A broad analysis of publications from the past three months shows that the fashion industry is resilient,driven by international growth, corporate mergers, and expansions. Major players reported revenue growth while many companies continue to navigate challenges such as fluctuating consumer spending, covid debts, and economic uncertainty in global markets. Overall full year fashion retail sales are on the rise in 2024.
Key Financial Trends:
Revenue growth and forecasts:
Despite macroeconomic challenges, many companies reported better-than-expected financial results during Q3. Strong brand positioning and the use of e-commerce channels have driven performance, especially among firms with loyal consumer bases.
Strategic acquisitions and expansions:
Consolidation in the apparel sector continues, with mergers and acquisitions aimed at diversifying product lines and expanding market reach.
Profit margins under pressure:
Companies are preserving or improving profit margins through strategic investments, supply chain optimization, and diversified production locations.
Consumer spending shifts:
Economic uncertainty is influencing consumer behavior, with demand remaining strong for luxury and essential items, while mid-tier brands face slower growth. Companies are adapting by adjusting pricing and product strategies to align with evolving preferences.
In the press:
During Q3 the companies listed below presented various results over a variety of timeframes which have been published on FashionUnited.nl. The Individual articles can be found on FashionUnited but this is the overall outline:
INretail Fashionpanel: Dutch retailers participating in the INretail Fashionpanel reported double digit sales growth in September and July with a 13 and 12% increase respectively compared to 2023. August showed a 4% increase. Cumulative sales increase in the Fashionpanel is 5% over 2024.
INretail Shoe Monitor: Shoe retailers reported 10% sales growth over the quarter compared to 2023. Cumulative sales increase in the Schoenmonitor stands at 3% over 2024.
CBS (National statistics bureau of The Netherlands): reported a plus of 4.4% from a year earlier in July for clothing stores. Retailers in shoes and leather goods saw revenue increase 2.7%.
On average sports retailers participating in the INretail sports panel have shown a 4% increase in sales in the month of September, compared to the same period in 2023.
In short:
Bestseller: Reported stable FY profits despite a decline in sales, indicating effective cost management and resilience in a challenging market.
Björn Borg: Reported a 28% sales increase over Q2, demonstrating strong performance in the sportswear market.
Burberry: Reported disappointing first-quarter results, retail revenue down 21%.
De Bijenkorf: Reported a higher profit of €7 million in 2023 due to cost-cutting measures, highlighting the importance of efficiency in achieving profitability.
Frasers Group: The CEO hailed a breakthrough year with a 13.1% profit increase, in the year ending April 28, 2024, demonstrating successful business strategies and growth.
Gap Inc.: Reported a strong second quarter with 5% sales increase, driven by a resurgence of its brands, signaling a successful turnaround strategy.
H&M Group: Reported lower-than-expected profits in the third quarter, leading the CEO to lower future expectations, suggesting challenges in the current retail environment.
Inditex: Achieved both sales and profit growth, demonstrating continued success in the fast-fashion industry.
JD Sports: Reported revenues of £5 billion, reflecting significant growth and a strong position in the sports retail sector.
Dry: Reported a 49% drop of its net profit in the first half of 2024, suggesting challenges in the luxury conglomerate’s overall performance. H1 sales were down 11%.
LVMH: Reported a 4,4% decline in sales in Q3, indicating potential headwinds in the luxury market.
Marcolin: Reported a 3% profit increase and a 3,6% sales decline during its license expansion, indicating a focus on strategic partnerships and potential shifts in its business model.
My Jewellery: Reported 6% sales increase over 2023.
Next Plc: Increased its profit forecast for the 2024 fiscal year, demonstrating positive business outlook, H1 sales up 8%.
On Holding AG: Achieved significant success in the first half of the year, with profits marking a 156.5% growth, highlighting strong growth potential.
Puig: Maintained growth despite a decline in profits in the first half of the year, indicating a focus on expansion and market share.
Puma: Sales up 2% but adjusted its profit forecast due to higher freight costs and weak consumer confidence in China, reflecting the impact of external factors on business performance.
Salvatore Ferragamo SpA: Revenue down 9,6%, suggesting significant challenges in the luxury footwear and fashion sector.
Shane: Achieved significant success in the UK market, reaching £1.5 billion in revenue in 2023, up 38%, ahead of its London IPO. Six European Union countries are calling on Brussels to tighten the screws on online shopping sites Temu and Shein, which are suspected of selling products that are sometimes dangerous to consumers.
The Platform Group AG (Winkelstraat.nl and Brandfield): Showed strong results, indicating positive momentum in the online retail sector.
Tapestry: Maintained stable results in their fiscal year, reflecting consistent performance in the luxury goods market.
Under Armour: Reported that transformation costs weighed heavily on its results, indicating ongoing investments and restructuring efforts. Revenue was down 10%.
Uniqlo: Exceeded its raised profit forecast for the 2024 fiscal year, demonstrating strong financial performance and positive investor outlook.
Urban Outfitters: Reported a 6,3% increase in sales in the second quarter, reflecting positive consumer response to its offerings.
Van de Velde: Experienced a slight decline in results in the first half of the year.
Wolford: Announced a comprehensive restructuring plan following its H1 results, indicating a need to adapt and improve its financial performance.
Zalando: Zalando raised its revenue forecast for the 2024 financial year, driven by strong sales performance in the e-commerce sector. Revenue up 5%.
Zegna: H1 revenues were up 6.3% but profit declined.
The companies with the best financial performance are:
JD Sports: Reported revenues of £5 billion.
Inditex: Achieved both sales and profit growth.
The Bijenkorf: Reported a profit of €7 million in 2023.
Gap Inc.: Reported a strong second quarter with 5% sales increase.
The Platform Group AG: Record high EBITDA, net profit up 32%.
Urban Outfitters: Reported a strong increase in sales in the second quarter.
Björn Borg: Reported a 28% sales increase over Q2.
On Holding AG: Achieved significant success in H1, profits marking a 156.5% growth.
Next Plc: Increased its profit forecast for the 2024 fiscal year. H1 sales up 8%
My Jewellery: Reported 6% sales increase over 2023.
Frasers Group: The CEO hailed a breakthrough year with a 13.1% profit increase.
Fast Retailing: Reported continued growth in both profit and revenue, leading the company to raise its forecast.
The companies that saw a decline in sales are:
Lanvin Group: Reported a 20% decrease in revenue in H1.
Dry: H1 sales were down 11%.
Geox: Reported declining activities in wholesale put pressure on H1 sales down 9,4%.
Nike: Predicted a ‘comeback’ after a significant drop in sales in Q1.
Calida Group: Reported an 8.8% decrease in H1 sales.
LVMH: Reported a 4,4% decline in sales in Q3.
Wolford: H1 revenue down 26%.
Burberry: Q1 retail revenue down 21%.
Some Strategic Acquisitions and Expansions:
Etria: Acquired Sneakers.nl, expanding its online shoe retail business.
Futura Capital Fund: Partially acquired Cassis Paprika, saving 70% of the company’s operations.
EssilorLuxottica: Completed the acquisition of Supreme.
Bluestar Alliance: Acquired Off-White from LVMH.
Tapestry: The acquisition of Capri Holdings faced resistance from the US competition authority.
Asos: Sold a majority stake in Topshop and Topman.
Stockmann: Acquired the Russian activities of Hugo Boss.
Peugeot: Acquired Lafuma Mobilier from the Calida Group.
Mytheresa Acquires YNAP
Hugo Boss: strategic investments in the Indian textile market, which is expected to enhance production capabilities and improve profit margins.
Conclusion:
The fashion industry’s financial landscape in the past three months can be described as cautiously optimistic. While challenges persist, especially concerning costs and consumer behavior, it seems that companies that prioritize sustainability, digital growth, manage costs, and strategic investments are well-positioned for success in this evolving landscape.
The extensive research for this article was conducted with the help of AI..
FashionUnited uses AI tools to read and research large amounts of financial reports and data. For this article over 450 news articles and financial statements were used. Articles created with the help of AI are checked and edited by a human desk editor prior to going online. If you have questions or comments about this process email us at [email protected]
