Jockeying for position

/in

This article was written by Buhle Mbonambi for Independent Online.
2137440640
Durban – Fashion designer David Tlale has notched up another achievement.

He is one of the most illustrious designers on the continent and there is no denying his success. He has conquered South Africa and the continent and his shows at New York Fashion Week have been grabbing the right kind of attention.

So it comes as no surprise that Jockey wants to work with him. It’s the first major deal for a South African designer creating a range of underwear for an international brand.

“It was one of those big deals that I couldn’t say no to,” the designer told me from his Joburg studio. “Jockey is a huge brand. Everyone knows and/or wears Jockey.

The collaboration, which will hit stores in July, will see Tlale create a special collection of luxury underwear for men and women.

”It’s obviously going to have a higher price… It’s luxury underwear. It’s one you want to see people wearing.

“Many people take underwear seriously, which is why brands like Calvin Klein have a successful underwear range. We see it at the gym. We see the branded elastication of the underwear peeping out from men’s jeans. There’s a certain status afforded to it. So why can’t we replicate that success with a label that’s very popular in South Africa?”

This Jockey deal and other brand extension commitments are the reasons why he decided not to showcase at New York Fashion Week this season. “To be honest, we are busy. It was purely a business move and we will be back in September for the summer 2017.”

His engagements in the country and on the continent, are keeping him on the hop.

“Yes, everyone knows David Tlale and what the brand stands for, but we want to make inroads and increase our footprint. There’s a big demand from countries like Nigeria, Ghana, Kenya, Zambia and Zimbabwe.”

The three years and six seasons he has been showing in New York, Tlale says, have given him the guts to aim to show in other fashion capitals, like Paris. “The plan is to go global and I feel we are well on our way to doing that.”

Designers are now choosing to show their ranges out of season. Tom Ford, Burberry, Vetements, Michael Kors and Tommy Hilfiger are choosing to show less and make their clothes available immediately. This move is called the “buy-now wear-now” model, and it is revolutionary because it will close the six-month time lag between the presentation and retail delivery.

Tlale loves this. “No one waits six months for an item they saw on the runway. They want it now. We have consumers who, when they see the item, want it at that moment, and it’s great for the industry.”

While it will mean that they must work harder, it will cut down the copycat designs of the fast fashion brands.

“It used to be that you showed your collection and a few weeks later, the fast fashion stores had replicated your work. When your clothes landed on the racks of stores six months later, people didn’t buy them because they had something similar.”

He is disappointed some South African retailers rarely stock local designs. “We are talented and it’s sad that you rarely see our designs in major retailers like Woolworths, Edgars and Markham.

In the US you find collections from their designers in almost every clothing store.

“Why don’t we have the same system in South Africa?”

The solution, he said, was to pressure retailers to support local fashion. “With shops like Topshop, Zara and H&M in the country, it’s a great opportunity for our retailers to focus on local designers and work with them.

“I am working on a diffusion line called David by David Tlale, which will be sold on e-tailer, Spree. We need more of these. And the ‘South African designers are unreliable’ excuse will not fly any more. How are you, as a retailer, helping the designer know the business so the clothes will be delivered on time?

“Can we please be given a chance? That’s how the industry will grow, when we work together.”

His next show is in Durban for the Metro FM Music Awards Fashion Experience at the Waterfront Hotel on Friday.

“It’s a small capsule collection but it celebrates the MMAs and how much (of a role) that has played in my career.”

Amazon has quietly launched its own clothing lines, as it tries to take over fashion retail

/in
This article was written by Marc Bain for Quartz Magazine

images

Already in the midst of a massive growth spurt, Amazon is looking to fashion to keep fueling its expansion. For months there have been clues that the e-commerce giant was developing its own in-house clothing brands, and just last week, job postings from the company (paywall) hinted it was actively moving toward a launch. But it seems the launch already quietly occurred.

The company has introduced at least 1,800 different fashion products on its site, under seven different brand names it trademarked, according to a Feb. 21 note by Ed Yruma, managing director and equity research analyst at KeyBanc Capital Markets. As WWD reported (paywall), Amazon is selling a wide variety of items, including women’s clothing and bags, men’s tailored wear and accessories, and even children’s clothing. They exist under the labels Society New York, Lark & Ro, Scout + Ro, Franklin & Freeman, Franklin Tailored, James & Erin, and North Eleven.
Searches of public records confirm that Amazon owns the trademarks to these brands. A quick look at the items for sale, such as a turtleneck dress from Society New York for $39.97, and a cap-toe oxford by Franklin & Freeman for $53.97, indicates Amazon is sticking toward the cheaper end of the price spectrum for its in-house labels.
A screen capture of the one of the items reportedly from Amazon’s private fashion linesFashion by Amazon.
In any case, Amazon has been moving toward launching its own lines as its fashion strategy shifts. Since it jumped into fashion retail more than a decade ago, it has occasionally struggled to gain traction, partnering with existing retailers and clothing brands. Its solution has at times been to acquire or launch its own outlets, including Shopbop and East Dane, and it makes sense that it would create its own clothing brands when its existing partnerships don’t offer what its shoppers want.
“When we see gaps, when certain brands have actually decided for their own reasons not to sell with us, our customer still wants a product like that,” Jeff Yurcisin, vice president of clothing at Amazon Fashion and CEO of Shopbop, said at a retail conference in October.

In-house brands can also sell extremely well. At fashion e-commerce powerhouse Revolve, the company’s private-label brands are some of its top sellers. And KeyBanc notes that, at their peak, Amazon’s margins in apparel are better than other goods, while the company has said fashion is one of its fastest-growing categories.

While Amazon faces definite headwinds to developing its apparel business—KeyBanc notes only about 15% of its active customers buy clothes through the site—the potential is there for Amazon to disrupt retail in the mass-market. Amazon has an immense amount of data to draw on, which could allow it to identify consumer trends and respond quickly, a capability that has allowed fast-fashion to take sales from chains such as Gap.
Successful private labels would also make it even more competitive against competitors that rely on brick-and-mortar stores. According to financial firm Cowen and Company, Amazon is on course to top Macy’s as the largest clothing retailer in the US this year.
The conditions are right for big profits, and more growth for Amazon.

Tills jingling for Cape retailers

/in

This article was written by Jenni McCann and originally appeared in Cape Business News.

money

CAPE TOWN headquartered retail conglomerates appeared to enjoy brisk Christmas trading with recent sales updates mostly confirming double digit growth. The trading statements – to an extent – allay fears that discretionary spending would dry up as consumers faced up to the prospect of lower salary increases and the prospect of higher interest rates as well as higher prices following the calamitous collapse in the rand against major international currencies. But the outlook for 2016 remains cautious, and local retailers are going to have to work extra hard to maintain margins and keep top line ticking over.

Woolworths – which sells a combination of groceries, general merchandise and fashion lines – reported group sales up a sprightly 17% for the 26 weeks ended 27 December 2015. If the recently acquired business of Australian-based department store David Jones was excluded, then Woolworths’ sales increased by 12,3%.

Woolworths clothing sales increased by 11,7% with a price movement of 6,6%. Sales in comparable stores grew by 8% with net retailing space growing 7,2%. General merchandise sales growth was markedly slower, increasing by 5,8% and only by 2,3% in comparable stores.

But Woolworths Food sales jumped by 12,1% with a price movement of 5,7%. Sales in comparable stores grew by 5,8% with net retail space increasing almost 10%.

Another key indicator was that Woolworths Financial Services division saw its debtors’ book growing nearly 8% for the trading period, with an annualised impairment rate of less than 5%. The bottom line is that Woolworths expects earnings for the 26 week trading period to come in between 30 and 40% higher.

Fashion retailer Truworths International – which has recently seen its retiring CEO Michael Mark opting to stay on board until 2017 – disclosed that its group retail sales for the 26-week period to the end of 2015 increased 36% to R8,5bn. The turnover growth figure, though, does include contributions from the recently acquired Office Retail Group as well as the Earthchild and Naartjie businesses.

Office is a cash based footwear retailer in the UK – in which Truworths acquired an 89% stake in early December. The contribution from Office meant Truworths encouragingly reported that group cash sales grew by 85% and credit sales by almost 16%. Credit sales comprised about 60% of total sales. If the sales recorded by Office, Earthchild and Naartjie were set aside, the retail sales for the period increased by 15% to R7,2bn with cash sales growth of 16% and credit sales growth of 15%

Like-for-like store retail sales give some indication of how tough trading really was in the 26-week period – increasing by just 10% for the period with product inflation averaging 9%. Truworths reported that the percentage of active account holders able to purchase remained at 86%.

The Foschini Group – which also owns menswear specialist Markhams – reported that Christmas trading was above expectation with group sales growth for December coming in at a nifty 27,2%. If the recently acquired UK-based Phase Eight business was excluded, then turnover growth was 13,5% with same store growth of 6,9%.

Foschini reported strong Christmas sales growth in clothing (16,7%) and cellphones (13,8%.)

Excluding Phase Eight, cash sales growth for December was 20,8% and credit sales grew by 7%.

Foschini reported that group sales for the nine months to 26 December 2015 increased 33,0%. But if Phase Eight was stripped out then turnover growth registered just below 12%, and less than 6% on a same store basis. Foschini also conveniently provided a post-Christmas sales update from December 27 to January 9 – noting group sales up almost 40% and 12,5% in Phase Eight was taken out of the equation. Same store growth was 6,2%.

Woodstock-based New Clicks – which owns Clicks Stores, Musica and the Body Shop – reported group turnover up 12% in the 20 weeks to January. The flagship Clicks chain increased sales by 13,6% – a performance, its directors contended, highlighted the resilience of the business in an environment of declining consumer confidence and increasing economic uncertainty.

Clicks reported comparable store sales growth of almost 116% and showed real volume growth of 7,2% with selling price inflation measured at 3,4%. The Body Shop increased sales by 12,7% and by 9,3% in comparable stores, while Musica grew sales by 2,6%. Total group turnover grew topped R9,2bn for the period with CE David Kneale singling out the Clicks chain, which managed a strong performance across all product categories.

“Over the festive season in particular customers responded positively to our product ranges and to our promotions.”

Looking ahead, Kneale expected trading conditions to be challenging, with consumers facing further pressure from a combination of higher inflation and rising interest rates.

Brackenfell-based supermarket giant Shoprite seemed to labour for growth traction in the six months to end December 2015. Group turnover increased 8,8% from R57,5bn to about R62,5bn. But growth on a like-for-like basis was a pedestrian 2,8%. CEO Whitey Basson said that after an improved second quarter driven by good festive season trading, the South African supermarket operations increased sales by 7,2%. Internal inflation averaged just 2.7% for the period.

The group’s non-RSA supermarkets – mainly scattered around Africa – recorded sales growth of 15,2%. This is a commendable effort considering the impact of (dramatically) lower commodity prices and the devaluation of certain currencies. Shoprite’s furniture division grew sales by 13,7% for the period with the OK Furniture brand the stand out performer.

 

Just how big is the Bangladesh garment sector?

/in

This article was written by Leonie Barrie and originally appeared in Just Style.

bangla

Just how many factories there are in the Bangladesh garment industry, the size of the workforce, and the number of workers covered by the various initiatives aimed at improving factory safety? The answer, it seems, is that nobody knows for sure and a has now broken out between two groups of academics over their analysis.

At the heart of the debate is a report ‘Beyond the Tip of the Iceberg: Bangladesh’s Forgotten Apparel Workers,’ which was published in December by New York University’s Stern Center for Business and Human Rights. It claimed there are thousands more factories in Bangladesh and almost a million more workers producing garments for export than have previously been accounted for.<h/3>

The researchers also concluded that there has been a “woeful lack of progress in actually fixing unsafe factories and that there still is no comprehensive plan to provide the resources to do so.”

But professors from Pennsylvania State University and the University of Colorado, who have studied the findings, say they have identified a series of errors in data collection and analysis – and have in fact come to the opposite conclusion.

“Contrary to Stern’s assertions, more than 70% of garment workers in Bangladesh are covered by the Accord and the Alliance, and if we include workers employed in factories inspected by the ILO-advised National Initiative, the percentage of covered workers reaches 89%,” they say.

Among the key findings of the Stern Center’s report was the identification of 7,000 garment factories in Bangladesh, a massive increase on previous estimates of 4,500 factories. It also assessed the prevalence of indirect sourcing, concluding that 91% of factories in two sub-districts of Dhaka, including informal subcontractors, produced at least partly for export and were unregistered.

It backed its hypothesis with the observation that from 2013 to 2015 while the number of direct exporters remained constant, total apparel export volumes fluctuated substantially. This is because either each direct exporter is able to dramatically increase and decrease its production in response to shifting demand, or the thousands of indirect suppliers enable direct exporters to accommodate significant shifts, it said.

While Stern’s report was based on an analysis of factory data collected from publicly available sources and a field survey, the researchers at Pennsylvania and Colorado say the database included closed factories (including the five factories destroyed in the Rana Plaza building collapse in April 2013), duplicate, and domestic market-oriented factories.

“We estimate that Stern’s database of 7,165 export factories is inflated by at least two thousand factories,” the professors say in their report ‘The Bulk of the Iceberg: A Critique of the Stern Center’s Report on Worker Safety in Bangladesh.’

Other criticisms of the Stern work are that they could not find the majority of the factories in the two sub-districts of Dhaka; the claim there are 5.1m garment workers in Bangladesh is unreliable because it is based on the flawed factory database; unregistered, informal factories employ less than 2% of workers producing garments for export; and “several hundred factories” were not categorised properly, resulting in an underestimate of the number of workers covered by the Accord and Alliance initiatives.

The Pennsylvania State University and University of Colorado analysis instead estimate there are 3.85m workers, and that the Accord and the Alliance initiatives cover 71.4% of workers in the ready-made garments sector.

Add in those under the National Initiative, the ILO-advised government factory inspection programme, and it calculates nearly 3.43m workers are covered – representing 89.1% of all workers.

While the Stern Center academics say they dispute many of the latest assertions about their work, there is one are on which they all agree: that there has been progress in addressing factory safety in Bangladesh, but that much work remains to be done.

 

Boston Retail Partners’ 2015 Merchandise Planning Survey

/in

According to the Boston Retail Partners’ 2015 Merchandise Planning Survey: ‘Today’s retailers are wrestling with a myriad of business and IT issues. Adding to the already long list, current planning systems are out-of-date and don’t effectively address today’s requirements for an omni-channel planning environment. Most retailers find their current planning applications are ineffective and can’t support the complex analysis required to optimize planning decisions and ultimately meet customer demand. The good news is that most retailers realize this and more than half of retailers are planning to upgrade or replace their planning applications within two years.”

rsz_1download_full_report

Bleaker outlook hits Woolworths stock

/in

This article was written by Marc Hasenfuss and originally appeared in BDLive 

SHARES in upmarket retailer Woolworths (Woolies), the darling of the JSE’s consumer sector, were shredded yesterday, with nervous investors fretting over less compelling prospects for the financial year ahead.

The shares finished 7.65% down despite Woolies reporting a 17% increase in revenue to R35.5bn and a 31% gain in headline earnings to 252c a share in interim results to end December. At one point the stock dipped as low as R84.20 — a drop of more than 9%.

One market source suggested there had been a spate of selling by foreign investors.

If the contribution from recent Australian acquisition David Jones was stripped out, then the Woolies top line was up a solid 12.3%.

While the interim numbers largely met expectations, the market is clearly fretting about prospects for the second half.

 

Although Woolies CEO Ian Moir reported robust trading for the first six weeks in the second half, independent analyst Syd Vianello said that there were tough times lying ahead for Woolies in the South African and Australian markets.

In SA, Woolies faced not only the prospect of higher interest rates, but also the possibility of an increase in value-added tax (VAT). “I would not touch a retail share now. I’d rather wait two weeks for the budget until the state of play as regards VAT is clear,” Mr Vianello said.

Directors underlined their confidence in the company’s prospects by hiking the interim payout 38% to 133c/share. Shareholders have been offered a scrip dividend option.

Avior retail analyst Kyle Rollinson suggested the scrip dividend option might have weighed on investor sentiment. “The market does not like scrip dividends, and we saw this with (fashion retailer) Foschini. It can be indicative of a share being expensive.”

In a note to clients, JP Morgan Cazenove analyst Stephen Carrott said the scrip dividend was a complete surprise considering the relatively comfortable gearing of Woolies.

He said Woolies management attributed the scrip alternative to a combination of going into an intensive capital expenditure phase of the business and uncertain economic times on the horizon.

A divisional breakdown showed clothing and general merchandise posting a much improved half, with sales growing 12.5% in SA. Mr Moir reported a good performance from core womenswear and menswear categories and a strong improvement from childrens wear.

The food division pushed sales up 12.1% and operating profit up 18%. Mr Moir said that the company’s supermarket strategy proved successful, adding that Christmas sales had been strong.

In Australia, department store business David Jones increased sales 11% on a 26-week basis, while Country Road saw a 5% increase in operating profit from a 13% gain at top line.Ian+Moir+xxx+February+12+2015+

The #JetLoveYourself campaign is everything that the fashion industry needs

/in

This article was written by Antoinette Muller and originally appeared in The South African.com

 

 

Jet is undergoing a bit of a rebrand at the moment and it has announced itself with a bang. The #JetLoveYourself campaign is making waves on social media for the simplest reason: it uses every day sized women and features diverse models.

By the fashion industry’s standard, these women would be labelled “plus-size” because according to the fashion industry, women above size eight are considered “plus”. Of course, if you go into a retail store, “plus sized clothing” will usually be a size 16 and up, but when it comes to modelling agencies, anything that’s not incredibly skinny is thought of as “plus”.

That’s why this campaign is so amazing, it’s trying to smash the perspective that there even is such a thing as “plus-size”. Whether you are super skinny or a bit more curvy doesn’t matter and what size you are should not determine whether you love yourself or not. It also reminds women that they are more than their size.

While the concept of using normal sized women isn’t anything new (Dove has done it for years), it’s quite new in South Africa.  Inspiring body positivity and teaching women that their bodies should not be held up by the fashion industry’s warped standards is a great thing.

It’s sad that we still have to celebrate this as something revolutionary, but it’s a start. Now, over to you, rest of South Africa’s fashion brands…