The Footwear Distributors and Retailers of America (FDRA) released its 2023 Back-to-School Shoe Sales Forecast, outlining that parents seek in-store deals and prioritize price. The FDRA surveyed 1,000 families with school-aged children from July 21-23 to gather insights to recreate the forecast.
“Comparing this survey to past editions, it is evident that families are demonstrating an unprecedented focus on price and their budget for back-to-school shoe shopping. The survey shows families more than ever looking to spend less for shoes as well as reduce the number of pairs purchased per child this season. This portends a continued challenging environment for retailers as our exclusive shoe retail data shows shoe spending growth decelerating the last few months,” said Andy Polk, SVP at the FDRA.
Polk added: “The changing economic conditions and spending power have spurred a shift in shopping behavior, with a substantial percentage of families prioritizing price well over other factors compared to more balanced priorities in years past. Shoe companies need to be aware of this shift to ensure marketing and merchandizing strategies successfully connect with these budget-conscious parents. We also note that even as they grip their pocketbooks more tightly and plan to reduce quantities purchased, families do expect to spend more on shoes than last year, perhaps due to continued inflation expectations. This may mean total back-to-school sales will increase, but with discounting returning, it may mean less profits for shoe companies than in 2022.”
Survey Highlights: Changing Economic Landscape Sparks Shopping Shift
Families are researching for shoes less on social media in 2023 compared to last year. The shift could be due to the changing economics and spending power, leading families to prioritize price and overall spending over aesthetics.
Approximately 80 percent of low to middle-income families plan to shop in-store for back-to-school compared to online shopping. Thirty-five percent of families with incomes over $150,000 plan to buy for the season online.
60 percent of families surveyed plan to shop in-store to find the best deals, signaling a demand for discounts and cost savings.
69 percent of families are buying shoes for their kids through mid-August at a 20 percent higher rate than for the same period in 2022.
52 percent of families plan to buy two pairs of shoes per child compared to 2022, where they purchase three or more pairs.
53 percent of families plan to spend under $60 per pair on shoes, compared to 41 percent last year. Data shows only seven percent of parents are willing to pay over $100 for a pair of kid’s shoes versus 18 percent last year.
To read FDRA’s 2023 Back-to-School Shoe Sales Forecast, go here.
]]>Linen
Used by labels like Eileen Fisher, Rag & Bone, Naked & Famous and Chloé, linen’s footprint in denim fabrics is growing. As mills add variety to their fiber lists, many are turning toward the bast fiber for its breathability, easy care, light weight, durability and comfort benefits. Foison, Evlox and Artistic Milliners offer linen blends in their Spring/Summer 2024 collections. Meanwhile, ADM is filling the gap for coastal grandmother fashion by introducing a line of 100 percent linen shirting fabrics.
Non-denim pants
In November, Abercrombie & Fitch CEO Fran Horowitz said the company is seeing women embrace non-denim bottoms—and there’s good reason. New trends that center on tailored looks coupled with interest in ’90s and Y2K styles including flare trousers, split hems and cargo pants give consumers wiggle room to experiment.
Eco stretch
Mills are expanding their use of biodegradable elastane and recycled polyester to give stretch denim a more environmentally responsible name. Others are introducing new weaving techniques that give 100 percent cotton fabrics natural stretch qualities. Jeans legs may be widening but stretch remains an all-important factor for comfort.
The 501
Levi’s 501 jean has been the blueprint to every jean style made since its inception in 1873. It’s neither trendy nor outdated and it will be celebrated in 2023. The 501’s 150th anniversary in May will thrust this classic wardrobe staple into the limelight and remind consumers of denim’s enduring appeal.
Lavender
Digital Lavender, the color WGSN and Coloro forecasted for 2023 in 2020, is on track to reach mass appeal this year. WGSN’s data shows that the pastel purple linked to wellness and sensorial experiences has been on a growth streak. The gender-neutral color was featured in 61.6 percent of Spring/Summer 2023 collections, and it remains the dominant tone of purple. Look for purple-tinted indigos, bold overdyes and lavender PFDs to capture the denim market.
Double denim
The Canadian tuxedo has peaked. From Prada’s minimal men’s denim shirts and jeans shorts to Self-Portrait and Schiaparelli stylized coordinates for women’s, there’s a double-denim look for everyone in 2023.
Indie makers
Artisans and independent designers are often the hidden talent behind the showstopping denim pieces seen on luxury brands’ runways. Instagram and TikTok, however, are providing these denim specialists with platforms to show off their work and launch businesses of their own. Expect to see more indie makers get the recognition they deserve in 2023.
Quality
Quality arguably never goes out of style, but more companies are emphasizing the steps they’re taking to ensure better products overall. Amplified by Levi’s popular “Buy Better, Wear Longer” campaign and continued interest in vintage, consumers are savvier about quality versus quantity. With more consumers paying closer attention to how products are made, expect to see brands deliver bolder messages about the quality and durability of their jeans by highlighting fibers, fabric weights and manufacturing practices.
Pink
Fashion isn’t souring on pink any time soon. The ‘It’ color of 2022—spurred on by viral Barbiecore looks and a barrage of celebrities wearing Valentino’s PP Pink collection—is evolving, however. Expect to see deeper, jewel tone shades of pink that are more soothing on the eyes as confirmed by Pantone’s Color of the Year for 2023, Viva Magenta. Described as powerful, empowering, electrifying, audacious, witty and inclusive, the crimson hue encourages experimentation, strength and self-expression without restraint. Pantone says it’s assertive but not aggressive and is capable of driving design to create a more positive future. Just what the industry needs.
Moto
From leather to racing stripes, elements of motorsports cycle in and out of fashion. In 2023, look for color-blocked pants made with coated denim or leather (like the Rick Owens styles Kim Kardashian has worn in her post-Balenciaga era) and quilted and padded denim jackets and jeans in both men’s and women’s categories.
Mono-fiber jeans
The content that makes up a pair of jeans has become a mosaic of cellulosic, regenerated and synthetic fibers in recent years, with ingredients serving up stretch, recovery, durability and more. But with demand for circular products growing, and consumers increasingly aware of the issues that come with recycling blended fabrics, denim mills are ramping up their promotion of fabrics made with a singular traceable and recyclable fiber.
Hem details
Step hems, split hems, undone hems…designers are beginning to make their jeans from the bottom up again. Though finished hems have held court for the past few years, these novelty version offer brands the opportunity to update their bestselling jeans and add newness to the sales floor.
Opulence
Glossy coatings, crystal embellishments and metallic foils have been on the radar of designers and consumers alike thanks to the Y2K revival, but these fancy tricks-of-the-trade are being put to more regal and opulent use in 2023. Driven by ongoing Regencycore trends and tales of royal families back in the pop culture spotlight, denim’s glow-up includes colorful gemstone embellishments, velvet details, Lurex threads and tapestry-like jacquards. Meanwhile, Pinterest reports an uptick in searches for ruffles, tulle and lace.
Overalls
Like the jumpsuit before it, the humble overall is the latest garment to benefit from fashion’s obsession with effortless dressing. Designers are putting their own spin on the workwear piece in 2023. R13 is leaning into its painterly roots with high-contrast washes, paint splatter and loose silhouettes. Brandon Maxwell adds a touch of glam by styling sequin bodysuits with wide-leg overalls with deep cuffs.
Jacquard denim
Weaving patterns into denim fabrics will be one of the ways that brands build uniqueness into their collections in 2023. Jacquard denim with floral, toile and damask-inspired patterns key into the trend for opulent jeans, but it also offers brands a chance to make custom fabrics. More mills are touting customizable jacquard denim, allowing brands to weave their logos and signature icons directly into the fabric.
Dirty denim
The yellow-tinted denim that trended in the early 2000s is back. Blumarine applied the dirty-looking wash to cross-shaped tops. KNWLS used the moto-meets-apocalyptic color for its denim miniskirts, duster coats, chopped jackets and body-hugging jeans with split hems. Yellow tints gave Vaquera’s collection of cropped jackets, distressed skirts and low-rise jeans a patina effect.
Brand collaborations
Brands have fully embraced collaborations as a marketing tool to tap into new audiences. With the amount of buzz that came from unexpected brand-on-brand collaborations in 2023 like Denim Tears x Dior, Dickies x Gucci, and Wrangler teaming with everyone from Gant and Billabong to The Brooklyn Circus and Pendleton, hypebeasts can expect to see more crossovers in 2023.
Sustainable and natural dyes
With colorful fashion in high demand, its prime time for brands to try one of the numerous sustainable dye solutions offered by the denim supply chain. Stony Creek Colors is scaling its natural indigo production with the help of Levi’s, while other companies are exploring circular solutions. Officina39’s Recycrom, a process that upcycles textile waste into new dyestuff, and Tonello’s Wake technology, which only uses 100 percent organic and compostable raw materials, can achieve the same dusty and mindful pastels with a smaller environmental footprint.
Jean shorts
Jorts are back. With labels like Prada, Louis Vuitton and Amiri giving jean shorts the seal of approval, look for this ’90s skater staple to get a premium makeover in 2023.
Vintage merchandising
If you’re not mixing a curated range of pre-owned and vintage products in with your new merchandise, you are missing a big retail opportunity. Statista reports that the global market value of secondhand and resale apparel will reach $218 billion by 2026. Denim brands and retailers including Lee, Primark, Levi’s, Diesel and Madewell are leading the way in this new mode of retail. Expect to see more brands and retailers introduce a thrifted component to their store floors in 2023.
Goth
The mainstreaming of goth fashion didn’t end with the 2022 wedding of Kravis, aka Kourtney Kardashian and Travis Barker. The popularity of shows like Netflix’s “Wednesday” and the growing interest in dark tourism—a.k.a. travel to creepy and spooky places—is keeping this moody trend alive. Black and gray denim is making an unusually strong appearance in spring collections this year. Voluminous shapes, pierced details, studs, grommets and leather-like coating add a punk-meets-raver edge.
Normcore 2.0
Minimalism and preppy fashion are driving interest in classic items like refined denim, button-down shirts, basic knits and relaxed suiting. While looser proportions and bold uses of color make the timeless aesthetic feel fresh, it also leans into bigger industry shifts like genderless fashion, seasonless shopping and pieces that work for hybrid work schedules.
Denim everything
There’s more to denim than the five-pocket jean. From Good American’s denim-printed swimwear and DL1961’s denim skiwear collection with Perfect Moment to the denim wedding dress Moschino designer Jeremy Scott made for friend and actress Bria Vinaite, denim entered new territory in 2022. With denim suiting, footwear and home décor on the rise, denim is on the path to become the fabric of our lives.
The fashion industry is about to go through a major transformation. The Fashion Sustainability and Social Accountability Act, often known as the Fashion Act, is crucial to its future. The New York State Legislative Commission is considering this document, which, if passed and put into law, will have global implications, also in Italy.
This law would make it mandatory for fashion companies to track and explain their environmental impact, taking into account the entire production chain. It's a metric for calculating the environmental and social effect of supply chains in order to make them more transparent. Despite the challenges, this transformation will allow us to achieve tangible progress in terms of sustainability.
Francesca Rulli talks about this as an expert in sustainability, CEO of the service company Process Factory and creator of 4sustainability, a system and brand that measures and certifies the sustainability of the fashion & luxury supply chains.
What does the entry into force of the Fashion Act entail?
“The Fashion Act will mandate that fashion companies record at least at 50 percent of their supply chain, identifying the impact of greenhouse gas emissions, water consumption, and chemical use. Furthermore, enterprises must commit to setting specific goals for lowering energy consumption and emissions, as well as communicating the quantity and type of raw materials they get from suppliers and the percentage of recycled materials.
However, from an ethical and social standpoint, employees' working conditions and remuneration must be disclosed, guaranteeing that they are at least adequate to the living wage. If these sustainable and ethical needs are not satisfied, a fine of up to 2% of yearly earnings may be imposed.
Regardless of whether it is enacted by the State of New York, this legislation will apply to any fashion firms with a global turnover of more than $ 100 million, have a headquarters in New York City, or conduct business there. In a nutshell, all fashion labels, from high-end to fast fashion”.
What are the reactions of the operators in this sector?
“Both well-known multinational brands, which may have to record a complete series of data they don't yet know as early as next year, and supply chain companies that interact with them and will have to satisfy those requests, are already taking steps to understand how to move forward.
Furthermore, this rule will intersect with the European regulation on “due diligence”, or the need of firms to monitor environmental, social, and governance issues. The Fashion Act is unique in that it holds firms accountable not just for what they do in person, but also for everything that occurs along their value chain.
Tracing the environmental and social impact entails identifying how profit is earned and the market behaviour of industry players."
What will the concrete consequences be?
“Italy is a leading country in terms of sustainability rules and, we pay close attention to the problem, but more training and a shift in mindset are required. Attention to sustainability is growing, and m any brands have already asked their suppliers for guarantees on environmental impact, chemical use, and good working conditions, among other things.
In most situations, the brand's limit is that it only interacts with direct suppliers, although what will be demanded is complete traceability of the supply chain, which means knowing and being able to guarantee even subcontractors further upstream in the manufacturing chain.
The brand will have to record all the connections in the value chain, assess its influence, and link it to the impact of specific products out on the market. Suppliers, for their part, must be able to provide the brands with the information they require.
Italy is directly involved because it is a manufacturing country. Many districts, including Prato, Biella, and Como, have already begun to track chemical use, CO2 emissions, water use, and other indicators, but there is still much work to be done”.
Are there any tools in place to keep track of all the necessary information?
“There are tools to keep track of this information, as well as several certifications that companies may use to demonstrate their commitment to sustainability. However, there is still one more step to take, which is to systematize, exchange, and convey all of these pieces transparently.
For this purpose, 4sustainability has created an ad hoc digital platform for companies that join it. It's a technology that intends to engage the entire supply chain: suppliers will be required to measure environmental and social data qualitatively and quantitatively, as well as update performance indicators. This information can be examined by the brand or other downstream links in the chain, resulting in transparent sharing”.
]]>Inflation and hefty shoe prices are having a direct impact on how consumers make their footwear purchases.
A national spring survey of consumers from the Footwear Distributors and Retailers of America released today found that almost half (48%) of footwear consumers plan to spend less on shoes this spring than last year.
The survey, which was conducted by Emerson College Polling in partnership with the Fashion Footwear Association of New York (FFANY), also found that 49% of shoe shoppers are putting off footwear purchases because of inflation.
Consumer prices rose by 8.5% in February compared with a year ago, according to the Bureau of Labor Statistics’ monthly report. This number was up from the 7.9% growth in February and represented the highest inflation rate since the 12-month period ending in December 1981.
Within footwear, prices are also hitting record highs. Footwear prices grew 6.6% in March, year over year, according to FDRA data. This marks the third-fastest year over year increase in about 33 years, trailing behind February’s 7% increase and May’s 7.1% increase. Men’s footwear was up 5.1%, women’s was up 5.8% and kids’ was up 11%. The spike in kid’s footwear marks the second highest spike in 33 years.
Within footwear, the rising prices can be attributed to a variety of factors, especially heavy tariffs on consumer goods like footwear. The FDRA has continuously pressured the Biden Administration to eliminate the burdensome tariffs that have contributed to soaring prices on footwear.
Consumers are not blind to these changes. According to the survey, 68% of shoe shoppers have noticed higher shoe prices.
However, inflationary pressure has not significantly dampened consumer spending thus far. The U.S. Census Bureau reported today that retail and food service sales in March 2022 totaled $665.7 billion, marking a seasonally adjusted 0.5% increase from the previous month and a 6.9% leap from March 2021.
According to the FDRA survey, most U.S. shoppers (74%) say they are still at least somewhat likely to buy shoes this spring for themselves or their family. When it comes to shoe preferences, athletic or casual shoes were voted as the most likely category (58%) that shoe consumers said they were likely to purchase from for themselves or their family. Fashion shoes followed with 35%, followed by work shoes at 4%.
When it comes to channels, 24% of shoppers said they planned to purchase new shoes in a physical store, while 19% said they would shop online for in-store pick-up. The majority (57%) said they planned to shop fully online. 65% of men and 50% of women said they plan to shop online, though a larger percentage of women (24%) said they planned to buy online and pick-up in store, compared to men (14%).
Given the higher prices 76% of of shoe shoppers said they are buying from discount retailers for better prices amid inflation. 44% said they plan to shop less or put off purchases until later.
Material Exchange — the Swedish software as a service (SaaS) company helping H&M and Ugg source more sustainable materials — has raised €25 million in Series A funding to grow its operations as a sustainable material provider for fashion brands.
The funding will allow Material Exchange to scale its operations globally, adding to its existing offices in Stockholm, India, Armenia, New York and Dongguan in China, and expanding its C-suite across Stockholm and London. The round was led by UK investor Molten Ventures, alongside previous investors Partech, Inventure, Norrsken, Lyra and Day One Capital.
Material Exchange — the Swedish software as a service (SaaS) company helping H&M and Ugg source more sustainable materials — has raised €25 million in Series A funding to grow its operations as a sustainable material provider for fashion brands.
The funding will allow Material Exchange to scale its operations globally, adding to its existing offices in Stockholm, India, Armenia, New York and Dongguan in China, and expanding its C-suite across Stockholm and London. The round was led by UK investor Molten Ventures, alongside previous investors Partech, Inventure, Norrsken, Lyra and Day One Capital.
Materials play a critical role in brands’ sustainability strategies, especially those with 2025 and 2030 goals to reduce carbon emissions: McKinsey & Company estimates that 70 per cent of the fashion industry’s emissions come from upstream activities including material production, preparation and processing. However, sustainable alternatives to synthetics can be difficult to source, as unreliable certifications are rife and transparency is limited.
“I see an incredible amount of waste in this industry, with many samples sent and materials created based on speculation rather than needs and data,” says CEO Darren Glenister. “I wanted an investor who saw the big picture and could help us make the industry more transparent and sustainable.”
Materials play a critical role in brands’ sustainability strategies, especially those with 2025 and 2030 goals to reduce carbon emissions: McKinsey & Company estimates that 70 per cent of the fashion industry’s emissions come from upstream activities including material production, preparation and processing. However, sustainable alternatives to synthetics can be difficult to source, as unreliable certifications are rife and transparency is limited.
“I see an incredible amount of waste in this industry, with many samples sent and materials created based on speculation rather than needs and data,” says CEO Darren Glenister. “I wanted an investor who saw the big picture and could help us make the industry more transparent and sustainable.”
There are two reasons behind this record result. Number one: our industry is resilient and agile, and it works really hard to provide the products that American consumers want to purchase. So, they did a lot of the right things to make sure that we had a successful year, a record year. The prior record was in 2019, 83.9 billion US dollars, which shows how much more economic activity we enjoyed in 2021.
The second variable that helped drive this success was the amount of cash in the hands of our consumers, driven predominantly by a strong economy and US government assistance. And so, one of the reasons we are seeing inflation now is that the US Government dumped so much cash into our system in response to COVID-19 that has created this inflationary pressure. But, at the same time, it helped fund our record year, as we hit that 100.7 billion record number. We were able to take advantage of the additional spending American consumers possessed by providing great products at a time when consumers were looking for great products.
We have been concerned about the withdrawal of funding from the US Government and what the impact will be on consumers, not just for footwear, but for all different consumer categories. So, we don't think we will have the record year that we had last year, also because inflation is going to decrease the buying power of the American consumer. There is some concern there. However, I can tell you our companies are still seeing very strong orders and are still working very hard to provide fulfilment to their retail partners. Therefore, we are in a position where we may not have a record year again, but we are optimistic that it will be a good year, that consumers will continue to buy shoes, despite some of the challenges that we have already discussed.
We are concerned about the rising of inflation across our supply chain. We continue to see inflationary pressure in the US that we have not seen in nearly 40 years. That is a concern. The Federal Government is attempting to raise interest rates to try tapping down inflation, so we are expecting interest rate increases over the coming weeks and months. That will be a challenge for consumers and that will be a challenge for people purchasing homes and taking out loans and all the things that the lower interest rate environment we have been in for so long has facilitated.
The question comes down to the fine line between increasing costs and having an impact on demand. Now, demand still seems pretty high. We have been for years, years and years in a promotional environment, where our companies had to
provide 40% discount just to get consumers to come in the door to purchase shoes. And over the last year, because of demand, because of all the cash in the system, our retailers have been able to sell very close to full price on average We haven't had that opportunity in a long time. The point is above and beyond the inflationary impact: we don’t know yet when that will have an impact on demand. But the challenge is not specific to footwear. It's across all consumer goods. When discretionary spending takes a hit, what will consumers prioritize? Will it be footwear, apparel over automobiles, or automobiles over washing machines, or washing machines over electronics? We just don't know and we have broad concerns about it.
That is why we have implored the Biden Administration to remove the additional duties President Trump put on certain Chinese footwear that the US imports, with the hope that would have an impact on, or at least, that would lessen impact of the inflation by removing some of the cost structure that is added as those products hit the store shelves. We will continue asking them to do that, they have not yet decided, but that is our hope, that they will do it soon.
Well, by this point in the political narrative of inflation here in the US, we believe that the US Administration would have already announced that it is removing duties on consumer goods, while maybe increasing duties on other things that China is focused on, like technology, aeronautics and heavy machinery. However, they haven’t done it yet, even though some Administration officials, like Secretary Janet Yellen, have said on record that tariffs impact inflation, that they drive costs up. It would be wonderful if they were to announce that.
I think it would be politically popular for the President to decrease some of these tariffs and maybe increase tariffs elsewhere. We are curious to see when and if that happens, particularly because this is an election year in the US (midterm fall in November). As of now, the president's party is not polling very well and, historically, the president in power loses seats in our Congress in the first midterm election of the president's first term. He is in a political challenging position, and I think this would be something that he could do to help ease some of the inflationary pressures. But he needs to do it soon if he wants it to have an impact on the American consumer before the elections.
There is a correlation in our industry between the US Government pushing out money into the pockets of our citizens and the increase in footwear spending, and that drove a lot of consumer behaviour. We also have to keep in mind that we are fifty unique marketplaces tied together as the US, and many states approached the COVID-19 restrictions differently (for example, Texas, Florida, South-eastern states), remaining relatively open almost throughout the entire pandemic. They might have closed in the first month, March/April 2020, but quickly opened again. A lot of our companies in the footwear retail space operating in these markets didn't furlough people. They were ready to open the moment the Government said it was ok and a lot of consumers responded to the opportunity to buy.
Lastly, on the trend side. Before the COVID-19 pandemic, we were experiencing the casualization of the Western world: more textile, knit up footwear, sneakers, sneakers being worn on every occasion, whether at a board meeting at work, dining out or at church. The pandemic worked like an accelerator for these categories. So, sneaker categories, casual, comfort, outdoors, hiking boots, hiking shoes, running shoes, slippers, Crocs: these are part of the casual active trend propelled by the pandemic. Occasion footwear, like fashion footwear, party footwear if you will, are seeing a resurgence now, as we get back together, but comfort is king in our society and I think that trend will continue.
I suspect they will continue to increase. We had... They call it the Great Resignation, millions of people quitting their jobs, moving to other jobs, or relocating to work remotely. The entire workforce has kind of turned on its head, so I assume wages will continue to go up, as will the competition for talent. If you go around the US, pretty consistently there is help wanted signs in about every window. The flexibility built by the remote work environment has allowed people to be more discriminatory towards what opportunities they take. Employees are determining the terms they want to work and for, or for whom they will work, and this has created an interesting environment. Therefore, competition for personnel and talent will continue, which will drive costs, playing right into our inflation theme. Salaries need to stay in competition with inflation, and right now they are not, so, for employers to be attractive they will have to overspend for talent.
We are hopeful that it will apply the appropriate pressure on the carriers to be more upfront about pricing and on terminal operators to be more collaborative. Currently, we are in an environment where carriers are making a ton of money and terminal operators are presenting difficulties in access to the containers. It has been very frustrating. Not just for footwear, for all importing industries. That is why we are starting to see big companies, such as Walmart, commission their own fleets, so they can chart their own course. I think we will continue seeing this trend post supply chain crisis because big retailers cannot rely on these third parties to sustain them as they need to deliver goods to their customers.
The carriers will argue that the bill creates more restrictions around pricing in the short term, but that in the long term, the historical nature of their relationship shows that spot rates have been more advantageous for importers. This is one of the rare times when there has been a flip, spot rates are astronomical and companies are getting dumped from their contracts because the carriers have to earn money. They hadn't had this opportunity a long time.
You hear both sides of the argument, but I think that the US Congress has spoken, the US House passed it overwhelmingly. There is very little opposition to it, we expect the Senate to pass it at some point soon, and we expect that President Biden will sign it. It is not a short-term fix, if it passes tomorrow, it won't fix everything that is causing issues within our supply chain, but we think it will apply appropriate pressure to the carriers, it will power the Federal Maritime Commission to be more active in the regulatory process as it comes to rates and additional charges, which have been very frustrating for our members. So, we are optimistic that it will provide some relief in the long term.
People are sometimes afraid to talk of the benefits of what we can take away from a crisis. I think that both from a personal and professional perspective, when we are faced with challenges and adversities, looking back, we often find the ways in which it has strengthened us, creating unique opportunities, reinforcing us to critically think about what we were doing before, maybe not taking for granted certain aspects of our lives or our businesses.
It really sped up the development of digital tools at the service of efficiency. Companies had to pivot to stay connected, particularly on product development, design, production, manufacturing. They had to use tools they were not used to using, fostering digital or virtual engagement, making them more efficient. For example, instead of going to Asia eight times a year for two weeks each trip, maybe go four times. It has eliminated the need to be somewhere else at all times, building up a more appropriate work-life balance. It is both more efficient and better for the environment.
So, heading into COVID we started digitizing the supply chain, figuring out ways to use digital design development of samples, keeping people off aeroplanes as much. I believe that in the future we will hold on to these things that made us more efficient and engaged, taking off the pressure to always be in the room meeting for everything. At the same time, as we ease back into it, we can choose to gather where it makes sense, creating the right opportunities for people to continue meeting in-person, reconnecting and socializing. I hope we can look back and hold on onto these lessons in some way.
Coronavirus Covid19 United States Companies Digital FDRA Footwear Imports Industry Interview Logistics Salaries and wages Sneakers Supply chain Trade War
]]>Today we bring the second part of a conversation with Manfred Junkert, Managing Director of HDS/L: Federal Association of the German Footwear and Leather Goods Industry. We took this opportunity to hear his views on sustainability and the future challenges of the footwear industry
We are pleased to be able to offer you sneaky preview straight from the Spring/Summer 2022 samples on show for men, women and children.
MAN
Hybrid mood
The formal look, turned on its head by the new tele-working habits, do not compromise in terms of comfort at home, and fashion adapts by offering designs that emerge from a hybrid look, based on classic uppers and sporty soles, for a more relaxed business uniform.
Leisuremoc
One of the big, leisure ‘must haves’ is the moccasin, with new materiuals and patterns, with bubble driver or ultralight reinforced soles and precise detailing make sure the wearer doesn’t go unnoticed - from elegant knotted clamps to loops in contrasting colours and bright strokes of colour, these details will immediately liven up the summer.
Summer casual
Natural materials such as cotton and hemp canvas, rope details and recycled soles: the casual summer look is consciously reinvented by adopting a relaxed aesthetic, favouring the shapes of the slip-on and the apron toe shoe.
Inno-stalgia
Innovation and nostalgia: an aesthetic that harks back to the nineties with the characteristic mix & match of materials and colour blocks, but with a silhouette updated by more voluminous, even if less exaggerated, soles than in previous seasons. The new, high-performance sneaker, beautiful to look at.
City Hiking
A walk around the city has become a serious matter. The concept of hiking makes itself at home, conquering metropolitan landscapes with models able to combine performance with fresh, new designs and innovative technical solutions.
Slipper fever
Along with technical details borrowed from the world of sport, camo patterns, leather and canvas combinations, the most comfortable of all shoes, the slipper, gets a makeover and becomes the trump card for the warmer months.
WOMAN
Soft look
After so many fears and restrictions, next summer expresses the general desire for freedom and 'hugs' with open sandals capable of offering maximum comfort with soft weaves and padding, combined with neutral and pastel colours that accentuate the sense of harmony.
Pastel colours
Light blue, cream, lilac, pale pink, light green, canary yellow: soft and relaxing pastel colours characterise summer accessories, giving sandals, sneakers and leather goods a fresh and bon ton look that will be love at first sight.
Square toe
The it.shoes of the season are a blast from the past with nineties-style square-toe sandals, perfect to combine with any look and with bold lines, pleasantly 'softened' by the much-loved neutral and pastel colours for summer 2022.
Neutral & natural
Neutral and all-purpose tones that cover the range of shades from brown to cream, perfect in combination with any model, from the most elegant to the most sporty, featuring soft leathers, brushed suede and calfskin, or with light-coloured details.
Boxed sneaker
Omnipresent in our wardrobe, trainers, which have now risen to the rank of 'sneakers,' never cease to win our hearts. For next summer, the trendiest will be those of tennis derivation with a white rubber boxed bottom, offered in light and pastel colours.
Rainbow sneakers
Among the seasonal trends in terms of sneakers we find the rainbow effect, with models featuring a chunky, boxed rubber sole, characterised by hyper-coloured uppers and combinations of different shades and materials.
City military
The military mood is still with us and will feature next summer with revisited summer combat boots with the typical, rubber, tank sole combined with canvas uppers in renewed neutral and pastel colours.
CHILDREN
Colorama
Colour blocks, the faded look, contrasts of fluorescent accents, eye-catching ton sur ton, glittery patches: sneakers for the little ones are fun and colourful, easy to put on and take off and ideal for a safe playtime.
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Ugg is following up March’s Plant Power Collection with a new line of eco-conscious styles.
Launched Thursday, the Icon-Impact Collection once again utilizes the Tencel-branded lyocell fibers at the center of Ugg’s Plant Power line. This time, however, the California lifestyle brand has mixed the plant-based material with reclaimed wool waste.
The Autumn/Winter line’s UGGplush material—a straightforward 50/50 mix of upcycled wool and Tencel lyocell—features predominantly as the eponymous fuzz in the Icon-Impact Collection’s Fuzz Sugar Slide and Fuzz Sugar Cross Slide. Both styles also incorporate Ugg’s sugarcane-based SugarSole foam material. According to Ugg, sugarcane absorbs 1.6 pounds of CO2 for every pound of petroleum-based ethylene it replaces.
The collection’s Classic Sugar Ultra Mini, meanwhile, features an upper made with UGGcycle, a leather-free sheepskin alternative that is 38 percent wool, 38 percent lyocell, 20 percent Unifi recycled polyester fibers and 4 percent silicone. The shoe’s mudguard is comprised of 60 percent GRS-certified recycled leather, 20 percent GRS-certified recycled polyester fibers and 20 percent polyurethane. Like the other two Icon-Impact styles, it features a SugarSole foam outsole.
Ugg is not just working to transition the materials it uses, but to help others in the industry do the same. This month, the Council of Fashion Designers of America—in partnership with Ugg—plans to debut an open-access Materials Hub aimed at helping fashion insiders discover and connect with investors, vendors and resources.
“The launch of the Materials Hub comes at a critical crossroads as climate change continues to impact our industry and planet,” CFDA CEO Steven Kolb told Sourcing Journal in August. “The ever-increasing investment in advanced and responsible products, practices and services related to sourcing and innovative materials means that there are a high number of resources already out in the market and the Materials Hub aggregates them to highlight the leaders in the sector.”
Sales at Ugg climbed 70.8 percent year-over-year in the quarter ended June 30 to $213 million. While impressive, the revenue increase proved shallower than that of its sister brand Hoka One One, which saw its net sales leap 95.5 percent. The increase brought the running brand’s net sales to $213.1 million—just enough to edge out Ugg as Deckers Brands’ top-selling division.
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From craftsmanship to attention to sustainability, passing through the desire to play and the iptimism of the summer: WGSN experts tell us in which direction chilren's shoes are going in the next SS22 season.
It will be described by the below 10 points:
1.The soft Volume SandalSoftness and a feeling of comfort is aroused by gentle padding, macro weaves and folding techniques that minimise the use of stitchings: the look is minimal, with resort to mono-materials.
2.The Crafted SliderCraftsmanshi and natural materials evolve the conceot of the slipper into a timeless and sustainable design.
3.The Utility SandalPractical and functional, it can be used on many occasions: a piece made to last with tactical Velcor closues that are juxtaposed with handcrafter or knitted elements.
It brings a playful note to the wardrobe with its high platform borrowed from women's trends and enriched with fun decorative motifs.
5.The Floral Mary Jane
A timeless classic immersed in floral patterns that are good for both play and occasions.
6.The Simple Slide
Easier said that done! If the upper of this slipper is minimal and functional, there is still space for decorative elements, even personalised ones.
7.The Hybrid Fisherman
Atransitional classic, ideal to be worn from the beach to the city. With a casual-sporty aesthetics it combines a durable sole with handcrafted elements.
The sneaker embraces the circular design from the very first steps: there is room to think of waste as a resource to be reused, creating upprs in recycled thread, soles with recycled plastic bottles mixed with rubber.
9.The Super Craft Sneaker
The sneaker becomes the ground for a creative expression that combines activism, optimism and joy, also opening up to personalisation experiences that make little girls become designers.
10.The Track Hiker Sneaker
Protective, multifuntional and with chunky soles: a durable and transitional piece, suitable for any terain, use and season.
In 2020 footwear production and exports fell by 15.8% and 19% respectively. Data are taken from the World Footwear 2021 Yearbook just released by APICCAPS, the Portuguese Footwear Association. Previous forecasts were gloomier, and the World Footwear Experts Panel had pointed to a drop in global footwear consumption in 2020 of more than 20%. Final numbers for 2020 in the developed countries of Europe and North America are in line with such expectations. However, Asia and less developed countries outperformed expectations thus supporting a lower plunge in the global footwear industry.
Footwear production down by 15.8%. Growth accumulated over a decade wiped away
The COVID-19 pandemic severely hit the footwear business and in 2020 production fell by almost 4 billion pairs, wiping way all the accumulated growth over the previous ten years.
Despite the impact of COVID-19, the geographic distribution of footwear production was not affected. The footwear industry continues to be strongly concentrated in Asia where almost 9 out of every 10 pairs of shoes are manufactured. Even with a global pandemic, Asia managed to increase its share in worldwide production by 0.2 percentage points.
China is the world’s largest footwear producer (54.3%). However, in 2020 the Asian giant reduced its production by more than 2 billion pairs and continued to lose world share (down by one percentage point). This reflects a shift of production into other Asian countries.
Asia accounts for more than half of global consumption
COVID-19 had a strong impact on footwear consumption in the advanced economies of North America and Europe, contributing to the shortening of the gap between per capita consumption across continents. Nonetheless, there are still important geographic differences in consumption patterns. Per capita footwear consumption varies from between 1.5 pairs in Africa to 4.3 pairs in North America.
In 2020 Asia’s consumption accounted for more than half (55.8%) of the grand total worldwide. Europe and North America followed with 13.6% and 13.1%.
The European Union, when taken as one region, represents the fourth largest consumer market for footwear with 1 763 million pairs consumed in 2020. Impacted by both Brexit and the pandemic, the European Union has dropped two positions in the rankings.
At country level, the distribution of consumption continues gradually to reflect that of the population. Whether this is a structural change in consumer behaviour or whether per capita consumption in advanced economies will rebound once the pandemic is overcome is a question to follow up.
The USA’s share fell below 10% of the world total for the first time. China, on the other hand, exceeded the 20% threshold and, together with India, now accounts for almost one third of world consumption.
European exports increase market share over the last decade
Total footwear exported in 2020 (12.1 billion pairs) was down by 19% over the previous year, resulting in the lowest figure registered for the last ten years. In value terms, the decline was smaller (14%) but still taking total exports back to 2013 levels.
The COVID-19 pandemic disrupted international value chains leading to a reduction in the percentage of production exported which fell from 62% to 59%.
Asia continues to be the source for most of the footwear exported but its share of the world total has been slowly declining over the last ten years. This trend continued in 2020. The same is happening with every other continent but Europe, whose share of world exports has increased by almost 4 percentage points since 2011. This reflects the high intensity of intra-European trade and a strong process of integration within the area.
China continues to be the indisputable leader in footwear exports, but in 2020, and for the first time, Vietnam exceeded 10% of world exports (volume). In value terms, Vietnam became the largest exporter of textile footwear, outstripping China. This is the first time since the World Footwear Yearbook has been published that China is not leading the list of exports for a category of footwear.
The sharing of values, personalisation and the creation of positive experiences. These are the key drivers which retailers and brands will need to strive for if they want to intercept the new consumer profile that is emerging from the pandemic.
So what are these new consumers like? They are more responsible, closer to their own community and proponents of ‘slow’ shopping,’ increasingly dependent on digital technology, affording them an autonomous approach to shopping and, despite the complications of the present time, they look to the future with optimism.
This is what emerged from the second part of ‘The Future Shopper’ live talk from the Expo Riva Schuh programme which featured Enrico Cietta, CEO of Diomedea, Maria Eugenia Errobidarte, senior consultant at WSGN, and Emanuela Prandelli, Director of the Fashion, Design & Experience Management Master at SDA Bocconi.
Retailers and brands will need to come to terms with a new kind of consumer – more knowledgeable and responsible than before, and, in a certain sense, an ‘activist-consumer,’ to whom they will need to provide a solid set of values that doesn’t just stop at storytelling, but that translates into actions that can be mirrored, if they are to be successful. All of this goes beyond the eco-sustainability of the product and must include social responsibility, respect for people and the community and also considered choices...a tangible commitment which is demanded above all by the Generation Z, whose consumption share will be increasingly consistent in the near future. Another phenomenon which has gained popularity in the midst of responsible consumption is that of ‘second-hand,’ a market forecast to account for a 15% share in 2030, (not to mention rental, which is also on the increase), and which provides brands with an opportunity to enter the prime market.
An additional imperative for retailers and brands is product and service personalisation which offers an exclusive shopping experience. Thanks to digital technology, it is possible to engage in a dialogue with the consumer that is totally targeted, offering an experience packed with emotive values, and that weaves a deeper relationship whilst building loyalty. As far as the product itself is concerned, consumers are prepared to spend up to 50% more for it to be personalised, as long as in exchange you not only have a better fit, but also the perception of being unique and the pride of feeling like a self-designer. But care must be taken not to overdo the personalisation. Consumers of luxury goods prefer it to be less exaggerated so as not to lose the brand’s recognition.
The pandemic will leave behind significant traces in consumption habits and retailers will have to offer safe, hygienic, contactless solutions through increasingly present digital technology in retail outlets. Despite consumers’ desires to leave fear behind and look forward optimistically to the future, they will seek experiences both on and offline that meet this expectation. To respond to them, retailers will have to use the power of entertainment, and the playful creation of ‘dreamscapes,’ using colours and elements that transmit positivity, reinforcing optimism with the personal touch.
To sum up, the factors that will determine retail success in intercepting the shopper of the future are: offering personalised customer service; inducing optimism; providing exceptional standards of hygiene; implementing CSR strategies and having a digital first approach.
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Sandals reigned supreme at the Magic trade show in Las Vegas last week, with brands exhibiting spring 2022 styles designed for comfort as well as statement-making.
Even the season’s more adventurous silhouettes straddled the line between versatility and easy-wearing, as the pandemic’s influence on daily life continues. Designers infused their offerings with practicality that would serve wearers whose work-from-home regimen may continue into the new year, while adding a dash of visual interest.
Sourcing Journal spoke with brands about the season’s most prominent trends, including silhouettes, color ways and more.
Dress slides
“I do feel people are inching closer to dressing up,” Freddie Allers of Belgium-based Slaye Footwear said. He believes “everyone has tons of athletic shoes in their closet,” which means consumers might be primed to purchase new shoes next spring.
Handcrafted dress sandals that pair equally well with casual wear and office attire might resonate with many women, he said. Footwear brands displayed slide sandals in supple leathers and suedes and classic color ways like white, black, nude and metallics like gold and pewter.
As women dip their toes back into what promises to be to a more casual office environment in 2022, Allers believes these “elevated yet understated” styles could take the place of pointed-toe flats or loafers. “I think dress sandals will become a more meaningful category going forward,” he said.
Fisherman sandals
“I think it feels transitional,” Kelsi Dagger Brooklyn designer Charlotte Walters said of the thick-strapped fisherman sandal, which brands seemed to favor. She believes female shoppers will gravitate toward the look’s trans-seasonal appeal and slightly edgy vibe. “Our girl would wear this with a sock when it’s cool, and as a sandal when it gets warm,” she added.
Fuller-coverage styles hold a special appeal for city-dwellers, because “when you’re riding the subway or walking down the street, you don’t want to be wearing a thong sandal,” Walters said.
Kelsi Dagger Brooklyn’s fisherman sandal featured a closed toe and wooden platform, while other exhibitors played with strap count and thickness, open and closed-toe designs, and lug soles.
Maximalist soles
“Our retail partners want to be inspired—they need a new look in their closet,” Mike Kerr, vice president at J Slides told Sourcing Journal. “The maximalist sole gives them a little bit more attitude and freshness that they haven’t had for a year and a half.”
Featuring sneakers as well as dress and sporty sandals, the brand has fully bought into the platform craze. The chunky midsoles can take on myriad different uppers, Kerr said. “You can really have some fun with what you put on them, from colors, prints and trends,” he added. What’s more, sizable soles serve as a convenient way to hide comfort features, like memory foam insoles.
Throughout Magic, brands debuted styles with EVA and cork midsoles, ranging from sporty and strappy to simple slides.
Pastels
While neutrals, tans and black proved most popular, pops of color punctuated numerous sandals. Most common were pastel shades of periwinkle, lavender, sage and teal, mostly taking shape mostly as slides in nubuck or leather.
The cheerful spring-inspired shades served to add visual interest to a field of offerings mostly designed for practicality.
Those looking for uplifting news regarding the state of the global supply chain will likely have to keep on waiting. One investment bank with its ear to the ground doesn’t see the current supply chain woes, or the pricier costs that come with them, letting up for quite some time.
A UBS report published Monday indicates that elevated supply constraints impacting the global ocean freight system are driving bottlenecks that “probably won’t be alleviated soon.” What’s more, the increasing costs for shipping containers likely won’t see much of a correction until 12 months from now at minimum.
Analysts that cover U.S. hardlines retail for the investment bank said the company recently hosted a call with two experts in the shipping industry, who cited three major culprits to the bottlenecks: port disruptions, labor shortages and a lack of available warehouse space to store cargo.
UBS says that even if these three issues are solved, the tightness in the market will likely remain at higher levels than usual due to backlogs from demand outpacing supply for a prolonged period.
The situation has gotten so dire that the National Retail Federation (NRF) requested a meeting with President Joe Biden and other administration leaders to discuss the ongoing challenges leading to the congestion and rising freight rates. Both the American Apparel & Footwear Association (AAFA) and the Port of Los Angeles have urged the administration to intervene.
The peak shipping season of August and September is expected to throw another wrench into the equation as retailers attempt to stock up again ahead of holiday 2021, said UBS, which did not respond to a request for comment. Even without major supply chain constraints, supply is typically lower during the peak season and container capacity becomes scarce, leading to increased shipping costs. Now, with the compounding of these issues, heightened shipping costs will undoubtedly be a bigger problem for retailers, at least in the near term.
The experts said shipping container rates have continued to climb amid limited supply, UBS said in the note. Specifically, one expert cited that from August 2020 up until now, containers going to the West Coast have cost approximately $8,000 to $9,000 per unit, with the East Coast experiencing rates of approximately $12,000. Further, one expert noted spot prices have moved as high as $20,000 to $25,000 in some instances.
This is a drastic change from two years ago, in June 2019, when West Coast containers were commanding rates of roughly $1,000, with the East Coast units averaging $2,200, UBS said.
Other markets have seen massive increases as well. According to Drewry’s World Container Index data released on Thursday, the rate for a standard 40-foot container shipped from Shanghai to Rotterdam, Netherlands was up 534 percent year over year, reaching $11,196. This was the highest rate among the eight major East-West trade routes examined by Drewry (freight forwarder Zencargo reported on June 9 that transporting the same container on the same route cost $10,522). The Drewry composite, which measures all eight shipping rates, was up 306 percent year-over-year to $6,957.
Making matters worse, container transportation companies out of Japan (Ocean Network Express, or ONE) and France (CMA CGM), have added surcharges on sea freight shipments bound for China’s Port of Yantian due to the congestion and container shortages. To cover the costs of re-routing shipments headed for Yantian, CMA CGM is implementing a $1,250 per container surcharge, while ONE added a $1,000 fee.
CMA CGM implemented the surcharges on June 11, but select nations have until July 21 before they get hit with the charges, including the U.S. and its overseas territories, Brazil, Argentina, Colombia, Ecuador, Panama, Venezuela, Uruguay and Paraguay.
Both ONE and Maersk are omitting calls at Yantian terminals in an effort to maintain schedules, amid congestion and delays in Europe, the U.S. and Asia. Maersk reported that the eastern area of the terminal at Yantian, which handles mainline vessels, is operating at 45 percent of its normal productivity.
However, despite ongoing Covid-19 restrictions at the Port of Yantian, Everstream Analytics reports that operations further normalized, with yard density and vessel waiting times decreasing “significantly” in recent days as of Tuesday. The port operator expects normal operations to resume from the end of June.
Perhaps the biggest frustration regarding the excessive costs is the length of time it will take to have any semblance of normalcy. The experts UBS cited also believe that rates will not see much of a correction until 12-18 months from now. Even when the supply/demand dynamics level out, there will likely be an elevated “new normal” for container prices.
“Further, in many cases, contracts are not being honored. This has caused some importers to look domestically for products,” the note said.
Constraints throughout the chain are having a negative impact on some of the country’s biggest railroad systems, particularly BNSF Railway and Union Pacific Corp. (UNP), according to the UBS discussion.
“It appears that both BNSF and UNP are facing a slower pace of containers leaving their terminals in the Chicago area (and also Memphis for BNSF) and the build-up/lack of space is causing both Western railroads to meter the flow of intermodal trains and containers going from Southern California into the Midwest,” UBS said in the note. “While drayage capacity is likely a constraint it appears that warehouse space constraints in Chicago and Memphis may also be an issue.”
However, the rising ocean freight rates are likely to drive sequential quarter-over-quarter growth in ocean-related revenue for freight forwarders in the second quarter.
“Commentary from the experts on our call lead us to believe the considerable tightness in ocean container shipping markets and disruption at ports is likely to support strong ocean container volume, gross revenue and net revenue performance from freight forwarders in the second quarter and this support is likely to persist into 2022,” the note said.
In its June 22 weekly summary of supply chain impacts still ongoing from the Covid-19 pandemic, Everstream Analytics noted that the U.S. extended restrictions for non-essential travel at land and ferry crossings with Canada and Mexico through July 21 to reduce the spread of the coronavirus. The border posts have been closed since March 2020 and restrictions have been extended on a monthly basis since.
And despite the U.S.’s higher vaccination rate and faster recovery, congestion across global markets still persists. Inbound and outbound flights via China’s Shenzhen Bao’an International Airport remain canceled after authorities imposed restrictions due to the discovery of a case of the Delta coronavirus variant. Airport congestion is likely to occur as a result, Everstream said.
Indonesia, which has the fourth-largest population in the world, tightened mobility restrictions in “red zones,” including Jakarta, for two weeks from June 22 due to an increase in Covid-19 cases. Authorities in South Africa tightened measures nationwide from June 15 and moved the country from “level two” to “level three” on its five-tier virus transmission risk scale.
On a positive note, Japan lifted its Covid-19 state of emergency travel restrictions in nine out of 10 prefectures on June 20, including Tokyo. Okinawa remains the only district with the restrictions in place, which will be enforced until July 11.
By Glenn Taylor
]]>Macy’s Inc. said customers are both shopping more frequently and newly engaging with its core retail brand, prompting the department store icon to raise its 2021 guidance after first-quarter results topped Wall Street estimates.
In a Nutshell: Macy’s reported 4.6 million new customers shopping the eponymous brand, 23 percent above 2019 levels. The retail brand, along with sisters Bloomingdale’s and beauty-centric Bluemercury, all outperformed, the company said, with strong fourth-quarter trends spilling into Q1. It credited federal stimulus funds, economic reopenings and vaccinations with bolstering consumer spending.
“As consumers seek to re-engage with each other, we are seeing promising signs that our core customers are shopping again, and we continue to attract new customers, who increasingly begin their shopping experience with us online,” chairman and CEO Jeff Gennette said in a statement. “Customers are shopping categories that have been strong throughout the pandemic, including home, fine jewelry and watches, fragrance and luxury items. And we’re encouraged by the improvement we’re seeing in special occasion categories as customers begin to travel and return to a pre-pandemic lifestyle.” He noted “emerging opportunities” in new categories and brands from toys and health & wellness to pet and home décor.
Gennette told Wall Street analysts that “consumers are ready to get out, reconnect with family and friends, and celebrate life,” after their social lives were curtailed for more than a year.
“We’re seeing record customers coming back to shop, and they’re spending more,” he said. Average customer spend is 10 percent higher in Q1 versus the same period in 2019, with the average number of visits per customer up and the average unit retail up 7 percent.
Genette credited Macy’s evolving Polaris turnaround plan with supporting the digital efforts that served customers—and the company’s bottom line—throughout the pandemic.
Home categories, Gennette added, are driving growth in textiles and furniture, while sleepwear—more than half of which is private brands—performed well, too.
At Bloomingdale’s, sunglasses and luxury handbags resonated with customers, while Macy’s saw improving consumer demand for apparel.
“As the weather warms up and vaccines are more readily available, customers are feeling increasingly confident to get dressed up and venture outside. They’re also starting to attend events again. Accordingly, we’re seeing an improvement in dresses, those special occasion [events] like prom, mother of the bride, and casual. At Bloomingdale’s, we see signs of improvement in dresses and dressy sandals. We’re also experiencing a similar increase on the men’s side of the business in tailored clothing,” Gennette said. “We are ready for the shift, and we will continue to take a balanced approach in our assortment. Denim is another area that is improving across styles and price points.”
Gennette said the kid’s business also improved, driven by Easter and a return to in-person instruction in many schools. Across Macy’s and Bloomingdale’s, the company is seeing trend growth in shoes and handbags. “As consumers start to travel again, they’re shopping our brands to prepare for their trips, including warm weather standout categories like sandals, swim, and luggage,” he said.
In addition to adding “hundreds of new brands and categories in apparel, home and beauty over the past year to capture additional spend from new and existing customers, Macy’s is working with data metrics as part of its Polaris plan to improve pricing science and reduce promotions to get better sell throughs and higher merchandise margins,” Gennette said.
“We continue to update our supply chain infrastructure and network while leveraging improved data analytics capabilities in our fulfillment strategy. Continuing supply chain disruptions across the entire retail industry are impacting our inventory levels and causing delays across subcategories. We’re navigating the disruption by adjusting our freight strategies, working closely with our overseas carriers and brand partners and pushing for earlier deliveries. We’re cautiously optimistic that the port delays will improve this summer,” Gennette said.
While the retail giant is hyperfocused on younger millennials, it is also looking at new income streams like Macy’s Media Network, which monetizes digital traffic. Gennette said the network, launched in February, has received “immense support from vendors” and ran 130 vendor-funded advertising programs in Q1. That helped drive a 3-million-plus traffic increase to Macys.com, Gennette said, closing in on a goal of $60 million in revenue for 2021 through the media network. With a greater focus on digital this year, the company is “well on the road to $10 billion” in annual digital volume by 2023.
The company will add 12 more within-Macy’s Backstage stores, bringing the planned total to 47 locations in 2021. So far, 33 have opened in the quarter, bringing the brand total so far to 250 off-price Backstage locations and an expected 270 by the end of 2021. The retailer will also open three new off-mall Market by Macy’s locations as it continues to test the concept, as well as experiment with a small-format concept for Bloomingdale’s in the D.C. metro area.
Adrian Mitchell, chief financial officer, said the company will continue to test and iterate different changes to promotions throughout the year to improve merchandise margin and inventory management. The company has increased the use of regional carriers to allow it improve its delivery rate to customers, Mitchell said. About 20 percent of Macy’s digital sales were fulfilled by stores. Data analytics are informing how to better place inventory at stores and distribution centers, increasing allocation efficiency.
Mitchell said the company started the year with a “healthy stock to sales ratio,” ending the year with balance sheet inventory down 23 percent versus the same quarter in 2019. While some of the decline is due to supply chain challenges, Mitchell said Macy’s “approach to inventory and chasing sales, as opposed to winning every sale at any cost” has been a factor, too.
Management has continued to mitigate risk by deleveraging the balance sheet by rolling over maturing dates for debt for the next four years. The company is “well on the path to returning to investment grade metrics,” Mitchell said.
In addition, the company will explore opportunities to monetize real estate assets, like its office-tower plan for Herald Square.
Net Sales: For the three months ended May 1, net sales jumped 56 percent to $4.71 billion from $3.02 billion. Including credit card revenue of $159 for the period, total revenue was $4.87 billion.
Macy’s said comparable sales rose 62.5 percent from 2020 levels on an owned basis and up 63.9 percent versus 2020 levels on an owned plus licensed basis. Compared with figures from 2019, comparable sales were down 10.5 percent on an owned basis and down 10 percent on an owned plus licensed basis.
Digital sales grow 34 percent versus 2020. The company is currently working to provide specific delivery dates and launching an improved returns experience on the Macy’s app, expected later this year.
Gennette said that by keeping inventory levels lean, the retailer has been able to remove the clutter in stores to provide customers with a more streamlined shopping experience. And while Macy’s expects to see increased domestic tourism, Gennette doesn’t expect international travel to rebound until 2022.
Earnings: Net income was $103 million, or 32 cents a diluted share, against a net loss of $3.58 billion, or $11.53, a year ago. On an adjusted basis, diluted earnings per share totaled 39 cents.
Wall Street was expecting an adjusted diluted loss per share of 41 cents on revenue of $4.37 billion.
Mitchell said the company expects fiscal 2021 net sales to be between $21.7 billion to 22.2 billion, with digital contributing $8 billion of the sales to the total figure. Adjusted diluted earnings per share was guided to a range of $1.71 to $2.12. That compares with prior 2021 guidance of net sales between $19.75 to $20.75 billion, with adjusted diluted EPS of between 40 cents to 90 cents.
For the second quarter, the CFO said net sales are forecasted at $4.9 to $5.0 billion, with adjusted diluted EPS between 3 cents to 12 cents.
For the first quarter of 2022, the company expects to receive an income tax refund associated with the carry back of 2020 net operating losses allowed under the Cares Act, estimated at $520 million.
CEO’s Take: “As we look to the rest of the year, we are hyper-focused on meeting consumers’ demand for speed, convenience and a seamless omnichannel shopping experience. We also continue to evolve our merchandising strategy, and we remain a partner of choice for top brands with more collaborative and profitable vendor relationships,” Gennette said. “With a healthier economy and the reopening of communities as the backdrop to the execution of our Polaris strategy, we are well positioned to deliver sustainable, profitable growth in 2021 and the years beyond.”
Valentino says it has drafted an action plan to move the company forward in the wake of a devastating fire that tore through one of the Italian luxury house’s shoe-manufacturing plants in Tuscany earlier this month.
While no one was hurt in the conflagration, which ignited on the evening of April 1 when the facility was empty, 90 percent of the premises, along with 38,000 pairs of finished and semi-finished shoes, was reduced to ashes. Investigations into the cause of the fire are still ongoing, but the loss to the brand is expected to be in the range of millions of euros.
The Valentino Shoes Lab (VSL) was a vital cog in Valentino’s machinery, cranking out 1,300 pairs of footwear a day, including its popular Rockstud line of shoes and sandals, and employing 160 people in the commune of Bucine, less than 30 miles southeast of Florence. A pair of Rockstud calfskin pumps can easily top four figures.
“I’m touched and moved by the solidarity that was formed within our company, and not only, as an immediate consequence after the devastating fire which has destroyed one of our manufacturing excellences,” Jacopo Venturini, CEO of Valentino, said in a statement Friday. “The swiftness with which we were able to develop an effective plan of action is an evident consequence of the love that the Valentino employees nurture for our company.”
Valentino, Venturini said, expects to manufacture “more or less at the same pace” it maintained before the blaze, starting in May, when it will schedule a double work shift at a neighboring site in Montelupo Fiorentino. A small number of employees will decamp to a VSL Logistics Hub nearby.
“This objective has become possible due to various initiatives which, implemented together, will allow us to regularly produce a good part of the seasonal orders,” he added.
Rival Prada was among the first to extend a helping hand, opening one of its plants for Valentino’s use, including footwear production and finishing.
“I would also like to thank from the bottom of my heart Patrizio Bertelli, Prada CEO, who immediately contacted us to express his solidarity and by making available one of his factories located a few kilometers away from our production site,” Venturini said.
The firm, he noted, is focused on tackling the challenges ahead “in the best possible way, also to reprogram the production activities of the production site in order to minimize the social and economic impact.”
Valentino is still struggling to recover from the body blow that the pandemic delivered, which saw the company’s revenues tumble 27 percent to $1.07 billion in the months leading up to Dec. 21, 2020, due to lockdowns and travel restrictions that injured physical sales.
“The financial results of 2020 underscore a sector that was strongly penalized by the global health emergency. Today more than ever, it is fundamental to concentrate on our omnichannel business with a strong focus on innovation and advanced digital technologies,” Rachid Mohamed Rachid, Valentino’s chairman, said in February. “Our aim is to be increasingly more streamlined and flexible, adapting effortlessly to the changing needs of the market in a quest for new opportunities.”
That same month, the landlord of its former American flagship on Manhattan’s Fifth Avenue sued Valentino for $207.1 million for breaking its lease a decade early and abandoning the store in a state of disrepair. Valentino had earlier sought to end its lease, arguing that Covid-19 had left it unable to operate the store “consistent with the luxury, prestigious, high-quality reputation” of its neighborhood.
The landlord, 693 Fifth Owner, said Valentino owes all rent through the lease’s July 2029 expiration date, along with another $12.9 million to repair damage to store fixtures such as a set of Venetian terrazzo marble panels, which it said are now defaced with paint and holes.
Valentino, in turn, said it will “defend itself against the landlord’s apparent attempts to harm Valentino’s reputation and brand with these inflated and baseless claims.”
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The most significant differences surround prints, including Prince of Wales check, which originated in Scotland and has royal connotations. The traditional print is predicted to see a 15 percent decrease in popularity in Europe, where it’s considered a “last call” trend, and a 7 percent decrease in the U.S, where it’s considered “steady.”
Similarly, polka dots are experiencing a 10 percent decline in Europe, where it’s considered a last call, and a 4 percent decline in the U.S., where it’s a “safe bet.” Designers such as Valentino and Fendi featured the retro yet reliable print in their presentations.
Fleece, a strong contender in the U.S. and a pivotal fabric for the increasing gorpcore trend, is one to avoid in Europe, Heuritech reported. In the U.S., however, the trend underscores consumers’ shift to outdoor garments that accommodate their desire to get outside post-pandemic.
On the other hand, ponchos are a trend that’s taking hold in Europe and slowly dissipating in the U.S. Their niche appeal and declining momentum in the U.S. are why they’re considered a markdown trend in the region, while they’re considered steady in European markets.
The most universally celebrated trends among both regions are tactile fabrics such as fur and velvet, which are considered safe bets across the board. Sustainable and vegan fur options, such as the upcycled fur featured by Fendi and the faux fur showcased in Prada’s collection are making the trend more appealing to a wider demographic of consumers.
Check, stripe and leopard prints are other major trends across the board, with all considered safe bets in both regions.
Other trends for the season include the color yellow, one of Pantone’s Colors of the Year, likely selected for its cheerful, optimistic connotation for the post-pandemic world. Heuritech predicts it will experience a 2 percent decrease in popularity in Europe and a 9 percent increase in the U.S. by Winter 2021 compared to the year prior. Pastel pink, light blue and orange are other safe color bets for both markets.
According to Heuritech, red is the key color trend of the season, underscored by previous reports from Lyst that showed the festive hue was the most in-demand color for knitwear in December 2020.
Heuritech also confirmed Lyst’s prior reports that showed sequins were on the rise in the U.S. However, the embellishment is considered to be on its way out of style in Europe, with a 12 percent decrease in the region. Feathers, an equally flamboyant and festive texture, are a steady trend to note in both markets.
Shackets and puffer jackets are all considered safe bets in both Europe and the U.S. Sustainable innovations in recycled and eco puffers have made the puffer jacket especially appealing.
The cardigan is also having a moment in both markets, with extra popularity in Europe. The shift to preppy styles underscored by pop culture moments and the return of Y2K fashion has made the style a popular investment for retailers in the coming months.
With consumers continuing to shop online at heightened levels, accurate sizing has become an increasingly crucial consideration for any business looking to stem costly returns.
The issue of inconsistent sizing has always been particularly pertinent within footwear. Late last year, Volumental released the results of an extensive study it conducted on shoe sizes. Looking at 78,000 foot scans and purchases of women’s size 9 running shoes, it determined that only 62 percent of shoe styles met the parameters of a true size 9.
MySize, a developer of smartphone measurement solutions, officially debuted its answer to this problem last week. First announced in December, the “hyper-accurate” shoe sizing solution is built to seamlessly integrate with a retailer’s e-commerce site, allowing the consumer to virtually obtain fits without needing to download an app.
By pairing the footwear retailer’s product table, the shoe’s global trade item number (GTIN) and description and MySize’s AI-driven and machine-learning algorithms, the service presents online shoppers “with a highly accurate size recommendation,” the company claimed. The footwear measurement technology is “plug and play” with “leading” e-commerce platforms, including Shopify, WooCommerce, Lightspeed and Magento, it added.
MySize, which traditionally has focused largely on apparel, claims its service directly reduces returns and increases average order value. During a three-month period last spring, it said, one of its partners, Turkey-based apparel brand Penti, saw returns drop by approximately 50 percent for customers using its MySizeID service. Apparel sales among these shoppers stood three times higher than those customers who did not use MySizeID for size recommendations, it found.
“When customers can order the right size without needing to jump through hoops or rely on guesswork, both the retailer and the consumer win,” Ronen Luzon, CEO and Founder of MySize, said in a statement. “By bringing our highly accurate sizing tech directly to retailers’ sites, we’re empowering larger numbers of customers to obtain the right fit for them, and increasing accessibility to those who may not have wanted to take the extra step of downloading the app.”
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Gap Inc.’s, the parent company of Gap, Old Navy, Athleta and more, is on course to impact the lives of more than one million women and girls through supply-chain vendor and community partnerships by 2022.
The company announced Monday that more than 800,000 women and girls have completed its Personal Advancement and Career Enhancement (P.A.C.E.) program since it was founded in 2007. Operating in 17 countries where its clothing is made, P.A.C.E. was developed to give women the foundational life skills, technical training and support that will help them advance in the workplace and in their personal lives.
In 2019, Gap Inc. enhanced the program with the addition of Empower@Work, a related program developed in partnership with labor organizations Business for Social Responsibility, ILO-IFC Better Work and CARE, formed to promote the sharing of knowledge, skills and networks.
The effects of the global pandemic, particularly the high rate of women losing their jobs worldwide, is driving Gap Inc. to double down on new commitments to foster women empowerment and set new goals for 2025. Gap Inc. is committed to have 100 percent of its strategic factories (facilities representing 80 percent of its total sourcing volume) participate in Empower@Work, and for all of its strategic factories to achieve gender parity at the supervisor level. This means the gender ratio of workers will be the same as the gender ratio of supervisors.
The company’s Gap and Athleta brands have committed 100 percent of their factories to participating in Empower@Work by 2025.
Gap Inc. will also set up gender-equitable workplace committees at all strategic factories and gender-based violence prevention and response training programs at all factories.
Achieving these goals, which are supported by Gap Inc.’s Supplier Sustainability programs, will rely on longstanding collaborations with expert stakeholders to support gender equity in the apparel supply chain.
“Our goal of achieving gender equity at the supervisor level in all of our strategic factories will be driven by our Supervisory Skills Training program. Similarly, our goal of having workers’ voices being heard through gender-equitable and representative workplace committees will be managed through our Workplace Cooperation program,” the company stated.
Both programs were developed in partnership with ILO-IFC Better Work.
Gap Inc.’s focus on women’s rights is reflected in a new collection of three limited-edition T-shirts with feminist slogans. Gap brand will donate $25,000 to non-profit Girls Inc., which serves girls from ages 6-18 across 1,500 sites in the U.S. and Canada, providing them with educational programming and mentorship to support their mental and emotional growth and development.
The sneaker reselling son of now-former Nike executive Ann Hebert was reported multiple times for abusing the brand’s family discount at Nike across Oregon stores, according to a report published Wednesday.
Input Magazine said it reviewed internal Nike documents and spoke with anonymous sources who were familiar with the matter. Sources also claimed Nike never followed up or properly examined Joe Hebert’s behavior.
Ann Hebert resigned as vice president and general manager of North America weeks ago after a Bloomberg investigation into her son’s sneaker resale business. Joe, whose company West Coast Streetwear saw sales of up to $600,000 in one month, spoke extensively and openly about his business with Bloomberg.
While he was working on the story, Joshua Hunt, who authored the 2018 book “University of Nike: How Corporate Cash Bought American Higher Education,” said Joe sent him a statement for a corporate credit card for WCS LLC to demonstrate his company’s revenue. The card, Hunt noted, was in Ann Hebert’s name.
When Hunt asked about the connection, he said the nineteen-year-old reseller said his mother never provided him with insider information such as discount codes and insisted she not be mentioned in the piece but soon cut off contact.
Many reactions on Twitter have focused on Ann Hebert’s oversight of the SNKRS app and her son’s admitted systematic use of bots for the purpose of reselling at a profit. In his internal remarks, Donahoe said the company planned to double down on anti-bot technology. Joe’s business, however, was not limited to exploiting bots.
According to Input, Joe was reported more than once to Nike’s Loss Prevention team for abusing discounts at retail stores. These sources noted that while Joe wasn’t going to these stores and buying shoes in bulk—Bloomberg details an instance in which he and his allies bought 600 Yeezy. shoes from Adidas with the help of sneaker bots—he was using the family discount for non-personal reasons frequently enough to raise flags at stores in Portland and Eugene.
The teenage reseller spoke in detail about a trip he and a high school friend took last summer when demand was high and supply low. Guided by a map of Nike outlets, the pair stopped in store after store—every Foot Locker, DTLR Villa and Champs Sports location they came across, according to Bloomberg—buying up as much product as they could.
Over the course of the 25-day trip, they had spent more than $200,000 on about 2,000 pair of shoes. The hope, reportedly, was to flip the sneakers for $50,000 profit.
“I’m not dealing with 100%, double-my-money margins usually,” he told Hunt. “It’s just a pretty calm 10 to 20 and then moving product as fast as I can.”
Nike has yet to publicly address the circumstances surrounding Ann Hebert’s departure aside from saying she made the decision to resign. Internally, however, Nike has reportedly held an internal all-hands meeting to address the situation, according to Complex, which said it reviewed a recording of the discussion.
In addition to CEO John Donahoe, who laid out plans for what the company will be doing differently moving forward, Heidi O’Neill, president of consumer and marketplace and Ann Hebert’s former manager, said Nike had conducted an internal review of the executive’s connections to her son’s resale enterprise months ago after receiving a media inquiry. That review, she noted, confirmed the newly resigned VP did not explicitly violate company policies.
“To be clear, we believe that Ann demonstrated poor judgment. However, we made the decision to not take corrective action against Ann,” O’Neill said, per Complex. “That decision was based on the information that we had at the time of the review. Following media reports, we had a more complete understanding than what we did when the review was conducted a few months ago and, together with Ann, we decided that it was best for her to resign.”
Bloomberg reported that some of Joe’s subscribers believed his consistent analysis of what shoes to buy, how to get them and how long resellers might expect demand to persist set him apart from his competitors. Hunt wrote that the entrepreneur declined to talk about his sources of information, but admitted he was lucky to grow up in Portland, near Nike and Adidas.
“If you know the right people here, this is the city to sell shoes,” he reportedly said. The right people “can give you access to stuff that, like, a normal person would not have access to.”
Joe would later deny his mother gave him any insider information. But, even if his parent wasn’t his source of information, his own words suggest he derived an advantage from insiders at Nike, as well as Adidas. According to Complex, Donahoe told staff that Nike would be auditing its launch process and updating its policies to further clarify what is and is not appropriate for employees and their immediate family.
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Management has been slow to come out with clear messages to investors and consumers, much to the detriment of Primark, says Sherman, as it has allowed "myths and assumptions to dictate perceptions."
This is particularly true in Germany where Primark has experienced strong consumer backlash on ESG concerns, based mostly on the
low price point.
"We have long emphasised that Primark (and ABF overall) is strong on ESG but is not getting credit for the good work the company
is doing."
Yesterday (1 March) ABF held its first-ever ESG investor day, a virtual
event hosted by CEO George Weston, with attendees including CFO John
Bason, the director of corporate responsibility, chief people officer,
and the company secretary, who formerly ran Primark's ethical supply
chain team.Primark's supply chain took centre stage during the event and notably,
management went into detail on the price-points of Primark's goods and
how they were able to keep them so low."Primark is often (mis)judged to have poor supply chain ethics, due to
its GBP4 price point, and has come under scrutiny from investors, consumers and politicians," points out Aneesha Sherman at
Bernstein Research.
“Research suggests that supply chain ethics are a strength,
not a liability, for the retailer”
"The retailer is often subject to suspicion by both investors and consumers. The retailer has been in the ESG spotlight for
potential labour issues for many years and has been subject to several investigations on supplier labour conditions, including
multiple interviews by UK Members of Parliament, though all such inquiries have ended with favourable results and a clean bill of
health."We find Primark's approach to be best-in-class," she says. "We have conducted detailed analysis on the economics of the business
model and the ability of Primark to make double-digit margins even with an industry-low average selling price. We have also compared Primark versus sector benchmarks, both on the business model and on the investments into supply chain monitoring and tracking. Finally, we have had multiple interviews with current and former executives in the Primark buying and supply chain
organisations. Our research suggests that supply chain ethics are a strength, not a liability, for the retailer. We find
Primark's approach to be more diligent and proactive than that of most apparel retailers."Clive Black, analyst at Shore Capital, points out Primark has engaged with 80 organisations to work towards compliance on the
factory floor of Primark's supply chain."Accordingly, continual audits are undertaken, one thousand per annum, all of which are unannounced; each factory is inspected at
least once per year. Audit inspectors are looking for a wide range of issues from machinery and electrical risks, building
maintenance (fire exits) to fair pay through payroll checks and worker engagement," he adds.He also notes the group's practice – post the Rana Plaza disaster in Bangladesh in 2013 – of prioritising building structural
integrity units apparel supply chain procedures with non-compliance leading to steps to assist with necessary change, and if not,
de-listing.
"Primark terminated any procurement from Xinjiang in China some time ago whilst it ceased its trading relations with the
Leicester factory base in the UK in 2014, not returning since. Pointedly, Primark also reported irregularities as it saw them to
the UK authorities at the time, quite a damning indictment of inept administration, noting the Boohoo crisis of 2020. Primark's
commentary also reflects poorly on the culture and values of Boohoo in our view," he adds.
A flaw in the system
Where Primark has fallen short though is on communicating its efforts.Management has been slow to come out with clear messages to investors and consumers, much to the detriment of Primark, says Sherman, as it has allowed "myths and assumptions to dictate perceptions."
This is particularly true in Germany where Primark has experienced strong consumer backlash on ESG concerns, based mostly on the
low price point."We have long emphasised that Primark (and ABF overall) is strong on ESG but is not getting credit for the good work the company
is doing."
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