When sportswear giant NIKE says it is concerned about the challenges that lie ahead for the remainder of 2024, it’s wise for the rest of the fashion retail sector to take notice.
During its conference call last week (27 June) to announce its FY24 results the retailer admitted ongoing headwinds will “have a more pronounced impact on FY25”.
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One noticeable worry was China with the retailer admitting there is continued uncertainty in the region.
Perhaps it was no coincidence that Esprit announced at the same time it was in talks to divest all trademarks and main domain names of its loss-making Greater China business in a potential $47.5m deal.
And it’s not just China that’s a cause for concern for the latter half of this year as Nike also reported continued “uneven consumer trends” in its Europe, Middle East, and Africa (EMEA) market.
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By GlobalDataAs we step into July and mark the beginning of H2 2024, Swedish fashion brand H&M warned of a potential 6% drop in sales for June due to unstable weather conditions impacting its summer ranges.
However, its biggest concern is the external factors that influence its purchasing costs and sales revenues. The retailer said these factors include materials and foreign currency and they are likely to have a greater negative impact than it expected in the second half of the year.
How can fashion retailers prepare for what’s to come in H2 2024?
UK retailers Next and M&S appear to have successfully staved off any headwinds this year to date and remain positive moving forward.
So, what do they both have in common that other fashion retailers could adopt? Both have introduced a strong third-party brand offering at various price points and ranges targeted at a wide variety of demographics, including childrenswear which is well-known to be a resilient category when consumers are strapped for cash.
Strong designs also have a key role to play with M&S’ 2024 annual report revealing its “perception for style” had increased from 25% in 2022/23 to 29% in 2023/24 and social media influencers are increasingly posting about its recent “glow-up”.
In contrast, GlobalData apparel analyst Louise Deglise-Favre believes H&M could face an uphill struggle when the wider headwinds hit as she believes it needs a “rehaul” of its designs to win back lost market share to its main competitor Inditex, which owns Zara.
Meanwhile, M&S’ investments to tighten up its supply chain have ensured it can respond to trends quickly, it’s full-price focus under its “first price, right price” strategy avoids it haemorrhaging money for no reason and it has worked hard to attract and invest top talent who remain on the pulse of what fashion shoppers want.
As socio-economic challenges and rising costs continue, it’s wise for fashion sourcing managers and buyers to take note of their main competitors’ success stories so they can make a fresh start in 2025.
Top stories on Just Style last week…
Nike FY25 warning follows lacklustre sales, headwinds see shares slump
Shares in Nike fell 12% in after-hours trading on 27 June after the sportswear giant posted a cautious outlook for the year ahead (FY25).
Esprit in talks to offload Greater China arm
Clothing brand Esprit has revealed plans to exit China as it looks to inject cash into its ailing business.
H&M ‘lags behind Inditex’ despite reporting best Q2 profit in years
Swedish fashion retailer H&M described its Q2 results as its best for “many years,” however an industry expert argues its performance remains far behind that of its main competitor Inditex.
Report slams worker representation by major fashion firms as ‘just for show’
A new report by the Business & Human Rights Resource Centre (BHRRC) reveals that international fashion brands are failing to uphold their commitments to freedom of association in South and Southeast Asia’s garment industry and ‘undermining’ independent trade unions through alternative structures.
How Guatemala apparel suppliers are owning sustainability (just-style.com)
Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) member Guatemala is a rising star for sustainable apparel sourcing with its suppliers keen to take ownership of their sustainability journeys.
South Korea, Singapore ‘most willing’ to pay for sustainable fashion
New research from Vlerick Business School found that consumers in South Korea and Singapore showed the highest willingness to pay for brands that prioritise “sustainability and inclusivity.”
Explainer: The cost of ignoring worker freedom of association
Three globally renowned fashion firms are facing backlash from worker campaign groups after policies around worker rights to freedom of association were flouted by a supplier.
Explainer: Proposed changes to SBTI rules on Scope 3 and carbon credits
The Science Based Targets Initiative’s (SBTI) planned changes to its policy on the use of carbon credits in Scope 3 have sparked a backlash from fashion companies as well as climate campaigners – but what do the changes mean?
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