November 2, 2009
Issue 495
just-style.com editor's weekly highlights
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Pinpointing that crucial tipping-point between recession and recovery is at best a fine art, and at worst a mug's game. But three sets of results posted last week suggest there is definitely a glimmer of hope on the horizon – or at least that aggressive moves to cut costs and inventories are finally paying off.
At branded apparel giant VF Corporation, CEO Eric Wiseman said: “The worst effects of the recession may be behind us,” after third quarter profit fell 6.8% to US$217.9m on a 5% drop in sales.
However, despite strong growth in Asia and rising sales in its sportswear and contemporary divisions, some caginess remains. “We do not believe that the global economy is out of the woods just yet,” Wiseman added, perhaps in reference to sliding revenues in Europe and in its jeanswear and imagewear units.
INSIGHT: VF shows the way despite mixed messages
US: VF Q3 profit dips despite positive signs
Timberland, too, surprised the market with a 23% jump in third quarter profit, helped by strong sales in North America and in its footwear business – but says there is still a lot of work to do before the brand reaches its full potential.
While profit rose to $37.8m, sales remained flat at $421.8m as strong growth in the European boots business and SmartWool brand were offset by declines in casual footwear and Timberland apparel. The company also told investors it hopes its Earthkeepers range of recyclable shoes can help it climb towards consistent and sustainable top-line growth.
US: Timberland Q3 profit jumps 23%
INSIGHT: Earthkeepers central to Timberland growth plan
And at Hanesbrands the good news continued after the apparel maker posted a 153% surge in third quarter profit to US$41.1m, driven by lower expenses and cost reduction initiatives. The company, whose brands include Playtex, Champion, Wonderbra and Hanes, also said it is ramping up production capacity after securing extra shelf space at retailers like Target, Walmart and Macy's that should add 5% sales growth in 2010.
US: Hanesbrands Q3 profit surges on cost-cutting
INSIGHT: Hanesbrands' enviable three-card trick
One of the sectors hardest hit by the global recession, though, is luxury retail, as shoppers defer new purchases, spend less, or simply trade down to cheaper alternatives. And Italian fashion house Versace Group has become the latest victim of the slowdown in spending on luxury items after deciding to cut 350 jobs – around a quarter of its worldwide workforce – in a bid to return to profit.
However, amid signs from some of the large luxury powerhouses that the market is starting to stabilise, retailers are being warned the post-recession luxury market will be far different from the one that came before.
INSIGHT: Versace cuts jobs as luxury downturn bites
COMMENT: Luxury firms must adapt to the ‘new normal’
But despite retailers and brand owners working at a frantic pace to produce and sell more and more garments at ever-cheaper prices, this business model seems at odds with steps being taken by many of these firms to build sustainability into their supply chains. However, the keys to narrowing this divide are increasingly held by designers.
Spotlight on...Sustainability in design
Until next time...
Leonie Barrie, Managing Editor
Web: www.just-style.com
Email: editor@just-style.com
Twitter: juststyle
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- Global market review of active sportswear and athletic footwear – forecasts to 2016
- Global Best Practices Statistical Yearbook for Clothing Manufacturers
- UV protective clothing: key to reducing skin damage, 2009 edition (download)
- China Apparel Industry - New Opportunities for Growth
- Textile Product Manufacturing in Australia - Industry Risk Rating Report (download)
- INSIGHT: Earthkeepers central to Timberland growth plan [MEM]
- COMMENT: Luxury firms must adapt to the ‘new normal’ [MEM]
- US: Target cuts 85 jobs in marketing reorganisation [MEM]
- INSIGHT: Hanesbrands' enviable three-card trick [MEM]
- UK: e-trader buys online fashion outlet Koodos [MEM]
- INSIGHT: Versace cuts jobs as luxury downturn bites [MEM]
- US: Hanesbrands Q3 profit surges on cost-cutting [REG]
- NORTH AMERICA: Holiday retail sales eye marginal growth [REG]
- UK: Blacks mulls “radical” restructuring as H1 losses soar [MEM]
- US: Macy’s to launch exclusive new men’s wear line [MEM]
- US: Jones Apparel boosts Q3 profit despite sales dip [MEM]
- Spotlight on...Sustainability in design [MEM]
- NETHERLANDS: Tommy Hilfiger in 3.5% H1 sales rise [MEM]
- UK: High street sales steady despite recession [MEM]
- US: Iconix to acquire 51% of Ecko Brands for $63.5m [MEM]
- INSIGHT: VF shows the way despite mixed messages [MEM]
- US: Warnaco names Prendergast as Chaps president [REG]
- UK: Supply chain seminar tackles sourcing strategies [REG]
- US: Olsen twins launch juniors line at JCPenney [MEM]
- HONG KONG: Prime Source launches ThinkTank platform [MEM]
With the global fashion and apparel industry working towards weeding out evil business practices like sweat shops and child labour, Sri Lanka Apparel shows the way with the 'Garments Without Guilt' industry certification from SGS.
COMMENT: Luxury firms must adapt to the ‘new normal’ [MEM]
Luxury retail has been one of the sectors hardest hit by the global recession, as shoppers increasingly defer new purchases, spend less, or simply trade down to discounts on higher-end brands or fast fashion alternatives. However, amid signs the market is starting to stabilise, retailers are warned the post-recession luxury market will be far different from the one that came before.
- INSIGHT: Versace cuts jobs as luxury downturn bites [MEM]
- SPAIN: Iame plans luxury holding to take on LVMH [MEM]
- 10 global luxury trends for the coming decade [MEM]
Clothing culture - International designers cut their cloth to suit local tastes
It almost seems common sense to say that an industry providing such a human product as clothing has to take account of cultural sensibilities in target markets. But it is not as simple as that. It’s not only Italians who appreciate Italian suits and shoes. Women worldwide appreciate French couture. And British tailoring has respect far beyond the shores of the UK. But one-size does not fit-all consumers. There are a bewildering variety of body shapes and sizes in different countries, and although respect for Italian design may be universal, some export markets will like certain aspects more than others. The best clothing companies will know how to balance the brand of their design with the need to satisfy local tastes. just-style writers around the world have investigated how they do it.
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