From the Sector

ISKO provided their latest innovation in material science to British designers, Priya Ahluwalia, Masha Popova, Chet Lo and Aaron Esh, for the London Fashion Week SS24 season.

Alongside supplying their latest denim fabrics, ISKO opened its doors to its London-based product development centre, Creative Room London, for finishing and washing of their final designs as well providing expertise and knowledge in denim design and construction.

Priya Ahluwalia
For Ahluwalia’s Spring Summer 24 collection, entitled Acknowledgements, Creative Director and founder Priya Ahluwalia’s research led her on a journey of creative rediscovery.
ISKO’s Ctrl+Z fabric, which is made entirely from recycled and regenerated fibres, was used to create the flower motif denim showcase within 3 looks across jeans and jackets. This development contains no virgin cotton and uses a minimum of 60% recycled materials and the remainder is regenerated cellulose fibres while still giving a look and feel identical to traditional denim and speaks to Ahluwalia’s ongoing commitment to sustainable design and business practices.

Chet Lo
This season, Chet Lo took an active stand in reclaiming the power lost during his youth, healing the childhood wounds inflicted by a society that sidelined differences instead of celebrating them.
ISKO’s Ctrl+Z fabric and specialist lasering techniques from ISKO’s Creative Room was used across three looks featuring signature Chet Lo erotic laser prints across denim bottoms.

Aaron Esh
The SS24 season marked the brand’s debut at London Fashion Week, a homecoming of sorts for Esh, who was born and raised in the heart of the British capital, studied at Central Saint Martins and became a finalist at the LVMH Prize earlier this year. The early impulses of Aaron Esh remain steadfast: clothes that combine establishment rigour with the rebellious spirit of youth culture, devotedly crafted for a generation who feels somewhere in-between.
Aaron created bootleg denim ripped jeans made entirely from ISKO Denim using R-TWO50 fabric, which comprises a minimum of 50% pre and post-consumer recycled content. The designer noted the addition of denim accompanied by leathers add a new level of depth to their latest collection.

Masha Popova
Masha Popova’s sophomore catwalk outing, MONSTER was a “seasonless” offering that combines Autumn Winter 2023 and Spring Summer 2024.
Masha continued her obsession with denim manipulation, using various finishings including over-dyeing, flocking, patchwork, scratching and fraying in a variety of colours from vibrant green to silver across jeans, tops and jackets, all developed with the help of ISKO’s Creative Room, London.

Lectra, a leader in technology solutions for the fashion, automotive and furniture industries, announces the appointment of Frédéric Morel as President of the Asia-Pacific region and as a member of the Group's Executive Committee, where he replaces Edward Wang, who previously held the same position. This nomination comes as Lectra prepares to present its latest software and connected equipment offers at the CISMA (China International Sewing Machinery and Accessories) trade show in Shanghai, China, to enable Asian industry players to accelerate their transition to Industry 4.0.

Lectra's presence in the Asia-Pacific region began in 1985 with the opening of its first office in Japan. Today, Lectra employs 16% of its workforce in the region, which accounted for 25% of the Group's revenues in 2022. Thanks to its dynamism, economic fabric and position in world trade, China is a key market in this region, generating 9% of Lectra’s revenues in 2022.

Prior to joining Lectra, Frédéric Morel held the position of South East Asia & Pacific Executive Vice President at Vallourec. He had previously been appointed Sales Director and then Sales Vice President for Vallourec in the Middle East, after holding various sales and general management positions for the company in the Asia region. A graduate of the Institut d'Etudes Politiques d'Aix-en-Provence and the EMLYON business school, Frédéric Morel began his career in 2000 with Saint-Gobain.

On 5th September 2023, the Amsterdam: Best of Bangladesh Europe’ started in the venue of Wastergas in Amsterdam. The 2-day nation branding event was organized by Bangladesh Apparel Exchange (BAE), with support from the Embassy of Bangladesh, Ministry of Commerce, Export Promotion Bureau (EPB) of Bangladesh and in association with PDS.

Tipu Munshi, MP, Commerce Minister, Government of the People’s Republic of Bangladesh; Michiel Sweers, Vice Minister of Foreign Economic Relations, Kingdom of the Netherlands; Shahriar Alam, MP, State Minister for Foreign Affairs, Government of the People’s Republic of Bangladesh; Md Siddiqur Rahman,  Former president of BGMEA; M Riaz Hamidullah, Ambassador of Bangladesh to the Netherlands; Leslie Johnston, Chief Executive Officer, Laudes Foundation; Pallak Seth, Founder & Vice Chairman, PDS Limited; and Mostafiz Uddin, Founder & CEO, Bangladesh Apparel Exchange; attended the inaugural ceremony of the ‘Best of Bangladesh’.

Three MoU were signed in the inaugural for the development of the industries of Bangladesh.
The 1st MoU was signed between Bangladesh Apparel Exchange and Eindhoven International Project Office (EIPO). The 2nd MoU was signed between Bangladesh Apparel Exchange and Apparel Impact Institution. The 3rd MoU was signed between Bangladesh Apparel Exchange and Oxfam.
More than 35 companies from various fields, including apparel, textiles, agriculture, handicrafts, and other sectors, participated in the initiative.

The event held six interactive panel sessions on the topics "Bangladesh – Perspectives from an Emerging Economy", "Sustainable Sourcing Realities: Challenges, Achievements & Next Steps”, “Empowering the Future: Advancing Safety & Well-being for Garments Workforce in Bangladesh", "Bangladesh Agro-Food: A Next Opportunity for Collaboration", "Impact Investing - The Next Frontier", and “Sustainable Synergy: Circular Economy, Climate Action & Bangladesh’s Future".

A Bangladesh Innovation Runway was presented by Pacific Jeans at the event. The Bangladesh Innovation Runway showcased the ability of the country in producing high end, sustainable and innovative apparel products.

SHIMA SEIKI MFG., LTD. of Wakayama, Japan, together with its Korean subsidiary SHIMA SEIKI KOREA INC., will participate in the Preview in SEOUL exhibition in Seoul, Republic of Korea this month (23rd - 25th of August 2023).

SHIMA SEIKI will show its SWG061N2 compact WHOLEGARMENT® knitting machine which can produce a wide range of WHOLEGARMENT® items in their entirety without the need for linking or sewing. The SWG-N2 series “Mini” range is suited to the production of small knit items and accessories such as gloves, socks, hats and scarves as well as cozies, shoe uppers, bags, card cases, glasses cases, smartphone covers and other personal items. The N.SVR093SP is a conventional shaped knitting machine featuring a loop presser bed that yields novel fabrics with special inlay patterns that are produced by inserting yarn into knit fabric in a weave fashion, offering new and exciting possibilities in hybrid knit-weave textiles. Both machines will be shown knitting such items as bags and sporting goods to demonstrate the capability of current knitting technology for producing non-apparel items.

SDS®-ONE APEX design system and APEXFiz® subscription-based design software will also be on display. Both support the creative side of fashion from planning and design to colorway evaluation, realistic fabric simulation and 3D virtual sampling. Virtual samples are a digitized version of sample making that are accurate enough to be used effectively as prototypes, replacing physical sampling and consequently reducing time, cost and material that otherwise go to waste. Virtual samples can furthermore be used in e-commerce to gauge consumer demand before production begins. Feeding that information back to production and combined with on-demand WHOLEGARMENT® knitting technology, production can be adjusted to optimize inventory and minimize leftover waste. APEXFiz® thereby helps to realize sustainability and digitally transform the fashion supply chain.

The Danish Ministry of Defence Acquisition and Logistics Organisation (DALO) Industry Days event is scheduled to take place from 23^rd to 24^th August in Denmark. Carrington Textiles and their main manufacturing facility in the UK, Pincroft, will showcase their latest innovations in military textiles.

Carrington Textiles - after recently announcing the launch of the new stretch military ripstop fabric, Spartan HT Flex Lite, and strategically appointing the new Head of Defence and Security Fabrics -  at the event represents the commercial focus on building on an over 90 years of heritage of manufacturing military fabrics.

Likewise, Pincroft’s latest technology in non-skin contact vector protection for defence textiles and the recent involvement in printing the new Dutch Ministry of Defence’s camouflage pattern as part of their army’s uniform programme, are just a few of the textile services that will be presented at the event.

The Sustainability Report 2022, which is now digitally available summarizes key ecological, economic, and social developments.
The report shows that the CHT Group has defined and anchored sustainability as an integral part of its corporate strategy.
 

• The group of companies is pursuing the goal of becoming climate-neutral by 2045
• At the end of 2021, the CHT Group subscribed to the Science Based Targets initiative (SBTi) to meet the targets of the Paris Climate Agreement and committed to the 1.5 °C target
• 77 % of sales were achieved with sustainably classified products

The issue of sustainability has been anchored in the DNA of the internationally active foundation-owned group of companies for 70 years. No less an aspiration is derived from this than to support all customers with the most innovative, most sustainable products and solutions and thus to become the leading supplier of sustainable chemical products and solutions in all target markets.

"Climate neutrality" and comprehensive social responsibility  
In the implementation of the sustainability strategy of the CHT Group, the field of action "climate neutrality" takes a central role. The CHT Group has set itself the goal of being climate neutral both in its own production and in the supply chain from the year 2045. The path to climate neutrality by 2045 is illustrated in the report as part of the strategic goal.

In addition to climate protection, social responsibility is also a top priority for the CHT Group. The continuous improvement of health protection and occupational safety is a top priority for the company.

From CHT's point of view, qualified and committed employees make a significant contribution to the company's future success. For this reason, the CHT Group promotes the professional and personal development of its workforce to a high degree and invests in future-oriented and targeted training and further education of its workforce.

For the CHT Group, the respect for human rights is an indispensable pillar of the corporate culture and an essential part of the group-wide Code of Conduct. In 2022, the Human Rights Compliance Policy Statement was developed, and compliance processes and measures were put in place to prevent any violations and identify and mitigate human rights related risks.

• 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.

Toby Lawton, CFO at Renewcell AB (publ), has announced that he will leave his position for a similar position in another company. Toby will continue to work as CFO until a successor has been appointed or at the latest until the end of the year.

"Toby has been an appreciated and valuable member of the management team and I would like to take this opportunity to thank him for the work he has done and the commitment he has shown", says Patrik Lundström, CEO.

SHIMA SEIKI MFG., LTD., together with its Brazilian representative BRASTEMA TECNOLOGIA TÊXTIL LTDA., will host the Tech Fashion shows, a series of private exhibitions held at two locations in Brazil in July and August. The exhibitions will be a showcase for the company’s latest computerized flat knitting technology, presented through fashion shows, machine exhibits and the latest knit samples featured at ITMA 2023. The event is organized by the Fashion Committee of Fitemavest, consultants to Brazil's fashion market, and will feature presentations by CS DESIGN STUDIO designer Cecilia Seibel.

Technological displays include a full lineup of SHIMA SEIKI flat knitting machines, ranging from the MACH2XS WHOLEGARMENT® knitting machine to N.SVR122 computerized shaping machine, as well as the SFG-I fully automated glove knitting machine. Exhibited machines vary between locations. Details are given below under ‘Exhibited Technology.’

The potential of each of these knitting machines are maximized in combination with the SDS®-ONE APEX4 3D design system and APEXFiz® design software. At the core of the company’s "Total Fashion System" concept, SDS®-ONE APEX4 and APEXFiz® provide comprehensive support throughout the apparel supply chain, integrating production into one smooth and efficient workflow from yarn development, product planning and design to production and even sales promotion. Especially effective is their capability to improve on the design and evaluation process with virtual sampling. Ultra-realistic simulation capability on SDS®-ONE APEX4 and APEXFiz® allows virtual sampling to minimize the amount of time, cost and material spent during the sample-making process

The fashion show will feature the newest creations in WHOLEGARMENT® and other knitwear.

From June 8 to 14, 2023, the leading international trade fair for textile machinery manufacturing ITMA took place in Milan, Italy. In total, over 111,000 guests visited the trade fair. Groz-Beckert was able to present its innovations to more than 7,000 customers and business partners, as well as welcoming many other visitors to its booth – including over 280 students.

An international audience gathered at the Groz-Beckert booth: guests came from 84 different countries. The majority of visitors came from Italy with just under 15 percent, followed by Germany with 14 percent, Turkey with 11 percent, India with 9 percent and the USA with 3 percent. For the first time, HR specialists were on hand at the Groz-Beckert booth to look after the student groups, offering the young people comprehensive insights together with experts from the Technology and Development Center (TEZ).

Groz-Beckert presented numerous innovations from its six product divisions Knitting, Weaving, Felting, Tufting, Carding and Sewing at the ITMA. One focus of the innovations was on the topics of efficiency, process stability and sustainability. While the topic of sustainability was reflected in the products on the one hand, a separate area in the Groz-Beckert Gallery was dedicated to the topic on the other. Here it was shown what contribution Groz-Beckert is making to making its own productions and its sites sustainable.