Supplier pain falls under the radar
1st July 2009 12:08

Beside part-mentions in domestic Asian newspapers, the thousands of job losses at Triumph International this week went relatively unnoticed by global media.

just-style broke the story that 3,616 jobs would be lost in the Philippines and Thailand on Monday (24 June), expecting a deluge of reports from international media and industry rags.

However, the story remains reserved to readers of just-style, together with local newspapers close to the action - like the Philippine Star.

Triumph will cease manufacturing and distribution centre operations in the Philippines and reduce manufacturing in Thailand, in a restructuring plan prompted by the downturn.

Meanwhile, unrelated to Triumph, rioting garment workers resisting pay cuts and unpaid salaries in Bangladesh have reportedly torched factories and warehouses leaving 100 injured.

The Bangladesh riots won some headlines, but Western media seems under-concerned that sloping retail demand is filtering through to Asian manufacturers on a dramatic scale. Indeed, the closure of a dozen stores or handful of shop assistants is more likely to stir the emotions of a consumer-driven West.

However, this coverage, or lack thereof, is unacceptable given the global nature of the apparel supply chain and increasing importance of 'manufacturing countries' in the design process.

The supply chain infrastructure and relationships in place today were not built overnight, and can't be jumped-started at the drop of a hat either.

It would therefore be dangerous for media outlets to underestimate the impact of overseas factory closures, especially in the apparel and footwear industry.

By Joe Ayling, news editor.

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Dress Barn tries onTween Brands
29th June 2009 14:45

In a deal that took the market by surprise last week, off-price women's apparel retailer Dress Barn  is set to acquire teen fashion retailer Tween Brands in a stock-swap agreement worth around $157m.

The transaction is due to close in the fourth quarter of this year, and will see Tween Brands – which targets 7 to 14-year-old girls through its 908 Justice stores – become a separate subsidiary of Dress Barn. The combined company will have net sales of around $2.4bn and operate 2,465 stores.

While some industry observers wonder what synergies there are between the two businesses, Dress Barn believes that adding the Justice chain will help to "diversify and complement" its existing career and casual fashion business. Tween Brands, meanwhile, will have its outstanding bank debt paid off. The companies also hope to generate cost savings through economies of scale in areas such as sourcing and real estate.

Changes are also taking place at athletic shoe and apparel retailer The Finish Line, which is to exit its unprofitable Man Alive business and focus instead on its core operations. The deal involves paying $7m in cash to a new company set up by the owner of the Jimmy Jazz chain – who will take control of 75 Man Alive and Decibel stores.

The urban apparel chain’s poor performance helped push Finish Line to a first quarter loss of $608,000 as sales dropped 7.2% to $267.2m. By division, same-store sales for Finish Line fell 3.9%, while Man Alive plunged 39.1%.

Slumping sales in every geographic region except Asia coupled with restructuring charges to push sporting goods giant Nike Inc to a 30% drop in fourth quarter profit of $341.4m. Revenues fell 7% to $4.7bn. But most worryingly for the Beaverton, Oregon based firm, worldwide future orders for Nike-branded footwear and apparel scheduled for delivery between June and November – a key indicator of future sales – are down 12%.

More than six months after shuttering its 807 high street stores, the Woolworths brand has begun trading again in the UK as an online business – selling a range of products including its iconic Ladybird children's wear label. The relaunch comes after the two names were bought by online and home shopping retailer Shop Direct Group back in February, and there are now plans to introduce clothing, footwear and sportswear for older kids too.

Marks and Spencer, meanwhile, has come under fresh attack over its continued insistence that the powers of chief executive and chairman are combined under Sir Stuart Rose as executive chairman. In a research note to institutional investors, advisory firm PIRC is backing plans calling for the appointment of an independent chairman by July 2010. Sir Stuart has also tried to placate shareholders by foregoing a third of his share entitlement – worth an estimated GBP1.13m (US$1.8m).

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Will Woolworths work?
26th June 2009 14:37

Saddled with an estimated GBP385m (US$594m) worth of debt, jaded stores, rising rents and a business model that sold everything from sweets to electrical goods, garden furniture to clothes but struggled to compete with specialist retailers on either price or range, the demise of Woolworths earlier this year was long overdue.

But whether this outdated concept can be revived by a new way of selling – via the Internet – remains to be seen.

There’s no doubt the combination of the well-known Woolworths name – in particular its popular Ladybird children’s label – and the growth in online sales should make for a compelling story. And without the physical restrictions imposed by its stores, the brand now has the scope to sell a far wider range of items than it could before, including plans to introduce clothing, footwear and sportswear for older kids.

But there are also concerns that Woolworths' traditional customers may not be regular online shoppers, and that in the six months since the retailer’s demise they will have switched their shopping for kids’ wear to the likes of supermarkets Tesco and Asda, H&M, Primark and even Next and M&S.

But if there’s anyone who can make Woolworths and Ladybird work then it must surely be Shop Direct. The retailer is aggressively shifting its business away from its more traditional mail order catalogues and onto the Internet.

The group’s online sales now account for 56% of its total revenues, up from 18% three years ago – and it expects 70% of its GBP1.7bn (US$2.8bn) annual sales will be online by 2010/11.

UK: Woolworths and Ladybird brands return online

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Shoes made for walking – and more
24th June 2009 18:14

When did shoes stop being just...shoes? Nowadays it seems that looking good and protecting your feet from the elements are the least of their requirements; instead, a new generation of ‘super shoes’ packs benefits that range from correcting the wearer’s posture to getting rid of cellulite, and some claim to relieve the symptoms of diabetes and arthritis too.

Even Reebok has stepped into the field with a toning shoe to “re-shape the butts and legs of women around the world.” Its selling point is a new balance pod system invented by a former NASA engineer that tones key muscles by making them work harder.

But there are some multi-tasking shoe ideas that might be slower to get off the ground. How about metal detecting sandals for one?

No they’re not a joke; inventor Hammacher Schlemmer describes them as “a way for beach combers to treasure hunt without carrying a handheld metal detector and wearing a bulky headphone.” And if that’s not enough, the sandals “allow you to unobtrusively locate buried artefacts as you stroll the beach.”

A copper coil built into the right sandal – and powered by a battery pack that straps to your calf by an elastic band – creates a magnetic field and alerts you to the presence of metal up to 2' underfoot. Unobtrusive maybe, but I don’t think the flashing red LED lights and “gentle vibration or clearly audible buzz” would allow you to stay inconspicuous for long.

Another alternative, perhaps, is the “social networking shoe.” These Global Positioning System (GPS) sneakers come with Bluetooth capability and enable the wearer to be tracked by friends and family through their cell phones.

“People will be able to see where their friends are – and have a better idea of estimated arrival time – without having to call them. And, because the wearer doesn’t have to be talking on the phone while driving, it will definitely improve safety.”

Hmmm. I can certainly see the point of shoes that help keep tabs on kids or the elderly, but I’m not sure I’d want my every move tracked like that.

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Eddie Bauer back from the brink?
22nd June 2009 14:42

It has been a dramatic week for outdoor apparel retailer Eddie Bauer, which finally filed for bankruptcy protection after struggling for years with mounting debts and falling sales.

However, in a dramatic move the company immediately announced a proposed sale to private equity group CCMP Capital Partners for $202m in a so-called "stalking horse" bid, which could yet be matched or beaten by rival bidders.

Business is continuing as usual while the sale goes through thanks to interim financing from its current lenders of $90m, plus $100m to meet its ongoing requirements. This means all 371 stores will remain open as usual, and vendors and contractors will be paid.

"Eddie Bauer is a good company with a great brand and a bad balance sheet," said Neil Fiske, company president and CEO. The filing and sale have raised hopes this will mark a fresh start for an iconic name.

Just as expected there have also been changes at teen clothing retailer Abercrombie & Fitch, which is to shutter its struggling Ruehl chain after deciding to focus on its other brands. The decision comes a month after the retailer launched a strategic review of Ruehl, which caters to post-college adults – and will see the chain’s 29 stores and related direct-to-consumer operations close by the end of the fiscal year.

The renewed auction of the assets of Filene's Basement has seen rival cut-price apparel retailer Syms emerge as the winner. Syms' US$62.4m joint bid with developer Vornado Realty Trust covers the leases for 23 Filene's Basement stores, along with the defunct company's trade name, inventory and distribution centre. Men's Wearhouse had originally been declared the winning bidder, but the auction was reinstituted after complaints from rivals.

In a major coup for fashion chain H&M, it is partnering with celebrity favourite footwear and accessory brand Jimmy Choo to launch a new collection in 200 of the retailer's stores around the world. The collaboration is particularly exciting because it is H&M's first shoe designer collection. It will also include bags plus a selection of women's clothing.

And finally, a row has broken out between rival US industry groups over whether US Customs and Border Protection is adequately enforcing trade laws affecting textile and apparel imports. The National Retail Federation is urging Congress to resist political pressure from the textile industry, which claims illegal textile fraud levels have reached record highs.

The textile executives want to see an overhaul the textile enforcement effort in trade deals such as CAFTA (Central American Free Trade Agreement), while retailers argue tougher tariff enforcement for apparel imports would penalise legitimate importers.

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