From the Sector

Ananas Anam, the provider of innovative low-impact textile solutions made from pineapple leaf waste, announced the appointment of Manel Echevarria as the new CEO. The Spanish executive who had previously worked as CEO for Grupo Excens Sports and Lacoste Iberia, as well as in senior executive roles for Swarovski and MontBlanc, will lead the global business from its European research and production site near Barcelona in Spain.

At the beginning of the year, the company reported the successful closing of a funding round led by HALTRA Group, a family-backed sustainable investment firm in Luxembourg and a group of strategic investors, including the French Compagnie Fruitière, one of the leading producers in Europe and major fruit producer in the Africa-Caribbean-Pacific region, as well the global automotive technology supplier Forvia, and Asahi Kasei Corp, a leading Japanese multinational group working in innovative materials and technologies.

“The appointment of Manel Echevarria as a seasoned CEO with an impressive track-record in the fashion and luxury industry marks another important milestone in setting Ananas Anam up for the next phase of growth” says Dr. Christian Kurtzke, Chairman of Ananas Anam. “Following our investment in the development of an impressive portfolio of next-generation innovative biodegradable, traceable and sustainable materials, and into the setup of its network of strategic partners on the supply and shareholder side, Manel will provide the leadership for driving growth and industrial scale of this pioneering sustainability brand amidst a continued challenging global market environment in fashion, interiors and automotive.”

With Ananas Anam’s core portfolio of innovative materials, the company has successfully collaborated with well-known brands including Nike, Hugo Boss, H&M, Paul Smith and Cat Footwear and sustainable-fashion pioneers like Ecoalf to drive innovation in footwear, as well as with fashion brands like Carolina Herrera in the area of bags and accessories, substituting animal leather in the product design with its vegan, cruelty-free, low-impact and sustainable pineapple leaf fibre based textiles. In July 2023, at the Premiere Vision exhibition in Paris, the company presented the next generation of Piñatex as well as its breakthrough innovation Piñayarn as a biodegradable, traceable and sustainable yarn, and introducing Anam PALF, as a commercially available premium textile grade pineapple leaf fibre, opening up a world of new applications and markets.

“Driving the sustainability transformation in fashion, as well as in interiors and automotive has become a key priority on the agenda of brands and OEMs around the world,” says Manel Echevarria, CEO Ananas Anam. “I am proud to have the opportunity to lead the company in this decisive time, and I am looking forward to collaborating with our exceptional Spanish founder, Dr Carmen Hijosa, and Josep Taylor in Spain, with Bruno de Penanster and his team in the UK, as well as with Chuck Lazaro and his team in the Philippines to turn this amazing sustainability ambition and purpose into a reality.”

The international OEKO-TEX® Association, offering collaborative solutions for partners in the textile and leather industry, has once again recorded positive business development. Overall, OEKO-TEX® issued more than 43,000 certificates and labels between July 1, 2022, and June 30, 2023 - an increase of 21% compared to the previous financial year. The MADE IN GREEN product label recorded the strongest growth of 52%. OEKO-TEX® continues to drive urgently needed change through cooperation and joint action - with their services and at the organizational level.

For their two new certifications, OEKO-TEX® focused on cooperation with numerous parties along the global supply chain. Launched in November 2022, OEKO-TEX® RESPONSIBLE BUSINESS addresses the increasing global expectations and due diligence requirements. The tool and certification supports textile and leather companies in preventing negative effects from their own business operations, supply chains and broader business relationships. Companies working with OEKO-TEX® ORGANIC COTTON benefit from a global network of certified companies to facilitate sourcing of chemicals, materials and business partners - from cultivation to finished product.

At the organisational level, OEKO-TEX® is focusing on partnerships with multi-stakeholder initiatives to include as many different perspectives as possible and allow all parties to benefit. Working with ZDHC to promote sustainable chemical management and becoming an ISEAL community member are just two of many collaborations for OEKO-TEX®, which is striving to address the industry's most pressing challenges.

Meanwhile, the Association’s core business advances. For example, based on industry developments and scientific findings, OEKO-TEX® issued a general ban on the use of per- and polyfluorinated alkyl substances (PFAS/PFC) in textiles, leather and shoes certified by STANDARD 100, ORGANIC COTTON, LEATHER STANDARD and ECO PASSPORT. OEKO-TEX® also surpassed the milestone of 1,000 STeP certified production facilities. OEKO-TEX® is in a strong position to continue its work - enabling the industry and consumers to make more responsible decisions through partnership and education.

From 16 – 18 August 2023, 1,022 exhibitors from 13 countries and regions will occupy four halls and 100,000 sqm gross at the National Exhibition and Convention Center (Shanghai). This Autumn Edition of Intertextile Shanghai Home Textiles will return to its regular format, as a comprehensive platform held separately from Messe Frankfurt’s other autumn textile fairs. Complementing the strong lineup of exhibitors over all three days, a varied selection of fringe events will communicate key insights, offer industry specific inspiration, and facilitate cross-sector exchanges for fairgoers.

Buyers from 66 countries and regions have already pre-registered for the show, while a range of international brands are preparing to showcase their latest innovations. Multiple exhibitors will gather according to origin, with three country and region pavilions a must-see for fairgoers seeking exotic home textiles:

• Belgium Pavilion: products on show include bedding fabrics and sets, curtains and curtain fabrics, sofa covers, upholstery, and much more. With the pavilion set to feature a number of Belgian brands, its highlighted exhibitors are Libeco and Love Home Fabrics.
• Taiwan (China) Pavilion: multiple Taiwanese exhibitors, including JWL Fabrics Co Ltd, Maxland Home Textile Industrial Co Ltd, and Vanttex International Co Ltd, will demonstrate specific examples of the varied applications of their home textiles.
• Türkiye Pavilion: organised by Uludag Textile Exporters’ Association (UTIB), the pavilion will showcase a range of curtains, upholstery fabrics, and other home textiles, from suppliers such as Aleran Tekstil Inşaat Gida Sanayi Ve Ticaret Ltd Şti, Küçükçalik Tekstil San Ve Tic A Ş and Weavers Tekstil San Ve Tic A Ş.

Beyond the pavilions, buyers can easily locate their desired home and contract textiles via conveniently placed product zones, covering categories such as curtain and curtain fabrics; sun protection and window shades; upholstery and sofa fabrics; furniture leather; bedding and editors; loungewear and bath; and rugs. Wide-ranging suppliers from China and beyond will showcase their various products, featuring international exhibitors such as Elastron – Leather & Fabrics, Morgan and PT Sinar Continental; and well-known domestic manufacturers including Hangzhou Aico Home Textile Co Ltd, Huatex International (Hangzhou) Co Ltd and Zhe Jiang Maya Fabric Co Ltd.

Fringe programme: keeping fairgoers up-to-date with range of industry developments
Business exchange at Intertextile Shanghai Home Textiles will once again be supplemented by multiple concurrent events, for home textile players to learn more about the latest industry innovations, as well as upcoming design trends. These include:

• International Intertextile Trend Forum 2023–2024: held in the afternoon of day one, the event will be hosted by a prominent member of the ‘2023 – 2024 Intertextile International Lifestyle Trend’ trend committee, Mr Shen Lei, joined on the panel by multiple designers. They will discuss various impacts on designs, such as sustainability’s effect, the influence of emerging technologies, and international integration and localised expression.
• IKASAS Japanese Home Design Gallery and themed seminar: the leading Japanese furniture brand IKASAS will utilise a display area to illustrate its unique design philosophy, by showcasing innovative furniture products that predominantly align with contemporary trends. The company’s founder, Mr Akiyuki Sasaki, will delve deeper into his design views in a seminar held on the morning of day one.
• The New Power of Healthy Home Decoration Environment: a first-time collaboration with CRECC Full Decoration Council, the cross-sector conference in Hall 5.1 on day two will welcome keynote speakers from the real estate industry, to discuss topical insights at the intersection of realty and home textiles. The audience will come away with a widened scope of the different applications and demands of home textiles, and an ability to more accurately identify business opportunities within the property market.

• Currency-neutral revenues flat versus the prior-year level
• Top-line development reflects improved sell-out trends and conservative sell-in strategy
• Gross margin up 0.6pp to 50.9%; strong improvement compared to Q1 reflecting better sell-through and less discounting
• Operating profit of € 176 million includes extraordinary expenses of around € 160 million related to one-off costs, donations and accruals for future donations
• Inventory position improves substantially versus Q1 level to € 5.5 billion; now up only 1% year-over-year

In the second quarter of 2023, currency-neutral revenues were flat versus the prior-year level. The top-line development continued to be impacted by the company’s conservative sell-in approach in order to reduce high inventory levels, particularly in North America and Greater China. At the same time, adidas second quarter revenues benefited from the first sale of some of its Yeezy inventory. The initial product drop in June generated revenues of around € 400 million in Q2, which is largely in line with the Yeezy sales generated in the prior year’s quarter.

Footwear revenues grew 1% during the quarter, reflecting strong growth in football, basketball, tennis and US sports. Apparel sales declined 3% in the second quarter. As the apparel market continues to be particularly overstocked, the company continued its conservative sell-in strategy to improve sell-through and margins in the medium term. Accessories grew 8% during the quarter driven by growth in football.  

Lifestyle revenues were down during the quarter despite extraordinary demand for the company’s Samba, Gazelle and Campus franchises. While adidas slowly started to scale its offering for these product families during the second quarter, the total volume still only represents a small portion of the company’s overall business. Sales in the adidas Performance categories continued to show positive momentum. This reflects strong demand for new product introductions such as the latest iterations of its Predator, X and Copa football boots, as well as jerseys for both the FIFA Women’s World Cup 2023 and the company’s unique portfolio of football teams ahead of the start of the European club season. In addition, the Adizero product family in running continued to gain a lot of attention around marathon races across the world, translating into higher demand. At the same time, the brand’s Barricade tennis franchise grew strongly, leveraging the excitement around major tournaments.

In euro terms, the company’s revenues declined 5% to € 5.343 billion in the second quarter (2022: € 5.596 billion).

Stronger sell-out trends and conservative sell-in
As a result of the company’s initiatives to reduce high inventory levels, currency-neutral sales in wholesale declined 10% despite double-digit growth in Greater China and Latin America. At the same time, direct-to-consumer (DTC) revenues grew 16% versus the prior year. This development was driven by strong growth in both the company’s e-commerce business (+14%) as well as own retail stores (+19%), reflecting continued strong sell-out trends across most regions. The outperformance of the company’s DTC channel versus the wholesale business was also related to the first sale of the Yeezy inventory, which was done exclusively through adidas’ own e-commerce channel.

Double-digit growth in Greater China and Latin America
Currency-neutral sales in North America declined 16% during the quarter. The region is particularly affected by elevated inventory levels in the market and – in response to this – the company’s significantly reduced sell-in. Revenues in Greater China grew 16% in Q2, reflecting double-digit sell-out growth in both wholesale and own retail. Sales in EMEA were down slightly (-1%) despite double-digit DTC growth. While the company’s initiatives to reduce inventory levels and discounting weighed on the overall top-line development in the region, adidas recorded significantly improving full-price trends during the quarter. Revenues in Asia-Pacific increased 7% during the quarter, driven by strong double-digit growth in DTC. Latin America continued to increase at a double-digit rate (+30%), reflecting strong growth in both wholesale and DTC.

Gross margin improves to 50.9%
The company’s second quarter gross margin increased 0.6 percentage points to 50.9% (2022: 50.3%). This improvement was mainly driven by price increases the company has implemented as well as by an improved channel mix. At the same time, higher supply chain costs and unfavorable currency movements continued to strongly weigh on the gross margin development. While still adversely impacting the company’s gross margin in the quarter, discounting levels significantly improved compared to the first quarter of the year.  

Operating profit of € 176 million, resulting in an operating margin of 3.3%
Other operating expenses were up 3% to € 2.582 billion (2022: € 2.501 billion). As a percentage of sales, other operating expenses increased 3.6 percentage points to 48.3% (2022: 44.7%). Marketing and point-of-sale expenses decreased 7% to € 617 million (2022: € 663 million). As a percentage of sales, marketing and point-of-sale expenses slightly decreased by 0.3 percentage points to 11.5% (2022: 11.8%). Operating overhead expenses were up 7% to € 1.965 billion (2022: € 1.838 billion), reflecting higher logistics expenses. In addition, the company recorded one-off costs of around € 50 million related to the strategic review the company is currently conducting as well as donations and accruals for further donations in an amount of around € 110 million. As a percentage of sales, operating overhead expenses increased 3.9 percentage points to 36.8% (2022: 32.8%). The company’s operating profit amounted to € 176 million (2022: € 392 million) in the quarter. This amount includes the extraordinary expenses of in total around € 160 million reflecting the one-off costs related to the strategic review as well as the donations and accruals for further donations. The sale of the Yeezy product positively impacted adidas’ operating profit by an incremental amount of around € 150 million in Q2. The operating margin reached 3.3% in the quarter (2022: 7.0%).

Net income from continuing operations of € 96 million
After taxes, the company’s net income from continuing operations amounted to € 96 million (2022: € 360 million), while basic EPS from continuing operations decreased to € 0.48 (2022: € 1.88).

Outlook

adidas expects revenues to decline at a mid-single-digit rate
On July 24, adidas had adjusted its full year financial guidance to reflect the positive impact of the first sale of some of its Yeezy inventory and a slightly better-than-expected development of the adidas business in the first half of the year. At the same time, macroeconomic challenges and geopolitical tensions persist. Elevated recession risks in North America and Europe as well as uncertainty around the recovery in Greater China continue to exist. In addition, the company’s revenue development will continue to be impacted by the initiatives to significantly reduce high inventory levels. As a result, adidas now expects currency-neutral revenues to decline at a mid-single-digit rate in 2023 (previously: decline at a high-single-digit rate).

Underlying operating profit anticipated to be around the break-even level
The company’s underlying operating profit – excluding any one-offs related to Yeezy and the ongoing strategic review – is still anticipated to be around the break-even level. Including the positive impact from the first Yeezy drop of around € 150 million, the potential write-off of the remaining Yeezy inventory of now € 400 million (previously: € 500 million) and one-off costs related to the strategic review of up to € 200 million (unchanged), the company now expects to report an operating loss of € 450 million in 2023 (previously: loss of € 700 million).

On August 2, the company launched a second drop of Yeezy inventory. Throughout the month of August, adidas is making a range of existing products available through both its own e-commerce channel as well as the digital platforms of selected wholesale partners. If successful, this second drop would further improve the company’s results. However, as the results of this drop are yet unknown, it is not accounted for in the company’s current top- and bottom-line outlook for 2023.

Fashion for Good launches new pilot with brand partners adidas, Inditex, Target and Zalando, and footwear recycling innovator FastFeetGrinded to test and validate the innovative footwear recycling process to support the uptake of recycled content in footwear, driving the change towards a more circular footwear industry.

Globally, 24 billion shoes are added to the market each year*, and a staggering 90% of shoes are either landfilled or incinerated*. To tackle this challenge, Fashion for Good has launched a new pilot with partners adidas, Inditex, Target and Zalando, in collaboration with innovator FastFeetGrinded, aiming to test and validate the footwear recycling process and support the uptake of recycled materials in footwear. FastFeetGrinded possesses the unique capability to deconstruct any type of pre- and post-consumer shoe, breaking it down into its macro-components. These macro-components are then subsequently grinded down into smaller high purity granulates which FastFeetGrinded may use to create material streams for repurposed use.

Through this collaborative pilot, the partners will divert pre- and post-consumer footwear to FastFeetGrinded, who will transform them into various new material granulates. The next step involves FastFeetGrinded’s network of supply chain partners, who will produce output products, such as outsoles, midsoles, and flip flops. The brands will closely evaluate the products’ quality and purity, aiming to showcase the potential of FastFeetGrinded's footwear recycling technology and pave the way for scalable solutions.

*World Footwear Yearbook (2020). Footwear production with a new record of 24.3 billion pairs.
*Vivobarefoot. 22 billion pairs of shoes are dumped into landfill each year. It’s time for change.
*WRAP (2019) Valuing our Clothes.
*Material Innovation Initiative (2021). 2021 State of the Industry Report: Next-Gen Materials.

In the first half of 2023, Rieter recorded a significant increase in sales of 22.2% to CHF 758.2 million, despite some cancellations or postponements of deliveries as a result of the earthquake in Türkiye. Cyclical market downturns in the individual market segments, which were already apparent in the second half of 2022, led to an order intake of CHF 325.0 million (-62.6%) in the reporting period, lower than in the corresponding period of the previous year.

Order intake in almost all regions was characterized by the reluctance to invest in new machines. Only in China did order intake increase due to investments by spinning mills in improving their local competitiveness. In addition, some customers held back pending investment decisions and waited for the innovations presented at ITMA in Milan in June 2023. At the same time, demand for consumables, wear & tear and spare parts declined due to the global market downturn.

On June 30, 2023, the company had a high order backlog of around CHF 1 100 million (June 30, 2022: around CHF 2 100 million). This therefore extends into the year 2024. As in the previous year, cancellations in the reporting period were around 5% of the order backlog, also impacted by the effects of the severe earthquake in Türkiye.

In the first half of 2023, Rieter posted a profit of CHF 25.2 million at the EBIT level, with an EBIT margin of 3.3% (first half of 2022: loss of CHF -10.2 million) and a net profit of CHF 13.3 million (first half of 2022: loss of CHF -25.2 million).

“Next Level” performance program planned
The challenging market situation over the past two years was marked by severe disruptions in the global supply chain in conjunction with rising material, energy, labor, and production costs. The current global demand for textile products remains at a low level. To increase long-term value for customers, employees, and shareholders, Rieter, as technology leader, is planning a performance program called “Next Level”. The goal of the program is to strengthen sales excellence, sharpen customer focus, improve cost efficiency in production and optimize fixed cost structures. The one-time cost of the program is anticipated to be around CHF 45 to 50 million, which will have an impact on the second half of 2023. Most of the program initiatives will be implemented before the end of 2023 with a view to achieving an expected impact from as early as 2024. With these measures Rieter is aiming to reduce operating costs by some CHF 80 million per year.

The program includes provisions for the net reduction of around 300 positions throughout the Group in relation to overhead functions. The possibility of further market- and volume-related adjustments in the order of 400 to 600 positions cannot be excluded. At the end of June 2023, Rieter had a global workforce of 5 555 employees.

Outlook
Given the economic situation and the ongoing cyclical market weakness, Rieter continues to expect below-average demand for new equipment in the coming months. A revival is not expected until the fourth quarter of 2023 at the earliest. Rieter also believes that demand for consumables, wear & tear and spare parts will not recover until later in 2023.

For the full year 2023, Rieter expects an EBIT margin of around 5 to 7% (including positive special effects of less than 2%) and sales at the previous year’s level of around CHF 1.5 billion.

INDA, the Association of the Nonwoven Fabrics Industry, announced the successful conclusion of the World of Wipes® (WOW) International Conference, July 17-20, Atlanta, Georgia. More than 495 senior-level leaders convened for new intelligence, connections, and business, which was a record turnout for the WOW event.

The 17^th edition of WOW featured almost 60 tabletop exhibits, 26 presentations, and two pre-conference webinars. The program introduced Lightning Talks, “supersized elevator speeches” covering new trends, products, and ideas, and a 1.5-day revised WIPES Academy training course. WOW also featured a mentorship program for participants new to the wipes industry.

The WOW speakers shared their expert insights in these key topics:

• Inflation, Supply Chain Issues, Capacity/Demand Balance
• Plastic Policy: Closing the Intention-Action Gap
• Sustainability and Manufacturing Practices
• Consumer Market Data and Trends
• Wipes Advancements
• Transparency in the Supply Chain
• Regulation, Innovation, Standards & Education in Flushability

World of Wipes Innovation Award^®
The winner of the World of Wipes Innovation Award was the Nonwoven Wipe Using Biotransformation Technology developed by Indorama Ventures and Polymateria. This innovative 100% polypropylene spunlace wipe utilizes advanced biotransformation technology, meeting the BSI PAS 9017 specification. The wipe is compatible with mechanical recycling however, in the event it becomes fugitive, and exposed to heat, sunlight, air and moisture, will transform into a harmless, bioavailable wax at its end-of-life, returning safely to nature without leaving behind microplastics or toxins. This polypropylene wipe represents a significant leap towards eco-friendly, sustainable nonwoven hygiene products.

INDA announced that WOW 2024 will be held June 17-20, at the Hyatt Regency Minneapolis in Minneapolis, Minnesota.

Kornit Digital LTD. announced Amaze Software, Inc. – parent company of the Amaze, Spring, and Outfts platforms – has selected KornitX Workflow Solutions and Kornit MAX digital on- demand fabric and textile decoration technologies as the platform to deliver their vision. Combined with the Amaze Creator Commerce Platform, the companies will jointly bring the power of on- demand production and fulfillment to new and existing social media creators, enabling them to better monetize branded products.

Kornit’s Global Fulfillment Network helps companies like Amaze Software connect creators with high-quality garment and textile production fulfillers across the globe. The platform is backed by the KornitX workflow engine, seamlessly integrating across industry-proven Kornit MAX technology- based fabric and textile decoration systems for end-to-end production, visibility, and control.

The  Spring platform offers an opportunity for fans to make purchases directly from where they consume the creator’s content (social platforms including Instagram, TikTok Shops, Twitch, and more). This allows creators to significantly enhance engagement and cultivate a more profound brand presence.

Kornit Digital LTD., a leader in sustainable, on-demand digital fashion and textile production technologies, announced the Company successfully concluded its exhibition at ITMA 2023, experiencing high volumes of engagement with new customers from key regions, such as India, Turkey, China, Central and South America.

With its industry-first vibrant new NeoPigment™ Vivido digital inks, the Kornit Presto MAX had a strong reception at ITMA. Also taking center stage was the anticipated Kornit Apollo platform, which delivers on the industry need for automated, high-throughput digital on-demand garment decoration at scale. Built on tested Kornit MAX technology, the Apollo effectively brings sustainable digital production to the mainstream.

“Our Apollo system was welcomed at ITMA by an industry now realizing that digital is the only solution for making fashion and textile production sustainable, producing closer to the end consumer, eliminating problematic inventory, and delivering the highest quality without sacrificing profitability,” said Omer Kulka, Chief Innovation Officer at Kornit Digital.

Kornit Digital LTD., a leader in sustainable, on-demand digital fashionx and textile production technologies, announced the Company is taking the power of digital fashion to new heights with enhancements to the Kornit Presto MAX system for digital fabric decoration on demand.

Designed with the fashion and home décor industry in mind, the enhanced solution presents innovative capabilities for transforming virtual concepts into custom fabrics, supplementing digital efficiency and quality with white printing on colored fabrics. The new NeoPigmentTM Vivido ink achieves darker, deeper blacks and colors and establish new fashion standards with a pigment-based process. Kornit’s patented solution offers a streamlined and completely dry process for the a sustainable fabric decoration.

At ITMA 2023, Kornit will also be displaying an end-to-end partner ecosystem – underscoring how integrated solutions ensure a smooth transition towards a digital infrastructure and enable long-term business growth. Highlighting the power of partnership alongside Kornit is Greentex.co, a supplier of textiles and apparel leveraging digitally enabled, eco-friendly waterless printing. The company will be showing Presto MAX with fabrics highlighting the depth of black inks. Working alongside Kornit, Zünd will demonstrate how its modular cutting systems is the foundation for an end-to-end “eco factory,” completing fashion decorated by Presto MAX with their digital cutting solutions. Pentek Textile Machinery joins to display the possibilities for inline, sustainable softening of fabrics for unique and demanding applications.