The Business of Fashion’s Post

How should we approach sustainability when in survival mode?

Shein has enlisted a former top European Union official to bolster its lobbying efforts across the region, taking a more active stance toward potential regulatory scrutiny as it plans a stock market debut in London. The online fashion retailer hired former EU budget commissioner Günther Oettinger as a consultant to help it navigate the bloc’s policy environment, a company representative told Bloomberg News. Shein faces a raft of issues including a debate whether to impose customs duties on cheap parcels — a potential game-changer for Shein and other low-cost online retailers like PDD Holdings Inc.’s Temu. The European Commission has kept the ultra-fast-fashion industry in its sights since about 2021, when President Ursula von der Leyen denounced it as “poison” due to the environmental impact of cheap, disposable clothes. That hasn’t prevented Shein from a major European expansion, and it’s preparing an initial public offering that could value the company at about £50 billion ($64 billion). https://lnkd.in/gBqVCRm9

Brands from Starbucks to LVMH are really hurting in one big market https://ift.tt/ICYMsQl Starbucks struggled in China last quarter as consumer spending drops. Beata Zawrzel/NurPhoto via Getty Images Brands like Starbucks, LVMH, and L'Oreal struggled in China last quarter as consumer spending dropped. Chinese consumers are saving more and spending on experiences over products. Starbucks plans to open more stores in suburban areas to counteract declining sales. Some of the world's biggest brand names are struggling to crack one market this year: China. Retailers, including luxury giant LVMH, L'Oreal, and Starbucks are all seeing lower sales in the world's second-largest economy, compared with past years. Chinese customers are choosing to save their money and spending on experiences when they do fork out. Starbucks, which reported earnings on Tuesday, saw an especially harsh reality check. Sales in the country tumbled 14% year-on-year in the second quarter, a metric important to investors since about 18% of all Starbucks outlets are in China. The company brought in $733 million in revenue in China in the three months ending June 30, down 11%. "China is one of our most notable international challenges," said CEO Laxman Narasimhan on Tuesday's earnings call. "We've continued to face a more cautious consumer spending and intensified competition in the past year." Starbucks faces intense competition from local chain Luckin Coffee, which has around twice as many stores as Starbucks in China. One of Starbucks' strategies for China will be opening more stores in suburban and rural areas, where populations are moving to, chief financial officer Rachel Ruggeri said on the call. Overall, Starbucks met analysts' quarterly profit expectations, but earnings fell 7.6% compared to the same quarter last year. Shares of the company are down 19% year-to-date. Chinese customers are not shopping It's not just dining. French fashion and beauty giants LVMH and L'Oreal have been struggling in the Chinese market, too. Last week, LVMH, which does not share China-specific results, posted a 13% decline in revenue for the Asia-except-Japan region in the first half of the year. The region made up 30% of the company's total revenue. Budget-friendly companies like L'Oreal, which owns a series of drugstore brands including L'Oreal Paris and Cera Ve, as well as more upscale brands, have also fared poorly in the Chinese market. Second-quarter sales declined 2.4% in North Asia including China, the company reported on Tuesday. "In mainland China, the beauty market was negative in the second quarter on a tough comparison base, exacerbated by lasting low consumer confidence," L'Oreal said in an earnings release on Tuesday. Some Chinese buyers, including those who shop at LVMH's massive stable of brands, are heading to Japan in search of luxury bargains, thanks to a weak yen. But not everyone's struggling in China. On Thursday, Hèrmes reported over a 7% uptick ...

Shares of H&M leapt 14% in early deals on Wednesday, after the Swedish retailer significantly beat profit expectations for its fiscal first quarter. Operating profit rose to 2.08 billion Swedish krona ($196 million), versus the 1.43 billion krona forecast in a LSEG poll of analysts. The company’s operating margin rose to 3.9% from 1.3%, as it reiterated its target of a 10% operating margin this year. Net sales fell year-on-year in the first quarter, hitting 53.7 billion krona from 54.9 billion krona. H&M has previously announced a focus on profitability, amid pressure from growing competition from Zara owner Inditex and Chinese fast fashion retailers, such as Shein. #EU #market #retail

Give us your thoughts on Jeremy Hunt and Shein ‼ The UK’s Chancellor is welcoming the possibility for a UK listing stating these very words: "A listing of Shein's stature could not only spotlight London as an attractive market for international companies but also provide investors with a lucrative opportunity to engage with the fast-growing fast-fashion sector, which continues to gain traction among consumers globally, particularly among Gen-Z audiences," These words come from a Government that cast more shadow on sustainable practices as we see them now, and no doubt the final nail in the coffin will come tomorrow on Budget Day. How should we approach sustainability when in survival mode? Quote Source: https://lnkd.in/dqN-geWv

U.K. Govt slowly disconnecting itself from sustainable commitment or do they really not see the bigger picture here. Fast fashion exacerbates an already major problem for waste and promotes this to the younger demographic. Concerning #sustainability #sustainablefashion

🔴 𝐒𝐡𝐞𝐢𝐧'𝐬 𝐏𝐫𝐞-𝐈𝐏𝐎 𝐂𝐡𝐚𝐫𝐦 𝐎𝐟𝐟𝐞𝐧𝐬𝐢𝐯𝐞 𝐅𝐚𝐜𝐞𝐬 𝐆𝐫𝐨𝐰𝐢𝐧𝐠 𝐑𝐞𝐬𝐢𝐬𝐭𝐚𝐧𝐜𝐞 𝐢𝐧 𝐄𝐮𝐫𝐨𝐩𝐞 As Shein ramps up its pre-IPO efforts in Britain, it's encountering significant pushback from Europe's retail industry and lawmakers. With the European Union elections underway, there's increasing pressure on policymakers to protect the region's 1.5 million textile, footwear, and leather industry jobs from the influx of low-cost products. 𝐊𝐞𝐲 𝐇𝐢𝐠𝐡𝐥𝐢𝐠𝐡𝐭𝐬 ▪ 𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐲 𝐂𝐨𝐧𝐜𝐞𝐫𝐧𝐬: European manufacturers are urging future EU policymakers to address the competitive pressures from cheap imports, drawing parallels to concerns about Chinese overcapacity in other sectors. ▪ 𝐌𝐚𝐫𝐤𝐞𝐭 𝐃𝐲𝐧𝐚𝐦𝐢𝐜𝐬: The European apparel sector, home to giants like Zara and H&M, generates over €200 billion annually, with 99% of companies being small or medium enterprises vulnerable to global competition. ▪ 𝐒𝐡𝐞𝐢𝐧'𝐬 𝐏𝐨𝐬𝐢𝐭𝐢𝐨𝐧: Despite allegations of unfair advantage due to Chinese state subsidies, Shein denies these claims, emphasizing its growing supplier bases in Brazil and Turkey. 𝐂𝐨𝐧𝐭𝐞𝐱𝐭 Shein is also striving to improve its image in France and Germany. In France, where lawmakers have approved a bill targeting the environmental impact of fast fashion, Shein has expanded its second-hand clothing resale platform. In Germany, Shein is engaging with officials through initiatives like ESG breakfast roundtables. 𝐓𝐚𝐱 𝐋𝐨𝐨𝐩𝐡𝐨𝐥𝐞𝐬 Retailers in Europe are increasingly critical of tax loopholes that benefit foreign e-commerce platforms. These loopholes allow for duty-free imports of low-value parcels, which domestic retailers argue create an uneven playing field. 𝐈𝐧𝐝𝐮𝐬𝐭𝐫𝐲 𝐑𝐞𝐚𝐜𝐭𝐢𝐨𝐧𝐬 Key figures in the industry, including executives from Ryman and Next, are calling for government action to close these loopholes and ensure fair competition. As Shein navigates these challenges, its strategies and responses will be critical in determining its success in the European market and its potential IPO. #Shein #RetailIndustry #Ecommerce #EuropeanUnion #IPO #FastFashion #TaxLoopholes #Sustainability #BusinessStrategy

Inditex, the parent company of Zara, reported record sales for the fiscal year 2023, with revenues reaching €36 billion (£31 billion), a 10.4% increase from the previous year.  Net income for Spain’s largest company grew 30.3% to €5.38 billion, demonstrating the “effectiveness of our integrated store and online strategy”, according to the group. Inditex announced a 28% increase in its full-year dividend to €1.54 per share . The group noted a positive start to 2024, with sales growing 11% in constant currency from 1 February to 11 March. The company continues to focus on expanding its global presence and enhancing its supply chain efficiency, including a significant investment in logistics over 2024-2025. The presentation did not make mention of the pressure Inditex is facing from shareholders to publicly disclose the full details of its supply chain. According to a Reuters report published earlier this week,... More at #Proactive #ProactiveInvestors http://ow.ly/neeF105lP32

“That’s not actually made in Ireland, is it?” I’ll never forget the shock at being asked by a journalist if we actually made our jewellery in Ireland. I suppose I shouldn’t have been surprised, made in Ireland is an oft abused phrase… But I felt it in my heart as our incredible team and partners Aaron O'Sullivan have worked to bring the Chupi Claddagh collection to life. I made the decision when I started 11 years ago to build a business that cares. For me made in Ireland so many things: Craftmanship: our team and partners have over 100 years of experience, the kind of expertise that means they can truly craft pieces made to last for generations to come right here in Ireland. Sustainability: In terms of our carbon footprint and air miles, all of our jewellery is made within an hour of our Flagship store and some is even made in our store itself. The future: ultimately it comes down to the kind of world we want to live in and the kind of future we want for our children. Whilst I know we have made the right choice, we often get asked does anyone care about made in Ireland? They reference the statistics that whilst people say, they care about sustainability, Shein’s (and indeed all of the fast fashion brands) sales are growing at an incredible rate. My answer is always the same. Not everyone cares. And that’s OK, we don’t make jewellery for everyone. We make our jewellery for the people who care, people like you. You can browse the claddagh collection here: https://lnkd.in/eK4ze-C2

Perhaps #sustainability does matter. At least when a company stands accused of unfit working conditions, considerable environmental damage (including CO2 emissions, microplastic shedding….), appropriation of IP, avoiding taxation and use of cotton produced by forced labor. Shunned by the US, SHEIN turned to London to confidentially file for its IPO. But…according to Sam Kerr, Gustav Hoejmark-Jensen, Crisitano Dalla Bona, and Taku Dzimwasha, Shein has yet to implement its financial advisors’ supply chain recommendations. They write “though Shein wanted a summer IPO, there are doubts even an autumn listing is possible, the first source said, if it proceeds, a 2025 floatation is more realistic.” Advisors are likely worried because “those responsible for a prospectus are liable to pay compensation to an investor who has suffered a loss” if there are misleading statements in the document….” according to a source. They continue…quoting a source “there are accute concerns among buysiders about Shein’s supply chain, particularly around modern slavery and working conditions.” Maxine Bédat Matt Powell Sarah Kent Zofia Zwieglinska Helen Reid Livia Giuggioli Firth Leslie Johnston, M.Sc. Joel Makower Heather Clancy John Elkington Paul Foulkes-Arellano Sydney Badger Grace Zuncic Kathleen Talbot Brett Mathews Christine Goulay Deborah Weinswig 韋葆蘭 Sucharita Kodali Tariq Fancy