From the Sector

BOGNER and James Bond – a perfect symbiosis of action, entertainment and athluxury lifestyle. The partnership started over 50 years ago when Willy Bogner Junior filmed the ski scenes for On Her Majesty's Secret Service (1969). Building on the success of the collaboration, Willy went on to work on three more James Bond productions. In 2022, both partners celebrate an anniversary: 90 years of BOGNER and 60 years of the James Bond film franchise. To mark the long-standing partnership as well as the two anniversaries, a limited capsule collection is released, consisting of two complete ski outfits for men and women, ski hardware and accessories.

Pincroft, UK’s largest textile dyer, printer and finisher, developed a new camouflage pattern for the Dutch Ministry of Defence as part of their Defensie Materieel Organisatie’s (DMO) ‘STRONG’ programme that aims to supply combat clothing and equipment to all military personnel part of the Royal Netherlands Navy, Army, Air Force and Marechaussee.

The new fabric and camouflage pattern boast the new Netherlands Fractal Pattern and will be used in at least 480,000 sets of uniforms for soldiers worldwide. The camouflage pattern is being manufactured in a green or woodland style for the Army, Air Force, Marechaussee and Marines, while the Navy receives a blue or marine style design. Pincroft followed the guidelines of the new Netherlands Fractal Pattern (NFP) to create an eight-colour camouflage design that provides high levels of disruption to give soldiers better concealment when needed.

The fabric was created by global workwear textile manufacturer, Carrington Textiles, specifically following the Dutch MoD’s requirements on comfort and protection. The result is a lightweight yet durable textile of 210gsm with a composition of 50% cotton, 50% high tenacity nylon and Ripstop for added strength.

The high cotton content of the fabric creates a uniform that’s comfortable to wear due to its softness to the touch, and breathability, as well as providing moisture wicking properties, key elements for the tough conditions soldiers work in. The addition of high tenacity nylon to the fabric, provides added strength and durability, with the Ripstop properties of the fabric offering tear resistance.

Around 480,000 trousers and jackets will be delivered to officers from the Royal Netherlands Navy, Army, Air Force and Marechaussee, during a uniform roll out part of the Dutch MoD’s ‘STRONG’ programme that aims to equip the armed forces in the next 18 months with versatile uniforms and equipment that are adjustable according to the assignment. The pack also includes a raincoat, combat shirt and baseball cap.

SHIMA SEIKI announces a sales promotion package for the apparel industry together with KDDI, Linking 3D fashion design with cross-reality― realizing digital catalogs, VR showrooms and new customer experience allowing 360-degree viewing without actual samples

Leading fashion technologist SHIMA SEIKI MFG., LTD. of Wakayama, Japan together with telecommunications company KDDI Corporation of Tokyo, Japan launched "XR Mannequin for APEXFiz," a sales promotion package that links SHIMA SEIKI's APEXFiz design software for the apparel industry with KDDI's XR (cross-reality) technology.

XR Mannequin for APEXFiz will be offered to the apparel industry. Using an XR Mannequin that enables viewers to check product images from any angle in 360 degrees on various devices, XR Mannequin for APEXFiz enables digital catalogues with 3D virtual sample image data of garments designed on APEXFiz design software, 360-degree VR showrooms, as well as digitally extended stores. It also realizes virtual proposals at exhibitions, showroom-style stores with no inventory, and user-friendly purchase experience on e-commerce sites, and more. It also allows users to reduce excess stock at stores and create new sales opportunities.

Eventually, by adding movement to models wearing Virtual Samples and rendering them on a cloud server, customers will be able to view high-resolution virtual fashion shows on their smartphones and other devices.

 Until now, the apparel industry has been making actual product samples in each of the planning and design stages of production. This process not only takes an enormous amount of time and cost, but generates waste of raw materials including fabric that require disposal. At the retail stage, stores also needed to have various sizes and colors in stock to address a wide range of customer preferences, resulting in excess inventory.

With SHIMA SEIKI's APEXFiz, designs can be evaluated without making actual samples, minimizing resources spent on sample production as well as lead time, enabling environmentally-friendly manufacturing.

In May 2022, KDDI developed a high-resolution XR mannequin for apparel sales, with support from Google Cloud. It enables various devices such as store signages and smartphones to check products from any angle in 360 degrees, enabling stores to sell products without maintaining inventory.

SHIMA SEIKI and KDDI combines APEXFiz and XR Mannequin to start providing XR Mannequin for APEXFiz. This brings DX solutions to all stages in the supply chain for the apparel industry, from planning and design to sample making, production, distribution, and retail sales. SHIMA SEIKI and KDDI will continue to create services together that link each other's products, to bring about a sustainable society by reducing excess stock, and providing a customer experience that gives peace of mind when purchasing products.

In cooperation with Platte Berlin, deadHYPE, Visionary Services and the Fashion Council Germany, The Ground invited to the Studio2Retail block party in Mitte. 950 guests, including creatives, influencers and the young Gen-Z Berlin fashion scene, came together for the first time since The Ground premiered in July to exchange and celebrate change.

The community had the exclusive opportunity to buy the limited pieces of the MUST-HAVE PEACE charity collection, which the Premium Group team initiated to support the people suffering from the war in Ukraine.

The collection includes 22 special items of clothing and accessories from 11 brands and designers from the Premium Group cosmos, of which 100% of the proceeds go to Be an Angel.

Be an Angel e.V. is an initiative of people from creative industries who are committed to the sustainable integration of people with a refugee background. Under the direction of Chairman Andreas Tölke, the team has been working intensively for the people from Ukraine for weeks, organising trips to Germany for refugees from Moldova, activating a nationwide network for accommodation and supplying hospitals in Odessa, Kyiv and Lemberg with medicine.

Sustainable fashion brands YesAnd & Kornit Digital are teaming up with the global platform fostering innovation in the fashion industry, Fashinnovation. This month, the three like-minded companies will be unveiling a direct-to-garment printing collaboration.
 
YesAnd & Kornit Digital are (e)co-creating digital, on-demand printed certified organic blank merchandise, with graphic designs by artists, celebrities, influencers, musicians, fashion VIPs, NGO’s and more. Sharing core values of fashion & innovation & non-toxic, zero-waste production, and the fusion of technology to accelerate impact, this launch represents a cutting-edge and sustainable solution that’s accessible, traceable, customizable, and scalable. By joining forces, this collaboration will educate, engage, and activate both consumers and industry alike.
 
"We at Fashinnovation have a strong belief that the fashion industry must walk side-by-side with innovation, in order to ensure a sustainable future. We are thrilled for this collaboration with YesAnd and Kornit, as we hope to set an example when it comes to the power of unity. In our minds, it's not about a person's wins, but rather it's about our collective progress," said Jordana & Marcelo Guimaraes, Founders of Fashinnovation.
 
Debuting the first of their brand collaborations with farm-to-print organic merchandise, this collaboration will together minimize waste, water, chemical use, and energy, while celebrating climate action, manufacturing efficiencies, and sustainable innovation—representing a true and timely fashion statement. The brands will be debuting their select blank styles of digitally-printed designs from the initial capsule collection—including the YesAnd Frida Hoodie, Gloria Hoodie Tee, Dominique Tee, and the Samata Dress, with a graphic option aligning the missions of YesAnd, Fashinnovation and Kornit Digital, “Don’t Wear Clothes, Wear Change.”

adidas has unveiled the latest in its Made with Nature Capsule Collection with a new Ultraboost 22 Made with Nature and Made with Nature apparel joining the range as the brand continues its mission to call time on conventional materials and design out finite resources.

Designed in balance with the planet, the women’s Ultraboost 22 Made with Nature takes the forward-thinking elements of the Ultraboost 22 and amplifies them with natural materials. The shoe is made in part with natural materials – 40% of the knitted upper is made with lyocell, a material created with cellulosic fibers made from sustainably grown wood.

Launching alongside the Ultraboost 22 Made with Nature is a new Made with Nature apparel range, including a performance running wear look for men and women. The apparel range is made with at least 50% organic cotton.

Christopher Wheat, Global Category Director Running Footwear said: “At adidas, we understand that change is not only possible, it’s an urgent necessity. With Made with Nature, we are on a journey to a world beyond plastic. We’re calling time on conventional materials and methods of make. Once depleted, there’s no coming back for fossil resources. But when we design in synergy with natural processes, when we make with nature, we can use materials that regrow or regenerate – and change the way products are made."

Freudenberg Performance Materials Apparel (Freudenberg) is pleased to announce the establishment of the Apparel Technical Solution Center – Asia at its Nantong factory in China to expand the company’s innovation capabilities. With floor space of 900 m2, the new center offers technical expertise and innovations to apparel customers from nearly all apparel segments in Asia and around the world.

New capabilities with the Apparel Technical Solution Center – Asia
Committed to bringing enhanced technical support and services tailored to customers’ needs, the dedicated Apparel Technical Solution Center – Asia (ATSC) is equipped with cutting-edge technology. This includes a wide variety of fusing and bonding machines, laser and ultrasonic cutters, specialized sewing machines for sportswear applications, fiber filling machines for insulation applications, and washing and dry-cleaning machines that meet GB and AATCC standards.

The ATSC offers technical know-how to help customers design complex apparel solutions. In particular, it furthers Freudenberg’s dedication to joint innovations with sportswear customers and to finding technical solutions for performance applications.

Further innovation at the Nantong factory
The factory was moved to the Nantong Economic and Technological Development Area to meet increased production demand with state-of-the-art technological capabilities. Covering an area of nearly 50,000 m² with cotton interlining, bi-elastic fusible interlining, and preformed materials production lines, the new site went into operation in 2021.

Dedicated to continuously improving production quality, the new factory also includes an innovative online defect detection system. This system enables defect information to be captured in real time and sent to operators for immediate adjustments, increasing the rate of bi-elastic interlinings and shirt interlinings. Furthermore, the online weft density automatic adjustment system helps improve the stability of the drying process and the quality of semi-finished products.

Munich Fabric Start presents a new project-area that will take place during the next edition.
BLUEZONE with CATALYZER and KEYHOUSE will be the place to be for the blue community on 30 and 31 August. As a global key event for the denim industry, 90 international denim mills, weavers, manufacturers and suppliers will show their latest innovations and trends in the Zenithhalle, the Kohlebunker and the Kesselhaus.

"THE ITALIAN LUSTER" will offer all visitors a deep dive into the Made in Italy supply chain with companies that have turbocharged growth by focusing on quality, innovation and research. Well-known and international companies that can make an important contribution to European and global brands.

From the production of trimmings and accessories, to the creation of unique fabrics, to the inspiration of new collections and their realization to the finishing of the garments, Made in Italy still represents the reality par excellence focused on ethical and sustainable production.

"THE ITALIAN LUSTER" will allow all visitors an incredible journey into the Italian supply chain that has the ability to meet any demand of brands, from small to large production needs.

On the top floor of the Catalyzer Hall, it will be possible to view the individual collections of the companies in attendance and receive a beautiful gift specially created by the CADICA GROUP company from Carpi.

 
Participants
ACM - TRIMS AND ACCESSORIES PRODUCER
ACM was founded in 1982.
Since 1982, ACM has been providing the fashion world with unique, sought-after and customized details, guaranteeing prestigious and innovative workmanship. Each and every product is the result of the care we take at every stage of our production process: from the prototype, designed by putting the consumer's health first, to production with state-of-the-art machinery, which allows for fine workmanship and cutting-edge customization, while minimizing the impact on the environment (we are GRS certified) and complying with the strictest eco-toxicological regulations.

FASHION ART - LUXURY FASHION DESIGN
Fashionart is the brainchild of Andrea Rambaldi, who, after learning his trade from his parents, his mother a seamstress and his father the owner of a dye shop, decided to pursue a freelance career.
He began by collaborating with companies in the textile sector, where he deepened his knowledge in the field of chemistry and industrial processes, touching on the problems of processing cycles.
The real turning point came as a result of an important job for the Maison Chanel, which recognized the originality and effectiveness of his technical proposals. From that moment, this is 2008, FashionArt was born, a company focused on luxury fashion and design, expert in the design and production of garments.
From the idea to the final product, the company is able to support the client throughout the entire production process.
Since then, the company has grown and developed exponentially thanks to a team of managers, artists and experts whose experience makes them a benchmark in the high fashion industry. Fashionart operates exclusively in high fashion, a very difficult field in which to combine experience and technique with art and creativity, where our potential can be expressed to the fullest.

ELLETI - GARMENTS AND WASHING MAKER
Advocate of an approach that combines tradition, creativity, and innovation, for over 30 years Elleti Group has defined standards of absolute excellence for the denim industry. Born in the 80s in San Bonifacio, near Verona, the company developed in a one-of-a-kind context, a hotbed of ideas that led to the defining and establishing of new professions and skills in the field of denim treatment and garment personalization. Led by Luigi Lovato, right from the start the company established itself on the denim scene thanks to an ambitious and pioneering investment in new solutions. The following ten years mark an important growth which leads to the internationalization both of brand and production. After the implementing of a new department for garment dyeing, Elleti Group was ready to welcome the ever-increasing international demand, equipping itself with the first laundry in Tunisia, a country logistically central in the Mediterranean area, and as a result, ideal for the development of a complete textile supply chain. This successful story continues to unfold in the 2000s, a decade that marks the opening to the market of garment making thanks to two new structures in Romania, and peaks with the acquisition of Martelli Lavorazioni Tessili. Today Elleti Group stands firm in the market as a result of a complete offer that preserves the company’s artisanal vocation enriched through a constant process of responsible innovation.

In addition, companies BERTO INDUSTRIA TESSILE and OLIMPIAS GROUP will participate in the project by presenting their collections within their booths in the Catalyzer hall.

IFFAC (Impact Fund for African Creatives) has revealed plans which will revolutionise West African textile and garment production at one stroke. The fund is converting a partially disused textile mill in the region into a hi-tech centre for processing local cotton and recycling waste fabric, to produce both fabric for further processing and new clothes. The mill will be equipped with modern equipment, all sustainably powered by hydroelectricity from the nearby Volta Dam.

West Africa grows about 6% of the world’s cotton but only a tiny fraction of that crop is processed on the continent, the vast majority being shipped thousands of miles to Asia before being shipped back again as finished or part-finished fabrics. The mill project will end the continent’s reliance on such an unsustainable practice with all the obvious financial and environmental benefits.

As well as producing fabric from sustainably grown virgin cotton, a joint venture with Shandong-based WOL Textiles Ltd., a privately owned plant that has long supplied the African market, the mill will be home to a state-of-the-art shredding and recycling facility, a joint venture between IFFAC and the Dutch Circularity B.V. CEO Han Hamers of Circularity B.V. in The Netherlands, has been involved in the production of 100% circular knit and woven articles.

The mill project is expected to create over a thousand jobs. The surrounding area already boasts a significant number of experienced textile workers ready to be retrained on the new equipment. While the majority of the products created will be sold within the region, all processes will confirm to new EU Supply Chain Law to allow for the possibility of export.  

Output is forecast at six million pieces of finished clothing and twenty-five million metres of spun and woven cloth per year. In total, thirty million US$ of investment will be made in the site with operations ready to begin next year (2023).

• Currency-neutral sales up 4%, despite more than € 300 million negative impact from macroeconomic constraints
• Markets representing more than 85% of the business grow 14% overall
• Gross margin down 1.5pp to 50.3% reflecting significantly higher supply chain costs
• Operating profit reaches € 392 million
• Net income from continuing operations amounts to € 360 million
• FY 2022 outlook reflects double-digit growth during the second half of the year

“Our Western markets continued to show strong momentum in the second quarter amid heightened macroeconomic uncertainty. With Asia-Pacific returning to growth, markets combined representing more than 85% of our business grew at a double-digit rate,” said adidas CEO Kasper Rorsted. “With sports back at center stage this summer, revenues in our strategic growth categories Football, Running and Outdoor all increased by double digits. However, the macroeconomic environment, particularly in China, remains challenging. The recovery in this market is – due to continued covid-19-related restrictions – slower than expected. And we have to take into account a potential slowdown in consumer spending in all other markets for the remainder of the year.”

Currency-neutral revenues increase 4% despite macroeconomic constraints
In the second quarter, currency-neutral revenues increased 4% as adidas continued to see strong momentum in Western markets. This growth was achieved despite continued challenges on both supply and demand. Supply chain constraints as a result of last year’s lockdowns in Vietnam reduced top-line growth by around € 200 million in Q2 2022. In addition, the company’s decision to suspend its operations in Russia reduced revenues by more than € 100 million during the quarter. Continued covid-19-related lockdowns in Greater China also weighed on the top-line development in Q2. From a channel perspective, the top-line increase was to a similar extent driven by the company’s own direct-to-consumer (DTC) activities as well as increases in wholesale. Within DTC, e-commerce, which now represents more than 20% of the company’s total business, showed double-digit growth reflecting strong product sell-through. From a category perspective, revenue development was strongest in the company’s strategic growth categories Football, Running and Outdoor, which all grew at strong double-digit rates. In euro terms, revenues grew 10% to € 5.596 billion in the second quarter (2021: € 5.077 billion).

Strong demand in Western markets
Revenue growth in the second quarter was driven by Western markets despite last year’s lockdowns in Vietnam still reducing sales, particularly in EMEA and North America, by
€ 200 million in total. In addition, the top-line development in EMEA was also impacted by the loss of revenue in Russia/CIS of more than € 100 million. Nevertheless, currency-neutral sales grew 7% in the region. Revenues in North America increased 21% during the quarter driven by growth of more than 20% in both DTC and wholesale. Revenues in Latin America increased 37%, while Asia-Pacific returned to growth. Currency-neutral revenues increased 3% in this market despite still being impacted by limited tourism activity in the region. In contrast, the company continued to face a challenging market environment in Greater China, mainly related to the continued broad-based covid-19-related restrictions. As a result, currency-neutral revenues in the market declined 35% during the three-months period, in line with previous expectations. Excluding Greater China, currency-neutral revenues in the company’s other markets combined grew 14% in Q2.

Operating profit of € 392 million reflects operating margin of 7.0%
The company’s gross margin declined 1.5 percentage points to 50.3% (2021: 51.8%). Significantly higher supply chain costs and a less favorable market mix due to the significant sales decline in Greater China weighed on the gross margin development. This could only be partly offset by a higher share of full price sales, first price increases and the benefits from currency fluctuations. Other operating expenses were up 19% to € 2.501 billion (2021: € 2.107 billion). As a percentage of sales, other operating expenses increased 3.2 percentage points to 44.7% (2021: 41.5%). Marketing and point-of-sale expenses grew 8% to € 663 million (2021: € 616 million). The company continued to prioritize investments into the launch of new products such as adidas’ new Sportswear collection, the next iteration of its successful Supernova running franchise and first drops related to the Gucci collaboration as well as campaigns around major events like ‘Run for the Oceans.’ As a percentage of sales, marketing and point-of-sale expenses were down 0.3 percentage points to 11.8% (2021: 12.1%). Operating overhead expenses increased by 23% to a level of € 1.838 billion (2021:
€ 1.492 billion). This increase was driven by adidas’ continuous investments into DTC, its digital capabilities and the company’s logistics infrastructure as well as by unfavorable currency fluctuations. As a percentage of sales, operating overhead expenses increased 3.5 percentage points to 32.8% (2021: 29.4%). The company’s operating profit reached a level of € 392 million (2021: € 543 million), resulting in an operating margin of 7.0% (2021: 10.7%).

Net income from continuing operations reaches € 360 million
The company’s net income from continuing operations slightly declined to € 360 million (2021: € 387 million). This result was supported by a one-time tax benefit of more than € 100 million due to the reversal of a prior year provision. Consequently, basic EPS from continuing operations reached € 1.88 (2021: € 1.93) during the quarter.

Currency-neutral revenues on prior year level in the first half of 2022
In the first half of 2022, currency-neutral revenues were flat versus the prior year period. In euro terms, revenues grew 5% to € 10.897 billion in the first six months of 2022 (2021:
€ 10.345 billion). The company’s gross margin declined 1.7 percentage points to 50.1% (2021: 51.8%) during the first half of the year. While price increases as well as positive exchange rate effects benefited the gross margin, these developments were more than offset by the less favorable market mix and significantly higher supply chain costs. Other operating expenses increased to € 4.759 billion (2021: € 4.154 billion) in the first half of the year and were up 3.5 percentage points to 43.7% (2021: 40.2%) as a percentage of sales. adidas generated an operating profit of € 828 million (2021: € 1.248 billion) during the first six months of the year, resulting in an operating margin of 7.6% (2021: 12.1%). Net income from continuing operations reached € 671 million, reflecting a decline of € 219 million compared to the prior year level (2021: € 890 million). Accordingly, basic earnings per share from continuing operations declined to € 3.47 (2021: € 4.52).

Average operating working capital as a percentage of sales slightly decreases
Inventories increased 35% to € 5.483 billion (2021: € 4.054 billion) at June 30, 2022 in anticipation of strong revenue growth during the second half of the year. Longer lead times as well as the challenging market environment in Greater China also contributed to the increase. On a currency-neutral basis, inventories were up 28%. Operating working capital increased 23% to € 5.191 billion (2021: € 4.213 billion). On a currency-neutral basis, operating working capital was up 14%. Average operating working capital as a percentage of sales decreased 0.4 percentage points to 21.0% (2021: 21.4%), reflecting an overproportional increase in accounts payable due to higher sourcing volumes and product costs.

Adjusted net borrowings at € 5.301 billion
Adjusted net borrowings amounted to € 5.301 billion at June 30, 2022, representing a year-over-year increase of € 2.155 billion (June 30, 2021: € 3.146 billion). This development was mainly due to the significant decrease in cash and cash equivalents.

FY 2022 outlook reflects double-digit growth during the second half of the year
On July 26, adidas adjusted its guidance for FY 2022 due to the slower-than-expected recovery in Greater China since the start of the third quarter resulting from continued widespread covid-19-related restrictions. adidas now expects currency-neutral revenues for the total company to grow at a mid- to high-single-digit rate in 2022 (previously: at the lower end of the 11% to 13% range), reflecting a double-digit decline in Greater China (previously: significant decline). While so far the company did not experience a meaningful slowdown in the sell-through of its products or significant cancellations of wholesale orders in any market other than Greater China, the adjusted guidance also accounts for a potential slowdown of consumer spending in those markets during the second half of the year as a result of the more challenging macroeconomic conditions. Therefore, growth in EMEA is now expected to be in the low teens (previously: mid-teens growth), while revenues in Asia-Pacific are projected to grow at a high-single-digit rate (previously: mid-teens growth). Despite the more conservative view on the development of consumer spending in the second half of the year, adidas has increased its forecasts for North America and Latin America reflecting the strong momentum the brand is enjoying in these markets. In North America, currency-neutral revenues are now expected to increase in the high teens. Sales in Latin America are projected to grow between 30% and 40% (both previously: mid- to high-teens growth).   

Due to the less favorable market mix and the impacts from initiatives to clear excess inventories in Greater China until the end of the year, gross margin is now expected to reach a level of around 49.0% (previously: around 50.7%) in 2022. Consequently, the company’s operating margin is now forecast to be around 7.0% (previously: around 9.4%) and net income from continuing operations is expected to reach a level of around € 1.3 billion (previously: at the lower end of the € 1.8 billion to € 1.9 billion range).