From the Sector

Coloreel has appointed Lucia Eklöf as Vice President of Customer Success to lead international expansion. Eklöf joins the company with a strong sales background and an in-depth understanding of international textile business dynamics.

Prior to her role at Coloreel, Eklöf managed key accounts at Coats, a global leader in thread manufacturing, where she was responsible for a large portfolio of prominent Scandinavian apparel and footwear brands and their global operations.

Lucia Eklöf’s appointment will strengthen Coloreel’s strategy of delivering collaborative partnerships and create value. She will work closely with Coloreel’s distributors, customers, and certified digitizers to help them maximize the benefits of Coloreel’s unique solutions.

HeiQ announces the appointment of Robert van de Kerkhof as Non-Executive Director, with effect from 1 January 2024 to the board of HeiQ plc and as Chairman of the Environmental, Occupation, Health & Safety and Sustainability Committee. Robert will also be appointed to the board of HeiQ AeoniQ Holding AG (in Switzerland), a subsidiary of HeiQ plc.

Robert van de Kerkhof has over 30 years of experience in general management and sustainability leadership and extensive knowledge of the textiles industry, including cellulosic fiber technology. He founded PEPPER-i2, an advisory company specializing in sustainability and circularity. Robert also serves as the Chief Sustainability Officer and as a Board Member of Lenzing AG, a position he has held since 2014. Robert will be leaving Lenzing and its Board on the 31st. December 2023.

Robert joins HEIQ AeoniQ™ with the firm belief that the novel HEIQ AeoniQ™ man-made cellulosic fibers (MMCF) are one of the most promising solutions to transform the textile industry, now the second-most polluting in the world, into one of the most sustainable, by rendering fossil fuel-based fibers like polyester obsolete.

Robert has also held senior positions as President of the Austrian Fiber Institute, President and Board Member of CIRFS – the European Man-made Fibres Association, and Chairman of the ReHubs Business Council for Euratex, which is the voice of the European Apparel and Textile Industry.

RUDOLF HUB1922 makes a move in response to the escalating demand for genuinely sustainable technologies, particularly from forward-thinking segments within the textile and apparel industry. In a showcase at Denim by Premiere Vision Milan, RUDOLF HUB1922 presents a pioneering range of textile chemistry that embodies true evolution.

This chemistry marks a milestone in addressing the pressing need for sustainable solutions. By harnessing raw materials derived from organic waste, plastic waste, and renewable feedstock, RUDOLF's latest textile innovations stand poised to transform the industry, promising a substantial reduction in its environmental footprint.

Alberto De Conti, Head of RUDOLF HUB1922, emphasizes the radical nature of evolutionary textile chemistry, stating, "RUDOLF's approach tackles the challenge of waste generation head-on by transforming waste materials into valuable resources". The diversion of waste and renewable feedstock away from landfills and incinerators to fuel textile chemical production is a game-changer, that diminishes the industry's reliance on non-renewable resources and endorses a circular economy model.

The successful integration of chemicals derived from organic and plastic waste, as well as renewable feedstocks, necessitates effective communication and education. Herein lies the significance of fostering collaborative efforts within the industry. De Conti underscores this point, stating, "Collaboration among scientists, fashion designers, and manufacturers is paramount. It propels a collective shift towards sustainable practices, making eco-friendly fashion the standard and minimizing the industry's environmental impact".

Hologenix® is an honoree on the second annual Power Partner Awards list by Inc. Business Media. Inc.’s 2023 Power Partner Awards feature B2B organizations across the globe that have proven track records supporting entrepreneurs and helping startups grow. There were 389 companies in all who achieved top marks from clients for being instrumental in their success and made the final list. Hologenix was recognized in the Health & Wellness category, which focuses on companies that provide health and wellness products or services. In order to achieve this status, customers provided written testimonials detailing their experience in working with Hologenix as a partner.

“Our business is set up to succeed when our partners succeed, so we are grateful that our partners have affirmed the superior level of support we aim to provide,” said Seth Casden, Hologenix CEO and Co-Founder. “CELLIANT offers something unique to world-class brands looking to deliver health and wellness benefits. Our proprietary technology offers a key textile differentiator for their products, from apparel, bedding and furnishings to medical-use fabrics, bandages and wraps, transportation seating and even saunas.”

OETI, a Member of TESTEX Group, is an official ZDHC Approved Solution Provider under the ZDHC Roadmap to Zero Programme. Expanding beyond its existing role as a ZDHC Approved MRSL Certification Body for OEKO-TEX® ECO PASSPORT around the globe, OETI now offers comprehensive ZDHC training services in India.

The ZDHC (Zero Discharge of Hazardous Chemicals) Roadmap to Zero Programme drives sustainable chemical management in the global textile, apparel, leather, and footwear sectors. OETI's ZDHC training services empower brands, manufacturers, and other ZDHC stakeholders to master sustainable chemical management, adopting ZDHC guidelines, platforms, and solutions.

This programme delivers a comprehensive understanding of chemical management systems (CMS) and their practical implementation within the textile and leather industries. Targeting various organisational departments, including management, chemical teams, procurement, compliance, and sustainability, this training fosters collaboration within the departments regarding sustainable chemical management.

Team Jumbo-Visma’s triumphant victories in Europe’s three Grand Tours of cycling, including the recent Vuelta a España, were supported by AGU’s cycling kits that are powered by the HeiQ Smart Temp thermoregulation technology.

HeiQ celebrates its collaboration with AGU, a high-performance sports gear manufacturer. Together, the companies integrated HeiQ Smart Temp technology into the jerseys of Jumbo-Visma, the triumphant team whose outstanding cyclists Jonas Vingegaard, Primoz Roglic, and Sepp Kuss won Europe’s three Grand Tours; the Tour de France, Giro d’Italia, and Vuelta a España.

HeiQ Smart Temp, an innovative thermoregulation solution, dynamically responds to body heat and moisture, providing cyclists with a cooling effect when they need it most. This technology enhances comfort and performance, making it ideal for next-to-skin apparel, sportswear, and activewear.

AGU's product developers harnessed the power of HeiQ Smart Temp to create jerseys with cooling properties. The Jumbo-Visma team's lightest-weight jersey, weighing 25% less than their regular aero shirt, keeps athletes up to 2.5°C cooler than other performance fabrics.

The Südwolle collection of yarns for weaving and circular knitting continues its evolutionary path based on the key concept of Responsibility. This principle guides Südwolle Group's commitment and engagement regarding all areas of business and stakeholders - the environment, the textile industry production chain, consumers, employees and the social repercussions of its business.

The intersection between these 6 areas has resulted in a collection in which the concept of seasonality is blurred, and products have a flexible, versatile use. The use of cutting-edge technology means yarns offer a high level of quality, suitable for apparel with outstanding durability, a factor that helps to reduce the environmental impact of textile waste and disposable fashion.

Overview of the collection
The collection is divided into 4 themes.
Natural, biodegradable or recycled fibre blends intended for crepe and crinkled fabrics are characterized by substantial twist and a high level of performance. The selection of fibres is oriented towards sustainability, with wool and silk organze combined with LENZINGTM ECOVEROTM viscose and Q-NOVA® regenerated polyamide.

Fuji crepe X-compact Nm 40/1 Z 1050 (40% wool 21.2 μ, 60% FSC certified LENZINGTM viscose EV), new this season, features a smooth look and no pilling thanks to the use of X-compact spinning technology, which produces yarns with excellent performance and durability.

When it comes to light, natural blends, wool and linen or wool, linen and silk blends follow the trend for softly fluid structures, such as the new Peschici Nm 42/1 Z 600 (53% wool 18.4 μ, 23% linen, 24% silk), with a fresh, dry handle and very current dappled effect, which results from the skilful combination of different fibres.

Contributing to a more sustainable and traceable textile production also involves attention to all fibres used. Mohair used for luxury yarns in noble fibres is strictly RMS (Responsible Mohair Standard) certified, which traces its origin, guaranteeing animal welfare and production according to responsible standards, similar to the analogous RWS (Responsible Wool Standard) used for wool. Bosforo RWS RMS Nm 32/1 Z 950 (20% wool 20.8 μ RWS, 60% FSC certified LENZINGTM viscose EV, 20% RMS Kid Mohair) is a fresh, bright yarn that is soft on the skin, suitable for trans-seasonal products, an example of careful selection of raw materials.

Among the fancy yarns, delicately animated structures predominate for naturally elegant creations, represented by Niche Nm 34/2 S 460 (42% wool 21.2 μ, 58% bourette silk), a twisted yarn in wool and bourette silk, which adds dynamism with its characteristic rough, knotty surface.

Textil Santanderina, a manufacturer of quality fabrics with controlled traceability, launched its Advanced Black denim collection in collaboration with Archroma.

The Advanced Black collection by Textil Santanderina uses Archroma’s new DIRESUL® EVOLUTION BLACK LIQ dyestuff to produce on-trend authentic black denim apparel with sustainability and resource savings. In addition to allowing fashion and apparel brands to choose eco-friendlier alternatives that demonstrate their commitment to protecting people and planet, Textil Santanderina’s new Advanced Black denim range also offers unique shade and wash-down effects.

Based on synthesis technology developed by Archroma, DIRESUL EVOLUTION BLACK LIQ delivers an overall impact reduction to 57%*, measuring its effect on human health, ecosystems and resources compared to standard Sulfur Black 1 liquid. Unlike traditional synthesis processes, it does not produce any ammonia, sodium salts waste or liquid effluents, and water consumption in the synthesis process is reduced by 73% for massive savings. The new DIRESUL dyestuff, when adopted with the full Archroma coloration system, delivers a new black color with on-tone wash-down effect and cleaner effluent at the mill.

Textil Santanderina and Archroma previously collaborated to produce Textil Santanderina’s aniline-free** indigo denim collection with the use of DENISOL® PURE INDIGO.

*As determined by Ecoterrae, a leading Spain-based sustainability consulting firm, through a Life Cycle Analysis (UNE-EN ISO 14044:2006) at the synthesis stage, using the ReCiPe 2016 Impact calculation methodology.
**Below limits of detection according to industry standard test methods.

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.

• 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.