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Full text issue week 17-2016

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ISSN 1994-2419

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Issue Week 17-2016

 Summary of news published since Week 16-2016

 

jpa4Sibil220THE GROWING ownership of smartphones in the US and Europe, which is predicted to boost considerably online sales of lingerie on both sides of the Atlantic, is only one of the many factors that promise to swell future sales of innerwear through e-commerce. But, to maximize their benefits from this trend, brands need to do more than merely intensify their efforts to wholesale more to online distributors. In addition to exploiting opportunities for multi-channel marketing, bodywear brands would have much to gain from the development and implementation of new merchandising concepts that involve closer collaboration between manufacturers and distributors. A closer focus on such potential collaborations could well bring dividends that would amply justify the modest investment involved.

 

Jean-Pierre Adeline

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BACKGROUND – developments to bear in mind

 

LINGERIE: strong growth of online sales predicted

EU: consumer confidence declines

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THE APPAREL SCENE – news of brands and labels

 

UNDER ARMOUR: growth in Europe accelerates

CONTROL BODY: diversifies into activewear

CALVIN KLEIN: German expansion maintained

FRUIT OF THE LOOM: logistics centre expanded

GHIRO: bid made to enter US market

HUIT: latest loss leads to failure

HANESBRANDS: Q1 results show higher EBIT

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DISTRIBUTION – evolution of chains and channels

 

VICTORIA’S SECRET: operation to be streamlined

ETAM: 2015 EBITDA rose appreciably

MOA: swimwear added to assortment

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PEOPLE – corporate personalities

 

FELIX SULZBERGER: fails to retain Calida support

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FINISHING TOUCH – the smile for this week

 

PUNISHMENT: drugs bosses dressed in lingerie

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BACKGROUND – developments to bear in mind

 

LINGERIE: strong growth of online sales predicted

 

THE LATEST report on the Global Online Lingerie Market from research firm Technavio predicts that sales of the sector will exceed USD 58bn by 2020 after growing at a CAGR of over 17 per cent in the five years starting in 2016. The predicted growth is attributed to four main factors: increased smartphone penetration, growing e-commerce industry, price discounts and special offers and changing consumer preferences. The report notes that the positive trend also applies to developing countries, where changing lifestyle trends have made lingerie a product of regular purchase.

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Triumph International

 

The predicted growth of online sales in developing countries suggests that brands could find it more profitable to invest in online distribution rather than developing wholesale operations there.

 

See also:

SPAIN: online sales of clothing rise sharply

ITALY; stronger online sales of bodywear reported

UK: online sales record set in November

           

EU: consumer confidence declines

 

FEARS generated by terrorist attacks, heightened refugee problems and the possibility of Brexit combined to cause EU consumer confidence to decline by 3.2 points in the first quarter of 2016. The trend was reported by the GfK research organisation on the basis of consumer attitudes in the 28 EU countries. The mid-March bomb attack at Brussels airport is said to have had a major negative impact on consumers.

Hunkemöller

Hunkemöller

The extent to which the reduced confidence will affect sales of bodywear and legwear remains to be seen. But innerwear is likely to be less affected than the outerwear sector.

 

See also:

SPAIN: Consumer confidence nears historic high

GERMANY: weaker consumer confidence reported

ITALY: business and consumer confidence rises

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 THE APPAREL SCENE – news of brands and labels

 

UNDER ARMOUR: growth in Europe accelerates

 

MAJOR US activewear brand Under Armour said that it would open a new European HQ in Amsterdam during 2017. The new office will complement the existing presence of the company in France, Germany and the UK and reflects its intention to assume full control of its operations in a number of key markets in Europe. At the same time, the company stated its objective to raise its sales to USD 7.5bn by 2018. In 2015, the company raised its sales by 28.5 per cent to USD 3.96bn and declared a profit of USD 232.5m, up by 11.7 per cent against the preceding year.

Under Armour

Under Armour

The brand will meet its growth objective, which exceeds market expansion by a considerable margin, only by winning sales from competitors. Consequently, other brands can expect appreciably stronger competition in the remaining months of 2016 and through the coming years.

 

See also:

UNDER ARMOUR: sales rights in Spain renegotiated

UNDER ARMOUR: new sports bra range launched

UNDER ARMOUR: new online store opened in Germany

 

CONTROL BODY: diversifies into activewear

 

ITALIAN producer of seamless shapewear garments Control Body has added activewear to its product range. The new range features sports bras, racer-back tops and leggings that smooth the abdomen and lift the buttocks, all made with breathable fabrics and designed to provide support as well as comfort.

Control Body

Control Body

The move provides further evidence of the blurring of distinction between the two clothing categories.

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CALVIN KLEIN: German expansion maintained

 

MULTINATIONAL innerwear brand Calvin Klein opened its seventh retail store in Germany. The 120m2 store occupies two floors of the premium Schadow Arkaden location in the city centre of Düsseldorf and proposes underwear, sleepwear and loungewear for men and women.

Calvin Klein

Calvin Klein

The continued growth of the retail operation promises to help boost also the wholesale business of the brand.

 

See also:

ARVIND: Calvin Klein underwear plans defined

 

FRUIT OF THE LOOM: logistics centre expanded

 

A LEADING US brand of underwear, Fruit of the Loom, opened an extension of its Palmetto Distribution Center that is intended to enhance its ability to fulfil growing online sales of the brand. The 37’000m2 extension more than doubles the floor space of the centre, providing the capacity to ship some 60m SKUs a year. In addition to an automated packaging system used to serve wholesale customers there is a special section dedicated to fulfilling direct-to-consumers e-commerce orders. Currently, online orders account for 1 per cent of sales but it is hoped to raise the proportion to 7 per cent in the coming years.

Fruit of the Loom

Fruit of the Loom

Some underwear brands believe that growth of online sales will be limited by consumers’ desire to check out fabric and fit before purchasing. But we believe that the convenience of home shopping will boost online sales of innerwear considerably in the years to come.

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GHIRO: bid made to enter US market

 

ITALIAN lingerie brand Ghiro, which is produced by Trucco Tessile, concluded a distribution agreement in the US with local marketing and distribution specialist DSNews. Initially, the new US distributor intends to focus on the basic collection of Ghiro and will expand later into seasonal fashion collections. Further, once distribution has been achieved in the US, DSNews plans to expand the operation into Canada and Mexico.

Ghiro

Ghiro

If the sales drive in North America produces expected results, it will boost considerably the export sales of the brand.

 

See also:

TRUCCO TESSILE: underwear and beachwear firm acquired

 

HUIT: latest loss leads to failure

 

ACQUIRED in 2010 by Eveden, which was itself acquired by Wacoal in 2012, long-troubled swimwear and lingerie brand Huit went into administration in early April 2016 after having declared a 2015 net loss of EUR 2m on sales of 6.2m. According to CEO Patrick Bordessoule the brand’s poor performance was due partly to a 2 to 3 per cent decline in French bodywear consumption and partly to its lacking a dedicated online store. He added that negotiations had begun with several potential buyers of the business and that deliveries of the 2016 range had been completed.

Huit

Huit

Founded in 1968, the brand should have accumulated sufficient recognition and consumer loyalty to allow viable operations to be resumed.

 

HANESBRANDS: Q1 results show higher EBIT

 

BODYWEAR and activewear giant HanesBrands revealed first quarter results that showed a 1 per cent rise in net sales, to USD 1.22bn, and adjusted operating profit 10 per cent higher at USD 147m. Chairman and CEO Richard A. Noll commented: “We remain focused on our previously announced sales initiatives, reaping acquisition synergies, expanding margins and developing growth plans for our pending acquisition of Champion Europe.”

Bali by HanesBrands

Bali by HanesBrands

Despite the considerable expansion of the business in recent years, the company appears to remain focused on further growth.

 

See also:

HANESBRANDS: Champion Europe acquired

HANESBRANDS: 2015 sales hit new high

HANESBRANDS: European labels to be retained

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DISTRIBUTIONevolution of chains and channels

 

VICTORIA’S SECRET: operation to be streamlined

 

A BRAND restructuring move being made by lingerie chain Victoria’s Secret involves the elimination of some merchandise categories and of its printed catalogue. In a bid to streamline operations and to focus on strongest categories, the business is to be organized into three business units: Victoria’s Secret Lingerie, Pink and Victoria’s Secret Beauty. The brand overhaul will lead to a cut of 200 jobs in the Columbus and New York offices. CEO Leslie H. Wexner commented: “We are making these changes to accelerate our growth and to strengthen the business for the long term by narrowing our focus and simplifying our operating model. I am certain that these changes are necessary for our industry-leading brands to reach their significant potential … nonetheless, decisions about people are the most difficult ones to make, and we are taking care to support associates who are being affected by these changes.”

Victoria's Secret

Victoria’s Secret

In particular, the separation of the lingerie and beauty businesses, with different product groups that do not necessarily appeal to the same consumer segments, should prove to be a beneficial move.

 

See also:

VICTORIA’S SECRET: start-ups in India to be helped

VICTORIA’S SECRET: Q1 sales rise by 8 per cent

VICTORIA’S SECRET: first stores in Italy to open soon

 

 

ETAM: 2015 EBITDA rose appreciably

 

ANNUAL results of distribution group Etam showed that nominal sales had risen by 6.2 per cent to EUR 1.29bn although like-for-like sales at constant exchange rates rose by only 1.6 per cent. Nevertheless, EBITDA rose by 11.7 per cent to EUR 95.4m while net profit was 7 per cent higher at EUR 25.8m. In Europe, the like-for-like sales growth of 2.9 per cent was achieved mainly as a result of lingerie sales by the Etam and Undiz retail networks while the group’s decision to improve the margin rate, rather than the sales volume, in China caused like-for-like sales there to slip by 2.5 per cent. The Group said that it continues to invest in the digital evolution of its brands as well as in the deployment and internationalization of its new store concepts.

Etam

Etam

The 2015 results show that the group managements strategy is well adapted to meet current market conditions in Europe as well as in China.

 

See also:

ETAM: Undiz brand to be developed in Spain

ETAM: 100th anniversary celebrated in 2016

ETAM: appreciable growth achieved in 2015

 

 MOA: swimwear added to assortment

 

FRENCH chain of fashion accessories stores Moa added a beachwear capsule to its assortment for S/S 2016. The capsule includes four styles of women’s swimwear in four colours as well as two coordinated styles for girls. Tops and bottom can be bought separately for EUR 20, allowing consumers to mix and match at will. Other items include fouta towels, beach bags and sunglasses. The capsule will be available in all of the chain’s 98 stores in France and 62 stores in other countries.

Moa

Moa

The move will help to broaden opportunities for buying swimwear in locations other than resort towns.

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PEOPLE – corporate personalities                                      

 

FELIX SULZBERGER: fails to retain Calida support

 

AT THE CLOSE of the AGM of Swiss bodywear brand Calida, the Board announced that a motion to maintain the presence of Felix Sulzberger on the company’s Board of Directors had failed to win the necessary support. This marks the end of a 14-year collaboration of Sulzberger with the company.

Felix Sulzberger

Felix Sulzberger

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FINISHING TOUCH –

 

PUNISHMENT: drugs bosses dressed in lingerie

 

MEXICAN law enforcers are reported to have adopted a novel method of humiliating drugs cartel chiefs after arrest. The drugs bosses are dressed in women’s lingerie, forced to kiss one another and photographed while wearing the lingerie.

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The news suggests that all Mexican drug dealers are male heterosexuals. But if the assumption is found to be wrong, the results could prove counter-productive.

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