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In the third quarter, Adidas’ revenues were up 12 per cent. Revenue growth was driven by an increases in distribution channels, with particularly strong support from e-commerce, where revenues grew 39 per cent. In euro terms, sales for the company were up nine per cent in the third quarter.
Gross margin increased 2.4 percentage points to 50.4 per cent. Other operating expenses increased eight per cent. As a percentage of sales, however, other operating expenses decreased 0.1 percentage points to 37.5 per cent. Operating profit increased 35 per cent. Net income from continuing operations was up 35 per cent and basic earnings per share from continuing operations grew 33 per cent. Net income attributable to shareholders increased 36 per cent, resulting in basic earnings per share from continuing and discontinued operations up 34 per cent.
Sales in the football and basketball categories declined. Revenues at Reebok brand grew one per cent. The strategic growth areas - North America, Greater China and e-commerce - were the main drivers of the company’s strong topline performance during the third quarter.
The company expects sales to increase at a rate between 17 per cent and 19 per cent in 2017. Net income from continuing operations is projected to increase at a rate between 26 per cent and 28 per cent.
Textile major Arvind’s profit plummeted 15 per cent for the second quarter. Revenues witnessed a 13 per cent rise. Q2 turned out to be another challenging quarter for the industry with GST implementation impacting Arvind’s domestic textile business.
Even the consumer facing brand business was impacted in the month of July as both the wholesale and retail channels were under pressure. However, the brand business saw a strong performance in August and September leading to good growth overall.
Arvind will demerge the branded apparel and engineering businesses from the parent firm into separate listed firms. The move will help unlock the full potential of the two divisions. The apparel business will be merged with Arvind Fashions while the engineering division will be shifted to Anveshan Heavy Engineering. Demerger will free Arvind’s resources and allow it to renew its focus on the textile business, which is not only the foundation but is now well-placed to achieve an accelerated growth trajectory.
Over the next three or four years, Arvind will invest almost Rs 1,500 crores and transform the textile business. Arvind is one of India’s largest manufacturers and exporters of textile products. The company is also one of the largest producers of denim fabrics.
Walmart is committed to buying more garment, footwear and luggage products from Cambodia. The US multinational is encouraged by the increased capacity of factories and improved labor conditions in the country. It is also happy with the quality of garment, footwear and luggage products.
Walmart with a chain of large stores with branches in most US states is a big buyer of garment products from Cambodia. Cambodia’s garment and footwear exports to the United States were up 6.9 per cent in the first half of this year.
The US last year granted duty-free benefits for Cambodia for the export of travel goods such as luggage, backpacks, handbags and wallets under the Generalised System of Preferences. The country gets 100 per cent preference from Australia, New Zealand, Norway and Switzerland and 99 per cent preference from the EU under the Everything But Arms clause.
The garment industry of Cambodia earns 80 per cent of Cambodia’s foreign exchange earnings and employs an estimated 3,50,000 people in more than 300 factories. Companies which buy from Cambodia include H&M, Inditex, Marks & Spencer, New Look, Adidas, Nike, Levi’s and Uniqlo.
Cambodia relies heavily on garment exports to earn foreign earnings. There are now plans to shift from low-priced garment manufacturing to higher end manufacturing of automobile, machinery and electronic parts.
No new garment units have opened in Tirupur in the past year. In fact, many garment units have shut in recent months. Reason: cash crunch following demonetization last November. The textile industry used to directly employ around 5,00,000 workers and log yearly sales of around Rs 40,000 crores. The cash crunch brought the industry, mainly comprising micro, small and medium enterprises, to a grinding halt. There was no business for three to four months.
A worker earning Rs 500 to Rs 600 a day had to lose a day’s salary to stand in the queue to exchange a sum of Rs 2000. The textile industry of Tirupur was expected to earn Rs 30,000 crores from exports alone in the year that ended on March 31. It ended with Rs 26,000 crores in exports, besides Rs 16,000 crores from domestic sales.
Even as the textile industry struggled on, it was hit by another disruptive event: GST. The Tirupur cluster has been facing a slow decline over the years. In 2004, India was a global leader in knitwear, just next to China. With the growing global market in Bangladesh, Cambodia, Vietnam, Sri Lanka, Myanmar and Ethiopia, it is no longer in the top position.
Swedish machinery manufacturers are exploring the Vietnamese market. These companies have leading edge production equipment and technology and are all well-established leaders in various areas of textile manufacturing process. The companies offer a unique combination of production expertise, textile manufacturing knowledge, and superior products and services.
They are the perfect match for the Vietnamese textile industry. They are a relatively small, tight knit group of companies, each specializing in a different key areas along the manufacturing process. Their size gives them flexibility and they work closely with customers, listen and adapt quickly to their changing needs.
Vietnam is emerging as the new global production center of textile products. Vietnam has been identified as a hub for the Asian textile industry in the next decade. The main reason for this is the increasing cost levels in China, causing many textile and garment brands to relocate in Vietnam. Sweden is bringing world-leading innovative expertise of smart industries into Vietnam, which will make Vietnam highly competitive globally.
Production in the Vietnamese textile and clothing industry is expected to increase by an average of 12 per cent to 14 per cent between 2016 and 2020. Exports are expected to reach 50 billion dollars by 2020.
Over the last year Primark’s revenue rose 19 per cent or 12 per cent currency-neutral. On a comparable week basis currency-neutral sales were 14 per cent with comp sales up just one per cent.
On the back of all this, Primark’s adjusted operating profit rose seven per cent (up three per cent currency-neutral) but the adjusted operating profit margin dropped to 10.4 per cent from 11.6 per cent. Even with challenges, Primark is hugely profitable and able to drive sales despite the volatile trading conditions. The chain performed particularly well in the UK over the past year with sales 10 per cent on a comparable basis and its share of the total clothing market up significantly.
After a good first half, trading in the third quarter was strong in the lead-up to Easter and trading in the fourth quarter was equally strong, driven by the ability of buying, merchandising and design teams to identify and deliver key seasonal trends.
Sales in continental Europe were 16 per cent ahead currency-neutral. Of Primark’s top 20 stores by sales density, 15 are now in continental Europe including seven in its newest markets of France and Italy. Primark is unique among mega-sized retailers in not selling online.
Pakistan is interested in hiking exports of textile to Japan to reduce the trade deficit. Japan-Pakistan relations are embedded in business, aid, politics and security. Japan assigns high value to its bilateral relations with Pakistan since the nature of their cooperation is multidimensional. Japan has helped Pakistan with humanitarian assistance, social security and infrastructure development.
The Indus Highway that connects Peshawar to Karachi stretches across 1200 kms and is being carried out with the assistance of Japan. It will be completed in June 2018. Pakistan-Japan relations have their roots in the ancient civilization of Gandhara.
Since the creation of Pakistan in 1947, the two countries have enjoyed cordial and friendly relations. Right now Japan focuses on small-scale socio-economic projects mostly run by NGOs in Pakistan. Japan would be better served by participating in big national mega-projects such as railways, roads, tunnels, ports, and shipping.
Soon after the San Francisco peace conference, Pakistan was one of the very few countries which opened their commercial office in Japan. In the 1980s, bilateral relations were further bolstered due to Pakistan’s role in securing the withdrawal of Soviet forces from Afghanistan and the sea lanes security through which Japan receives the bulk of its oil.
Nike is among the names that figure in the Paradise Papers. The US sportswear giant used a loophole in Dutch fiscal law to reduce its tax rate in Europe to just two per cent. Two companies based in the Netherlands concentrated all Nike's European revenues, allowing the company to avoid paying tax on profits in the countries where it actually sells its shoes.
Nike managed to bring its tax on profits down to two per cent from the 25 per cent average for European companies. To carry out this tour de force, Nike used the Dutch fiscal system and its possibilities for optimization. Under this system, set up in 2014, Nike paid itself for the right to use its brand and artificially reduced its profits, thus reducing also its taxes.
The system was so effective that it reduced Nike’s global tax rate from 24 per cent to 16 per cent in three years. European countries are asking the Netherlands to make up the shortfall.
Nike has reported its weakest quarterly sales growth in nearly seven years. Nike still gets about 70 per cent of its revenue from retail customers but has been investing heavily in e-commerce, partnering with Amazon and offering heavy discounts on its own website.
H&M has released a collection by designer Erdem Moralioglu. The collection takes inspiration from English pastoral design signatures and reinterprets some of the codes that have defined his work over the past decade and it’s also inspired by film, music.
From the sharply tailored suits that remind him of those his father wore, to the dramatic dresses which reflect his love of cinema, the entire collection is an autobiographical exploration of the designer’s interests.
Every year, the affordable fashion retailer, pairs with a significantly in-vogue high fashion designer to release a special collection. In these collaborations, designers create products that would normally be priced in the thousands, while H&M makes the items available for no more than a couple hundred dollars.
These annual collaborations create a buzz in the fashion world, and often attract coverage from magazines like Vogue, GQ and Glamour. It has become common for these collections to sell out on the day of release. Each collection is different and the stores where certain collections are held change on a regular basis.
No two collaborations are ever the same. H&M looks at the store list every year and makes decisions on where to sell it that are based on a variety of different factors. The designer collaborations are meant to be exclusive, which is why they are not sold in every store.
Spanish company Jeanologia has developed a fashion collection totally made in Bangladesh, with fabrics woven in the country with the support of sustainable technology from Jeanologia. Jeanologia is a leader in the development of sustainable and efficient technologies.
For this project Jeanologia managed to get together everyone involved in the Bangladeshi textile industry, from fabric manufacturers to end product makers and buyers. Through this collection fabric manufacturers and producers will work together for the first time to attain a cleaner textile industry. Their innovative technology is contributing to the transformation of the country’s textile industry.
With Jeanologia as the expert technology partner, the Bangladeshi textile market hopes to be the most competitive, speeding up time to market and offering a modern sustainable product. Since 1993, Jeanologia’s mission has been to improve the industry of garment finishing through its technology and knowhow. Its laser, G2 ozone and e-flow system have revolutionized the textile industry. They offer infinite design possibilities and garment finishes, while saving water, energy and chemicals, eliminating waste and toxic emissions.
The Spanish company currently has clients in five continents. Exports of its machines and services represent 90 per cent of its total billing, reaching 60 countries.
