Adidas shares jumped more than 7% on Wednesday, reaching their highest point in more than two years after the German sportswear giant on Tuesday reported better-than-expected quarterly effects and raised its 2024 forecast in favor of a more potent momentum.
The expansion was driven by a strong call to push old-fashioned “terrace” styles, such as Samba, Gazelle and Campus, as well as strength in functionality categories, Wedbush analysts said.
Stifel analyst Cedric Lecasble also noted that the planned 2024 build “had little to do with Yeezy mechanics, but much more driven by the construction of the Adidas logo that is materializing at full speed. “
Adidas underwent a change after it severed ties with rapper West, who goes through the so-called Ye, in October 2022, postponing sales of the successful Yeezy sneaker line.
It then resumed sales of Yeezy products under the direction of CEO Bjorn Gulden, who has been in the role since early 2023, to clean up remaining stock and bring its popular old-fashioned styles to life.
Lecasble called the earnings functionality in the first quarter “impressive” amid market conditions.
However, analysts believe that Adidas’ operating profit (EBIT) target of €700 million remains conservative.
While the consensus already estimates this figure at around €890 million by 2024, RBC analyst Piral Dadhania noted that “the market is obviously not in the EBIT guidance, which we find unrealistic and overly conservative. “
Adidas achieved a quarterly EBIT of €336 million.
The company said it sold an additional €150 million worth of Yeezy products in the last quarter, for an operating profit of around €50 million. However, it does not expect any additional contribution to profits from the rest of Yeezy’s inventory, which is expected to be sold for around €200 million later this year.
Shares were up 6% by 0949 GMT, outperforming the pan-European STOXX 600 index.
Thick boot maker Dr. Martens warns of a tricky year ahead.
Dr. Martens shares plunged more than 30% on Tuesday after the iconic British logo forecast that its wholesale earnings in the United States, its largest market, would see a double-digit drop from last year.
Trading in Dr. Martens shares was temporarily halted on the London Stock Exchange early Tuesday as they fell to an all-time low of £0. 64, according to FactSet.
This could simply lead to a significant drop in profits, as the company reports an expected base effect of £20 million ($24. 9 million) in pre-tax profit year-on-year. Seasonal orders from wholesale consumers may simply reduce U. S. cash expectations, the company noted, but they are difficult to predict.
Beyond weakening revenues, Dr. Martens anticipates other significant expenses similar to the company’s employee retention plans, as well as single-digit inflation in its charge base. Unlike previous years, the logo has no plans to increase its charges to compensate for them.
Dr. Martens also announced a leadership reshuffle on Tuesday. After six years at the helm of the company, CEO Kenny Wilson is stepping down from his role. Ije Nwokorie, Chief Brand Officer at Dr. Martens, will assume his role before the end of the current fiscal year.
In a statement on the financial outlook for 2025, Wilson mentioned the difficult situations ahead and said that Dr. Martens is focused on his plans to “reignite the demand for boots, specifically in the U. S. and Canada. “”We are not going to be able to do anything
Still, Wilson said the logo “is still going strong. “Martens said he saw an uptick in direct consumption expansion in the fourth quarter.
Dr. Marten’s stock is down more than 56% over the past 12 months, according to FactSet.
LVMH reported a 3% jump in first-quarter sales on Tuesday, marking a slowdown as emerging costs prompted more shoppers who aspire to own their handbags and other luxury items to refrain from spending thousands of dollars.
The slower expansion in quarterly sales reflects comparisons to the same time in 2023, when sales rose thanks to the lifting of COVID-19 restrictions in LVMH’s main market in mainland China and comes amid considerations of a prolonged slowdown that has sent luxury corporate stocks tumbling. year.
The global luxury group, owner of Louis Vuitton, Tiffany
LVMH, Europe’s second-largest publicly traded company valued at about 400 billion euros, is the first luxury goods maker to report quarterly results, setting the tone amid growing concerns about demand in China, the world’s second-largest economy.
Gucci owner Kering issued a stunning warning last month that first-quarter sales would fall 10%, with sharp declines in Asia, leading to uncertainty about the sector’s outlook.
Sales at LVMH’s fashion and leather goods division, made up of Louis Vuitton and Dior, rose 2 percent, also matching expectations.
Sales of the division, which sells Lady Dior small handbags for €5,400 and roomy Louis Vuitton Speedy handbags for €10,000, rose ninefold year-on-year in the latest quarter.
Chief Financial Officer Jean-Jacques Guiony told reporters that LVMH was “quite satisfied” with the demand from Chinese buyers.
He said purchases of Louis Vuitton products through Chinese shoppers around the world have increased by about 10 percent, with an increasing proportion outside mainland China as they resume their travels, specifically to Japan and, to some extent, Europe.
LVMH, a conglomerate that includes spirits, jewelry, cosmetics and fashion and is a barometer of the luxury industry in the broadest sense, does not give the main points of its brands.
The stylish London-based Alexsandrah has a twin, but not in the way you’d expect: her counterpart is made of pixels rather than flesh and blood.
The virtual dual was generated using artificial intelligence and has already given the impression of replacing the genuine Alexsandrah in a photo shoot. Alexsandrah, who is going through her first professional call-up, in turn receives credits and refunds every time the AI edition of Herself is used, as a human model.
Alexsandrah says she and her personalized ego mirror others “down to a baby’s hair. “And it’s yet another example of how AI is transforming the arts industries, and how humans might or might not be compensated.
Its proponents argue that the ever-increasing use of AI in fashion modeling shows diversity in all shapes and sizes, allowing consumers to make more tailored purchasing decisions, reducing fashion waste due to product returns. And virtual modeling saves businesses money and creates opportunities for others who need it. to paints with this technology.
But critics worry that virtual models may simply put human models (and other professionals like makeup artists and photographers) out of work. Unsuspecting consumers can also be misled into thinking AI models are genuine, and corporations may simply take credit for living up to their diversity commitments. without employing genuine humans.
“Fashion is exclusive, with limited opportunities for other people of color to come in,” said Sara Ziff, a former stylist and founder of Model Alliance, a nonprofit whose goal is to advance workers’ rights in the fashion industry. The use of AI to distort racial representation and marginalize role-playing styles of color shows this troubling gap between the industry’s stated intentions and its actual actions. “
Women of color in particular have long faced higher barriers to accessing modeling, and AI could alter some of the progress they’ve made. Data suggests that women are more likely to work in occupations where technology can be implemented and are more at risk of displacement than men.
In March 2023, the iconic Levi Strauss denim logo
“We don’t see this (AI) pilot as a way to promote diversity or as a replacement for the actual steps we want to take to reach our diversity, equity and inclusion goals and it shouldn’t have been presented as such. Levi said in his at the time.
The company said last month it had no plans to expand the AI program.
The Associated Press reached out to several other stores to ask if they use AI mannequins. Target, Kohl’s and fast-fashion giant Shein declined to comment; Temu responded to a request for comment.
Meanwhile, spokespeople for Nieman Marcus, H
However, companies that generate AI models are finding demand for the technology, added Lalaland. ai, who was co-founded by Michael Musandu after becoming frustrated by the lack of clothing models that looked like him.
“A style doesn’t constitute everyone who buys and buys a product,” he said. “As a wearer of color, I’ve felt it painfully myself. “
Musandu says its product is meant to complement classic photoshoots, not update them. Instead of seeing just one model, shoppers can see nine to 12 models with filters of different sizes, which would enrich their food shopping experience and help reduce product returns and fashion. waste.
The generation creates new jobs as humans will Lalaland. ai paid to exercise their algorithms, Musandu said.
And if brands “are serious about their inclusivity efforts, they’ll continue to rent those color models,” he added.
London-based Black Style Alexsandrah says her virtual counterpart has helped her stand out in the industry. In fact, the genuine Alexsandrah even replaced a computer-generated black style called Shudu, created through Cameron Wilson, a former photographer turned CEO of The Diigitals. a virtual styling agency based in the UK.
Wilson, who is white, designed Shudu in 2017, described on Instagram as the “world’s first virtual model. “But critics at the time accused Wilson of cultural appropriation and virtual blackface.
Wilson took the experience as a lesson and remodeled The Diigitals to make sure Shudu, which has been booked through Louis Vuitton and BMW, doesn’t eliminate opportunities but opens up opportunities for women of color. Alexsandrah, for example, modeled herself as Shudu for Vogue Australia, and Ama Badu imagined Shudu’s story and described her voice for interviews.
Alexsandrah said she’s “extremely proud” of her work with The Diigitals, which has created its own AI-powered twin: “It’s something that, even when we’re gone, future generations can look back and say, ‘They’re the pioneers. ‘. ‘»
But for Yve Edmond, a New York-based fashion designer who works with primary stores to verify the compatibility of garments before selling them to consumers, the rise of AI in design is more insidious.
Edmond worries that modeling agencies and corporations are taking advantage of the credit of models, who are typically independent contractors with few labor protections in the U. S. He has been forced to use artificial intelligence systems in the U. S. through his photographs to use artificial intelligence systems without his consent or compensation.
He described an incident in which a consumer asked to photograph Edmond waving his arms, bending over and walking for “investigation” purposes. Edmond refused, and then felt ripped off: her modeling company had told her she had booked for a tryout, not to create an avatar.
“It’s a blanket violation,” he said. It was disappointing for me. “
But in the absence of regulation on AI, it is incumbent upon corporations to be transparent and moral in the deployment of AI technology. And Ziff, the founder of the Model Alliance, compares the current lack of legal protection for fashion to the “Wild West. “”
That’s why Model Alliance is pushing for a law like the one in New York State, in which a provision in the Fashion Workers Act would require partnerships and brands to download transparent written consent from models to create or use a virtual reproduction of a model. ; specify the amount and duration of compensation, and prohibit the modification or manipulation of the virtual reproduction of the models without consent.
Alexsandrah says that with proper moral use and legal regulations, AI can open the doors to more color models like this. She has let her clients know that she has a reproduction of the AI and directs all inquiries about its use through Wilson, who she describes as “someone I know, love, accept as sincere and who is my friend. “Wilson says they make sure any payout for Alexsandrah’s AI is comparable to what she would earn in person.
Edmond, however, is quite a purist: “We live on this Earth. And there are users of all colors, of all sizes, of all sizes. Why not track down that user and compensate them?
Nike is spending more on those Olympics than on all previous Games, its executives said Friday, as the U. S. sportswear logo embarks on a marketing crusade that it hopes will reignite its declining sales and compete with emerging rivals.
Sportswear brands are looking to revive demand following Paris 2024, which represents a return to normalcy after Tokyo 2020, which was postponed until 2021 and held without spectators due to the global pandemic.
Sponsored athletes, including U. S. sprinter Sha’Carri Richardson and Kenyan marathon runner Eliud Kipchoge, modeled Nike’s Olympic uniforms at a fashion exhibition in Paris on Thursday, where the logo also revealed thirteen prototypes of futuristic shoes evolved with the athletes.
“These Olympics are going to be our biggest media spend,” Heidi O’Neill, Nike’s president of consumers, products and logos, said in an interview. “This will be the biggest investment and peak moment for Nike in years. “he added, without giving a figure for how much he will spend.
In Nike’s latest peak quarter, total marketing spending was $1 billion, up 10% from the same period last year. When asked if spending will continue to increase, O’Neill said marketing is “the number one priority investment” for the company.
Nike generally focuses on “fewer and bigger” marketing campaigns, he added. The $139 billion company hired a new chief marketing officer last year in a bid to bolster its logo in a competitive sportswear market.
New running brands such as On and Hoka are snatching market share from Nike, while the ditch of chunky basketball shoes is benefiting its closest rival, Adidas, and its low-key terrace sneakers.
Nike’s plans contrast with those of Adidas. The German logo cut marketing spending and spent 2. 5 billion euros ($2. 7 billion) on marketing in 2023, down 8. 5% from the previous year. Nike’s spending in the last four quarters was $4. 3 billion, a 6% increase.
Nike’s investment is expected to help boost demand despite pressure on consumers around the world, executives say.
“Consumers face challenging situations in nearly every market in which we operate,” said Craig Williams, president of geographic and global markets at Nike.
Despite this, they still respond “very positively” to the Olympics as an event, Williams said, adding that they are still considered “the epitome of sport. “
Zara’s owner, Inditex, has demanded more transparency from the certification framework that controls some of the cotton used by the Spanish fashion giant, following an investigation that uncovered malpractice by two qualified Brazilian cotton producers.
Inditex sent a letter dated April 8 to Better Cotton CEO Alan McClay asking for explanations on the certification procedure and progress in traceability practices after the NGO Earthsight informed the store that Better Cotton-certified manufacturers were concerned about land grabbing. illegal deforestation and acts of violence against manufacturers. communities, according to one of the letters seen via Reuters.
Inditex said it had waited more than six months to learn the effects of a promised internal investigation of Better Cotton until the end of March and which began in August 2023, according to the letter.
The allegations “represent a serious breach of the agreement set out in the Better Cotton certification procedure through our organisation and our product suppliers,” Inditex said in the letter. “The agreement accepted in such procedures evolved through independent organizations, such as yours, is key to our strategy of controlling the chain of origin. “
The contents of the letter first came through Modaes, a fashion industry news site. Inditex told Reuters it had sent the letter.
Inditex does not buy cotton directly, but its suppliers are audited by certifiers such as Better Cotton to determine their smart practices when sourcing raw materials.
Geneva-based Better Cotton, one of the world’s largest certification bodies for sustainable practices in the cotton industry, responded to a request for comment on Wednesday.
The company said on April 4 that it had concluded an independent audit of three farms involved in Earthsight, but that it would not publish its findings until it had seen the full report, which was due to be released on Thursday.
Better Cotton said its strategic partner in Brazil, the Brazilian Association of Cotton Producers, is revising its criteria to align with those of Better Cotton.
Created through corporations and various nonprofits, in addition to the World Wildlife Fund, Better Cotton says it aims for greater practice in areas such as water and soil control and promoting higher standards of hard work.
Fashion stores are facing increasing pressure from consumers and activist groups to sell products with less environmental impact and manufactured under safe operating conditions.
Japanese operator Uniqlo, the global apparel giant, is expected to post a stronger quarterly profit on Thursday as its sets offset slowing domestic growth.
Fast Retailing’s operating profit in the 3 months through February likely rose 11% year-on-year to 114. 3 billion yen ($753. 4 million), on average of five analyst estimates compiled through LSEG.
The increase follows that of the first quarter, when Fast Retailing reported a 25% increase in profits thanks to strong effects in China, its largest market.
The company cautiously kept its guidance unchanged after the results, so second-quarter results could beat consensus figures, according to Oshadhi Kumarasiri, an analyst at LightStream Research.
“This optimism is driven by several factors, including the ongoing recovery of Uniqlo’s operations in China and South Korea, same-store sales functionality in the Asia, India and Oceania regions, as well as the impressive apparel sales volume seen in the U. S. December 2023,” he wrote in a report on the Smartkarma platform.
The company founded and led by Tadashi Yanai has posted record results over the past two years and expects a profit boost this year as it continues its competitive expansion overseas.
Yanai, Japan’s richest man, is scheduled to speak at Fast Retailing’s earnings briefing on Thursday.
With 922 outlets in mainland China, Fast Retailing is a barometer of global stores operating in the world’s second-largest economy. Sales in the region have rebounded strongly over the past year after the fall of COVID-19 lockdowns.
The yen’s fall to its lowest level in 34 years is also a tailwind for Fast Retailing, which generates more of its profits outside Japan.
Fast Retailing shares are up 28% so far in 2024, with the benchmark Nikkei up 19%.