost management.
Fluctuations in crude oil, a primary input in polyester manufacturing, have not influenced domestic PSF pricing in recent months. For instance, WTI crude oil dropped from $74.38 per barrel in early October 2024 to $70.73 in early November, yet domestic PSF and upstream materials have not mirrored this trend.
The upcoming Heimtextil exhibition will focus on international exhibitors and upcoming designers in contract textiles.
To be held from Jan 14-17, 2025in Franfurt, Heimtextil will offer architects, interior designers and hospitality experts,the entire spectrum of textile furnishings in one place,along with an informative comprehensive program, design and trend inspiration. The exhibition will also feature latest products incontract textiles ranging from wallpapers, curtains and sun protection, upholstery and outdoor fabrics, bedding, bed linen, bathroom textiles, mattresses and sleeping systems, fibres and yarns to carpets.
A champion league of home textiles, contract textiles cater to the highest demands in terms of quality, functionality, safety and design. Exhibitors launch innovative products in this field every year alongwith the latest development in functionality.
The exhibition will feature products from exhibitors including Atenzza Outdoor (Spain), Aydin Tekstil, Barine (Turkey), Bedding House (Netherlands), Cabanes & Ortuno (Spain), Elastron Portugal, Englisch Dekor (Austria), Futura Leathers (Italy), Gebrüde rMunzert, Höpke Textiles (Germany), Indetex (Belgium), Indorama Ventures Fibers Germany, Kücüker Tekstil (Turkey), Lameirinho (Portugal), Marburger Tapetenfabrik (Germany), Martinelli Ginetto (Italy), Mundotêxtil (Portugal), OBB Oberbadische Bettfedern fabrik (Germany), Têxteis J.F. Almeida (Portugal), Textil Blanca 1941 (Spain) and The Wallfashion House (Belgium), etc.
It will also include a program tailored to the needs of architects, interior designers and hospitality experts. The program will comprise lectures and guided tours on topics such as AI and sustainability as well as unique special presentations. Some of the major attractions of the exhibition include the Interior. Architecture Hospitality Library in Hall 4.0, the Trend Arena in Hall 3.0 and the ‘among-us’ installation by Patricia Urquiola in Hall 12.0.
