Brand (45)
D2C brands to drive India’s retail market growth as big players enter the space
Written by FW
The current D2C market in India is being driven by Gen Next enterpreneurs who are inspiring traditional conglomerates with their New Age approach. Tata and Reliance have already announced plans to launch super apps while the Aditya Birla Group has decided to increase focus on the D2C and e-commerce space.
Aditya Birla Fashion and Retail (ABFRL) recently announced plans to set up a new subsidiary for building a portfolio of New Age, digital brands (D2C) across fashion, beauty and allied lifestyle segments. To be known as the House of Brands, the initiative will help it align itself with evolving markets, says an Inc4 report. ABFRL will join startups such as Globalbees, Mensa Brands, Thrasio, Good Glamm Grup, GOAT Brand Labs to build a new brand portfolio, says Ashish Dikshit, Managing Director, ABFRL.
New Age consumers in focus
Many of these brands may not be able to expand their operations in digital space. Yet, they can leverage ABFRL’s tradition, experience and network by acquiring a plethora of brands like the company. Most of these brands are launching products targeting a specific set of consumers. They aim to tap evolving group of New Age consumers by growing their digital operations over the next five to seven years. They also plan to help ABFRL grow its brand portfolio by investing in other selective brands, adds Dikhshit.
The House of Brands business of Aditya Birla Fashion subsidiary will initially include 8 to 10 brands acquired through own capital. These small companies will have the required potential to become large brands over the next 5-10 years.
E-commerce majors take to D2C
With an expected market size of $100 million by 2026, D2C brands are expected to be the biggest drivers of retail market. In 2021, these brands clinched around 174 deals to raise $1.81 billion capital. This not only resulted in the creation of thousands of new brands but also gave enablers and digital sellers new growth opportunities by launching new disruptive models such as ecommerce roll-ups, houses of brands, etc.
The first D2C Fulfilled by Amazon (FBA) brand was acquired by US-based Thrasio. The concept was later popularized by other models set up by Nykaa, GlobalBees, Mesa Brands, etc. In 2022, Mensa Brands acquired Florona, an aromatherapy D2C, Estalon, a Kolkata-based leather brand and TrustBasket, a gardening startup. Now, the D2C space is being coveted by even e-commerce majors like Flipkart which has launched the Flipkart Boost program for these brands. Last January, Amazon India also introduced the Amazon Global Selling Propel (AGSP) Accelerator with around 10 startups.
Best products at affordable rates
Through its D2C foray, Aditya Birla Fashion aims to become not just a marketplace or a platform for brands but also facilitate brand-building and provide consumers with best products at affordable prices. An expert in building brands, it plans to focus on building distinguished brands for consumers, adds Dikshit. ABFRL also plans to scale up existing brands with the help of Rs 1,500 crore investments made by Flipkart last year. Other plans include tapping emerging high-growth categories such as innerwear, athleisure, casual wear and ethnic wear.
The brands recently acquired by ABRFL for its D2C foray have already raised investments worth millions form VCs. The company plans to use these funds for expansion over the next 12-18 months. It will raise external funds once it manages to scale up its D2C operations.
Tommy Hilfiger launches 2nd edition of fashion frontier challenge
Written by FWPVH Corp owned brand Tommy Hilfiger, launched the second edition of the Tommy Hilfiger Fashion Frontier Challenge. This global program supports entrepreneurial start-up and scale-up stage businesses to develop solutions that promote inclusive and positive change in fashion. After a successful first year, the company is excited to continue to work on identifying opportunities that support the advancement of the fashion industry.
Businesses interested in this initiative can submit their project proposals focusing on inclusive fashion. These applicants will be narrowed down to six finalists over a multi-stage four-month process. They will be invited to develop their project plans with the support of a team of dedicated Tommy Hilfiger subject-matter experts at the Campus of the Future in Amsterdam, the Netherlands. They will pitch their finalised concepts at the global Tommy Hilfiger Fashion Frontier Challenge Final Event in early 2020, where a prestigious jury panel will award €150,000 among two winners to support their ventures.
The winners will also receive a year-long mentorship with Tommy Hilfiger’s experts globally as well as INSEAD experts, in addition to a place on the INSEAD Social Entrepreneurship Program (ISEP). An additional €10,000 will be awarded to the finalist who wins the “Audience Favorite Vote”.
Nilit has launched Sensil®, a softer, stronger and more durable version of nylon which provides odor, temperature and moisture management What truly makes Sensil® different is the degree to which Nilit is working with brands to help them find the factories and mills that can make their product using Nilit yarns. The company had never worked directly with brands before but it saw the need for greater transparency and trust.
Nilit is helping the brands overcome supply chain challenges. Its collaboration with the yoga brand, Avocado helps it to present an exciting product for the end customer. It helps those brands that may have been priced out of premium fibers in the past to find partners willing to help them find cost-effective means for bringing their collections to life.
Further, the company has created a robust marketing program that allows brands to connect to the customer through educational, marketing, and event experiences. Sensil®’s goal is to create a relationship between all supply chain participants and a feedback pipeline from the retailer and consumer upstream.
Swedish retailer H&M plans to phase out the use of conventional cashmere in its collections due to environmental and animal welfare concerns. The business will stop placing orders on conventional cashmere at the end of next year.
The brand will continue to work for a more transparent supply chain, where cashmere is sourced from sustainable sources that are independently certified by standards that cover both animal welfare and environmental aspects. If the cashmere industry in the future meets its sustainability criteria, the brand would consider turning to virgin cashmere again.
The fashion industry consumes vast amounts of cotton, water, and power to make 100 billion accessories and garments annually—three-fifths of which are thrown away within a year Less than one per cent of that is recycled into new clothes. The equivalent of a dump truck filled with textiles gets landfilled or incinerated every single second.
The industry’s growth is slowing as millennials increasingly understand fast fashion’s impact on the environment and exhibit a preference for spending on experiences rather than goods. By 2021, Gap will procure cotton only from organic farms or other producers it deems sustainable.
Uniqlo is experimenting with lasers to create distressed jeans using less water and chemicals. H&M is funding startups developing recycling technologies and fabrics made from unconventional materials such as mushroom roots. H&M is seeking to make all its products from recycled and sustainable materials by 2030, up from 35 per cent today.
There is a shift in the industry known for churning out super cheap stuff that fills closets for just a few months before being tossed into the used-clothing bin. With growing concern over waste, retailers have placed recycling bins prominently in many stores. Highlighting such initiatives in tandem with efforts to use greener materials can help win customers.
VF Corp completes licensed sports group business sale to Fanatics
Written by FWVF Corporation has announced that it has completed the sale of its licensed sports group business to Fanatics. The announcement comes just days after the release of VF’s first quarter results. The group contributed nearly $550 million to VF as half of the billion-dollar image wear coalition. The Greensboro, South Carolina-based company has been exploring strategic alternatives for the LSG business since March 2016.
In the month of April VF announced that it had entered into an agreement to sells its LSG business to Fanatics. The Jacksonville, FL-based online retailer in 2020 will replace Majestic, one of the brands in the LSG business, as the official partner of Major League Baseball. Majestic has been in partnership with MLB since 2004.
The sale also follows the announcement of VF’s 2021 growth plan that includes prioritization of digital and direct-to-consumer, increasing focus on Chinese market, and reshaping its brand portfolio. President and CEO Steve Rendle commented that the company’s first quarter results were in line with expectations, despite incurring a $5.5 million net loss from the LSG sale.
VF reported a 2 per cent dip in total revenue to $2.6 billion and an 8 per cent decrease in earnings per share. The international revenue and direct-to-consumer revenue both increased and digital revenue jumped sharply by 25 per cent
Mexico’s Tavemex reduces water usage with Monforts Eco Denim Line
Written by FWMexico-based Tavemex, has become the second denim producer in the world to install a Monforts Eco Denim Line, and the first to use the technology for finishing denim fabrics of up to 300 g/sq. m. Tavemex completed installation of the Eco Denim Line early this year. The company now reports an 80 per cent reduction in water usage after one month of operation.
For Tavemex, the investment comes at a time of fundamental change for the company. Previously known as Tavex, the company was part of a multinational enterprise that originated in Spain and had denim-manufacturing plants there and in Morocco, Brazil and Argentina, as well as Mexico. Now, Tavemex is an independent Mexican-owned concern, with the US as its prime market.
Tavemex’s capacity is now 2 million mt. per month, and part of current production is gradually being moved from the existing stenters to the new Eco Denim Line. The equipment was delivered from Monforts in Germany via the manufacturer’s distributor in Mexico, Sattex-Mexico.
Talking about using less water, Arturo Ornelas Elizondo, Tavemex’s Industrial Director says the major reason for investing in the Eco Denim Line was to satisfy customers who have been requesting us, more and more, to use less water in dyeing and finishing. The company uses its own well for water, so cost is relatively low, and is saving more than 80 per cent on water usage.
Eco Denim Line is projected to save energy. The new installation includes a Monforts Eco Applicator, which applies the chemicals, replacing a conventional padder. This is said to reduce the drying needs and, therefore, energy consumption, due to the fact that the eco applicator applies less moisture to the fabric. On this Elizondo commented that this will further give the company a opportunity to improve our wastewater plant to the latest European standards.
When it comes to Islamic fashion apparel, Pakistan is one of the top 10 consumer markets. The rise in Pakistan’s fashion retail industry in recent years has been huge, creating space for local as well as global brands which feed the lifestyle needs of the affluent and the rising middle class.
This is especially the case in the women’s apparel category with long shirts, colorful hijabs and the like. Small and medium enterprises have the required potential to streamline operations and offer products to local as well as global markets. However, with Pakistan being a Muslim country, there is scope for modest fashion.
Rabia Z is a global pioneer in the modest fashion category and has chosen Pakistan’s lucrative market as its next destination after dominating markets in the Middle East, Europe and the United States. In Pakistan, the formal launch will be held this summer. The brand plans to establish a proper retail set-up and is interested in starting production in Pakistan and then sourcing all the natural fabrics from Pakistan. It might delve into the franchise model in collaboration with some of the leading textile groups of the country. The brand already has a presence in Pakistan with the company selling its products via e-commerce.
In general, Muslim countries already spend billions of dollars on apparels and global Islamic fashion clothing is among the top three segments after halal food and Islamic finance.
Li & Fung signs new supply chain agreement with PVH Corp
Written by FWHong Kong-based Li & Fung, one of the world’s leading consumer goods design, development, sourcing and logistics has entered into agreements for a new supply chain relationship with PVH Corp. The agreements transform the current non-exclusive buying agency agreement between them into a new strategic partnership under which Li & Fung will provide additional value-added services to PVH. The new agreement will lead to cessation of existing non-exclusive buying agency agreement between them. The transaction is expected to close on July 1, 2017.
The new supply chain relationship is expected to be mutually beneficial and focus on applying latest technology and knowhow into the PVH supply chain. And as Daniel Grieder, CEO Tommy Hilfiger Global and PVH Europe said the focus of his company was to create a more effective and efficient supply chain that would enable them to adapt and evolve so that it could stay ahead in the rapidly changing industry. This transformation in the company’s sourcing strategy is an important step to improve speed to market and faster integration of consumer insights into our new collections.
US-based PVH Corp has a diversified portfolio of brands including Calvin Klein, Tommy Hilfiger, Van Heusen, IZOD, ARROW, Speedo, Warner's and Olga and numerous other owned and licensed brands and markets them globally. PVH has 30,000 associates operating across 40 countries and speaking 20 languages. In 2015, the company generated over $8 billion in revenues.
Next posted a 3.8 per cent drop in pre-tax profits for the year to the end of January. Next is anticipating another fall in profits. UK’s biggest clothing retailer has been battling a combination of economic, cyclical and internal factors. Next has raised shop prices by four per cent to offset the higher import costs from a weaker pound.
Total sales at the retailer’s 538 shops have fallen by 0.3 per cent, hit by a 4.6 per cent slump in full-price shop sales. The group’s Directory business, long seen as the engine driving its growth, also suffered a lackluster year with its own-brand sales down by 1.8 per cent. However, this was offset by its growing business selling other brands, which lifted its Label sales by 18.9 per cent and boosted total Directory sales by 4.2 per cent.
Next attributed some of its weakness to a reshuffle of its buying operations, which means it can respond to fashion trends faster, but at the expense of omitting some of its best-selling, heartland products from the range. The retailer also bore an increase in costs. Next expects a further increase in costs this year as it absorbs wage rises, the apprenticeship levy, and energy taxes.
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Lenzing is expanding production capacities of Tencel fibers. New types of Tencel premium fibers such as the Refibra fiber are made using cotton scraps from the manufacturing of cotton garments and wood as raw materials. This fiber contributes to the circular economy.
Lenzing is an Austria-based manufacturer of textile and nonwovens cellulose fibers such as modal and lyocell. This investment will increase the annual production capacities for fibers by about 25,000 tons. Lenzing put its first industrial-scale lyocell fiber production facility into operation 20 years ago. Today the fibers are sold under the Tencel brand name.
Tencel fibers are being produced in Austria, US and UK. The lyocell technology is characterised by a good environmental performance. Cellulose fibers are derived from the renewable raw material wood in a closed-loop process, resulting in a minimal amount of environmentally harmful emissions.
Due to their outstanding properties, Tencel fibers boast a particularly broad range of applications, both in the world of fashion, as well as technical areas and nonwovens. Lenzing’s aims is to earn 50 per cent of its revenue from specialty fibers by 2020. The company has a focus on profitable growth based on environmentally friendly specialty fibers. The company produces 9,65,000 tons of fiber for the global textile and nonwoven markets.
Inditex registered a net profit jump of 10 per cent last year. And the momentum has continued this year, with 13 per cent growth in store and online sales in constant currency terms over the past six weeks. Sales at Inditex stores rose eight per cent in the first six weeks of this fiscal year.
Inditex is the world’s largest fashion retailer by sales and seeks to have full integration of the brick-and-mortar stores and online businesses. Among the brands run by Inditex are Pull & Bear, Bershka, and Zara. For all of 2016, Inditex reported a rise in sales at all of its eight brands. Zara alone was responsible for 66 per cent of total sales.
Inditex plans to open between 450 and 500 new stores in 2017 while absorbing 150 to 200 smaller ones. In 2016, it opened a net 279 stores, bringing its total to nearly 7,300. This new strategy leaves plenty of space for the online platform to expand without cannibalizing the brick-and-mortar shops. By closing smaller stores and focusing on flagship stores, customers who aren’t close to these stores could be prodded into shopping online.
Inditex is trying to integrate the two services. For instance, customers can pick up and return online store-bought purchases. They can also order online with the help of a store clerk.
Brands are publicly disclosing their supplier lists. Popular online fashion retailer ASOS is set to publish a list of the factories where it produces its own-brand products. Uniqlo has revealed the names and addresses of 146 of its core factory partners.
Earlier Adidas, Converse, H&M, Levi Strauss and H&M have published a list of their manufacturers. Adidas and H&M have published the names and addresses of sub-contractors or fabric/yarn suppliers. Publishing supplier lists is important because it helps NGOs, unions, local communities and even workers themselves to alert brands of any potential human rights and environmental issues in their supply chains. This sort of transparency makes it easier for the relevant parties to understand what went wrong, who is responsible and how to fix it.
Marks & Spencer published an interactive map of its suppliers in both food and clothing, which spans 53 countries and covers 1,229 factories employing 787,331 workers. Gap, C&A, VF (which owns more than 20 brands including The North Face, Timberland, Vans and Wrangler) have revealed the names and addresses of the factories that manufacture their clothing around the world.
The information brands provide varies widely. Some publish every factory where their clothes are manufactured. Others may only reveal a selected portion of their manufacturers, such as their core high-volume suppliers, factories located just in one country or only the factories the company owns.
Welspun has opened a state-of-the-art plant in Gujarat. The Rs 150 crores facility will have unique capabilities of spun lace and needle punch lines which can manufacture multi-layer composites for various applications. This advanced and innovative technology will provide non-woven solutions for high-end industrial applications such as filtration, acoustics, automotive, fire safety, thermal insulation, vibration control, noise control, aerospace, defense and mass transportation. The initial capacity of the manufacturing unit will be 2,400 metric tons a year.
With this facility, Welspun has also invested in a wide range of finishing technologies including coating, laminating, dyeing, and printing to provide innovative solutions all under one roof. The new facility will enhance Welspun’s product offerings and provide cutting edge solutions in high growth areas such as industrial and defense applications.
Welspun has also invested Rs 100 crores to set up a fresh state- of- the-art fully automated cut and sew unit in the made-ups segment with a capacity of 10 million units a year. The new initiatives are testimony to Welspun’s commitment in enhancing employment opportunities in the region, particularly for women. Welspun plans to expand its focus on branded and innovative products to become a two billion dollar company in four years, with 20 per cent revenue coming in from domestic sales.
