From the Sector

Fresh Relevance announces that DC International has selected its versatile personalization platform to power personalized online experiences for its Coverstore and Leatherology brands.

DC International is a vertically integrated eCommerce company and home to two fast-growing direct-to-consumer brands: Coverstore and Leatherology. By selecting Fresh Relevance to power personalization across the website and email marketing of Coverstore and Leatherology, DC International will be providing shoppers with a more engaging and tailored online experience. The business will take advantage of the rich feature set within the Fresh Relevance platform, including product recommendations.

“We’re delighted to welcome DC International to the Fresh Relevance family and are excited to help them provide their Coverstore and Leatherology customers with a more tailored and valuable experience online,” says Mike Austin, CEO & Co-founder at Fresh Relevance.

The ecological and social conditions in the production of textiles are coming to the fore and into the consciousness of industry and end customers. With the new LAB102 brand, the "Jeans & Garment" team of the CHT Group to offer its global denim customers sustainable chemical solutions and technologies in the future.

Where does the name "LAB102 - Blue veins of CHT" come from?
LAB was chosen not only because the English word for laboratory fits perfectly with a chemical company, but also because it stands for innovation, development, and discovery. The digits 102 in the name refer to the house number of CHT's corporate headquarters in Tübingen.
The slogan "Blue veins of CHT" maintains the connection to the name CHT which is well-known in the industry. Moreover, the denim or jeans industry is traditionally and historically indigo - thus blue.

Focus on sustainability
LAB102 focuses not only on chemistry, but also on technology. Fogging, laser, and ozone technologies are innovations that currently enable new approaches in jeans and garment treatment and are at a high ecological level. Their use can lead to savings in water and energy. The use of chemicals can also be reduced if processes are optimized and adapted to the new requirements. To this end, the CHT Group's "Jeans & Garment" team works with the leading machine manufacturers on new developments.

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.

• 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).

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.

ROICA™ strengthens its presence in the apparel segment thanks to its established network of partners, who will present their latest innovations at the upcoming Première Vision.

ROICA™ partners are the “artists” and “heartists” of premium stretch in fabrics: because they have at heart all the values for which ROICA™ stands for. These partners presenting at Première Vision are:

• Iluna Group, whose journey into the new dimension of responsibility continues with developments in GRS (Global Recycled Standard) certified recycled yarns aimed at unprecedented effects in looks, performance and hands. Brand new for this edition of Première Vision is the inclusion of GOTS-certified organic cotton in GRS-certified galloons and allover lace containing ROICA™ EF, so as to meet market demands for natural comfort in the underwear sphere.
• Innova Fabrics, which recently enhanced its smart offering by launching the RF (Residual Free) line, with the goal of reducing the impact of microplastics derived from the fashion industry. This is made possible by mixing two responsible ingredients, SENSIL® BioCare by Nilit and ROICA™ V550 by Asahi Kasei, which give birth to both sporty and casual fabrics.
• Inplet, which enriched its production of smart elastic and rigid knitted fabrics with three new products: a powernet fabric in 77% polyamide RECO and 23% ROICA™ EF with good recovery; a net fabric in 55% polyamide RECO and 45% ROICA™ EF characterized by a soft hand and good elasticity; and a 79% polyamide and 21% ROICA™ V550 good power, good recovery and a soft touch.
• Penn Textile Solutions/Penn Italia, whose highlights of the new collection are on one side fabrics developed with the use of Neride eco yarns by Nurel with ROICA™ V550, characterized by restraining lace effect, soft touch and breathable, in combination with tulle as a sustainable basic, and on the other side charmeuses with soft hand, raw cut in combination with a band fabric from the dreamshape family with reinforced gripping edge, made again in Neride eco yarns by Nurel with ROICA™ V550
• Tessitura Colombo Antonio, which in its new A/W 23-24 collection expands its proposal of regenerated lace from the ECO-LACE line: new designs inspired by fashion trends using ROICA™ EF. Also, in its BIODEGRADABLE line it uses ROICA™ V550 for the realization of new designs. The new MICROMODAL line uses ROICA™ V550; the effect of this lace range is softness, elegance and relief effect.

adidas drops an all-new sportswear capsule. The collection is inspired by the way the next generation continues to turn tradition on its head with how they move through the world, opting for a fresh comfort-first mindset and rejecting old-world pressures.

To get closer to this mindset, adidas reached out to uncover more about the rise of the cosy fit. Nine in ten believe the clothes they wear impact how mentally comfortable they feel, and over three quarters say they are more likely to thrive in multiple aspects of life when rooted in a true feeling of comfort. With this in mind, adidas’ sportswear capsule is built for next-level comfort both at home and on the streets with a full collection of casual, stylish fits for both men and women.

Fronted by a raft of next generation trailblazers, including global award-winning actress Hoyeon, US gymnast sensation Nia Dennis, American football superstar Tua Tagavailoa, and Chinese national sprinting champion Xie Zhenye, the campaign reveals how choosing comfort in mind and body has given them confidence, more internal headspace, and the ability to embrace any challenges within their journey of progress.

Key looks include:

• Women’s Rib Dress: A straight minimalist silhouette in block-colour black, which can be worn individually or layered for a more expressive look. Features a twister racerback detail, crew neck cut, and side split hem for an added edge
• Men’s Classic Tee paired with Woven Pants and Coach Jacket: Paying homage to sport heritage, the woven pants and coach jacket offer an oversized and relaxed fit, in a neutral but bold colour pairing. The ribbed crewneck tee complements the look with a stylish mixture of textures
• Women’s Oversized Hoodie with Rib Crop Top and Biker Shorts: A muted pastel toned top designed with a cropped hem and matching shorts in soft rib knit material, creating an effortless fresh but cosy look which can be easily layered with a slouchy oversized hoodie
• Men’s Fleece Hoodie layered over Oversized Tee and Fleece Shorts: Relaxed fit basic tee with a vibrant red block logo paired with a boxy hooded jumper which boasts an oversized aesthetic. Complemented by baggy fleece-lined shorts ensures comfort through every move and moment

From 7 - 9 July, the who's who of the fashion industry and the entire fashion ecosystem will finally meet again in person at the events of the Premium Group at Messe Berlin! For business and exchange, for new experiences and impulses, for new brands and above all for one thing: for a new togetherness!

As usual, the trade shows PREMIUM and SEEK as well as the conference format FASHIONTECH are reserved for business professionals - who can find inspiration on site entirely. With the new D2C festival ‘The Ground – Celebration of Style & Culture’, young consumers and fashion enthusiasts from GenZ and GenY as well as the international community living in Berlin are invited to the exhibition grounds for the first time.

More than fashion: 360-degree inspiration at The Ground Festival
At The Ground, industry professionals meet young enthusiasts to inspire each other and discover new worlds. The Ground presents a completely new mix of topics, brands and partners around beauty, music, sport, play, soul and talks. Fashion is the connecting element of The Ground and runs through all areas. Creative and interactive brand presentations meet pre-loved and vintage store pop-ups, inspiring panel talks, sports and mental health workshops and live performances.

In the name of peace and unity: The Ground Festival opened by #FashionUnites Parade
On 7 July, the first The Ground Festival will open with a colourful parade through the capital. Together with the PLATTE.Berlin community, The Ground is organising a parade under the motto #FashionUnites starting at noon from the Victory Column through the west to the festival location of the Berlin exhibition centre. Accompanied by a Berlin DJ, everyone is invited to take part in the parade and can register here and thus also receive free access to The Ground on the first day of the festival.

High-profile charity campaign: The Ground launches 'MUST-HAVE PEACE Merch Collection'
Due to the ongoing war situation in Ukraine, the makers behind The Ground have launched a charity campaign: the MUST-HAVE PEACE Merch Collection. In this exclusive collaboration, players and brands such as Closed, Drykorn, Eastpak, Lala Berlin, Lee and others design one piece of merch each (denim jackets, shirts, shorts, bags) that can be bought during The Ground Festival.

New hub for sustainability: the SEEK Conscious Club
SEEK has always been a magnet for brands and people who have a common vision, tackle things and get them on the road. With the new SEEK Conscious Club, there will be a separate exhibition area focusing on sustainability - more than 80 sustainable brands are joining the club already.

New brand worlds at PREMIUM
This July, PREMIUM will be divided into three sections for the first time: High, Icon and Volume. High is the new home for brands that operate in the market above the premium segment. These include Lala Berlin, Nove, Helene Galwas and Jane Kønig. Icon covers the classic premium segment from Strellson and Seidensticker to Mos Mosh and Denham to Young Poets Society and Fabienne Chapot, and Volume is the new area for commercially successful brands that approach premium from the middle of the market. Here you will find brands like Gerry Weber, Mexx, Pierre Cardin or Miracle of Denim.

The Content Stage program
The stage program will reflect all relevant topics of the fashion ecosystem as part of the new Premium Group cosmos.

• It starts on the first day of the fair, Thursday 7 July, with the popular FASHIONTECH conference.
• On 8 July, the SEEK Conscious Club will host an extensive stage program on the subject of sustainability in all its facets for the first time.
• On Saturday, 9 July, the stage will become the entertainment spotlight for The Ground visitors.

ECOSENSOR™ by Asahi Kasei Advance presents its SS 2023 collection, made of high-tech fabrics implementing new-generation values, with the aim of keeping nature, body and mind in harmony at Performance Days.

ECOSENSOR™ presents 40 new references that meet the needs of the contemporary consumer, such as durability, wellbeing and performance. Being capable of combining active climate control, exquisite touch, lightness and comfort with sustainable values, ECOSENSOR™ stands out as a unique eco-high-tech performance proposition in its market. The collection covers the different market applications with 7 items for INNERWEAR, 2 for OUTERWEAR, 17 for SPORT KNIT and 14 for SPORT WOVEN.

All of ECOSENSOR™ fabrics are made with sustainable materials which are certified by internatinal certification such as GRS, RCS or self-certification by each yarn supplier, through a traceable and transparent production process and supply chain.
100% of the stretch articles (representing 35% of the collection) are made with ROICA™ EF by Asahi Kasei, the recycled stretch yarn made from pre-consumer materials.
 
The main fibers are GRS certified recycled polyester and recycled polyamide, but the collection also features some blends, such as in Bemberg™, the high-tech yarn born from the transformation of cotton linters through a circular, transparent and traceable process with a precious hand, optimal moisture management characteristics,  whose end of life guarantees its biodegradability.
Even the dyeing and finishing phases - key moments for performancewear - have been certified by international labels such as bluesign® or OEKO-TEX® Standard 100.

A new interview study from NGO ChemSec shows that there is a gap between supply and demand when it comes to recycled materials, causing confusion and bottlenecks. Among other things, suppliers go out of their way using elaborate trade schemes to reach the coveted ”100% recycled” tag, which – it turns out – is not that important to consumer product brands. Far more crucial aspects, according to several major B2C companies, are:

• Honest communication towards customers
• Comprehensive information from suppliers
• Clear standards for recycled material

These are some of the conclusions from NGO ChemSec’s survey and interview study with 26 highly well-known consumer product brands. All brands responded to a survey concerning their current plastic use, as well as their needs, expectations and challenges regarding using more recycled material, to enable the shift to a circular economy for plastics.

Ten of the brands then participated in in-depth interviews on the same topics:, Essity, H&M, IKEA, Inditex , Lego, Mars,  SC Johnson, Tarkett, Unilever and Walgreens Boots Alliance.

Is non-mechanical recycling the answer?
Only about ten percent of all discarded plastics is recycled today, which is of course not nearly enough to achieve a circular plastics economy. Despite ambitions and initiatives to reduce plastics use – replacing the materials with other, more sustainable ones – the “plastic tap” is not expected to be turned off anytime soon. Quite the opposite, which makes raising the recycling rates more important than ever.

Although commercially viable, traditional (mechanical) recycling is afflicted with severe flaws, such as legacy chemicals, quality and functionality issues, as well as the lack of clean and sorted waste streams. The brands cited quality and functionality issues as the main obstacles for using more recycled material in their products.

This opens up for non-mechanical recycling, sometimes referred to as chemical recycling, where the plastic is either dissolved or broken down into smaller building blocks. Harmful additives and other hazardous chemicals can be removed in the process, and a material comparable to virgin plastic can be achieved – at least in theory.

So far, however, non-mechanical recycling technologies are costly, energy-intensive, and often require the addition of a great deal of virgin plastic to work – the very material that needs to be phased out.

The chain of custody models needs to be detangled
Apart from these production issues, there is a wide range of chain of custody models surrounding non-mechanical recycling, including mass balance and book & claim, which enable trade of credits or certificates for recycled material.

This cuts the physical connection between input and output, making it possible for a supplier to sell a material as “100% recycled”, when the actual recycled content could be zero.

This is a major issue for the brands ChemSec has spoken to, who value honest and correct communication towards customers. It turns out, perhaps somewhat surprisingly, that being able to slap a “made from 100% recycled plastic” label on a product is not all that important to brands.

To the brands, a physical connection between input (the discarded plastic waste headed for recycling) and output (the product at least partially made from recycled plastics) is far more important.

A physical connection, along with correct and adequate information from suppliers, as well as clearer standards and guidelines than what is available today, is what brands require to increase the use of recycled material and move us closer to a circular economy for plastics.