From the Sector

With a current booking level of almost 90% for the international fabric trade show MUNICH FABRIC START, KEYHOUSE, THE SOURCE and BLUEZONE, Munich Fabric Start Exhibitions GmbH is starting the new season for Autumn.Winter 24/25 on a strong footing. From the organisers' point of view, the main reason for the high level of acceptance is the rebalancing of the July dates.

The international fabric trade show MUNICH FABRIC START (18 to 20 July), the innovation hub KEYHOUSE, theb one-stop sourcing platform THE SOURCE and the international denim trade show BLUEZONE (18 and 19 July) will move ahead and at the same time increase their relevance in the international trade show scene. For a large part of the visitors, the earlier date is closer to the collection rhythms and offers more time for further developments.

What's new?
Due to the early date of MUNICH FABRIC START and BLUEZONE, the Munich trade show duo with KEYHOUSE and THE SOURCE formats will function even more strongly as an impulse generator and leading international event. The Munich location will also be strengthened by the relocation of the DMI Fashion Day from Düsseldorf to the Bavarian capital. The first DMI FASHION DAY LIVE will take place the day before the next MUNICH FABRIC START at the MOC.

The course will also be set anew in September: The date, which remains important for the industry, will in future be occupied by reVIEW - the new format of the VIEW PREMIUM SELECTION for follow-ups and trends as well as new market developments. On an area of around 2,500 square metres, the first reVIEW Autumn.Winter 24/25 will be held on 13 and 14 September 2023 on the Zenith grounds in Motorworld.

For the period 1 March to 31 March, Renewcell 1 produced approximately 1,150 tonnes of prime quality dissolving pulp (within specification for Circulose®). About 1,300 tonnes were delivered to customers during the period. Total production output at Renewcell 1, including prime quality, was approximately 1,350 tonnes of dissolving pulp during the period.

On 30 March 2022, the European Commission presented its vision for the future of the textile industry. The strategy mainly focuses on reducing the environmental footprint and promote sustainability and transparency in the value chain.

EURATEX has welcomed the publication of the strategy, as it recognises the strategic importance of the European textile industry, and its core competitive values of quality and creativity. At the same time, the association has warned that translating that vision into reality is a delicate process, as the industry needs to reconcile sustainability with competitiveness. Making the green (and digital) transition should make companies stronger; the benefits should outweigh the costs.

This premise had a serious blow by the Russian war in Ukraine, which erupted at almost the same time when the strategy was launched, and has dramatically changed the economic context. Energy prices increased by a factor of 10 (!), putting the European industry at a significant disadvantage with its global competitors, leading to company shutdowns or relocations. Extended lock downs in China and defensive trade policies in the US and elsewhere have further generated uncertainty on the market and disrupted supply chains.

Today, one year after its publication, EURATEX remains carefully optimistic about the implementation of the strategy, but needs to warn against some important pitfalls on the road ahead.

1. Despite these turbulent times, the Commission is moving ahead “swiftly” in translating their EU Textile Strategy into (draft) legislation. At present, at least 16 pieces of legislation are on the table, which will turn the textile industry into a strictly regulated sector. The quality of this new regulatory framework is critical to the success of the strategy: upcoming rules need to be coherent, technically feasible and enforceable, and have a minimal cost for SMEs. EURATEX calls for a realistic timetable and “competitiveness test” for each piece of legislation before it is adopted.
2. Textile companies need to be informed and supported to comply with this new framework. This requires substantial funding which should be earmarked exclusively to the sector, covering areas of innovation and digitalisation, skills development, support to start ups and internationalisation, as well as access to affordable energy. In this regard, EURATEX calls on the Commission to translate the current “good intentions” into concrete decisions.
3. The EU strategy will not work if there is no demand for sustainable textiles, both from individual consumers and public authorities (procurement). Concrete measures need to be taken to offer a competitive advantage to sustainable and high quality textile products, e.g. through a different VAT rate, strict procurement rules, closer cooperation between the brands/retailers, producers and consumers.
4. The EU strategy could also fail, if the global dimension of the textile industry is ignored. Up to 80% of clothing products are produced outside the EU; these products need to comply with the new framework, but it remains unclear how to ensure that level playing field. Market surveillance needs to be stepped up massively – also targeting on line sales – but this would require significant efforts from member states, which are not available as of today.

Despite these important challenges, EURATEX remains committed to the successful implementation of the EU Textile Strategy. Director General Dirk Vantyghem commented: “We want to be a global leader in sustainable textiles, building on the entrepreneurship, quality and creativity of nearly 150,000 European textile companies. Creating this new framework is an incredible challenge, requiring a close dialogue between the industry and the regulator. But if well designed and carefully implemented, it can set a new era for the European textile industry”.

Kornit Digital LTD. announced to unveil its new Smart Curing and Rapid SizeShifter solutions at TecStyle Visions 2023. Kornit Smart Curing is an intelligent and adaptive solution significantly streamlining curing processes while delivering high-quality results. Additionally, the introduction of Rapid SizeShifter eliminates time-consuming direct-to-garment pallet changes typically required to address disparate applications.

Kornit’s new energy-efficient Smart Curing solutions include Orion for mid-level production, and Titan for higher-capacity volumes – both optimized for compatibility with Kornit Atlas MAX systems and based on field-proven solutions from the acquisition of Tesoma. These highly efficient curing systems sync production and finishing for an end-to-end process that reduces both energy consumption and total cost of ownership (TCO). Kornit’s Rapid SizeShifter for Atlas MAX is an adjustable pallet that quickly adapts to disparate application requirements – reducing costly downtime associated with pallet changes and streamlining production for accelerated time-to-market.

• Less C0₂ emissions + sustainable + recyclable

Sustainability first - this is the principle of the Institut für Textiltechnik (ITA) of RWTH Aachen University at JEC World 2023. ITA combines various lightweight construction technologies to reduce C0₂ and to use renewable and/or recyclable raw materials.

ITA presents innovations in the production of reinforcing fibres and in the textile processing of high-modulus fibres. It also shows the impregnation of high-modulus fibres with thermosetting and thermoplastic matrix systems.  

ITA will be exhibiting in hall 6 together with Textechno, Mönchengladbach, Germany, textile testing equipment and Maruhachi Fukui, Japan, Thermoplastic Composite Material Systems. The Interreg AACOMA project will also be presented at the stand. 

On the sidelines of the Intertextile Shanghai fair, the Swedish textile-to-textile recycling innovator Renewcell and the leading Chinese viscose manufacturer Tangshan Sanyou announced the next step in their partnership to make fashion circular that stretches back to 2018.

The two companies’ new shared ambition is to offer manufacturers and brands Circulose® viscose fibers made from 100% recycled textiles in commercial quantities starting in 2024. The collaboration has been facilitated by Ekman Group, Renewcell’s exclusive global trading partner.

“I am very happy to announce this acceleration of our long-standing partnership with Tangshan Sanyou. They were the first commercial producer of Circulose®-based fibers in the world, and the first to commit to sourcing significant volumes from us. Now, they aim to also be the first to commercialize 100% Circulose® content fibers” said Patrik Lundström, CEO of Renewcell, adding "I applaud Tangshan Sanyou’s vision and support to scaling next gen raw materials like Circulose®.”

The announcement, which follows the recent start of deliveries of 100% recycled textile Circulose® pulp from Renewcell’s newly opened Renewcell 1 recycling plant, is the result of successful validation of Circulose®’s quality in production at Tangshan Sanyou’s commercial-scale manufacturing lines. Tangshan Sanyou would strive to finish the mission of producing commercial volumes of 50% Circulose® content fibers during 2023 and work towards achieving the delivery of 100% Circulose® content branded viscose fibers to selected fashion brands and manufacturers starting in 2024. The two companies will cooperate to market the fibers globally using Renewcell’s Circulose® ingredient brand name.

Mr. Zhang Dongbin, Executive Vice General Manager of Tangshan Sanyou Chemical Fiber, says, "Through the collaboration with Renewcell, we have achieved to use Circulose® made from recycled cotton in the production of our viscose fibers, which is great beneficial to improving resource utilization efficiency and lowering carbon footprint of the industry. It has brought a huge impact in the sustainable fashion industry. We will continue putting efforts in forming good interaction between consumers, brands and enterprises, convey the concept of circular sustainable fashion, promote the greening of textile industry, and ensure a more sustainable way to ensure the sustainable development of the textile industry. Protecting the global ecological environment by applying sustainable solutions is our common goal."

Freudenberg Performance Materials Apparel is expanding its Super Elastic Interlinings Range with the introduction of the apparel industry’s first 100% recycled thermoplastic elastomers (rTPE) base content interlining series. In recognition of the growing use of elastic interlinings in apparel and building on the principles of Freudenberg Performance Materials´ Apparel’s House of Sustainability, these new products speak for high-quality and sustainable solutions.

The new, 100% rTPE base content interlinings are offered in 40-90 g/m2 weights, with wide applicability – from lightweight knit fabrics with applications in leggings and sports bras to elastic woven fabrics that require medium-to-heavy weights, such as denim, maternity clothes, or casual wear. Sustainable without compromising on quality, the new interlinings offer exceptional elasticity and retain excellent recovery capabilities.

The 100% rTPE base content interlinings reduce the need for virgin materials in apparel while also reducing the demand for the extractive practices necessary to produce such materials. Furthermore, the use of recycled components reduces materials in landfills and oceans, in consideration of full-garment lifecycle management.

The Swedish textile-to-textile recycling innovator Renewcell has signed a Letter of Intent with China Textile Academy Green Fibre Co. Ltd., an Chinese lyocell fiber producer, concerning a long-term commercial collaboration around man-made cellulosic fiber production.

The LOI provides the framework for an upcoming offtake agreement between the parties. The future legally binding offtake agreement will set out commercial terms for the delivery of 18,000 tonnes of Circulose® dissolving pulp to CTA Green Fibre over five years. CTA Green Fibre intends to use Circulose® as feedstock in the production of lyocell fibers to be supplied to textile manufacturers and fashion brands worldwide.

The agreement affirms the two companies’ intent to work together to supply lyocell textile fibers made using Circulose®, the 100% recycled textile pulp made by Renewcell, to global fashion brands in the coming years. The agreement has been facilitated by Ekman Group, Renewcell’s exclusive global trading partner.

Patrik Lundström, Renewcell’s CEO, commented: ”With this agreement, we take a new step in demonstrating the applicability of Circulose® in commercial-scale production of lyocell fibers. Lyocell is a high quality, low-impact fiber using closed loop production process which is highly sought after among our fashion brand partners that will now soon be available incorporating Circulose® recycled from textile waste. I am impressed by the innovative capacity and leadership of CTA Green Fibre and look forward to working together with them to make fashion circular together.”

From March 15-16, 2023, the spring edition of PERFORMANCE DAYS kicked off on the fairgrounds of Messe München. With around 2,685 visitors, the event organizers were particularly pleased with numbers up on the previous winter fair. High attendances were also evident at the Expert Talks on both days, which provided information on the latest color and fabric trends, news on developments in sustainability and new technologies from fiber manufacturers. The focal points of the show were marked by the PERFORMANCE FORUM, which showcased the fabric highlights for the spring/summer 2025 season as well as the two PERFORMANCE AWARD and ECO PERFORMANCE AWARD winners.

After the kick-off event in Munich in March, the industry now looks forward to the follow-up fairs in Portland from April 4-5, 2023 and in Shanghai, April 10-11, 2023.

New concept starting October 2023: Premiere for highlighted focus on footwear
As part of the upcoming PERFORMANCE DAYS, which will once again take place at the Messe München exhibition center on October 4-5, 2023, the event organizers will no longer focus explicitly on sustainable functional textiles and accessories, but will also focus on the footwear market.

To support the integration of the footwear market into the trade fair events in Munich, Portland, New York and Shanghai, the organizers have brought on board two industry specialists, Nina Conrad and Rucky Zambrano.

Nina Conrad has been active as a sustainability consultant in the textile and leather industry for many years, specializing in traceable and local supply chains. Her core business is the production of leather and leather goods derived from animals raised on certified organic farms. She is also a founding partner of the Sustainable Leather Foundation and co-founder of the Fibershed subsiduary DACH.

Rucky Zambrano is a industrial designer and expert. When he got to know Vibram in 1992, he shifted his career to footwear for reasons of passion. For 13 years now, Zambrana and Vibram have been a driving force in the footwear market and made the leap from performance to fashion, as witnessed with the Merrell Chameleon, the Prada Luna Rossa boat shoe sole or the latest Vibram FiveFingers models. He is currently responsible for footwear for the Finnish children’s outdoor brand Reima.

Major developments FY 2022

• Currency-neutral revenues up 1% reflecting growth in all markets except Greater China
• Double-digit increases in North America and Latin America, EMEA up high single digits
• Gross margin declines to 47.3% due to strong increase in supply chain costs and discounting  
• Operating profit at € 669 million, including one-off costs of € 312 million
• Operating margin decreases to 3.0%  
• Net income (continuing operations) of € 254 million includes € 350 million one-off costs
• Executive and Supervisory Boards propose dividend of € 0.70 per share

Major developments Q4 2022

• Currency-neutral revenues decline 1% impacted by termination of Yeezy partnership
• Gross margin at 39.1% reflecting increased supply chain costs and higher discounting
• Operating loss of € 724 million
• Net loss from continuing operations of € 482 million

Outlook for 2023
Underlying operating profit expected to be around break-even level
In 2023, adidas expects currency-neutral revenues to decline at a high-single-digit rate as macroeconomic challenges and geopolitical tensions persist. Elevated recession risks in Europe and North America as well as uncertainty around the recovery in Greater China continue to exist. The company’s revenue development will also be impacted by the initiatives to significantly reduce high inventory levels. In addition, while the company continues to review future options for the utilization of its Yeezy inventory, the guidance already reflects the revenue loss of around € 1.2 billion from potentially not selling the existing stock. Accounting for the corresponding negative operating profit impact of around € 500 million, the company’s underlying operating profit is projected to be around the break-even level in 2023.

Reported operating loss of € 700 million projected
Should the company irrevocably decide not to repurpose any of the existing Yeezy product going forward, this would result in the potential write-off of the existing Yeezy inventory and would lower the company’s operating profit by an additional € 500 million this year. In addition, adidas expects one-off costs of up to € 200 million in 2023. These costs are part of a strategic review the company is currently conducting aimed at reigniting profitable growth as of 2024. If all these effects were to materialize, the company expects to report an operating loss of € 700 million in 2023.