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U.S. Fashion Industry Association Releases Fourth Fashion Industry Benchmarking Study

The United States Fashion Industry Association (USFIA) has released its fourth annual Fashion Industry Benchmarking Study, surveying 34 executives from leading fashion and apparel brands, retailers, importers and wholesalers.

Although there is optimism about the five-year outlook for the fashion industry, many executives are reluctant about positive growth due to political and economic conditions. When surveyed, 71.0 percent of fashion industry executives said they were optimistic about the five-year outlook, which was a severe decline from 92.3 percent the previous year 2016.

Retail executives cautious about the five-year outlook for fashion

Possible reasons for the decline include the rise of new challenges for the industry, specifically protectionist trade policy agenda in the United States, which executives consider their top challenge this year, up from being ranked the number 10 challenge last year.

The study was conducted in conjunction with Dr. Sheng Lu, assistant professor at University of Delaware Department of Fashion & Apparel Studies. The survey sent out asked respondent about business outlook, sourcing practices, utilization of Free Trade Agreements and preference programs and views on trade policy.

Key findings from the study include:

    - Executives are more concerned about trade protectionism, market competition from e-commerce, and supply chain risk than they are about cost; “increasing production or sourcing cost” dropped from the number 2 concern in 2016 to the number 7 concern in 2017.
    - Only 36 percent of executives expect to increase sourcing from Vietnam, compared to 56 percent last year; this is likely due to the United States’ withdrawal from the Trans-Pacific Partnership.
    - Among all sourcing destinations examined this year, Bangladesh is considered the most competitive in terms of price—but also the riskiest in terms of trade compliance.
    - Free trade agreements remain underutilized; only the North American Free Trade Agreement (NAFTA) is utilized by more than 50 percent of companies surveyed.
    - Ethical sourcing and sustainability are given more weight in sourcing decisions, with 87.5 percent saying these issues have become more important in sourcing decisions today versus five years ago; 100 percent of companies surveyed audit their suppliers.
    - It’s unanimous: 100 percent of respondents oppose the U.S. border adjustment tax (BAT) proposal.

While the fashion industry has relied on increased globalization, Donald Trump has proposed nationalist policies that could affect trade agreements that have long benefitted the retail sector. Market competition from e-commerce sites like Alibaba, which gives everyone from Amazon to Wal-Mart a run for their money, is also of major concern to U.S. retail executives. The industry is in a very much wait-and-see state right now.

photo: via usfashionindustry.com
Battle of the Bra: Lululemon sues Under Armour over sports bra design

London - With sports bra sales on the rise across the globe, thanks in part to the rise of athleisure, retailers, and brands are doing everything they can to protect their assets. So it should come as no big surprise that Canadian activewear label Lululemon Athletica filed a lawsuit against US sportswear giant Under Armour over trademark infringements on its sportswear bras.

In the lawsuit filed last Friday in a Delaware court, Lululemon alleges that Under Armour has copied the patent designs of its sportswear bras without its permission. The main sports bra design in question is Lululemon's 52 US dollar Energy bra, which features four straps which crisscross on the back. The Canadian label claims that Under Armour copied its design in four of its sports bras, including the Armour Eclipse Low Impact, Armour Shape Low Impact, UA On the Move and UA Printed Strappy Bra sports bras, according to media reports.

Battle of the Bra: Lululemon sues Under Armour over sports bra design

Lululemon accuses Under Armour of copying its sports bra design

In its filing, Lululemon claims that: "Under Armour’s unauthorized acts have caused and will continue to cause irreparable damage to Lululemon and its business." The activewear retailer, best known for its yoga wear, argues that Under Armour sports bra designs are so similar to its own that they are likely to cause confusion among consumers.

"An ordinary observer will perceive the overall appearance of the designs of the infringing products to be substantially the same as the overall appearance of the designs of the patent-in-suits," added the claim. Lululemon is seeking an injunction to stop Under Armour from further infringing on its design patents and trademarks, an end of all the sales of its allegedly copied sports bras, damages from Under Armour's profits from its bra sales as well as attorneys' fees and costs.

This is not the first time the Canadian activewear retailer, which reported 2.34 billion US dollars in revenues last year, has taken a rival brand to court over its patent designs. In 2012, Lululemon mounted a lawsuit against Calvin Klein for allegedly copying the waistband design of its Astro pant. The two companies ended up settling the lawsuit out of court for an undisclosed sum.

Battle of the Bra: Lululemon sues Under Armour over sports bra design

The lawsuit marks both Lululemon's and Under Armour growing interest in the booming sports bra market, which is expected to account for more than 1 billion US dollar sales annually in the United States alone. Sports bra, soft bra, and bralettes are said to be the main drivers in the bra industry at the moment, as consumers seek out comfort and functionality over traditional designs.

Photos: Lulemon and Under Armour sports bra Enegry and Eclipse,

Nearly a year ago, former American Apparel founder Dov Charney started a new apparel company. Dubbed Los Angeles Apparel, it seems that his new venture is expected to do well.

In August of last year, he told FashionUnited that he was in the development and research stage of a new company. Months later, the endeavor has been publicly confirmed as his new apparel company, although it doesn't stray too much from his past label. While his past company had many mistakes, it seems in the future Charney is aiming to do things differently. “We’re stepping forward and I’m going to use the second half of my life to build a spectacular company,” he told FahsionUnited at the time.

Currently, there are no numbers officially posted of Los Angeles Apparel's success. However, Charney states that he "expects to surpass 20 million dollars in annual sales" in the next year, as reported by Business of Fashion. He also is hoping to expand the business in retail similar to American Apparel's expansion. While there is no confirmation on how this plan of action will come to fruition, considering his past experience in retail, it is likely that the label may do well.

The warehouse for the new brand is located in South Central Los Angeles with approximately 350 employees. Essentially starting over, the new brand has similar elements as it sells high-quality basics such as shirts and sweaters. According to Business of Fashion, the new line is headed towards a similar effects even towards having a tagline that reads "Made in South Central," echoing American Apparel's "Made in Downtown LA" tags. Whether or not the label will be successful still remains to be seen.

C&A pulls out of RussiaFashion retailer C&A is withdrawing from the Russian market and is said to have already ceased collaboration with its Russian partner, the Russian Trade Group (RTG). This was announced by Thorsten Rolfes, head of communication at C&A, according to RNS.

The decision was already taken a few months ago, in February, when the franchise agreement between C&A and RTG ran out. In line with C&A's new global strategy, the company no longer wants to use the franchise model according to Rolfes.

The Russian Trade Group had been the sole licensee since 2004 and started with eleven store in 2005. The last one, in Moscow's shopping centre Gorod-2 Lefortovo, will soon shut its doors for good. According to Fashion Network, there are currently no new plans to continue with C&A stores in Russia.

In February, C&A had announced a new strategy to halt its decreasing turnover, namely to modernise the entire company. To this effect, it already closed a number of loss-making stores, but will also invest 1 billion euro to remodel existing ones. Within the next five years, the company hopes to update 80 percent of its store network.

C&A is not the only fashion company to pull out of Russia. In April, German discounter Takko closed its last Russian store. Now, fashion brand Mexx, since 2015 part of the Turkish textile company Eroglu, wants to shutter all of its Russian stores by 31st July because of a lack of profits. This was announced by operator BNS Group according to Russian news daily Vedomosti .

Photo: C&A Facebook

Zara's international expansion focuses on India and Belarus

Spanish fast fashion chain Zara wants to focus its international expansion on two countries in particular: India and Belarus. In India, the brand will launch its online sales platform in October, while in Belarus, not only Zara but also other brands of the Inditex Group will open their first stores already in August. This was announced by Inditex chairman and CEO, Pablo Isla, at yesterday's annual general meeting at the head office in Arteixo, Spain.

He called the Group's strategy a “solid growth model”, fuelled by its ongoing international expansion with launches of flagship stores across the world and Inditex brands in 2016 and the first half of 2017. Isla further pointed to the model's topline and same-store sales growth of 69 percent and 37 percent, respectively, over the past five years, with positive results in all regions.

Despite being in India since 2010, Zara does not operate its own online sales platform yet but so far relied on in-store sales and third-party platforms, which will change from October onward. In Belarus, Inditex plans to open debut stores for its brands Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho and Zara Home.

In his performance review of the year 2016, Isla defined Inditex as a company “focused on its people, devoted to creative talent and underpinned by an integrated offline-online store model”.

Photo: Zara store in Mumbai / FashionUnited
Primark recalls men's flip flops over cancer causing chemicals

London - Fast-fashion retailer Primark pulled thousands of pairs men's flip flops from its shelves and issued a recall after finding they contain dangerous levels of cancer causing chemical, namely chrysene.

Primark is recalling three colours of its men's Ceder Wood State flip flops and offering a full refund to anyone who purchased a pair after discovering they contain high levels of chrysene, a carcinogenic substance, commonly used in darker coloured dyes. The flip flops have been listed on the European Commission alert system, Rapid Exchange of Information System (RAPEX), as a 'serious risk' and carcinogenic, as a person could be exposed if the product comes into direct and prolonged or repetitive contact with the skin.

Read more on Primark's ethics and view on sustainability here:

The flip flops, which feature a PVC upper and polyethylene sole contained more than Primark's 1.0 mg.kg requirement according to a statement on the value retailer's website. "It has come to our attention that the footwear product detailed does not meet the Primark usual high standards for chemical compliance," said the retailer. "With the safety of our customers and respect for the environment at the forefront of our minds, we have taken the decision to recall this product."

Customers who purchased this product which was on sale in stores from January 4 to June 2, 2017, will be given a full refund. Primark has launched a "thorough investigation" and halted all new orders following the product recalled, according to Sky News. The value retailer did not confirm the location of the factory in which the flip flops were made.

Photo: Primark

Vince recently has sought back up assistance for financial issues. Seeking out sister brand Rebecca Taylor, the contemporary brand has confirmed it may need help with purchase-order financing.

Vince filed with the Securities and Exchange Commission where the company confirmed a subsidiary has an agreement with Rebecca Taylor. The agreement states that the agreement will allow for Rebecca Taylor to purchase Vince-branded finished goods from certain supplies, according to WWD. Afterwards, the goods will be sold back to Vince. This is a way for the company to back itself financial in case of liquidity issues.

For now, the deal is meant as a way to help Vince's business if needed. The agreement is a back up plan in case Vince faces blocks and obstacles due to liquidity problems. Currently, the agreement has no set dates for how long it is in place for, according to the publication. The filing could end as soon as two months if one of the parties agreed to terminate.

Third of Burberry shareholders reject executive pay deal

One in three Burberry shareholders voted against the luxury fashion houses remuneration report in protest again pay deals for president Christopher Bailey and chief operating and financial officer Julie Brown at the company’s annual general meeting.

Over 32 percent of investors rejected the remuneration report, with even more investors withholding their votes in protest on Thursday morning. The vote comes after numerous attempts to appease to shareholder anger by reducing executive pay deals. The rejection vote is said to be the biggest since 2014, when more than half of the luxury fashion house’s shareholders voted against Christopher Bailey’s pay deal.

Chairman at Burberry, John Peace, defended the pay packages for leading executives during the AGM, saying: “My job is to work with the board and remuneration committee to do what’s right for the longer term. My job is to get the best we can for the company and I think in Julie we have an absolute star.”

Bailey’s total remuneration for the past year increased from 1.9 million pounds to 3.5 million pounds. Even though he waived his entitlement to any annual bonus, his total was boosted by a 1.4 million pound payout from am award of shares from a 2014 pay plan. In addition, Bailey is also set to receive shares worth some 10.5 million pounds this month from a share plan he awarded in 2013.

Brown, who joined the team at Burberry earlier this year, was paid 4.7 million pounds between January and March 2017 and was given a warm welcome in the form of 4.5 million pounds compromising of 4 million pounds in shares and 550,000 pounds in cash. However, Brown handed back 1.6 million pounds of the award following complaints from shareholder advisory groups.

“With the interests of shareholders and the company in mind, and with the support of Julie Brown, on 26 June 2017 we announced her decision to waive a portion of her buyout award and 75 percent of her 2016/17 EPS award,” said Burberry in a statement following its AGM. “We also provided additional information on the assessment of performance for Christopher Bailey’s 2014 exceptional performance-based share award on our website.”

“We appreciate the importance of shareholder alignment on remuneration matters and would like to thank our shareholders for the time they have invested with us. We will continue to build on the constructive dialogue we have established, and will give full consideration to their feedback in our decision-making over the upcoming year,” added the statement.

Image: Burberry

Solillas launches crowdfunding campaign

London-based Balearic footwear brand Solillas has launched its first public fundraising appeal via equity crowdfunding platform Crowdcube to raise 350,000 pounds to help fuel the growth of the summer sandal in the US.

Solillas has become known for its fresh take on a classic Menorcan sandal and has achieved rapid success over the last five years, with this year’s sales forecast set to top 1 million pounds, and since 2014 the brand has sold more than 150,000 pairs.

Solillas launches crowdfunding campaign

The footwear brand is hoping to raise 350,000 pounds for 14 percent of the equity on Crowdcube as it looks to fund its expansion in the US with a “firm wholesale and retail presence”. In addition, the money raised will support the growth of its own web experience, including internationalising its e-commerce and to create an international digital marketing strategy to build on its loyal following in the UK, US, and EU.

Solillas is also looking to establish its first permanent store that will open in early 2018 in London. In recent years it has hosted temporary stores at Boxpark, Westfield, and Old Street in the capital.

Solillas founder Jonnie Matthew said: “We are so excited to be sharing our dream and inviting new investors into the Solillas family. We want a chance for our customers, our followers, our fans, and our friends to be a central part of the Solillas story and own their part of our success.

“In the current market you have to offer something different to the crowded retail mass and we are very excited about doing just that.”

Solillas launches crowdfunding campaign

Footwear brand Solillas launches campaign to raise 350,000 pounds

To date Solillas has been 100 percent owned and funded by its founders, husband and wife Jonnie and Sarahjayne Matthew. However, in May it did raise 50,000 pounds from Dean Forman and Nigel Brooks, founders of Capital Support, who are backing this fundraising appeal.

The hope is to build Solillas into a globally recognised brand like Toms or Birkenstock, said the footwear label.

Solillas was founded in 2009, it designs bohemian updates on traditional Spanish leather sandals that are handmade using premium leathers in second generation family factories in Spain, using traditional techniques and classic stitch-down construction.

The footwear brand first launched in Urban Outfitters in the UK in 2012 and are now sold nationwide in Office and Schuh nationwide, as well as Topshop, Selfridges, House of Fraser and Liberty. In the US, they are stocked in Free People, Urban Outfitters and Abercombie and Fitch, as well as international across 25 countries.

Images: courtesy of Solillas

Coach completes tender offer to takeover Kate Spade

London - Coach announced that its wholly owned subsidiary successfully completed its tender offer to acquire Kate Spade & Company.

The New York-based company has acquired all the outstanding shares of common stock at 18.50 US dollars a share, for a total of 2.4 billion US dollars. The announcement comes after Coach extended its tender offer on July 10, 2017, at 5:00 pm EDT from its previously scheduled expiration date of June 23, 2017, at 11:59 pm EDT.

Following the successful completion of the tender offer, both Coach and Kate Spade & Company expect to complete the acquisition of all remaining outstanding shares of the luxury lifestyle label on Tuesday, July 11, 2017.

Afterwards, the merger of Coach, Inc.’s wholly owned subsidiary into Kate Spade & Company will take place, which sees Kate Spade & Company become a wholly owned subsidiary of Coach. All Kate Spade & Company shares will be delisted from the New York Stock Exchange.

Photo: Coach website