From the Sector

Far Furore: Die 50. Ausgabe der MUNICH FABRIC START ist am 30. August erfolgreich gestartet - innovativ und nach vorne gerichtet. Mit rund 900 Aussteller:innen aus 40 Ländern und 1.500 Kollektionen auf einer Gesamtausstellungsfläche von 45.000 Quadratmetern sind die Messen MUNICH FABRIC START mit vier Hallen im MOC, BLUEZONE mit zwei Hallen, das KEYHOUSE sowie das neue Format THE SOURCE mit rund 2.500 Quadratmetern zusätzlicher Fläche nochmals gewachsen und erreichen Aussteller:innen-seitig das Niveau der letzten Vor-Corona-Ausgabe im September 2019.
 
THE SOURCE als Antwort auf die steigende Nachfrage nach Manufacturing und Nearshoring ist mit 65 Aussteller:innen in der neu erschlossenen Halle 8 direkt gegenüber vom MOC ebenfalls ausgebucht.
 
Das hohe Besucheraufkommen am ersten Messetag ist ein Zeichen dafür, dass die MUNICH FABRIC START mit ihrem Termin vom 30. August bis 1. September richtig liegt und bekräftigt das Standing der Münchener Veranstaltung als eine der wichtigsten europäischen Stoffmessen und Trendautorität. FURORE, das aktuelle Leitthema der MUNICH FABRIC START, hat sich bewahrheitet.

Aufsehen erregen. Einen außergewöhnlichen Zustand der Begeisterung erzeugen. Rasend vor Wut und gleichzeitig voller Verzückung. All diese Widersprüche beinhaltet das Wort „Furore“ – und damit das aktuelle Leitthema der 50. MUNICH FABRIC START. Die Farb- und Materialtrends für Herbst/Winter 23/24 spiegeln dies in einer Kontroverse wider – von ruhig, dezent und natürlich bis hoch-innovativ, impulsiv und provokativ; von nahezu unsichtbar bis maximal plakativ.

Mit knapp 900 Aussteller:innen und 1.500 Kollektionen auf einer Gesamtausstellungsfläche von rund 45.000 Quadratmetern umfasst die MUNICH FABRIC START inzwischen acht Bereiche: Fabrics und Additionals mit internationalen Materialinnovationen für alle Bekleidungssegmente, ReSOURCE und Sustainable Innovations für nachhaltige Innovationen, Design Studios mit Stoffdesigns und neuen Entwicklungen für Prints auf vergrößerter Fläche, den Innovationshub KEYHOUSE, das Denim Powerhouse BLUEZONE und das neue Sourcing-Areal THE SOURCE für internationale, vertikale Integration.

Seit Wochen ausgebucht, ist THE SOURCE die neue europäische One Stop Solution für ein ganzheitliches Fashion Sourcing und neu gedachte Wertschöpfungsketten. 65 ausgewählte internationale Fertigungsunternehmen präsentieren ihre Angebote von Cut-Make-Trim (CMT) bis hin zur High End Production. Durch ein Cluster der wichtigsten Beschaffungsländer wie Portugal, Türkei, Marokko, Tunesien, Bosnien und Vietnam entsteht ein businessrelevanter Mix für die Risikodiversifikation, genre- und preislagenunabhängig. Die MUNICH FABRIC START hat dafür die neue Halle 8 mit rund 2.500 Quadratmetern zusätzlicher Fläche entwickelt. Die unter Denkmalschutz stehende, jüngst fertigrestaurierte, direkt an das bisherige MUNICH FABRIC START Gelände angrenzenden Lokhalle ist dafür die perfekte Location - mit gigantischen Ausmaßen und spektakulärer Architektur eine der größten, freitragenden historischen Stahltragwerkhallen Europas.

ReSOURCE, die Sourcing Plattform für nachhaltige Materialentwicklungen, bietet bio-zertifizierte, biobasierte, recycelte, kreislauffähige oder aus regenerativen Quellen hergestellte Stoffe und Zutaten und gewinnt weiterhin an Bedeutung.

Für die DESIGN STUDIOS wurde im Atrium 3 des MOC ein neues Areal geschaffen. Mit rund 40 Studios hat sich die Ausstellerzahl verdoppelt. Neben bekannten Namen wie buntastic, Eleonora Clerici, Fusion CPH, Le Studio Copenhagen, LETI., Musticstsyle oder Zisser Textile Design, die bereits langjährig in München präsentieren, ist dieses Jahr erstmalig das CREATE-Kollektiv in München vertreten, dessen 27 kreative Studios das Print-Segment der MUNICH FABRIC START bereichern.

In 2015, adidas Originals launched the NMD silhouette – taking cues from the brand’s inimitable archive in order to create a shoe that disrupted the sneaker world at the time. Six years later and the Trefoil has returned with an updated take on the original innovator, channeling the very same independent mindset to present the  NMD V3.

Built for a life in motion, the NMD V3 reimagines its own iconic heritage with a distinctly forward thinking vision. The silhouette features a re-engineered mesh that wraps around the foot, a transparent heel clip, and BOOST cushioning that’s partially encapsulated in a TPU shell. The NMD V3 also comprises an upper made with a high-performance yarn which contains at least 50% Parley Ocean Plastic – re-imagined plastic waste, intercepted on remote islands, beaches, coastal communities and shorelines – and 50% recycled polyester.

• Made in Bangladesh Week is organized by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in partnership with Bangladesh Apparel Exchange (BAE)
• A week-long event in November will showcase sustainability strides being made by Bangladesh garment makers
• The event will host 17 physical events like - conferences, expositions, photo exhibitions, fashion runway shows, sustainable design and innovation awards, factory tours –and many more.

The Honourable Prime Minister of Bangladesh, Sheikh Hasina, will inaugurate the first ever Made in Bangladesh Week in November. The event represents a major branding exercise for Bangladesh’s burgeoning garment manufacturing industry as it looks to position itself as the first-choice apparel sourcing hub for global fashion retailers.

It is the first branding event of the Bangladesh Apparel Industry dedicated solely to celebrating and showcasing the newest innovations, compliance, and sustainable developments of the RMG sector in the global market.

The event aims to promote the apparel industry of Bangladesh locally and globally by showcasing the compelling stories of the ready-made garments sector, especially its impressive strides in the areas of workplace safety, environmental sustainability and workers’ wellbeing.

The event is expected to draw a gathering of more than a thousand people from home and abroad, including key stakeholders in the local and global fashion industry.

Bangladesh’s garment manufacturing industry has undergone a renaissance in recent times. Significant strides have been made in technological innovation, eco-friendly production, worker welfare and factory safety.

In addition to panels, seminars, awards, fashion shows and exhibitions, the week will also provide an opportunity for factory tours to give journalists and other stakeholders a chance to see for themselves innovative garment production in Bangladesh.

Made in Bangladesh Week will be organised by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in partnership with Bangladesh Apparel Exchange (BAE).

• 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).

adidas unveils the first of two drops with South African luxury designer, Thebe Magugu. The debut collection for women features the celebratory and joyful artwork of a woman dancing, designed in collaboration with artist Phathu Nembilwi, and influenced by Thebe’s mother, aunt and grandmother, and the theme of femininity, interwoven with leading adidas material technology . Each garment features an abstract selection of bright and punchy colors including, impact orange and yellow, accents of shock pink, backgrounded by pulse lilac. The collection spans across sports including running , swimming , training , tennis , football , and cycling alongside a set of casual lifestyle garments.  

United by a shared passion for inclusivity and kinship, the collection includes a three-piece modesty swimwear set made in part with recycled materials and chlorine resistant fabric that is lightweight and chlorine-resistant; swimwear in inclusive sizing (XS-4XL); and gender-neutral pieces with UNITEFIT – a fit system that is created with a spectrum of sizes, genders, and forms in mind.

The high-performance tennis pieces will be premiered during one of the most prominent hardcourt tournaments by adidas’ inspirational athletes Dana Mathewson, Stefanos Tsitsipas, Felix Auger Aliassime and Daria Kasatkina who are passionate about showing support for what matters and encouraging diversity and inclusivity on and off the court. The tennis collection features the Purple NY UNITEFIT Tennis Dress, delivering style and functionality, made in part with recycled materials.

Alongside the performance pieces, the statement Originals looks include the Originals Crop T-shirt, in white and semi pulse lilac, delivering classic streetwear style, and the Originals 7/8 Leggings, a go-to choice for every occasion. The collaboration also includes remixes of iconic adidas footwear silhouettes including the Stan Smith, Nizza Platform, Astir and Forum footwear, which feature design accents from Thebe Magugu's signature prints. Reflecting adidas's commitment to consciously crafting performance materials, hero styles and pieces have also been made in part with recycled materials, just one of the innovations that represent adidas' commitment to help end plastic waste. 

C.L.A.S.S. Eco Hub has selected the winner of C.L.A.S.S. ICON Award 2022, the annual contest with the aim of sponsoring a visionary creative who is able to combine design, responsibility, innovation and communication. Receiving the third edition of the eye-turning award is FROY Club, an experimental and responsible fashion project born in 2018 by designer Arman Avetikyan.

Froy is rooted in Armenian culture and by mixes high quality materials and yarns. Working with a sustainable ethic, Froy reconciles traditional know how and innovative techniques to create hybrid, versatile and speaking surfaces. The brand uses Italian certified fabrics and yarns that meet European standards, selecting natural materials to create high-quality products with a circular life. Froy also chooses GOTS, FSC and OEKO-TEX certified fabrics and yarns in order to support a clear production chain.

By receiving two thousand euros for sourcing purposes, smart consultancy support and communication aid from the C.L.A.S.S. team, plus assistance to the brand in commercial activities, a physical stand in the WHITE Show and a dedicated brand page on Renoon powered by C.L.A.S.S. partners; Froy will have the opportunity to upgrade its efforts in terms of responsibility and innovation, while sharing its conscious vision and values with a wider audience. Moreover, the Italian brand with Armenian roots will become part of the C.L.A.S.S. ICON community, joining past winners such as the high fashion Italian designer Gilberto Calzolari and the Portuguese streetwear brand Duarte

The partnership will aim at eliminating hazardous Potassium Permanganate Spray and most manual processes in denim finishing, while reducing Greenhouse Gas emissions, water and chemical use in the process

Hong Kong based Epic Group, a leading garment manufacturer for global brands today announced its strategic partnership with CleanKore, a denim innovation and patent licensing company. This partnership aims at scaling the CleanKore patented yarn dyeing technology that provides numerous sustainability benefits for both the denim mill and garment manufacturer.

CleanKore patented technology changes the chemistry and the process used to dyeing yarns at the denim mills by keeping intact the white core of the yarn and only dyeing the surface. This technology significantly reduces water, chemicals and process time in the denim garment finishing stage.

Denim garment finishing often involves onerous manual processes such as handsanding and hand whiskering, spraying of harmful Potassium Permanganate (PP) (done by heavily protective equipment donned personnel), and multiple washing cycles. CleanKore technology coupled with lasers enable elimination of the PP spray process, significantly improving health and wellbeing of apparel workers, as well as emissions of harmful chemicals. Manual processes are eliminated in most styles and significantly reduced in others.

CleanKore technology also enables the reduction of wash cycles – reducing water, chemical use and process time, adding to the sustainability credentials of the end products. The products currently tested by Epic Group and CleanKore demonstrate up to 44% of water savings in garment finishing and up to 60% of energy savings in the fabric dyeing stage, along with the elimination of PP spray.

Through their partnership, Epic Group and CleanKore are planning to rapidly scale up the adoption of this technology in partnership with Epic Group’s customer base. In the first year, the partnership plans to reach over 4 million pairs of denim and working towards a scale of 15 - 20 million pairs of denim per annum in the next 3 years, converting a large portion of Epic Group’s denim production to CleanKore technology.

The 50th INNATEX fair opens its gates to a Green Fashion trade audience from 29 to 31 July 2022 in Hofheim-Wallau, near Frankfurt. At this anniversary fair, over 200 labels will be exhibiting, a wide range of experts and organisations will be gathering, and elaborate features and facilities are planned for the Rhein-Main exhibition centre.

According to INNATEX project manager Alexander Hitzel, one highlight is the Community Area, which brings together a range of experts. In short lounge talks, they reveal insights into what they are currently working on and a dialogue format encourages personal discussion. Mirjam Smend, whom we know well from Greenstyle Munich, introduces her recently launched sustainability magazine, Pureviu, and facilitates the morning talks.

Alongside standard bodies such as IVN and GOTS, which have taken part in INNATEX for many years, younger projects such as Fairmodel and the digital platform Retraced will be part of this special area. Fairtrade Germany, Femnet and the VDMD are to be found there too. Almost all of them are joining in with the Ask Me Anything dialouge format. Interested attendees can pre-book a slot of up to ten minutes for a personal discussion with the expert of their choice.

The supportive activities that had to be suspended during the pandemic are enjoying a comeback at this year’s summer fair: five newcomers to INNATEX designated DesignDiscoveries will be presenting their projects in another special area. Vegtus, from Barcelona, produces sneakers and other products from cactus leather. Natural textiles such as organic cotton are used by Lounge Cherie, a yoga fashion label.

Products for kids through to seniors, classics and streetwear, footwear and accessories
Nordlicht similarly relies on recyclable, renewable natural fibres for its outerwear, bags and accessories. The field of circular fashion is also served by the remaining two Design Discoveries. Both Nature is Future, with its handmade sneakers, and Freibeutler, with its functional rucksacks, make extensive use of recycled materials, while also paying due attention to broader sustainability aspects.

Regular INNATEX exhibitors include Lana, Chapati and Didymos, all of whom are also celebrating anniversaries. Labels such as Anokho with their colourful accessories in jacquard fabrics and Danish label Angel Circle with its plus-size fashion are exhibiting for the first time.

Checkpoint Systems, a provider of source to shopper solutions to the retail industry, has announced the launch of the OPAL Tag. The new pinless article surveillance solution facilitates the protection of footwear, sportswear, outdoor equipment and other hard-to-protect goods.

The one-piece OPAL Tag, developed by Checkpoint’s Alpha High Theft Solutions division, uses a unique locking mechanism that includes small rubber pads. This pinless solution is suitable for a range of goods – including footwear, sportswear, outdoor clothing as well as outdoor and athletics equipment – as it ensures that the device does not damage the items when it is attached or removed.

In addition, the OPAL Tag has two other advantages: It is easy for store associates to apply and remove with just one hand, optimising workflows - and it is unobtrusive, improving the customer experience. For example, if it is attached to a shoe, the customer can still try on the item without having to ask staff for help.

Proven security features
Besides the new, optimised handling, the OPAL Tag has a bandwidth of security features that have proven successful for retailers in preventing theft. These include flashing LED lighting to deter potential thieves, showing them that the security device is live. The OPAL solution is also equipped with Alpha 2 Alarm technology, meaning that an alarm will sound if the device passes by an EAS antenna. Attempts at tampering are also detected in this way.