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You have to really have an imagination to come up with an Ad like this Fiat Ad

November 30, 2014 Leave a comment

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THE ADIDAS GROUP SOURCING MODEL

November 30, 2014 Leave a comment

THE DILEMMA OF THE APPAREL AND FOOTWEAR MANUFACTURING INDUSTRY

Provided that the above-mentioned relevant conditions are in place, sourcing countries not only benefit from the creation of jobs and economic growth based on the apparel and footwear industry. Often, the evolution of this basic industry paves the way for a more diversified production and economy at a later stage. Taiwan is a clear example of this evolution: from an apparel-based economy, the country has now moved to more complex electronic and financial services.

However, the apparel and footwear manufacturing sector also faces numerous challenges as it is often associated with human rights abuses, poor environmental performance as well as questionable purchasing practices – challenges that sometimes dwarf the millions of jobs created by the industry and its contribution to the country’s economy.

THE ADIDAS GROUP SOURCING MODEL

In order to address these challenges, the adidas Group strongly believes that long-term partnerships with its suppliers are of utmost importance.

Within the company, the Global Operations department, specifically Sourcing, looks into these aspects in collaboration with Social and Environmental Affairs (SEA). And while the company spreads its sourcing over multiple countries, 80% of its global production comes from the so-called ‘strategic’ suppliers.

Our sourcing strategy embodies the very spirit this company is built upon: only the best for the athletes. We do not simply buy products from our suppliers, but we instead have built outstanding, long-term partnerships with them which ultimately allow us to develop and bring the best-performing product to market.

JOHN MCNAMARA, ADIDAS GROUP SENIOR VICE PRESIDENT FOR SOURCING

LONG-TERM PARTNERSHIPS

Instead of frequently changing suppliers depending on which one can offer the same product for the cheapest price, the adidas Group focuses on key long-term partners that are transparently disclosed in its global supplier list. The relationship with these core suppliers has existed for over a decade. For example, this year the company celebrated more than 25 years of sourcing in Indonesia.

CELEBRATING MORE THAN 25 YEARS OF SOURCING IN INDONESIA

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Not even increasing labour costs in some of these countries have produced challenging effects on these relationships. In fact, business in Cambodia, Vietnam and Indonesia has been growing, not shrinking. To have an idea, the wage increase over the period 2011 to 2013 has been 19% in China, 45% in Vietnam and 54% in Indonesia.In the long run, it is these long-standing partnerships that carry greater benefits for both parties rather than constantly changing to maximise short-term profits.

TOGETHER WE WIN

The terms of business with suppliers are not based on a purely order/purchase relationship. Over time, the adidas Group has for example also developed specific programmes to address productivity, efficiencyand quality at supplier level.

More interestingly, substantial investments on both sides are made. This is why the company also places its own personnel in the strategic factories, where they work closely with the local personnel on developing the next innovation. Take Brazuca, the 2014 FIFA World Cup™ icon and the ultimate example of innovation in ball manufacturing.

Brazuca was produced in China by a long-term partner and supplier of the adidas Group, Longway. Why in China? Why at this factory? Since the beginning of the cooperation with the adidas Group in 1997, Longway has established itself as the expert in high-tech ball production. In 2006, engineers and developers from Longway and adidas set up a Centre of Excellence at the factory: this is where Brazuca was brought to life.

These two-way relationships generate synergies, trust, dynamism and technology transfer, which are all key to fostering innovation.

IT IS MORE THAN JUST BUSINESS

Many also question the industry’s approach when it comes to social and environmental considerations. In the case of the adidas Group, the business relationship with suppliers is guided by the company’sWorkplace Standards, which contain clauses to ensure fair labour practices, fair wages, safe working conditions and environmental standards in factories.

Thanks to hundreds of factory visits every year, the company consistently reviews and evaluates suppliers, works with them to address issues and makes improvements where necessary. In 2013, nine manufacturing relationships were terminated with suppliers who failed to adhere to the standards and requirements.

This is not all we do. We also proactively engage with governments to tackle critical issues such as minimum wages, freedom of association or environmental standards. Ultimately, business can thrive only if the right conditions are in place and as a responsible company we want to drive positive and long-lasting change.

FRANK HENKE, ADIDAS GROUP’S VP FOR SOCIAL & ENVIRONMENTAL AFFAIRS.

For example, back in 2010, the adidas Group successfully led a group of suppliers and brands to develop a protocol ensuring the exercise of trade union rights in the workplace in Indonesia. More recently, the company has joined the U.S. Business Call on Climate Change, urging federal policymakers to collaborate on a bold response to climate change.

A LONG JOURNEY

Over the last two decades, the adidas Group has been working on defining the key elements of effective management of its supply chain; the current challenges require changes that will not happen overnight, though. From fair wages to women’s rights, from migrant labour to chemical management – there is still a lot to do to maintain the balance between shareholder expectations, economic success and social and environmental advancement.

The adidas Group is convinced that commitment to long-term solutions is the right way to achieve this balance, so that all sides can benefit: the developing countries through social and economic advancement as well as the adidas Group through best-in-class products and economic value. As John McNamara concludes:

It is a challenge but we want to keep leading the game – on the pitch and off the pitch.

JOHN MCNAMARA, ADIDAS GROUP SENIOR VICE PRESIDENT FOR SOURCING

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Accessories Are the Latest Fashion for Investors

November 29, 2014 Leave a comment

 

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Retailers That Primarily Sell Apparel Fare Worse Than Those With Other Offerings

 Nov. 29, 2014

Clothes may still make the man. But increasingly it seems any retailer’s duds will do.

Amid cheaper gasoline and stronger economic data, a sense of optimism surrounds retail sales in the all-important fourth quarter.

But not all retailers are created equal. That is true even within the subset of specialty stores—outside the big-box retailers, in which a divide appears to be emerging between companies that primarily sell clothing and those that don’t.

Over the past two years, apparel retailers have largely seen shrinking same-store sales and operating income, while those more focused on accessories, such as Michael Kors Holdings and L Brands , have been mostly shielded from the storm, according to Nomura analyst Simeon Siegel. He estimates the 10 apparel retailers he covers will see an average decline in operating income of 16% in 2014 versus average growth of 24% for the five “nonapparel” companies, as he labels them. The gap was even more stark in 2013, when apparel firms saw profits drop 35% on average versus an 85% jump at the nonapparel firms.

Mr. Siegel chalks this up to e-commerce lowering the barriers to entry for new apparel companies. This has led to a proliferation of online competition for teen retailers such as Aéropostale and Abercrombie & Fitch , as well as those targeting older consumers such as Ann, which operates Ann Taylor stores, and Chico’s FAS .

Indeed, no apparel company has generated positive same-store sales growth for the past three quarters. This is the first period since the beginning of 2005 during which none of the publicly traded specialty clothing retailers has won market share, according to Mr. Siegel.

Accessories makers have fared better, thanks, it seems, to their differentiated offerings. Signet Jewelers , Tiffany , Michael Kors, Kate Spade and L Brands all posted solid same-store sales growth in the first nine months of fiscal 2014. Fossil Group ’s sales have been roughly flat. Only Coach has seen declines.

Michael Kors and other retailers more focused on accessories have better weathered a storm in apparel sales in recent years. Above, a Michael Kors store in Tokyo.ENLARGE

Michael Kors and other retailers more focused on accessories have better weathered a storm in apparel sales in recent years. Above, a Michael Kors store in Tokyo. Bloomberg News

Granted, retailers, including apparel firms, have reduced inventory over the past year. But one year of historical data may not show the complete picture. Looking at the range of specialty retailers’ inventory per square foot going back to 2010, Aéropostale and L Brands were the only two heading into the second half of 2014 with inventories below trough levels, according to Wells Fargo .

For Aéropostale, such an adjustment makes sense given recent steep declines in sales per square foot. But it is unclear when that decline will be arrested. And lower inventories aside, apparel retailers may have to cut prices just to lure people in the door amid higher online competition.

For investors seeking to get ahead of the latest fashion, now looks a good time to accessorize.

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U.S. Officials Chase Counterfeit Goods Online

November 29, 2014 Leave a comment

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ICE, Customs Agents Police a Global Trade That Has Shifted From Ports to E-Commerce

 

 

A counterfeit Coach handbag displayed by ICE officials on Friday.ENLARGE

A counterfeit Coach handbag displayed by ICE officials on Friday. Patrick T. Fallon for The Wall Street Journal

Nov. 28, 2014

LONG BEACH, Calif.—Friday was one of the biggest shopping days of the year, but U.S. Immigration and Customs Enforcement agents here have other plans for the holiday season.

Over the next few weeks, the agency is ratcheting up efforts to track down and confiscate millions of dollars’ worth of gift-friendly goods before they can reach store shelves or the doorsteps of online shoppers.

The holidays are a popular time for knock-off sales—everything from headphones and electronics to sports jerseys, jewelry, handbags and toys. Shoppers, especially on Black Friday, are looking for deals. And often, as long as it looks real, many admit they will go with the more budget-friendly option.

But ICE and U.S. Customs and Border Protection are prepared to crack down on that trade, coordinating an increased number of enforcement actions. “It’s hugely important because of the dollar loss that’s experienced by industry and by the U.S. in general” in tax revenue, Special Agent in Charge Claude Arnold said Friday.

In each of the last three years, federal agents have seized counterfeit goods with a retail value totaling well over $1 billion. A vast majority of those goods come from China and Southeast Asia, commonly arriving on U.S. shores at the ports of Los Angeles and Long Beach, according to ICE’s Homeland Security Investigations branch.

But increasingly, the counterfeit market has been going online, where it can be easier to trick buyers with slick websites and photographs copied from genuine retailers. Many of those goods no longer come in through the ports, where Customs agents might intercept them. Instead, they are being shipped directly to consumers.

UGG boots, for example, have many online imposters, says Graham Thatcher of Southern California-based Deckers Outdoor Corp. , which owns the brand. Deckers has managed to shut down more than 60,000 websites selling knock-off versions of its familiar fur-lined UGG boots. But the fakes are still out there, and because UGGs are such a popular gift, the holiday shopping season is one of the primary times of year that people get duped.

“Those are some of the saddest stories,” said Mr. Thatcher, a brand-protection associate. “People will have saved up to buy them, primarily for their daughters, and on Christmas they open them up and right away they know they’re fake,” he said. “It’s really sad.”

In response, UGG created a service on its website where consumers can enter the address of the website where they are shopping, and UGG will tell them whether it’s an authentic retailer or not.

While online sales have become popular for counterfeit vendors, there are still storefront operations in places like Santee Alley, in downtown Los Angeles, agents said. On Friday morning, hundreds of discount vendors there were rolling up their metal gates and setting out mannequins and other displays, spilling out of their stalls into the narrow street.

Ellie Rivera, a 24-year-old employee at Betty Shoes, said Black Friday tends to be busy even though not many of the retailers in the area offer specials. Prices in the Santee Alley shopping district are already highly discounted. “They just want to shop because it’s Black Friday,” she said.

Ms. Rivera said her store sells Chinese-made women’s shoes, but no knock-offs. “Everyone knows there’s undercover police” in the area, she said.

Mr. Arnold of ICE says local law enforcement still conducts storefront checks, but the real threat these days is online. And while he admits that his job is to remove many of the season’s most popular gifts from the market, Mr. Arnold says his agency is no Grinch.

“If we are,” he said, “we wear that label with a badge of honor.”

 

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Retailers That Primarily Sell Apparel Fare Worse Than Those With Other Offerings

November 29, 2014 Leave a comment

 

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Survey: Nordstrom, Amazon most engaged brands on Pinterest

November 26, 2014 Leave a comment

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Nordstrom was the most engaged retail brand on Pinterest, followed by Amazon, according to Curalate, which collected more than 180,000 Pins and analyzed nearly five million interactions associated with the Top 100 brands from November 1st to November 21. Rounding out the top five: Urban Outfitters, American Eagle Outfitters and Zulily.

New York – Nordstrom was the most engaged retail brand on Pinterest, followed by Amazon, according to Curalate, which collected more than 180,000 Pins and analyzed nearly five million interactions associated with the Top 100 brands from November 1st to November 21. Rounding out the top five: Urban Outfitters, American Eagle Outfitters and Zulily.
The most popular product on Pinterest is the J Crew Women’s camp sock followed by American Eagle Outfitters’ Sequin Sleeve Sweater and JC Penny’s military jacket and striped top.
Of the 180,000-plus product images Curalate looked at, 81.7% were shared organically from brands’ websites showing that organic engagement continues to be incredibly important for brands. Despite this, Curalate pointed out, brands are still missing out on organic engagement. Twenty-eight percent of the brands it surveyed have yet to add Pin It buttons to their product pages, and 44% of brands do not have Pin It buttons on their homepages, making it difficult for consumers to share the products they find while browsing these brands’ sites.
Brands need to take stock of their products. Three out of the top five products that generated the most engagement are either no longer available for purchase or are no longer available in the suggested color. This is a missed opportunity for brands, as these are the products that consumers aspire to own, and yet they will be unable to buy them. In other key findings: Fashion is dominant. Eight out of the 10 most-engaged products on Pinterest were related to fashion (either apparel or accessories).
Brands need to take stock of their products. Three out of the top five products that generated the most engagement are either no longer available for purchase or are no longer available in the suggested color. This is a missed opportunity for brands, as these are the products that consumers aspire to own, and yet they will be unable to buy them, according to Curalate.

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European Commission Formally Commits to Enhanced Transparency in TTIP

November 26, 2014 Leave a comment

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Monday, December 01, 2014
Sandler, Travis & Rosenberg Trade Report

The European Commission on Nov. 25 adopted a proposal to significantly increase transparency in the Transatlantic Trade and Investment Partnership negotiations with the United States. The Commission indicates in a press release that this decision is “vital to ensure that the general public has accurate and full information on the EU’s intentions in the negotiations, to address the concerns and to evacuate misperceptions.” The communication adopted by the Commission includes the following commitments.

– making public more EU negotiating texts that the Commission already shares with member states and the European Parliament

– providing access to TTIP texts to all members of the European Parliament, not just a select few, by extending the use of a “reading room” to those MEPs who have had no access to restricted documents so far

– classifying fewer TTIP negotiating documents as “EU restricted,” making them more easily accessible to MEPs outside the reading room

– publishing and updating on a regular basis a public list of TTIP documents shared with the European Parliament and the Council

The Commission will also make an effort to report more extensively on the outcome of negotiating rounds and prepare additional online materials that explain EU negotiating positions and approaches. On the other hand, the Commission does not intend to publish any U.S. documents or common negotiating documents without the explicit agreement of the United States. The EU market opening offers on tariffs, services, investment and procurement would not, in principle, be made public either as they are the essence of the confidential part of the negotiations.

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