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For Q2, revenues for Adidas brand increased 12 per cent. While revenues in the wholesale channel increased at a high-single-digit rate, direct-to-consumer sales rose at a double-digit rate with strong support from e-commerce, where revenues grew 26 per cent in the quarter. Adidas remains firmly on track to achieve its set targets for the full year 2018 and long-term until 2020.
The company’s gross margin increased 2.2 percentage points to 52.3 per cent. This development was driven by an improved pricing and channel mix, reflecting the company’s focus on the quality of its top-line growth. Royalty and commission income increased 10 per cent. Other operating expenses increased nine per cent. As a percentage of sales, other operating expenses were up 1.8 percentage points to 43 per cent. This increase was mainly driven by significantly higher marketing expenditure, which grew 14 per cent.
As a percentage of sales, marketing expenditure increased 1.2 percentage points to 13.5 per cent. In addition, operating overhead costs increased seven per cent as a percentage of sales to 29.5 per cent as the company continues to invest into further improving the scalability of its business. Inventories declined six per cent. Operating working capital increased one per cent at the end of June 2018.
"Amid athleisure’s growing preference, the world’s most famous attire – denim is witnessing lacklustre growth since the last two years. But what can bring zing back is the products newness. In a report, ‘Spotlight on Jeans: Denim Bounces Back’, Lorna Hennelly, fashion & beauty analyst, Euromonitor, says consumer demand for leggings is slowing, giving rise to a rebound in rigid, retro-style denim. The resurgence in demand is driven by millennials and grows in line with the industry-wide revival of ’90s-style fashion and nostalgic Americana, after over a decade of ultra-stretch skinny jeans saturating the market. In an effort to compete against athleisure, jeans manufacturers are innovating and adapting to evolving consumer needs."
Amid athleisure’s growing preference, the world’s most famous attire – denim is witnessing lacklustre growth since the last two years. But what can bring zing back is the products newness. In a report, ‘Spotlight on Jeans: Denim Bounces Back’, Lorna Hennelly, fashion & beauty analyst, Euromonitor, says consumer demand for leggings is slowing, giving rise to a rebound in rigid, retro-style denim. The resurgence in demand is driven by millennials and grows in line with the industry-wide revival of ’90s-style fashion and nostalgic Americana, after over a decade of ultra-stretch skinny jeans saturating the market. In an effort to compete against athleisure, jeans manufacturers are innovating and adapting to evolving consumer needs.
Similarly, Cotton Incorporated Lifestyle Monitor Survey suggested in the US, almost six out of 10 consumers (59
per cent) ‘love or enjoy’ wearing denim. Nearly two thirds (61 per cent) say they wear denim jeans or shorts at least three times a week. American women are even more likely than men to wear denim so often (63 per cent versus 57 per cent). According to Prescient & Strategic (P&S) Intelligence, North America is the world’s largest denim market, contributing more than 30 per cent revenue to the global market in 2016.
Growth channels
Statista research reveals sales are being encouraged by expanding urban populations, increase in the number of white-collar employees, changes in perceptions about ‘executive wear’ and the resulting acceptance of jeans as business casual attire for men. Affinity for denim is highest in Colombia (82 per cent), Germany (81 per cent), Turkey (72per cent), Mexico (71 per cent), and Great Britain (68 per cent). The two most heavily populated countries in the world, India and China, have come to appreciate denim jeans more than ever. The number of people in these Asian countries who love or enjoy wearing denim has grown significantly between 2003 and 2018, from 22 per cent to 53 per cent in India, and from 39 per cent to 65 in China, states the Global Lifestyle Monitor Survey.
Monitor research shows on average, men and women in the US own six pairs of denim jeans. In contrast, consumers in denim-loving Colombia own nine pairs; followed by Mexico (eight pairs); Germany (seven pairs), Italy and Turkey (both six pairs); Great Britain and Thailand (both five pairs); China (four pairs); and Japan and India (three pairs). P&S Intelligence says jeans have been the largest contributor to global denim market, and they are expected to drive future sales as well. The availability of numerous styles in jeans, such as: skinny, stretch, ultra-low-rise, mid- and high-rise denims, boyfriend, straight/cigarette jeans, flared, wide-legged, capri, cropped, and cuffed jeans, provides multiple options for buyers to choose according to their preference. Globally, consumers want quality denim that wears well because they are usually wearing it out in public. The Global Monitor finds denim is worn to run errands (48 per cent), to work (35 per cent), to go out for dinner (33 per cent), to be stylish or fashionable (28 per cent), and to look and feel good in your outfit (27 per cent).
Your denim in future
It’s going to be packed with embellishments, destroyed and bleached denim going forward. Oversized denim will see a rise, although younger designers and emerging brands will use overly exaggerated silhouettes and more street-style looks. Spring/Summer 2019 will also see a strong usage of raw denim. According to Hennelly, the novelty of athleisure is wearing off, and consumers are looking to their fashion favorite for newness in their wardrobes. Consumer demand for leggings is slowing, giving rise to a rebound in rigid, retro-style denim. The resurgence in demand is driven by millennials and grows in line with the industry-wide revival of ’90s-style fashion and nostalgic Americana, after over a decade of ultra-stretch skinny jeans saturating the market.
Cooperation between the garment and textile sector will be one of the priorities in Vietnam and India’s efforts to raise bilateral trade value. Both have prioritized development and cooperation with the aim of enhancing bilateral trade and building a supply chain for the textile sector.
In 2017, India’s apparel exports to Vietnam surged 44 per cent. To enhance trade cooperation, India intends to export apparel fabrics worth one billion dollars to Vietnam. Despite being one of the five largest apparel exporters in the world, Vietnam also imports the highest amount of garments and textile materials in the world.
And India owns a strong fiber and yarn production industry that is able to produce almost all kinds of fabrics and supporting materials available in the market, making it one of the three largest textile products providers in the world. India is strong in producing and exporting textile products from synthetic yarn, being used widely in the global garment industry.
While Vietnam will gain from India with regard to latest technology, textile materials and products, India too can expand its market. Vietnam applauds the quality of Indian fabric.
Nitin Spinners has reported net sales worth Rs 300.72 crores during the three month period ended June 30, 2018, as compared to Rs 287.43 crores during the three month period ended June 30, 2017. The company posted net profit of Rs 15.42 crores for the period ended June 30, 2018, as against Rs 12.72 crores for the period ended June 30, 2017.
Nitin Spinners manufactures pure cotton yarns and fabrics for both the national and international markets at Bhilwara in Rajasthan. With a capacity of 2,23,000 spindles and 3,000 rotors, it produces 50,000 tons of yarn and 9,000 tons of fabric a year. Nitin Spinners makes cotton yarn in single, multifold slub, compact, core spun and Elitwist yarns. The products are suitable for applications such as high value apparels and garments, undergarments, terry towels, denims, woven and medical fabrics, carpets, mattresses, stockings, furnishing fabrics and industrial fabrics.
The company uses Rieter compact spindles. Thanks to optimum raw material utilization, the quality of the yarn was improved and a high quality of compact yarn was achieved. In 2015-16, Nitin Spinners clocked a turnover of Rs 767 crores, out of which exports totaled Rs 531 crores.
The first Philippine Leather Goods, Garment and Fabric Expo will be held from August 23-26, 2018 at the SMX Convention Center in Pasay City, Philippines. The expo will be attended by nine Philippine companies and 63 companies from seven other countries including China, Hong Kong, Taiwan, Singapore, South Korea, India, Pakistan and Malaysia.
The expo is endorsed by the Philippine Board of Investment (BOI), Confederation of Wearables Exporters of the Philippines, and supported by the Textile Producers Association of the Philippines, Marikina Shoe Industry Development Office of the LGU Marikina; the Garment Manufacturers Association of the Philippines and the Department of Science and Technology-Philippine Textile and Research Institute (DOST-PTRI). It is mounted by CP Exhibition Inc., in partnership with the Philippine Exhibitions and Trade Corp.
It will showcase fabrics and garment accessories, garment machinery and parts, textile machinery, nonwoven machinery, dye machinery and chemicals, industry/factory automation, quality control, computer-aided design tools and software, as well as leather and leather goods machinery.
Luxury retailer Kering which owns like Gucci and Alexander McQueen, has published its latest Environmental Profit and Loss (EP&L) report which attempts to denote a financial value to the impact of its activities on the environment.
As per the report, the most significant impacts are generated in the supply chain (90 per cent) and in particular from the production and processing of raw materials that represent 76 per cent of the total. The brand’s operations represent just 10 per cent of the impacts. Among raw materials it uses, leather continues to be the major driver, followed by other animal fibres.
Supply chain impacts are the challenge for all apparel brands and with this in mind, Kering now plans to focus its efforts in this area. The brand has indicated that it might make small-scale changes in sourcing options, such as replacing materials with recycled alternatives, which can result in tangible EP&L savings.
For the half year Indorama Ventures’ net profit rose 109 per cent higher year on year. Revenue rose 22 per cent higher year on year. The company delivered record performance, with improvements in production volumes and margins across all key segments and geographies.
IVL’s strategy to drive sustainable and profitable growth in both high-volume necessities and the stable but high margin and high value-added HVA business continues. The company further upgraded its portfolio through organic growth, operational excellence initiatives, value accretive acquisitions and strategic integrations.
Chemical producer IVL now operates on a global scale of an integrated polyester value chain and HVA platform, with a more resilient product and geographic mix. Investments continue to drive value-accretive growth with six acquisitions since March 2018, including PET plants in Brazil and Egypt, which have an added net PET capacity of 1.1 million tons.
Industry fundamentals continue to be positive, led by strong demand growth for 100 per cent recyclable PET, supply balance and on-going improvements seen in the PET industry. This creates opportunity for well-managed and committed producers to enable supply reliability to customers in tight market conditions.
For Q2 the company will continue to pursue value accretive opportunities in its key segments to further strengthen the foundations of sustainable performance.
India and Sri Lanka are widening the scope for free trade agreement they already have by including services and investments. Economic ties between the two countries will be boosted by liberalising trade norms.
The free trade agreement was arrived at in 2000. India has a healthy trade surplus in goods with Sri Lanka. India exported goods worth $4.5 billion in 2017-18 and its imports were $773 million. Sri Lanka is India’s major trading partner in South Asia.
Sri Lanka is a garment making hub. A scenario where Sri Lanka sources from India and manufactures apparel and garments for the rest of the world could lead to a win-win situation for both countries. Both countries share a rich textile tradition. Large Indian companies can encourage Sri Lankan companies to be part of their supply and value chains.
Sri Lanka has been urged to make use of fully-funded training opportunities in India under the Indian Technical and Economic Cooperation program, in which a number of slots is earmarked for textile related subjects.
Sri Lanka is one of India’s largest trading partners in SAARC. India in turn is one of Sri Lanka’s largest trade partners globally. Sri Lanka is among the top ten countries which import cotton fabrics from India.
Foreign direct investment in Bangladesh’s textile and apparel sector rose 15.70 per cent in 2017 compared to 2016. South Korea made the largest investment in the country’s textile sector, followed by Hong Kong and the United Kingdom.
Since the garment sector is growing fast in Bangladesh, foreign investors choose the country as an investment for textiles. The availability of workforce at a reasonable wage, duty-free market access to major export destination, preferential location in the heart of the Asia-Pacific region and policy support have acted as a catalyst to attract FDI.
The Bangladesh Investment Development Authority provides a one-stop service. The digitized system has made the process very easy, pushing the foreign investment in the textile sector up. Bangladesh has to import a huge amount of woven fabrics to meet the local demand. Foreign investment in the textile sector will help Bangladesh build a strong backward linkage for the woven sector.
Bangladesh produces mostly basic clothing items. Foreign investment is especially valuable in high tech-fabric manufacturing and technology-based garment manufacturing to make value-added products. FDI in the textile and apparel industry will help in the production of high-quality fabrics as foreign investors have expertise in this area.
UK’s international trade secretary Liam Fox has put the chances of failure to reach a deal on Brexit at 60:40, blaming the EU’s stubborness for it. His comments come at a time when the deadline looms for Britain to exit the European Union on March 29, and amid growing fears that the deal will not be agreed in time.
The minister stated that he had previously thought the prospect of a no-deal were 50:50 but that has now increased -- largely due to European bureaucrats harboring a "theological obsession" with EU rules, rather than "economic wellbeing."
Meanwhile British Prime Minister Theresa May, whose blueprint for leaving Europe has come under fire from both Brexiteers and Remainers within her Conservative Party, was in talks with French President Emmanuel Macron at his summer residence in the south of France over the weekend. The negotiations come at a delicate time for May, who in recent months has seen a string of resignations in her party over her Brexit plans -- most notably between Brexit secretary David Davis and foreign secretary Boris Johnson.
