FW
Once synonymous with British heritage and timeless elegance, Burberry has faced turbulent times in recent years. While the brand has undoubtedly held a strong position in the luxury market, a series of strategic missteps has impacted its performance.
A fall from grace
Burberry's global market share in the luxury apparel segment has dipped from 3.2 per cent in 2015 to 2.7 per cent in 2023 reveals Euromonitor International. Revenue growth too has stagnated, hovering around the £2.8 billion mark for the past three years. And the company's stock price has plummeted by over 40 per cent since 2019.
Table: Burberry's financial performance
|
Year |
Revenue (£ million) |
Operating Profit (£ million) |
|
2019 |
2,813 |
519 |
|
2020 |
2,231 |
200 |
|
2021 |
2,828 |
539 |
|
2022 |
2,915 |
528 |
Burberry's challenges can be attributed to several interconnected factors. First, brand dilution as overexposure of the iconic check pattern has affected it. While it was once a symbol of exclusivity, it has become ubiquitous, diminishing its allure. The brand's attempts to appeal to a younger demographic has resulted in a diluted brand identity. The core luxury customer base feels alienated, while the new target market remains elusive. Also, the rise of luxury competitors, particularly those with a strong digital presence and agility, has eroded Burberry's market share. Then there are factors like global economic uncertainties and shifting consumer spending patterns have impacted luxury brands, including Burberry.
Strategic missteps
Over-reliance on traditional markets is a major factor for Burberry’s loss of market share. Burberry's focus on mature markets like Europe and North America may have blinded them to the booming luxury market in China. Add to this, frequent creative director changes (four in the last decade) might have resulted in a lack of brand identity and direction. Also, aggressive discounting and a large outlet network could be damaging brand perception and cannibalizing full-price sales.
Consider the contrasting fortunes of Burberry and Moncler. Both are European luxury brands, but Moncler has seen significant growth in recent years. Analysts attribute this to Moncler's successful focus on digital marketing and e-commerce, particularly in China. They've consistently offered fresh designs and diversified their product portfolio beyond outerwear. Moncler has cultivated a clear brand identity associated with luxury sportswear and adventure. Similarly, Louis Vuitton successfully expanded its product range while maintaining brand exclusivity through limited edition collections and collaborations with renowned artists. And Gucci reinvigorated the brand under Alessandro Michele by embracing a bold and eclectic aesthetic, attracting a younger demographic without alienating core customers.
A path to revival
Burberry has recently appointed a new CEO, outlining a turnaround plan. The new CEO, Fiona Kelly, has acknowledged the challenges and stated, "We are committed to reigniting the magic of Burberry...by focusing on our heritage, product excellence, and innovation." Analysts say here's what they need to focus on:
Capturing Chinese market: Increasing brand awareness and tailoring offerings to Chinese consumers' preferences.
Digital transformation: Investing in e-commerce platforms and social media engagement.
Product innovation and relevancy: Revamping core collections and exploring new product categories.
Rejuvenating the brand image: Building a more consistent and relevant brand story that resonates with younger generations.
The bottomline is Burberry's journey to recovery will require a steadfast commitment to redefining its brand identity, reconnecting with its heritage, and delivering exceptional customer experiences. By implementing the proposed action plan and learning from competitors' successes, Burberry can regain its position as a leading luxury brand.
The recently released Textile Exchange Materials Market report offers a comprehensive snapshot of the global fiber landscape, revealing a complex interplay of growth, sustainability challenges, and emerging trends.
A booming but resource-intensive market
The global fiber market is experiencing unprecedented growth. The report indicates a staggering increase in fiber production from 57 million tonnes in 2000 to 113 million tonnes in 2022. This exponential rise, driven by increasing global population and consumption, is projected to reach 149 million tonnes by 2030.
However, this growth comes at a significant environmental cost. Polyester, the dominant fiber, primarily derived from fossil fuels, constitutes 54 per cent of the market. While its affordability and performance properties have contributed to its popularity, the reliance on non-renewable resources raises concerns about sustainability.
Regional disparities in fiber consumption and production
The report highlights stark regional differences in fiber consumption and production. Asia, particularly China and India, is the epicenter of both fiber production and consumption. The region's rapid industrialization and growing middle class have fueled demand. In contrast, Europe and North America, while consuming significant quantities of fiber, are increasingly focused on sustainability and circular economy models.
Consumer power driving change
A pivotal force reshaping the fiber industry is the evolving consumer. Growing awareness of environmental issues, coupled with a preference for sustainable products, is driving demand for eco-friendly fibers. Brands are responding by incorporating recycled and organic materials into their offerings. Consumers are becoming more discerning, say experts, a sustainability consultant. They want to know where their clothes come from and how they are made. This is putting immense pressure on the industry to clean up its act.
Sustainability at the forefront
The future of the fiber industry is inextricably linked to sustainability. The report predicts a surge in demand for recycled fibers, driven by both environmental concerns and economic considerations. Technological advancements in recycling processes are expected to play a crucial role in scaling up production.
Additionally, there is a growing interest in bio-based fibers derived from renewable sources such as wood pulp and agricultural residues. While still a niche market, these fibers offer a promising alternative to fossil-based synthetics.
Policy initiatives for change
Government regulations are increasingly shaping the fiber landscape. Policies promoting sustainability, such as extended producer responsibility and carbon pricing, are encouraging industry to adopt eco-friendly practices. Governments have a critical role to play in creating a level playing field for sustainable fibers. By providing incentives and setting clear targets, one can accelerate the transition to a more circular economy.
Circular economy gains momentum
The concept of a circular economy, where resources are kept in use for as long as possible, is gaining traction in the textile industry. Textile-to-textile recycling is emerging as a key focus area, with companies investing in innovative technologies to break down and repurpose used garments. Closing the loop on textile waste is essential for the long-term sustainability of the industry, say experts. One needs to move away from a linear model and adopt circular principles at every stage of the value chain.
While the report outlines promising trends, challenges persist. Scaling-up production of sustainable fibers while maintaining affordability remains a hurdle. Additionally, ensuring the transparency and traceability of supply chains is crucial for building consumer trust.
Despite these challenges, the fiber industry is at a crossroads. The choices made today will shape the industry's future. By embracing sustainability, innovation, and collaboration, the textile sector can contribute to a more sustainable and resilient global economy.
Scheduled from Aug 27-29, 2024, in Shanghai, the upcoming Intertextile Apparel Fabrics trade show will feature 45 of the best Italian producers of high-end textiles and accessories. These exhibitors will present their Fall/Winter 2025-2026 collections to the Chinese market, which ranks as the third-largest export market after France and Spain, with a 7.4 per cent share.
Spanning over 800 sqm, the exhibition area will cater to a highly targeted clientele from the local and international markets, increasingly drawn to Italian manufacturing excellence, technological innovation, and sustainable products.
The Italian Trade Agency (ICE) has played a crucial role in organising the event, supporting the international expansion of Made-in-Italy businesses and boosting the visibility of Milano Unica, which has grown as a prominent brand in the elite trade show circuit.
This trade show is a significant event for the Italian textile industry especially as Chinese imports show encouraging signs of a gradual recovery. In the first quarter, retail sales increased by 4.7 per cent, with additional 3.7 per cent in April and May, avers Augusto Di Giacinto, Director, Italian Trade Agency ICE in Shanghai. In this delicate market phase, Chinese consumers are seeking innovation, quality, research, and storytelling. All these characteristics will be displayed by the best Italian Companies at the event through their Fall/Winter 2025-26 collections, he adds.
Compared to the July 2023 edition, the 39th edition of Milano Unica at Fiera Milano Rho registered an 18 per cent rise in exhibitors totaling 700. These included 569 companies, numerous research and content areas. The participation of buyers from China and other major target markets rose by 55 per cent compared to the July 2023 edition. This success resulted from the rigorous strategy in selecting companies and the creative content of the proposals, adds Simone Canclini, President, Milano Unica.
A higher surplus and a strong demand from countries like Bangladesh and Vietnam led to India's cotton exports rising by 68 percent to 26 lakh bales of 170 kg each during the first nine months of the MY’23-24 ended June 2024.
Statistics by the Cotton Association of India (CAI), show, as of the end of June, India’s closing stocks for the crop year 2023-24 declined to 20 lakh bales from 28.90 lakh bales in the previous year. Total demand for the crop rose to 317 lakh bales from 311 lakh bales last year while total supplies for the year reached 363 lakh bales, compared to 355.40 lakh bales in the previous year.
The supply estimate included an opening stock of 28.9 lakh bales and imports of 16.40 lakh bales, up from 12.5 lakh bales last year.
CAI estimates, by the end of June 2024, CAI possessed cotton stocks worth 77.29 lakh bales of 170 kg each. This included 40 lakh bales held by textile mills, equivalent to about 46 days of consumption. The remaining 37.29 lakh bales were held by the Cotton Corporation of India (CCI), the Maharashtra Federation, and others, including multinational companies, the Multi Commodity Exchange (MCX), traders, ginners, and cotton that has been sold but not yet delivered. CAI estimates its annual balance sheet remained as previously stated.
Adidas experienced a robust second quarter in 2024, with currency-neutral revenues increasing by 11 per cent year-over-year, reaching €5.822 billion. The company reported a 16 per cent growth in its underlying business, driven by positive consumer response to new product launches and effective marketing strategies. The sale of remaining Yeezy inventory contributed approximately €200 million, though this was a decline from €400 million in the previous year.
Footwear sales were a standout, rising by 17 per cent on a currency-neutral basis. Successful launches in Originals and Football, alongside increased demand in Running and Training, bolstered this growth. Apparel also saw improvement, with a 6 per cent increase, largely fueled by jersey sales from the UEFA Euro 2024 and Copa America victories for Spain and Argentina. Notably, demand for lifestyle products surged due to collaborations with popular partners, contributing to double-digit growth.
Sales surged in Europe, with a 19 per cent increase, while Emerging Markets and Latin America saw gains of 25 per cent and 33 per cent, respectively. North America, however, faced an 8 per cent decline, attributed to reduced Yeezy sales. Despite this, the direct-to-consumer channel performed well, with a 4 per cent overall increase; excluding Yeezy, it rose by 21 per cent.
Adidas reported an operating profit of €346 million, nearly doubling from €176 million in Q2 2023. This reflects an operating margin of 5.9 per cent. The company’s gross margin improved to 50.8 per cent, driven by better sell-throughs and a favorable product mix, despite ongoing currency challenges.
Adidas raised its full-year revenue guidance to a high-single-digit increase, anticipating an operating profit of around €1 billion. While acknowledging potential currency headwinds, the company remains optimistic about its ability to capitalize on brand momentum and continue its recovery trajectory.
Led by Javid Ahmad Tenga, President, a Kashmir Chamber of Commerce & Industry (KCCI) delegationdiscussed crucial issues affecting Kashmir’s handicraft sector with Giriraj Singh, Minister of Textiles. The meeting was held at the UdyogBhavan.
Also including ZubairMahajan, Treasurer and Shaukat Khan, Executive Committee Member, the KCCI delegationemphasised on the importance of accrediting the Pre-Export Pashmina DNA Testing Lab at SKUAST Srinagar with the National Accreditation Board for Testing and Calibration Laboratories (NABL) and the Wildlife Department. This accreditation would streamline export processes, preventing seizures and delays that often result in order cancellations and reputational damage for exporters, they said.
The delegation also highlighted concerns regarding the current Rebate of State and Central Taxes and Levies (ROSCTL) scheme for woolen and Pashmina shawls. They pointed out, the existing cap of Rs. 438 adversely affects high-value products, such as Pashmina shawls resulting in losses worth thousands or even lakhs of rupees. To prevent these losses and ensure appropriate export benefits, KCCI proposed introducing a separate Harmonised System of Nomenclature (HSN) code for value-added and Pashmina shawls.
Additionally, the delegation recommended announcing handicraft clusters in various Kashmir districts. They cited the success of Kanihama village in Budgam District, which was declared a Handloom Village due to its dense production of Kani Shawls and Pashmina. The KCCI also proposed conducting market study tours to European, Middle Eastern, and US markets to promote the export of handicrafts and other sectors.
Appreciating KCCI for raising the concerns, Singh assured the issues would be addressed soon.
A recent report by Avendus Spark paints a picture of a textile, apparel, and fashion retail sector in India on the cusp of recovery. While there are positive signs, cautious optimism is the watchword as the industry navigates a complex post-pandemic landscape.
Cautious optimism
While the report indicates a clear path to recovery, it also underscores the challenges faced by the sector. The industry is experiencing a resurgence, but the journey is far from smooth. While order books are gradually filling up, the pace is slower than pre-pandemic times, leading to shorter order cycles. The report attributes this cautious outlook to factors such as global economic uncertainties, geopolitical tensions, and evolving consumer preferences. Despite these headwinds, the sector is demonstrating resilience, with several segments showing promising growth trajectories.
The report highlights that global retailers and brands have seen their inventory levels return to pre-COVID levels, indicating a pick-up in demand. However, there's a caveat. Apparel manufacturers are yet to see a significant boost in order book momentum. This ‘cautious optimism’ suggests that order cycles might remain shorter than usual in the near future.
Cotton spinners see volume growth
One bright spot is the cotton spinning segment. Lower global cotton prices have benefitted Indian spinners, leading to a surge in volume sales. The industry's revenue grew almost 8 per cent in the last quarter of FY24 (Q4 FY24) compared to the previous year. However, a 5 per cent decline in yarn prices limited the overall value growth. Analysts expect value growth to catch up with volume growth soon as cotton prices stabilize.
Man-Made Staple Fiber (MMSF) segment witnessed a 5 per cent year-on-year revenue growth, but pricing pressures from cheaper imports limited volume expansion. Capacity constraints have also hindered growth, but upcoming capacity additions and the Production Linked Incentive (PLI) scheme are expected to boost the segment.
Home textile companies, on the other hand, are clear winners. The report states they witnessed a stellar performance in Q4 FY24 with a 16 per cent value growth, driven by strong demand and increased exports. This is further exemplified by India capturing a record-breaking 62 per cent market share in US cotton sheet imports. Fabindia, the leading Indian retailer of home textiles and apparel, serves as a real-world example of this trend. The company reported a significant increase in sales of bedsheets, towels, and other home textile products during Q4 FY24.
The report delves into the women's apparel market, which is valued at Rs 1 trillion and growing at an 11 per cent annual rate. The shift towards branded apparel is even more pronounced, growing at around 20 per cent per year. This trend is driven by increasing female workforce participation, rising disposable incomes, and evolving consumer preferences.
Challenges galore
Despite the positive trends, the industry faces several challenges, including pricing pressures due to cheaper imports from countries like China and Bangladesh. Capacity constraints have also limited growth opportunities for MMSF players.
However, the report also identifies several opportunities. The growing middle class, increasing disposable incomes, and changing consumer preferences are driving demand for branded and fashion-forward apparel. Moreover, the government's focus on textile and apparel exports through initiatives like the PLI scheme offers potential for growth.
The Avendus Spark report offers a nuanced view of the Indian textile, apparel, and fashion retail sector. While recovery is underway, challenges persist. "The industry is in a wait-and-watch mode," says an analyst at Avendus Spark. "Success will depend on factors like sustained demand growth, managing input costs, and navigating a competitive global market. However, the inherent strengths of the Indian textile sector, coupled with government initiatives, position it well for future growth."
Along with a group of British textile companies, the UK Fashion and Textile Association (UKFT) will participate in the Intertextile Shanghai Apparel Fabrics exhibition from August 27-29, 2024. The event will showcase the remarkable talent, innovation, and quality that define British design and manufacturing.
Some of the noted exhibitors at the event will include premium mills, manufacturers, and merchants like Abraham Moon, Alfred Brown, Kenneth Mackenzie, Linton Tweeds, Mallalieus, OMC England, Scabal, Schofield & Smith, and the Celtic Weaver. Additionally, creative print studios and surface specialists such as Fairbairn & Wolf Studio will be present, along with the testing house Intertek Group and trend forecaster WGSN.
Intertextile Shanghai Apparel Fabrics will provide a platform for international buyers to explore the UK's textile sector, celebrated for its tradition, innovation, and creative flair. Located in Hall 5.1, UKFT's stand will feature a diverse array of samples from UK firms. Visitors will have the opportunity to learn about the UK textile industry and watch a new film titled ‘UK Fashion & Textiles: It’s What We’re Made Of.’ The film will showcase the innovation, responsibility, and ethical practices at the core of British style, underpinned by tradition, quality, and craftsmanship.
The UK apparel and textile industry is renowned for its rich heritage, cutting-edge design, and commitment to sustainability and innovation. Intertextile Shanghai Apparel Fabrics will highlight the latest trends, sustainable fabrics, and revolutionary technologies in this industry, showcasing the creativity and craftsmanship of UK brands. A stunning array of fashion-forward collections blending tradition with modernity will be showcased at the event.
Paul Alger MBE, Director - International Business, UKFT, remarks, the UK textile industry stands out in the global market, particularly in China and Asia, due to its emphasis on quality, innovation, and unique British style. The competitive advantage of this industry lies in its ability to merge tradition with contemporary trends, offering products that are not only stylish but also ethically produced. This commitment to excellence and sustainability resonates well with consumers in these markets, helping the industry build strong, lasting relationships.
The Functional Fabric Fair, powered by Performance Days, concluded its summer edition in New York City with record-breaking attendance. The event saw an 18 per cent increase in attendees, attracting industry giants such as Calvin Klein, Hoka, L.L. Bean, Nobull, Peter Millar, Under Armour, and Vineyard Vines.
Key industry figures praise event
The fair has become a crucial event for apparel CEOs, designers, sourcing and material managers, and product development executives. With over 140 sustainable-certified suppliers, the fair showcased the latest in high-performance functional fabrics, finishes, trims, and accessories for the 2025/2026 seasons. Attendees praised the event for its focus on performance and sustainable sourcing.
The show floor was a hive of activity, featuring cutting-edge innovations, hands-on demonstrations, and interactive exhibits. These showcased the latest advancements in sustainable textiles. The event also provided numerous opportunities for education, networking, and business sourcing, setting it apart from other textile trade events.
Steve McCullough, the Event Director of Functional Fabric Fair, emphasized the event's unique offerings, which include a productive experience with a curated lineup of top vendors, an easy-to-navigate floor plan, vetted sourcing opportunities through Trend Forum displays, engaging activations, expert-led discussions, and networking opportunities designed to inspire and inform attendees.
Positive feedback and record participation
McCullough observed a high level of participation and enthusiasm at the event, noting the significant presence of returning high-caliber sourcing buyers and professionals, along with many first-time attendees. The event featured packed booths, bustling aisles, and received positive feedback from vendors, contributing to its remarkable success.
The fair featured several notable activations. In the Design Lab (LIVE), sustainable fashion designer Kelly Dempsey, known for her innovative upcycling techniques and a past contestant on ‘Project Runway,’ created a performance kimono-style jacket in real-time using materials from exhibitors. Attendees could engage with her creative process, and the final garment was auctioned for charity during the drirelease-sponsored Happy Hour, with proceeds going to Fabscrap.
Performance trend forum highlights
The Performance Trend Forum displayed highlights across 12 key categories: Baselayer, Midlayer, 2 Layer, 2.5 & 3 Layer, Lightweight & Downproof, Softshell& Outer Midlayer, Shirts, Pants & Tights, Focus Topic, Accessories & Trims, Function Meets Fashion, and New York Exclusive. This exclusive selection of 100 per cent sustainable fabrics was curated by the Experts Jury of Performance Days.
The fair also featured an Expert Talks Program, where industry experts and thought leaders led sessions on seasonal trends in colors and materials, technical aspects of performance wear fabrics, sustainability, and business development. Topics included ethical sourcing, environmental impact, regulations, and future industry forecasts, providing valuable insights for professionals looking to stay ahead in the apparel and functional fabric industries.
Looking ahead: Next edition in Portland
The next edition of the Functional Fabric Fair is scheduled for November 19-21 in Portland, OR, at the Oregon Convention Center. It will kick off with the New Day Zero Sustainability Workshop, followed by the Exhibit Hall and Expert Talks.
This successful edition of the Functional Fabric Fair not only set new records but also solidified its position as the leading trade show for sustainable functional fabrics. With its innovative offerings and strong industry support, the fair continues to be a must-attend event for professionals in the apparel industry.
Kraig Biocraft Laboratories, Inc.("Kraig Labs") has entered the rapid growth rearing phase for its third spider silk production cycle of the season. During this phase, the silkworms experience exponential growth in preparation for spinning the company's proprietary recombinant spider silk cocoons.
To support this growth, Kraig Labs has expanded its production space. The company is closely monitoring the health and performance of the silkworm colony, with reports indicating that the BAM-1 Hybrids are the most robust strain to date.
Kraig Labs has adopted a batch-rearing process to minimize overcrowding and manage the need for fresh, dry mulberry during the rainy season. This approach supports silkworm health and ensures optimal conditions for rearing and cocooning.
COO Jon Rice stated that Kraig Labs has made significant advancements in spider silk production capacity, attributing these achievements to strategic investments in facilities, equipment, silkworm genetics, and a knowledgeable team. The company is experiencing breakthroughs nearly every week as they advance their production capacities for cost-effective, commercially scalable spider silk.
This progress underscores Kraig Labs' commitment to leading the industry in spider silk production, positioning the company for continued success and innovation in the field.
