Blog: Leonie BarrieRalph Lauren’s gain a blow for Gap

Leonie Barrie | 6 October 2015

The unexpected appointment of Old Navy president Stefan Larsson to replace Ralph Lauren as CEO of his namesake business later this year saw Ralph Lauren’s share price jump 13.6%, while Gap Inc’s declined 5.7%.

Larsson is widely credited with leading a recovery at Old Navy, adding US$1bn in sales. But his departure has prompted analysts to ask whether parent Gap Inc can maintain its momentum as it tries to turnaround its Banana Republic and Gap brands.

Separately, analysts believe Larsson’s new perspective on product and vision could be just what Ralph Lauren needs – and that his first tasks will be to target "low hanging fruit" such as supply chain enhancements, inventory realignment and cost management.

Patagonia's goal of building "the world’s most socially and environmentally responsible supply chain" has made the outdoor wear specialist something of a pioneer in its industry. Cara Chacon, the group's director of social & environmental responsibility, talks to just-style about the successes and ongoing challenges.

The company is also ramping up its Fair Trade Certified apparel offering this autumn, as well as working to enroll more of its supplier factories into the programme.

German sportswear giant Adidas Group is launching a three-year “game-changing” research project to develop what it calls a “new breed of sporting goods” that can be repeatedly recycled in a chemical and waste-free process.

And sportswear giant Nike is joining forces with the Massachusetts Institute of Technology (MIT) Climate CoLab to try to drive new “revolutionary” innovations in low-impact fabrics and textiles.

Meanwhile, a group of independent and pro-government trade unions has agreed on a proposal for a new US$168 monthly minimum wage in the Cambodian garment sector, although talks are still underway with employers.

But fashion retailer H&M has been criticised by labour rights groups for potentially endangering hundreds of workers at its supplier factories Bangladesh because they have fallen behind on fire and building safety repairs.

And latest first-half results for Berlin-based fashion e-tailer Zalando saw revenue up 32% to EUR1.4bn (US$1.6bn), while profit margins dipped to 3.5%. Where should the business focus its attention to maintain growth momentum? asks Bernadette Kissane, apparel and footwear analyst at Euromonitor International.

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