Global Apparel Markets: Business Update, 2nd Quarter 2009

Published by: Textiles Intelligence

Published: Oct. 1, 2009 - 29 Pages

Table of Contents

SUMMARY

ACQUISITIONS, DIVESTMENTS AND MERGERS

Delta Apparel has acquired Gekko Brands

Escada has completed the divestment of the Primera Group's women's fashion brands, prior to filing for

bankruptcy protection

Iconix Brand Group has acquired a 50% stake in Hardy Way

ANTI-COUNTERFEITING AND TRADEMARK INFRINGEMENT

Authorities in Sri Lanka have seized more than 10,000 counterfeit Victoria's secret garments

Authorities in Thailand have seized more than 4,700 counterfeit Columbia Sportswear products

Gucci has filed a trademark infringement lawsuit against Guess

Italian customs officials have seized around 26,000 counterfeit Lycra swimsuits

Kay Celine has filed a counterfeit lawsuit against Stein Mart and Sienna Rose

The European Observatory on counterfeiting and piracy has been launched by the EU to combat the

production of fake goods

COMPANY RESTRUCTURING AND REORGANISATION

Triumph International has reduced its workforce by about 8% as part of a restructuring programme

UPM Raflatac is planning to reorganise its production facilities in order to strengthen its

competitiveness in the radio frequency identification (RFID) industry

FINANCIAL RESULTS

Abercrombie & Fitch has reported a 24% decrease in total net sales during the first quarter of its

2009/10 financial year

Outlook

Asos has reported a 104% surge in revenues in its 2008/09 financial year

Gap has reported an 8% decline in net sales during the first quarter of its 2009/10 financial year

Gildan Activewear has reported a 16.7% drop in net sales during the second quarter of its 2008/09

financial year

Second quarter 2008/09

First half of 2008/09

H&M has posted a 23% rise in sales during the second quarter of its 2008/09 financial year

Second quarter 2008/09

First half of 2008/09

New stores in the second half of 2008/09

Inditex has posted a 5% rise in net sales during the first quarter of its 2009/10 financial year

JC Penney has reported a 5.9% fall in sales during the first quarter of its 2009/10 financial year

Marks & Spencer (M&S) has reported a 0.4% rise in total sales in its 2008/09 financial year and a

2.9% rise in the first quarter of 2009/10

Fourth quarter 2008/09

2008/09

First quarter 2009/10

Global apparel markets: business update www.textilesintelligence.com

Perry Ellis International has posted a 9.7% decline in total revenues during the first quarter of its

2009/10 financial year

Outlook

TJX Companies has reported a 1% increase in net sales during the first quarter of its 2009/10 financial

year

INTERNATIONAL TRADE POLICY

Two US senators have introduced a bill which aims to provide textile and apparel imports from least

developed countries (LDCS) with duty-free access to the US market

The South African Clothing and Textile Workers' Union (SACTWU) has submitted a request to the

South African government to increase apparel import tariffs

Vietnam has ratified a free trade agreement (FTA) with Japan

JOINT VENTURES, COOPERATION, LICENSING AND DISTRIBUTION AGREEMENTS

Brand Matter and Ivory International have entered into a licensing agreement covering Caribbean Joe

branded sportswear

Calvin Klein has signed a global licensing agreement with Premium Golf Brands (PGB) which covers

Calvin Klein Golf branded apparel

Fast Retailing is collaborating with Jil Sander to develop a new clothing collection for Uniqlo

Iconix China has entered into an agreement with Bosideng International to develop the Rocawear

brand in China

Sanei International and Kate Spade are planning to set up a joint venture company in Japan

Sony Computer Entertainment Europe (SCEE) has entered into a licensing agreement with Target

Entertainment to develop PlayStation-branded apparel

Tory Burch has signed new distribution agreements in Japan and South Korea

MARKETS

For the second year in a row, Brazil has been named as the most attractive emerging market for apparel

retailers making foreign investments

Global sales of apparel and home textiles made from organic cotton reached an estimated US$3.2 bn in

2008

Sales of Ethical clothing in the uk are expected to be worth £175 mn (US$251 mn) in 2009

Sales of apparel in the USA declined in December 2008 and February 2009, but sales of dresses, jeans,

outerwear and tights rose

NEW STORES

Adidas has launched its first originals retail store in Saudi Arabia

Aéropostale has opened its first PS from Aéropostale retail store and has launched a new website

Gap and Armin Systems have entered into a franchise agreement to establish Gap retail stores in

Thailand

H&M opened its first store in Beijing, ChinA

Topshop opened its first store in the USA

Zara has opened its first store in Egypt

ONLINE RETAILING

Moët Hennessy Louis Vuitton (LVMH) has announced plans to close its online luxury clothing

retailer, eLuxury

Uniqlo and Taobao have launched two virtual clothing stores for the Chinese online retail market

Abstract

Abercrombie & Fitch and Gildan have reported poor financial results for the early months of 2009. But results at Marks & Spencer (M&S) are relatively upbeat, and UK-based Asos has continued to grow apace. One of the biggest casualties of the global economic slowdown has been the Germanybased luxury fashion group Escada, which filed for bankruptcy protection in August 2009. However, before doing so, it managed to sell four women’s fashion brands—apriori, BiBA, cavita and Laurèl, which belonged to its wholly-owned subsidiary The Primera Group—to two German firms.

In the area of anti-counterfeiting, authorities have seized thousands of counterfeit clothing items in Sri Lanka, Thailand and Italy. In an attempt to combat counterfeiting activities, the EU launched an official observatory. Other intellectual property matters included the filing of two trademark infringement cases—one by Gucci against Guess and another by Kay Celine against Stein Mart and Sienna Rose.

Many companies have been taking steps to deal with the consequences of the global economic slowdown. Triumph International, for example, has reduced its workforce by about 8%, or 3,600 jobs. Meanwhile, UPM Raflatac has continued to transfer production of its radio frequency identification (RFID) tags and inlays to China and the USA. Other strategic activities have included: the signing of a global licensing agreement between Calvin Klein and Premium Golf Brands (PGB); collaboration between Fast Retailing and Jil Sander to develop a new clothing collection for Uniqlo; Iconix China’s development of the Rocawear brand in China and its acquisition of a 50% stake in Hardy Way; a licensing agreement between Sony Computer Entertainment Europe (SCEE) and Target Entertainment relating to the development of PlayStation-branded apparel; and two agreements relating to the distribution of Tory Burch products in Japan and South Korea.

Market data show that global sales of apparel and home textiles made from organic cotton rose by 63% to reach US$3.2 bn in 2008, while sales of ethical clothing in the UK are expected to be worth £175 mn in 2009. In the Americas, the management consulting firm AT Kearney has named Brazil as the most attractive emerging market for apparel retailers in 2008, for the second year in a row.

Several major brands have opened new clothing stores in various countries or are planning to do so—including Adidas in Saudi Arabia, Gap in Thailand, H&M in China, Top Shop in the USA, and Zara in Egypt. Japan-based Uniqlo and China-based Taobao have launched two virtual stores dedicated to selling Uniqlo products online to consumers across China. Meanwhile, Guess has invested in product life cycle management (PLM) software to manage its global sourcing and product development.

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