Blog: Esprit plans to get back on track
Leonie Barrie | 19 September 2011
Fashion brand Esprit last week outlined steps to get its business back on track by exiting its North American operations, disposing of its retail businesses in Spain, Denmark and Sweden, and closing certain under-performing stores worldwide. Its plans were outlined as it booked a 98% drop in full-year profit, but analysts have told just-style they believe the company still has a long way to go before it regains a steady footing.
In contrast, Fast Retailing, operator of the Uniqlo casual clothing chain, has outlined ambitious expansion plans to help it become the world's leading manufacturer and retailer by 2020 - including new factories to ramp up production to 5bn items a year. The company hopes to open some 200-300 Uniqlo stores a year as part of the moves, to reach an annual revenue rise of JPY500bn.
It is also eyeing new production bases outside of China, including Bangladesh, Vietnam, Indonesia and Cambodia, and will also launch fully-fledged production in India.
But as the eighth round of the talks on the Trans-Pacific Partnership (TPP) concluded in Chicago, stakeholders from the textile, apparel and footwear industry all pitched in on how they believe the best interests of their sectors should be treated in any resulting trade deal. The yarn forward rule of origin has emerged as one of the most divisive issues, with the US and its regional trade partners all calling for strong textile and apparel rules in the pact.
Meanwhile, more than 60 of the world's best known apparel companies and brands, including Adidas, Burberry, C&A, Levi Strauss, Li & Fung, Liz Claiborne and Wal-Mart Stores, have vowed not to source Uzbek cotton harvested using forced child labour. The American Apparel and Footwear Association (AAFA), representing more than 800 brands, has also signed the pledge.
The Indian government has also decided not to impose any restrictions on cotton exports in the new season, which begins on 1 October. But heavy monsoon rains and devastating floods across the cotton producing areas of Pakistan have damaged more than 1m cotton bales worth around PKR34bn (US$387m).
UK-based fashion retailer Next Plc said it had managed to navigate a "perfect storm" of rising costs to post an 8.5% rise in first-half pre-tax profit, and offered reassurances that prices will not rise any further in the first half of next year. The high street clothing chain said selling prices rose by 7% in the six months to the end of July - but without steps to mitigate a tightening of capacity in the Far East and soaring cotton and oil costs, price rises would have been nearer 18%.
Further confirmation that China's garment manufacturing industry continues to lose its competitive edge came last week when it was revealed that a number of Hong Kong garment companies are looking to ...
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