From the Sector

• Considering that 2024 summer discounts have increased compared to the previous year (+6%), even sharper price cuts are expected for Black Friday and Cyber Monday
• Outerwear: the growing popularity of suede garments suggests that brands should focus their discounts on other outerwear, such as down jackets
• Sneakers: basic and slim-fit models are selling out quickly, while those with a more structured fit are experiencing slower turnover

With Black Friday and Cyber Monday just around the corner, fashion brands are called upon to make conscious and targeted decisions to remain competitive during this peak season. In this context, Lectra, a leader in Industry 4.0 within the fashion, automotive and furniture sectors, leveraged real-time data from Retviews – its AI-powered solution for automated market intelligence to offer insights on increasing sales, reducing stocks and boosting profitability. These tips aim to guide brands in developing the most effective discount strategies based on key fashion trends for the year’s most popular shopping period.

Discounts: marked reductions are expected, but targeted at specific categories
For brands, preparing year-end discounts require careful planning to align with consumer preferences. The summer sales period, which represents the highest sales peak before winter promotions, serves as a valuable indicator. AI-based solutions, such as Retviews, are useful to identify and track items that only sell with discounts versus those with high sell-through rates and regular restocking. This allows brands to pinpoint when and where discounts are necessary, optimizing inventory and maximizing profitability.

In particular, Retviews data shows that summer discounts in Europe increased by 6% in 2024 compared to the previous year, suggesting even sharper price cuts for Black Friday and Cyber Monday.

In 2023 the average discount rate slightly decreased compared to 2022 (35% vs 37%); however, weaker summer sales this year indicate a greater quantity of products in stock, which may prompt brands to increase their reductions (following a trend that had already established itself in the United States in 2023, when discount rates had risen to 40%, compared to 37% in 2022).
Strategic and targeted price reductions, however, will help brands maintain margins while also meeting the demands from fashion enthusiasts. So, which product categories are likely to see the most significant discounts?
 
Autumn jackets: full price for suede outerwear, discounts on down jackets
In the autumn-winter season, outerwear is at the heart of collections, with this year's styles ranging from denim and leather to suede. Suede stands out as a premium, on-trend fabric with high consumer demand. For instance, in ZARA's latest collection, suede jackets quickly became bestsellers, with the brand’s blazers consistently selling out and being restocked, despite their premium pricing.
 
The popularity of suede highlights its potential as a full-price item, allowing brands to focus discounts on other pieces and prioritize full-price sales for trend-driven items. Classic and timeless styles continue to dominate, from tailored blazers to sophisticated silhouettes seen in prêt-à-porter, premium, and luxury collections. Meanwhile, down jackets, which are a key part of the Gorpcore trend, could now be considered a less promising investment for brands and may therefore see deeper discounts this Black Friday.

Sneakers: slim fits are bestsellers, while running shoes see lower demand
When it comes to sneakers, there has been a surge in popularity for classic, aerodynamic styles, with consumers gravitating towards slim and basic models inspired by Adidas classics such as Sambas, Gazelles, and Spezials. These slimmer, retro-inspired models are selling out quickly, while more structured sneakers appear to have slower turnover rates. According to Retviews data, retro and colorful sneakers have become bestsellers in brand collections from Adidas, Puma and Zara. On the other hand, bulkier, running-style sneakers are experiencing lower demand, with larger stock levels. Consequently, these items may be subject to special discounts.

In-store Asia, a trade fair for retail resources and investments in store design, visual merchandising and in-store marketing on the Indian subcontinent will again be held in Mumbai from 13 to 15 June 2024. Over the course of the 15 years of its existence it has become established as the biggest get-together of retail decision-makers in India. Here, over 4,500 players from retail, consulting and services, manufacturers as well as retail solution providers come together.

Visitors to In-store Asia have the opportunity to discover a wide variety of exhibitors showcasing their products and solutions for the retail sectors including:

• Point-of-Purchase (POP) displays and interactive flatscreens
• Visual Merchandising (VM) and store fittings
• Signage and graphic design solutions
• Retail technologies for improving customer retention
• Tailor-made store design services
• Start-up initiatives for the retail sector

The 2-day conference at In-store Asia provides a platform for discussions about current retail trends in India and the world over. More than 40 key speakers from India and abroad will share their forecasts, latest trends and use cases on the topics of retail markets, retail experience design, sustainability, visual merchandising, retail technology and store fitting under the inspiring motto “Connected, Collaborative, Conscious”.

Highlights at the trade fair amongst others include the VM&RD Retail Design Awards and the VM Challenge, two events that honour special achievements and innovations in visual merchandising and store fitting. The VM&RD Retail Design Awards acknowledge outstanding store fitting projects in a total of 24 categories. The VM Challenge is a unique live window display contest for the visual merchandising community where six teams compete to dress a window on a given theme.

The 14th in-store asia will be held in Mumbai from 1 June to 3 June 2023. The trade exhibition for retail resources and investment in store design, VM and in-store marketing gathers decision-makers from more than 7,500 retail companies, consultants, service providers, and manufacturers, bringing together over 100 exhibitors.

Since 2018, in-store asia has been a member of the international trade fair family of EuroShop in Düsseldorf. It assembles all leading retail solutions providers from India and other countries under one roof. Here decision-makers from retail, including branded product producers, retail consultants as well as providers of services and solutions for retail, store designers, architects and VM experts come together.

The 3-day event includes not only the Expo area but also a wide range of side events comprising a Convention with over 30 speakers, the presentation of the coveted VM & RD Retail Design Awards as well as the VM Challenge, a live shop window challenge for top-notch visual merchandisers that is unique for India. Furthermore, the Retail Technology Pavilion will present new tools, for instance for retail management and customer tracking as well as solutions revolving around AI & virtual reality, NFTs, smart checkout all the way down to store management, retail security and payment. Celebrating a premiere here will be the Start-up Hub, which will provide emerging, innovative companies with a stage to present themselves to the industry.

The Indian retail industry has changed drastically; being one of the fastest growing retail markets it has proven a key driver for the Indian economy. The Indian retail sector is forecast to continue posting enormous growth rates due to such factors as growing urbanisation, rising household incomes, better connected rural consumers and rising consumer spending.

The European textiles and clothing sector is set for a major transformation which will affect both industry and workers. The EU’s strategy for sustainable and circular textiles aims to ensure that by 2030, textile products placed on the EU market are long-lived and recyclable with the industry moving from a linear to a circular business model. This strategy is accompanied with the EU’s transition pathway for a more resilient, sustainable, and digital textiles ecosystem linking the green transition with the digital transition while stressing the need for the sector to remain competitive.

IndustriAll European Trade Union (industriAll Europe) and Euratex, representing the workers and employers in the textiles and clothing sectors respectfully, jointly highlight both the challenges and opportunities of the giant forthcoming transformation of the sector and call for action to ensure that European industrial policy is fit for purpose and enables the sector to transform without negatively impacting workers or European industry.

Specifically, the European social partners jointly call for:

1. EU action to guarantee that the European textiles ecosystem remains competitive, including ensuring a level global playing field.
2. Measures to increase the demand of sustainable products including awareness raising campaigns, incentives such as lower VAT rates, and sustainability criteria in public procurement.
3. Measures to ensure access to green and affordable energy.
4. Policy gaps to be addressed, such as promoting a harmonised Extended Producer Responsibility approach across the EU and ensuring that SMEs can use Product Environmental Footprints.
5. Action to ensure that the Sustainable Products Regulation and the forthcoming Digital Product Passport will offer a transparent, predictable and SME-friendly framework.
6. Investment in attracting, training and reskilling workers including via concrete support for the EU Pact for Skills.
7. Appropriate funding, sound metrics and legal incentives at regional, national, and European level to support the green and digital transitions of the textile and clothing sectors.
8. Regional and national authorities to coordinate with sectoral social partners to ensure that the green and digital transitions are fair and just and do not leave the industry, regions or workers behind.

Aim: Reducing returns and thus increasing sustainability in fashion e-commerce

Hohenstein, a global market leader in apparel sizing and fit development, has invested in AI technology startup, Sizekick. The collaboration will enable accurate decisions on apparel size, improving online shopping experiences, reducing returns and preventing the associated CO2 emissions.

Hohenstein’s 1.3 million Euro investment in the 2022 startup will drive growth in the Sizekick team and enable the 2023 launch of its smartphone app for online shoppers.  The technology will enable online shoppers to find the right clothing size in a few seconds via smartphone.

Sizekick puts an end to unnecessary size-related returns in fashion online retail. The Munich-based company uses artificial intelligence and computer vision technology to recommend the right clothing size to customers in partner web stores. With the help of the integrated Sizekick software and a smartphone, anyone can find the right size in a few seconds. Fashion and sports brands, but also multi-brand stores or marketplaces can integrate the "Sizekick Button" in their online store. Sizekick offers its solution as Software-as-a-Service (SaaS).

"The strategic partnership with Hohenstein enables us, as a new AI solution, to meet the high demands of the market right at the start and to take on the role of technology leader. Our artificial intelligence is already learning thanks to the comprehensive Hohenstein database of 3D body scans. This is an extremely big advantage for our AI," highlights Jake Lydon, CTO at Sizekick.

NCTO President and CEO Kim Glas testified at a hearing on “Supporting U.S. Workers, Businesses, and the Environment in the Face of Unfair Chinese Trade Practices” before the House Ways and Means Trade Subcommittee.

In written testimony submitted to the committee, Glas outlines China’s rise to dominance of global textile and apparel production and its adverse impact on the U.S. textile industry, details ways to strengthen onshoring and nearshoring of supply chains, and provides recommendations on the critical policies needed to address these illegal trade practices and rectify inequities.

“China holds the dubious distinction of being the world’s leading purveyor of illegal trade practices that are designed to unfairly bolster a blatantly export-oriented economy,” NCTO President and CEO Kim Glas says. “These predatory practices take many forms, from macroeconomic policies that grant across-the-board advantages to their manufacturers, to industry specific programs intended to dominate global markets in targeted areas. The U.S. textile industry has been a longstanding victim of China’s predatory export practices.”

“China’s virtually unlimited and unrealistic pricing power coupled with its subsidies and lack of enforceable labor and environmental standards strips benefits and undermines policy objectives throughout the U.S. free trade and preference program structure,” Glas further notes.

“A program of maximum pressure must be developed and fully enforced to reconfigure textile and apparel sourcing patterns that currently place an unhealthy and heavily weighted dependance on China,” Glas adds. “With a strong trade policy holding China accountable, the opportunities are ripe to unlock further domestic and regional investment to bolster this critical textile and apparel production chain because of the important rules of origin for this sector.  We can nearshore more production, help address the migration crisis, and assist in addressing the urgent issue of climate change and create a win-win-win for workers in the United States, workers in the region, and consumers.”

Glas outlines key policy recommendations to the committee, including:

• Enact tax incentives and other targeted critical investments to strengthen Western Hemisphere trade relationships and re-shore manufacturing
• Close the Section 321 De Minimis Tariff Loophole
• Step up enforcement of forced labor of Uyghurs and others in the Xinjiang Uyghur Autonomous Region (XUAR)
• Firmly maintain Section 301 penalty duties on China for finished textiles and apparel products
• Immediately pass the MTB to help manufacturers with a limited list of critical inputs not made in the U.S. and review/close the mechanism in the MTB renewal which allows for finished products
• Strengthen buy-American practices for PPE and other essential products
• Block expansion of the Generalized System of Preferences (GSP) to include textile and apparel products
• Use trade enforcement in free trade agreements to mitigate transshipment schemes by unscrupulous importers seeking to illegally circumvent duties

• Checkpoint becomes the first RFID label manufacturer to achieve ARC certification with NXP’s UCODE 9 IC

Checkpoint  Systems,  a  vertically  integrated  supplier  of RFID  solutions  for  retail,  has again  demonstrated  its  commitment  to  innovation  by becoming the first manufacturer to have an RFID inlay featuring the new NXP UCODE 9 IC certified by Auburn University’s ARC Laboratory.

The  announcement  follows  news  that  Checkpoint  recently  became  the  first  company  to achieve ARC-certification for its Impinj M700-based inlays. By setting another new standard for the  industry,  Checkpoint  are  enabling  retailers  around the  world to  further  improve  their inventory visibility, reduce costs, improve performance and increase their overall profitability.

Delivering enhanced performance
Delivering the same ARC certifications as the Vortex U8 (Spec G, K and Q), the new Vortex U9 goes one step further by meeting the requirements of Spec N.

All aspects of the retail supply chain benefit from the increased read and write sensitivity of the  Vortex  U9.    The  11%  increase  in  read  distance,  decreases the time  for  inventory  cycle counts in both sparse or densely populated environments.  It also increases the compatibility of  smaller  RFID  labels with  RFID  Point  of  Exit  (PoE)  or  loss  prevention systems.  The  write sensitivity is significantly improved which is beneficial when encoding labels in densely packed cartons during source tagging and bulk encoding operations.

Finally,  the  new  Vortex  U9  will  provide  retailers  with  added  value  when  it  comes  to sustainability. NXP’s UCODE 9 RFID IC is 18% smaller than its predecessor, reducing the carbon footprint on an individual IC basis.

Scott Mitchell-Harris, Group Vice President Checkpoint Systems, commented:  “The investment Checkpoint has made over the past few years in our manufacturing facilities is evident. We have one of the most talented development teams who are continually seeking out the latest technology with new ideas to deliver market leading label designs.”

Checkpoint’s Vortex range delivers high read rate performance in semi-automated  physical inventory control and RFID as EAS. Vortex is ISO18000-6C compliant and can be encoded and printed tocarry EPC data in several formats -RFID EPC global protocol, printed bar code and human readable text.

The U.S. International Trade Commission held a public hearing on September 23-24 as part of its investigation of conditions impacting U.S. industry sectors and supply chains in the production of medical goods related to the COVID-19 pandemic.

National Council of Textile Organizations (NCTO) President & CEO Kim Glas is testifying on panel 5.

“Amid the devastating challenges of responding to COVID-19, NCTO members have been at the forefront of deploying manufacturing resources to address the critical need for personal protective equipment (PPE),” Glas said in testimony prepared for delivery.  “Our members quickly mobilized, proactively retooling production lines and retraining workers to provide U.S.-made PPE to frontline medical workers.”

“Despite these heroic efforts to confront the ongoing crisis, the onshoring of a permanent PPE industry will only materialize if proper government policies are implemented to incentivize the long-term investment needed to sustain PPE production in the United States,” Glas said.

Glas’ testimony as prepared for delivery can be found here.

•  Historically difficult market environment – trade tensions put textile value chain under pressure in 2019
•  Prices for standard viscose at a historic low
•  Positive development of the specialty fiber business with a revenue share of already 51 . 6 percent
•  Strategic investment projects are progressing according to plan
•  sCore TEN targets for 2024 defined – EBITDA of EUR 800 mn

Lenzing – Despite a generally difficult demand environment for textile fibers and a drastic drop in prices for standard viscose, the Lenzing Group recorded a solid business development in 2019. The disciplined implementation of the sCore TEN corporate strategy and the accompanying focus on specialty fibers once again helped to mitigate the effect of unprecedentedly low standard viscose prices.

As a result, revenue dropped by 3.3 percent from EUR 2.18 bn to EUR 2.11 bn in 2019, driven by lower selling prices as well as standard fiber volumes. Due to positive mix effects and more resilient specialty fiber prices, the share of specialty fibers increased from 45.5 percent to 51.6 percent of revenue. The earnings development was largely influenced by the decline in revenue, but also by negative currency effects on material and personnel costs. EBITDA (earnings before interest, tax, depreciation and amortization) fell by 14.4 percent from EUR 382 mn to EUR 326.9 mn. The EBITDA margin declined from 17.6 percent to 15.5 percent. Net profit, at EUR 114.9 mn, was 22.4 percent lower than in the previous year at EUR 148.2 mn. Earnings per share amounted to EUR 4. 63 ( 2018: EUR 5 . 61 ).

The National Council of Textile Organizations (NCTO) lauded Senate passage today of the U.S.-Mexico-Canada Agreement (USMCA).

“We are pleased the Senate voted swiftly to approve USMCA--a trade deal that we expect to significantly bolster textile exports to Mexico and the Western Hemisphere,” said NCTO President and CEO Kim Glas.

Mexico and Canada are the two largest export markets for the U.S. textile and apparel industry, totaling nearly $11.5 billion for the year ending Nov. 30, 2019, according to government data.

“USMCA is a win for the textile industry,” Glas said. “The improvements it makes to the North American Free Trade Agreement (NAFTA) will only serve to generate more business for domestic producers and create more jobs and investment in the U.S.”
NCTO worked with the administration during negotiations on USMCA and secured several provisions in the trade deal including stronger rules of origin for certain textile inputs and increased U.S. customs enforcement.

U.S. textile executives are ramping up to take advantage of the modifications in USMCA and some plan to build new business or expand existing business in areas such as pocketing, sewing thread and narrow elastics.

“Our member companies, making some of the most advanced textiles in the world, have long supported USMCA and are eagerly awaiting implementation of the trade deal,” Glas added. “We urge quick implementation of USMCA and thank the administration and Congress for their hard work to get the deal across the finish line.”

The USMCA updates and modifies the NAFTA and makes significant improvements, including:

• Creation of a separate chapter for textiles and apparel rules of origin with strong customs enforcement language.
• Stronger rules of origin for sewing thread, pocketing, narrow elastics and certain coated fabrics.  Under the current NAFTA, these items can be sourced from outside the region – USMCA modernizes this loophole and ensures these secondary components are originating to the region.
• Fixes the Kissell Amendment Buy American loophole, ensuring that a significant amount the Department of Homeland Security spends annually on clothing and textiles for the Transportation Security Administration is spent on domestically produced products.