Victoria's real secret: child labour in Burkina Faso


Victoria's real secret: child labour in Burkina Faso

Victoria's Secret has been in the centre of a storm of criticism since Bloomberg reported about its involvement in child labour in Burkina Faso. The luxury lingerie brand has some of its fair trade cotton picked by children, as the news agency reported. Parent company Limited Brands is “concerned” and promises to “fully investigate this matter”.

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Inditex's profit and turnover up 10% after impressive expansion

Spanish fashion group Inditex has witnessed a 10% turnover growth during the first three quarters of its financial year 2011, and 9.5% during the third quarter. Although the group did not release like-for-like figures, it is very likely that most of the growth comes from Inditex's fast expansion, adding over 350 new stores to its existing 5000+ store network.

Major growth in turnover and profit 

The retail giant from A Coruña has had an excellent sales record from February to October: turnover rose to €9.71 billion (+10%), EBITDA went up to €2.22 billion (+8%) and net profit reached €1.3 billion (+10%). Despite the difficult circumstances, like rocketing prices for raw materials, Inditex's margin stayed almost stable at 59.6% (down from 59.9%).


The only downside to the third quarter figures was that turnover grew 'only' 9.5%, slightly lower than the 11% in the first and second quarter. The Galician company blames the beautiful autumn in Europe, but says the sales have recovered again in the beginning of the fourth quarter. The holiday season will be hugely important for Inditex, as stocks are growing faster than sales can follow.

Online and offline expansion

Expansion remains paramount for the Spanish group: since February the group has opened 79 new stores in China alone and 358 worldwide. On top of that, Inditex also launched webshops for all its brands. The most remarkable offline achievement was the Rotterdam store of the Pull&Bear chain, a highly ecological design that is – according to the group – a landmark of sustainable and ecological retail.


At the end of October, Inditex had 5,402 stores in 78 countries and 106,251 employees. In the fourth quarter, the group is aiming to open another 142 stores (including a first one in Taiwan, South Africa and Azerbaijan).

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House of Fraser opens physical stores for online shoppers

British retailer House of Fraser is experimenting with a 'buy and collect' format, a place where customers can try on the clothes they ordered online before taking them home. The chain has two such stores so far, in Liverpool and Aberdeen.

Physical services for web customers

The choice for these cities came after a surge in online orders - especially from Liverpool, where the department store chain had no physical branch. From now on, customers can not only collect their orders at a convenient moment, they can also check if their size and colour are correct. If this is not the case, they can either change sizes if necessary or even get an instant refund.

The new 'buy and collect'-concept is aimed at cities where House of Fraser is not yet present with a 'real' store. The chain does not intend to turn the new branches into 'normal' stores, but still aims to give a “personal touch” there through personal style advice, places to sit and even touch screens so customers can shop online in the store itself – quite a unique feat. “This is a personal service”, says CEO John King. “We are bringing the services of a flagship store to the smaller high streets”.

Breaking the £100 million barrier

The group hopes this move will lift them over the £100 million milestone (€115 million) for web sales revenue in 2011 – that would be twice the amount of last year; though still just a small part of the chain's total turnover that was just over 1 billion pounds for 2010. 

House of Fraser is not the first chain to look for more “bricks” - even for their “clicks”-activities. The Belgian postal services bpost, the London branch of and also Tesco are looking for, or have already realised, similar 'click and collect'-stores.


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Greenpeace rebrands 28 H&M stores for "Detox Now" campaign

In eleven European countries (plus Hong Kong), climate activists staged a Greenpeace action to “rebrand” H&M stores for their “Detox Now!” campaign. In nearly thirty stores, mostly in Northern countries, huge stickers were pasted on windows in an attempt to force the Swedish fashion retailer into stopping collaborations with polluting Chinese factories.

"Dirty laundry" report shows toxic pollution in China's main rivers

The Detox Now-campaign started in July, with the publication of the Dirty Laundry report. In that report, Greenpeace proved that several of the main clothing producers in the world (like Nike, Adidas, Puma, Calvin Klein, H&M, Converse or Abercrombie and Fitch) had contracts with Chinese suppliers that discharge a range of hazardous and persistent chemicals with hormone-disrupting properties in Chinese rivers like the Yangtze or the Pearl River, of which millions of people depend for their drinking water. 


The Detox Now-campaign specifically focuses on these worldwide brands. “As brand owners, they are in the best position to influence the environmental impacts of production and to work together with their suppliers to eliminate the releases of all hazardous chemicals from the production process and their product”, says Greenpeace. “As one of the largest clothing groups in the world, an H&M committed to a toxic-free future would set the trend for the rest of the fashion industry to follow”, is Greenpeace's hope. 

Puma, Nike, Adidas already agreed to halt chemical discharge

H&M is the fourth major brand to be tackled by Greenpeace, after Puma (immediately after the report publication), Nike (mid-August) and Adidas (end of August) had already promised to halt the discharge of toxic chemicals. So far, H&M has not officially responded to Greenpeace's allegations, but its head of CSR Helena Helmersson has said that the Swedes “always want to improve and share Greenpeace´s ambition to eliminate hazardous chemicals throughout the entire textile production. That is why we will continue our dialogue with Greenpeace this week to see how we together can take another step forward.”

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Esprit sees profits vanish, leaves five countries

The financial year 2010/2011 has been the worst achievement for fashion chain Esprit in the last eight years. The Hong Kong based group saw its net profits plummet 98% and seems certain to divest its North American operations, deemed unprofitable. Esprit would also leave three European countries completely.

Exit from US, Canada, Spain, Sweden and Denmark

The chain announced its intentions to close 80 unprofitable stores in Europe and Asia, including all its stores in Spain, Sweden and Denmark. Moreover, Esprit is looking to completely leave its “home territory” North America, where the chain was founded in 1968. It is still unsure whether Esprit will close or sell their almost 100 North American stores, the solution depending on buyers' interests. 


The massive store divestiture was confirmed as Esprit announced its net profits had vanished in the last financial year, crashing from 4.23 billion to 79 million Hong Kong dollar (3,125 to 7.3 million euro). Analysts had expected a decrease to 3.16 billion HK dollar (293 million euro, or -26%), but apparently hugely overestimated the chain's performances.

"Neglecting the brand heritage"

In the financial year 2010/2011, ending 30 June 2011, Esprit's turnover grew marginally by 40 million HK dollar (4 million euro) to 33.77 billion HK dollar (3.129 billion euro). CEO Ronald Van Der Vis expressed concerns turnover for the current financial year might drop by as much as 5%, but remains hopeful for the future. “In essence, Esprit is a strong and profitable brand, but the brand has gradually lost its soul over the past few years,'' he said, claiming that "the heritage of the brand has been neglected and the company lost its customer focus.''


Leaving North America for good, Esprit will now focus on Eurasia – and China in particular. The group will invest 1.6 billion euro (18 billion HK dollar) in a “Transformation plan 2014/15”, including the opening of 200 new franchise stores and the complete renovation of all its own stores. Apart from China, the group's main focus will be the Benelux, France and Germany.  


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Scabal wants to open six new flagship stores

Scabal, the Belgian suit tailor, is planning to extend its sales network and might even start a webshop. The group also announced its revenue from their own retail is rising quickly.

Six new flagship stores and a webshop?

“In the last few years, we have drastically reduced the number of external stores we work with: this way we were able to focus on just a few exclusive points of sale. This also leaves some room for six new flagship stores and we hope to be able to open one new flagship store each year”, says CEO Gregor Thissen in Trends without revealing where the new openings are planned.


The CEO also dreams of opening a webshop: “Our IT platform is perfectly suited for e-commerce – but we might be in the wrong business to really deploy it. Our suits can easily cost 1200 euro and an expert is needed for taking the measurements and choosing the right fabrics.” A webshop for accessories (like ties or cuff-links) would still be a possibility for Thissen.

"Delivery at home" in Paris

A new form of distribution that Scabal is currently trying in Paris, is one where their specially trained experts go to the client's home or office to give personal advice. “It took a while for the concept to really take off, but now we are really seeing its success grow”, says the CEO, who hinted the concept could be exported to other countries as well.


Founded in 1938 as a weaving mill in Brussels, Scabal started with the production of suits in 1974. The store's flagship store is located in Savile Row, the mythical world centre of bespoken tailoring, where Scabal has been present since buying Wain Shiell & co. “That takeover was not only the start of our internationalisation, but it also gave us the British style to distinguish us from the Italian brands”, as Thissen explains.

Beckham, Armani, Gucci and Prada

Since then, Scabal has become an important player in tailored suits – as David Beckham proved by choosing a Scabal suit for the Royal Wedding of Prince William and Kate Middleton. The company offers approximately 5000 fabrics and 200 options for made-to-measure suits. Its fabric production, used in many Armani, Gucci or Prada suits, still accounts for half of the 40 million euro turnover.


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Gap expands to Serbia, Banana republic to Moscow

Gap, the American clothing chain, is expanding its network in Eastern Europe. This week, the chain opens its first Gap store in Serbia and its first Banana Republic store in Moscow. This week's expansion lifts the number of franchise stores over the milestone of 200 – just half of the number Gap aims for by 2014.

Ideal market opportunity in Russia

AfiMall City, Moscow's largest shopping centre, welcomes the city's first Banana Republic. “Given Russia's high demand for retail consumption, the market presents an ideal opportunity to introduce Banana Republic's affordable luxury offering”, says Stefan Laban, managing director Strategic Alliances at Gap Inc. The new store will be operated by Fiba Holding, which also has Gap stores in Turkey and the Ukraine. 


Both Gap and Banana Republic had been available for Russian consumers since last year. The brand Gap itself has been active in Russia since 2008 and has established 11 franchise stores since, 9 of which in Moscow. The brand now focuses on Serbia, as one of Greece's main retail groups,  The Marinopoulos Group, is opening the first Gap store (complete with GapKids and babyGap) in Belgrade. The Greek group already manages Gap stores in Bulgaria, Croatia, Cyprus, Greece and Romania.


Including Serbia, Gap Inc is now active in 27 countries and hopes to raise that number to 30 before the year is over. Chili, Morocco and Vietnam are next in line to join the group of Gapped countries.


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