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Sales of the Global Fashion Group have risen 22.8 per cent in the third quarter. Net merchandising value has grown 29.2 per cent. The number of orders increased 20.8 per cent. The group’s customers are purchasing 7.5 per cent more often at 2.6 times per year with a 2.8 per cent increase in their average order value. Global Fashion Group registered 12.4 million active users in the third quarter, 15 per cent more. Global Fashion Group finished the third quarter with an adjusted ebitda margin of 2.8 per cent. The company has focused on enhancing its market leading customer experience through broadening its assortment, enhancing app functionalities and further cementing sustainability as a key pillar of the business.
Global Fashion Group is a part of Rocket Internet, a business accelerator that has promoted platforms like Zalando. In addition to the fashion segment, Global Fashion operates with food and consumer companies. In the third quarter, the company has introduced more than four hundred new brands on its platforms. In addition to launching its first eco-owned firm, Aere, the group has appointed a new sustainability director to pilot this segment. By the end of the year, the company estimates a net merchandising value growth of between 20 per cent and 23 per cent.
For the third quarter revenues of Iconix decreased by 23 per cent. For the nine months ending September 30, 2019, total revenue declined by 27 per cent compared to the nine months ending September 30, 2018. Adjusted ebitda increased 30 per cent from the prior year quarter while the adjusted ebitda margin improved to 59 per cent from 35 per cent in the prior year quarter. The decline in the third quarter of 2019 was principally as a result of the transition of the company’s Danskin and Mossimo direct to retail licenses in its women’s segment. Revenue for the third quarter of 2019 was also impacted by the effect of the Sears bankruptcy on its Joe Boxer and Bongo brands in the women’s and the Cannon brand. While Iconix recently signed new agreements with the new Sears and Kmart for the Cannon and Joe Boxer brands, overall revenue for the Cannon and Joe Boxer brands was down year over year. Revenue for the men’s segment increased nine per cent in the third quarter of 2019 compared to the prior year quarter, primarily from the Buffalo and Starter brands. The international segment declined 17 per cent in the third quarter of 2019 primarily as a result of the poor performance of Umbro in China and Umbro and Lee Cooper in Europe.
IndustriALL general secretary, Valter Sanches, and Inditex executive chairman, Pablo Isla, worked on a global framework agreement (GFA) at the International Labour Organisation in Geneva, Switzerland. The agreement contains provisions for a global union committee to share better practices in uplifting the freedom of association and to form collective bargaining.
The committee will be made of union representatives from Inditex's six main production clusters around the world and representatives from IndustriALL Spanish affiliates Comisiones Obreras and UGT.
Through the global union committee, local union representatives will participate more directly in how the GFA is applied and have the chance to receive advice from union experts, as was stipulated in the expansion of the agreement agreed upon in 2016.
The meeting also focuses on the establishment of joint training policies and programs that involve workers at Inditex factories and suppliers, in order to make progress on the promotion of social dialogue and workplace equality, among other things.
The design brand Masai Copenhagen became the first Danish fashion brand ever to gain FSC certification. In Denmark, FSC certification is best known in the paper, furniture and wood products industries, but Masai is the first Danish company in the fashion industry to gain certification. It is one thing for Masai’s paper goods to be FSC certified, but the fact that the brand’s wood-based textiles are now also certified is a significant achievement in the brand’s overall sustainability and CSR strategy because large parts of Masai’s collections are made from wood-based viscose fibres.
“It has been and is a pleasure to work with Masai Copenhagen through certification and as they begin to implement the CSR strategy. Right from the start, they’ve been keen to do something big that would make a positive impact on large elements of production, and that desire has now been fulfilled. Of course, it didn’t just mean Masai making changes; their suppliers had to start sourcing in a different, sustainable way, while also ensuring traceability through certification. Fulfilling this objective demands dedication from both Masai and their suppliers. Masai is the first Danish textile industry player to take this step and also to have its suppliers on-board, and praise is richly deserved here,” Loa observes Dalgaard Worm, strategic director, FSC Denmark said.
The Bahadurke Textile and Knitwear Association is going through though time as the November 15 deadline for starting a new Common Effluent Treatment Plant (CETP) is approaching, but the Municipal Corporation authorities are not happy by the approach of the association.
Around 26 dyeing unit owners at Bahadurke Road were served notices for disconnection of sewer lines from the MC’s main sewer. MC Commissioner Kamalpreet Brar said, “Today, association members had come to submit their representation. They should have accomplished the task within the stipulated time, especially when they had committed it to the NGT. Their discharge is choking our sewer lines. But now this issue is to be dealt with at the MC General House meeting. Their representation has been moved to the Mayor today itself. Action will be taken accordingly by the House.”
A few days back, the MC authorities had served notices to association members to disconnect their connections from the MC’s main sewer lines by November 15 else it was to be cut. MC authorities said several deadlines were crossed but the association had not been able to start CETP.
Michael Kors’ revenue increased 9.3 per cent in the second quarter. Retail revenue was approximately flat compared to the prior year. Comparable store sales decreased 2.1 per cent. On a constant currency basis, comparable store sales decreased 1.3 per cent. Wholesale revenue declined 1.3 per cent. Jimmy Choo delivered better than anticipated revenues driven by strength in footwear. The company acquired by Jimmy Choo in 2017 and, compared to Jimmy Choo standalone results from the prior year, revenue increased double digits. Michael Kors has also acquired Versace, setting the stage for accelerated revenue and earnings growth.
For the full year, reported comparable store sales for Michael Kors are expected to be down in the low single digits, primarily driven by an unfavorable currency impact. The company has raised guidance for operating margins to approximately 18.2 per cent. For the third quarter of fiscal 2019, the company expects retail revenue for Michael Kors to grow in the low single digits. Comparable store sales on a reported basis are expected to decline in the low single digits, primarily due to an unfavorable foreign currency impact. The company expects wholesale revenue to decrease in the high single digits, and licensing revenue to decline in the mid-teens. Operating margin is expected to be approximately 20.8 per cent.
Global retailers are facing scrutiny over cotton supplies sourced from Xinjiang, a Chinese region plagued by allegations of human rights abuses. China is one of the world’s top cotton producers and most of its crop is grown in Xinjiang.
H&M, Esprit and Adidas are among the firms said to be at the end of supply chains involving cotton products from Xinjiang. The Xinjiang region is a key hub of Chinese cotton production. China produces about 22 per cent of global cotton supplies. Last year, 84 per cent of Chinese cotton came from Xinjiang. That has raised concerns over whether forced labor has been used in the production of cotton from the region. In many cases western companies aren’t buying directly from factories in Xinjiang. Rather, the products go through several stages of transformation after leaving Xinjiang before they are sent to large western brands. H&M does not have a direct or indirect business relationship with any garment manufacturer in the Xinjiang region. It has an indirect business relationship with Huafu’s spinning unit in Shanyu, which is not located in the Xinjiang region. Since it has an indirect business relationship with the yarn supplier Huafu, it has also asked for access to its spinning facilities in Aksu.
The UK retail industry is faced with high store closures and job losses. The 12-month average retail sales growth currently is just 0.1 per cent, the lowest on record, though the industry has invested in research and development as well as new technologies.
The UK retail industry accounts for five per cent of the economy and drives 5.1 per cent productivity growth across the industry compared to just 0.5 per cent in the United Kingdom as a whole.
Among the measures needed are lowering the burden of business rates, reforming the apprenticeship levy to allow greater flexibility to spend on any form of accredited training, and protecting hardworking shop workers by bringing forward legislation to safeguard the 115 retail workers who are attacked every day. The British Retail Consortium (BRC) has put forward recommendations for a comprehensive strategy for retail as well as measures to reform funding for digital skills and to tackle both in-store crime and online fraud. In addition BRC wants action to be taken to promote investment and allow the industry to fulfil its vision of success. It wants support for the industry’s transformation driven by new technology and changing consumer behavior. All this, says BRC, is needed if retail is to be the vision of success it sets out to be.
Vietnam’s apparel exports grew 10.4 per cent from January to October 2019. The US is the largest importer of apparel goods from Vietnam. These imports are up 12.84 per cent year-on-year. Vietnam’s exports to member countries of the CPTPP and the EU also grew significantly. Once the free trade agreement with the EU comes into force, investments in Vietnam’s textile and garment industry are expected to increase further.
There are over 2,000 textile and garment projects in the country. Vietnam’s supply chain diversification has been happening for a few years already, mainly driven by rising labor costs in China. Even before the trade war, Vietnam was getting attention because of the proximity to China and because of the existing infrastructure in the country. The full supply chain has been set up in the country for the past decade already.
Despite the increase, there are some opposite downward pulls. Vietnam has been affected indirectly by the perpetual trade war. Yarn exports to China have fallen this year. The shrinking of global fashion industry has also played a critical role. This fiscal orders received by manufacturers have fallen. Like any other apparel sourcing country, Vietnam needs further investment in high-value items.
With these being stagnant over the last three years, the Indian exports paint a dismal story. The government recently issued a circular to replace the existing the Merchandise Exports from India (MEIS) scheme with the new Rebate of State Taxes and Levies (RoSTL) scheme. “But we would like the MEIS scheme to be continued upto March 2020 as we have already booked our export orders,” says Dr A Sakthivel, Chairman, AEPC which plans to concentrate on promotion of exports.
AEPC has formed a new management team that will identify new products and markets other than Europe, US and Canada. “We plan to expand in these markets by developing new products and guiding our exporters on how to penetrate these markets. We also plan to strengthen our IT system by developing a portal for small exporters and buyers,” adds Sakthivel.
Another strategy that AEPC aims to adopt is of exploring free trade agreements with Europe, UK and also CEPA with Canada and Australia. “This will enable us to double exports. The only reason other countries are growing is that their buyers don’t have to pay duty. We have to work on these scales. Not only are we planning to set up bigger factories but have also submitted a proposal for an EXIM policy and reduction of the GST on capital goods by half.
