Global Apparel Markets: Business Update, 3rd Quarter 2011

Date: November 22, 2011
Pages: 35
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US$ 785.00
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Publisher: Textiles Intelligence Ltd
Report type: Strategic Report
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ID: G3659F7C63AEN
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Global Apparel Markets: Business Update, 3rd Quarter 2011
Global sales of apparel and home textiles made from organically grown cotton reached an estimated US$5.16 bn in 2010, while US clothing imports, EU clothing imports and China’s clothing exports were all up in value terms in the first half of 2011. Several companies have reported increases in their net sales—including Abercrombie & Fitch, Asos, Benetton Group, Gap, Gildan Activewear, H&M, Inditex, Levi Strauss & Co, Marks and Spencer (M&S), Perry Ellis International and TJX Companies—and clothing market demand in Europe is predicted to grow by 4.5% per annum between 2010 and 2015.

New stores have been opened by Arcadia Group, Athleta, Forever 21, Gap, Inditex and New Look, while Gap, H&M, Saks Fifth Avenue and Tommy Hilfiger will open new stores in late 2011 and early 2012. Meanwhile, Inditex has opened online stores for six of its brands.

Investigations by Greenpeace have found evidence that two textile factories in China are responsible for causing toxic water pollution, and that clothing and certain fabric-based shoes sold by major clothing brands are manufactured using hazardous substances. Giorgio Armani and Versace will ban the use of sandblasting in the manufacture of their products, H&M has joined the Fair Wage Network, and M&S is developing a clothing supply chain traceability programme. Sports Direct has bought a majority stake in USC and Cruise Clothing while Van de Velde has acquired 87% of the shares of Rigby & Peller.

Tommy Hilfiger has acquired a 50% stake in Arvind Murjani Brands (AMB) and Inditex will acquire five of its franchised retail brands from Fawaz Alhokair. A franchise agreement relating to Arcadia’s Topshop and Topman brands in Australia has been entered into by Arcadia Group and Next Athleisure, while a partnership agreement relating to the distribution of the David Beckham Bodywear range has been signed by H&M and David Beckham. Inditex Group and Tata Group have signed a joint venture agreement to establish new Massimo Dutti stores in India, and a licensing agreement relating to Nina Ricci branded products has been entered into by Itochu and Puig. Meanwhile, a new joint venture agreement relating to Calvin Klein branded apparel and accessories has been signed by the Warnaco Group and Brand Marketing India, and Louis Vuitton and Burberry have won damages in a counterfeiting and copyright case in Canada. The EU has concluded a free trade agreement with South Korea, the US Trade Representative (USTR) has launched a new online sourcing directory for textile and apparel companies, and Tempe has opened a new logistics centre in Spain. Several events took place in September 2011 in Barcelona, Spain, including the International Exhibition of Textile Machinery (ITMA), the annual Textile Exchange Sustainable Textiles Conference, the International Textile Manufacturers Federation (ITMF) conference and the first World Textile Summit.
SUMMARY

ACQUISITIONS, DIVESTMENTS AND MERGERS

Inditex will acquire five of its franchised retail brands in Kazakhstan from Fawaz Alhokair
Sports Direct has purchased a majority stake in USC and Cruise Clothing
Tommy Hilfiger has bought a 50% share in Arvind Murjani Brands (AMB), a joint venture which represents Tommy Hilfiger products in India
Van de Velde has acquired 87% of the shares of Rigby & Peller

ANTI-COUNTERFEITING

Louis Vuitton and Burberry have won damages totalling C$2.48 mn (US$2.56 mn) in a counterfeiting and copyright case in Canada

CORPORATE SOCIAL RESPONSIBILITY (CSR)

A Greenpeace investigation has found evidence that two textile factories in China are responsible for causing toxic water pollution
A Greenpeace investigation has found that clothing and certain fabric-based shoes sold by major clothing brands are manufactured using hazardous substances
H&M has joined the Fair Wage Network initiative to promote fair wages for workers across its global supply chain
Giorgio Armani has announced a ban on the use of sandblasting in its global supply chain
Marks & Spencer (M&S) is developing a clothing supply chain traceability programme
Versace has announced a ban on the use of sandblasting in its global supply chain

EVENTS

The ninth annual Textile Exchange Sustainable Textiles Conference was held during September 19-20, 2011
The International Exhibition of Textile Machinery (ITMA) was held in Barcelona, Spain, during September 22-29, 2011
The International Textile Manufacturers Federation (ITMF) Annual Conference 2011 and the
World Textile Summit 2011 were held in Barcelona, Spain, during September 2011

FINANCIAL RESULTS

Abercrombie & Fitch: net income surged by 64% as net sales rose by 23% in the second quarter of 2011/12
Asos: total revenues increased by 63% in the first quarter of 2011/12 thanks to strong international sales
Benetton Group: net sales rose by 1.7% in the first half of 2011 but net income fell
Gap: net income fell by 19% as net sales rose by 2% in the second quarter of 2011/122
Gildan Activewear: net earnings were up by 45.4% as net sales rose by 34.0% in the third quarter of 2010/11 Outlook
H&M: sales rose by a marginal 0.3% but gross profit fell by 5.0% in the first nine months of 2010/11
Third quarter 2010/11
First nine months of 2010/11
New stores
Inditex: net income rose by 14% as net sales increased by 12% in the first half of 2011/12
Levi Strauss & Co: net income recovered in the second quarter of 2010/11 as net revenues rose by 12%
Marks and Spencer (M&S): sales rose by 3.2% in the first quarter of 2011/12
Perry Ellis International: net income recovered as total revenues increased by 33% in the second quarter of 2011/12
TJX Companies: net income rose by 14% as net sales increased by 8% in the second quarter of 2011/12

INTERNATIONAL TRADE POLICY

The EU has concluded a free trade agreement with South Korea

JOINT VENTURES, COOPERATION, LICENSING AND DISTRIBUTION

Arcadia Group has signed a franchise agreement with Next Athleisure relating to its Topshop and Topman brands in Australia
H&M and David Beckham have signed a partnership agreement relating to the distribution of the David Beckham bodywear range
Inditex and Tata Group have signed a joint venture agreement to establish new Massimo
Dutti stores in India
Itochu and Puig have entered into a licensing agreement relating to Nina Ricci branded products
The Warnaco Group and Brand Marketing India have signed a new joint venture agreement relating to Calvin Klein branded apparel and accessories

MANUFACTURING FACILITIES

Tempe has opened a new logistics centre in Elche, Spain

MARKET FORECASTS

Clothing market demand in Europe is set to grow by 4.5% per annum between 2010 and 2015

MARKETS

China’s clothing exports were up in value by 24.3% in the first half of 2011
EU clothing imports increased by 16.1% in the first half of 2011
Global sales of apparel and home textiles made from organically grown cotton reached an estimated US$5.16 bn in 2010
US clothing imports were up in value by 13.1% in the first seven months of 2011

NEW STORES

Arcadia Group has opened a Topshop and Topman flagship store in Chicago, USA, and will open a Topshop and Topman store in Las Vegas, USA
Athleta has opened two stores in New York City as part of its expansion strategy
Forever 21 has opened a new flagship store in London, UK
Gap has opened its first gap flagship store in Rome, Italy
Gap will open stores in France, Guam and Vietnam
Gap has opened its first Banana Republic store in Russia
H&M will open its first store in Sofia, Bulgaria
Inditex has opened a Zara store in India, and its first Bershka store in Germany
New Look has opened its first store in Romania
Tommy Hilfiger will open up a new flagship store in London, UK
Saks Fifth Avenue will open its first store in Almaty, Kazakhstan

ONLINE RETAILING

Inditex has opened online stores for six of its brands for consumers in 15 European countries

SOURCING

The US Trade Representative (USTR) has launched a new online sourcing directory for textile and apparel companies

LIST OF TABLES

Table 1: Europe: clothing market demand, selected markets, 2006-15"
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