Newsletter No.36 07 October 2016
Gucci named among hottest luxury brands.
Luxury brand Gucci, along with Louis Vuitton and Chanel, has been named hottest luxury brand. Gucci’s editorial value climbed over 15 per cent year-on-year, in the first half of 2016, according to a latest report. However, the editorial values of Louis Vuitton and Chanel grew at a slower rate of less than 15 per cent despite a high print advertising spend.
An Exane BNP Paribas report evaluated the brand temperature of premium and luxury brands. This was based on the ratio between their print advertising spend and the editorial coverage they receive in magazines.
According to the report, brands are ranked hot, if magazines offer these brands more editorial space than their advertising spends should warrant.
So, if brands receive more editorial coverage than their magazine advertisement spends, they get a hot rating, while brands that fall below this ratio are rated cold.
Meanwhile, other luxury brands like Giorgio Armani and Prada saw a drop in editorial print coverage vis-à-vis their advertisement spends, thereby lowering their editorial value in double digits, denoting that their brand temperature had cooled as against the same period last year. (AR)
Woolworths Holdings Limited to acquire Politix, a leading Australian menswear business.
Woolworths Holdings Limited (“WHL”) today announced that its wholly owned subsidiary, Country Road Group had entered into an agreement to acquire Politix, a market-leading retailer in Australian designer menswear. Politix has 75 stores, including 31 concessions across Australia and FY2016 sales of A$56 million. The agreement is subject to the fulfilment of certain conditions precedent normal for a transaction of this nature. The proposed acquisition will be funded through internal resources and is expected to be immediately EPS accretive. With a 40-year heritage, Politix is an iconic Australian men’s fashion brand with a distinctly modern and detailed DNA, which appeals to a broad base of fashion-conscious men aged 18 to 35. Former Liverpool FC and Socceroo star, Harry Kewell continues to be the brand’s key ambassador, in a long-standing association that stems back to 2008.
The acquisition is consistent with WHL’s southern hemisphere strategy of building a strong and diversified portfolio of iconic brands. Politix will add to WHL’s existing Australian stable that already includes David Jones, Country Road, Witchery, Trenery and Mimco. WHL’s Chief Executive Officer Ian Moir said: “The acquisition of Politix is a logical acquisition that will deliver value for WHL’s shareholders. Politix will extend WHL’s menswear offering in Australia and in time we expect to roll out the brand in David Jones and into New Zealand.
“We are delighted to welcome the Politix team to our business. Politix CEO, Peter Sitch and his team have done a fantastic job over the past 10 years growing the company to become the success story it is today and we look forward to Peter and his management team driving the next phase of the brand’s growth.” Peter Sitch said, “This is a tremendous result for our people and our customers. WHL is a world class retailer and will provide the best possible platform for further domestic growth and future international expansion of our brand.”
Apparel brands bogged down by sourcing issues
Responsible practices and sustainable sourcing remain a challenge for the global footwear and apparel industries, even as they continue to register growth and are poised to net $134 bn by 2020, observed a Hong Kong based quality control solutions company that tracks global trade, product quality and supplier compliance trends across the world.
In its Q3 barometer released over the weekend, AsiaInspection acknowledged that cotton sourcing practices in particular were in the spotlight in a recent report which slammed many major brands for doing “virtually nothing” to ensure that their cotton is sustainable.
Forced and child labour also posed particular risk to apparel supply chains, with top cotton exporters such as Uzbekistan and Turkmenistan being pointed out for doing little to enforce the conventions they sign.
According to Sebastien Breteau, AsiaInspection CEO Child labour could trap multiple generations in poverty, and it gets further perpetuated by the lack of access to quality and free education.
Thus, AI was keen to align its efforts with initiatives such as the Global Business Council for Education, and help out in eradicating child labour, he said.
Meanwhile, progress in structural safety of apparel supply chains also remained slow. AI’s data on structural audits for Q2 2016 found that a little more than half (53.3%) of all factories audited were ranked as “Immediate Action Required” or “Need Improvement”.
Citing an ILO and IFC report, AI noted that despite the recent strides made by the Bangladeshi RMG sector, one in four factories requires extensive retro-fitting remedial work.
On sourcing challenges, AI data indicated that while the manufacturing base in Africa is growing, it is still immature: Inspection demand saw +61% growth year-on-year, but at the same time failed inspections rate surged by +15% in 2016 compared to last year.
Other industries such as jewellery industry also faced responsible sourcing issues, AI noted adding that sustainability efforts were gaining momentum with an audit program for jewelers launched by the Responsible Jewelry Council. As the EU recently adopted the framework to curb trade in conflict minerals, this program’s membership is poised to increase further.
Across industries, AI data showed that unethical labour practices remain among the most pressing issues discovered during ethical audits: in Q2 2016, 5.9% of audits failed in the “Child Labour” section, an uptick from the Q1 figure of 4.6%. (SH)
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A reply to Trade Unions, the state and ‘casino capitalism’ in South Africa’s Clothing Industry by Nicoli Nattrass & Jeremy Seekings published in Review of African Political Economy December 2015…
Did you Know………
Actress Julie Newmar, who starred as the original Catwoman, actually holds the patent for “pantyhose with shaping band for cheeky derriere relief,” a forerunner to Spanx. She was granted the patent in 1975.
According to Icelandic folklore, if you don’t get new clothes to wear for Christmas, there is a giant Yule Cat that will eat you.
Up until the 19th century, children were dressed as miniature adults.
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