Blog: Online fashion outperforms
Leonie Barrie | 6 July 2009
The combination of internet shopping and demand for fashion from a young market whose spending is relatively unscathed by the recession continues to be a winning one for Asos. Last week the online retailer posted a 93% hike in full-year profit to GBP14.1m (US$23.4m), helped by a 104% jump in sales to GBP165.4m.
Its new year has also got off to a strong start with sales for the 13 weeks to 26 June up 52% year-on-year. But there was a warning note, too, as this compares to an increase of 95% for the same period last year amid signs that the rate of growth in online sales has begun to slow.
Nevertheless, the retailer continues to outperform the market. New ranges and strong international opportunities are likely to offset any slowdown – with international sales in particular soaring 303% to make up 20% of the business, up from 10% last year.
Problems for American Apparel are closer to home, after a US federal probe found that about 1,800 of its factory workers in Los Angeles are working illegally. The investigation by US Immigration and Customs Enforcement (ICE) in January 2008 found that the workers had suspect or invalid documentation, while some records could not be verified.
American Apparel said the potential loss of the workers would not impact its financial results – although it does damage the firm’s image as an advocate of immigration reform.
German lingerie maker Triumph International, meanwhile, plans to cut thousands of jobs in the Philippines and Thailand as it restructures its business to meet lower demand brought on by the economic downturn. The company will cease manufacturing and distribution centre operations in the Philippines, with the loss of 1,686 jobs, and cut manufacturing in Thailand which will lead to 1,930 redundancies.
French fashion label Pierre Cardin is planning to sell all of its 32 clothing and accessories licences in China to two local companies for EUR200m (US$280m). Talks with Jiangsheng Trading Company and Cardanro just relate to its licences in China – not the brand as a whole. However, there are concerns the brand might lose some of its cachet if it was Chinese-owned.
There are growing calls for global sanctions to be imposed on Honduras unless democracy is restored following the military coup which ousted Honduran President Manuel Zelaya last week. The global union for workers in the textile, garment and footwear industries is calling for an urgent review of trade with the country.
While some businesses in the capital, Tegucigalpa, are reported to have closed amid the rising tension, Canadian apparel group Gildan Activewear said the continuing unrest had not affected its sock manufacturing operations in the country.
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