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Beyond the Bale : March 2015
54 MARKET INTELLIGENCE The wool industry was celebrating an unprecedentedly busy Pitti Immagine Uomo trade show in early January as a record number of buyers, particularly from North America, came to Florence to source men's wear for their autumn 2015 collections. The woollen and worsted fabrics that were centre-stage at the Première Vision textile trade show in Paris in September last year dominated the stands and catwalks in Italy as orders for a decisively wool season were confirmed to be in store in late August in the northern hemisphere. Optimism about China domestic demand has been subdued, due to a general slowdown in the Chinese economy. However the importance of China as a processor for the global market cannot be underestimated. The current 'surge' in China is primarily driven at the moment by very healthy demand in Japan, the UK, Germany and increasingly the USA. JAPAN Every wool-growing nation, every spinner or weaver of wool across the globe has benefited immensely from the three year boom in Japanese business. Often unexplainable, like much of the Japanese enigma, sales of woollen jacketings, chunky and superfine knitwear, fine worsted suitings continue to expand. Sales of UK and Italian worsteds were up by 20 per cent in 2014, as were sales of Harris Tweed and Shetland style jacketings. Sales of Chinese fabrics, by far the largest players in Japanese retail from Aoyama to Isetan, but the least lauded suppliers, increased similarly. The big question for 2015 is 'will this continue or will the bubble burst?'. EUROPE There are signs of growth in two of Europe’s leading per capita wool consuming nations, the UK and Germany. Indicators at leading 'barometer of the nation clothing retailers' John Lewis in the UK and Peek & Cloppenburg in Germany are as positive as they have been in five years. The UK economy is expanding at an unexpectedly healthy rate, with demand on the famous British High Street relatively buoyant over the year. British fashion brands, made under license in several countries, saw increased demand as the 'British Look' continues to dominate the upper middle fashion markets of the world. Burberry and Paul Smith immediately come to mind. Demand in most other European countries still remains relatively quiet. USA Talk in the trade has also turned to the USA where economic indicators are as positive as they have been in a number of years. Several brands present at Pitti Immagine Uomo (a record 1100 in total) plan on reinforcing their presence in the USA in 2015. Brunello Cucinelli, the 'star' of the show in Florence, whose suits retail at $4000+ in the Madison Ave store, sees significant potential in the expanding US economy in the seasons to come. Weavers and spinners supplying all levels of the market, be it Bergdorf Goodman, Barneys or Macy's, predict double digit growth in both men's and women's wear sales this year. Little or nothing in wool is spun, woven, knitted or sewn in the USA, so clothiers in China, Canada and the EU are set to benefit from a welcome 'windfall' that has been illusive for at least six seasons. INGREDIENT BRANDING As 2014 drew to a close, one of the clear trends emerging in fashion was the phenomenon known as ‘ingredient branding’ which has gained major momentum in the past few seasons. Ingredient branding is alive and extremely well on the UK High Street, in Germany and in the USA. It will be the movement of the future in China and will benefit European weavers in the Middle Kingdom just as it has done elsewhere. Effectively disguising the country of origin of a garment by featuring the key component, the fabric, is a win-win development for the Woolmark brand. Weavers from less marketable countries will seek to feature the next best ingredient, the fibre content and all the natural, renewable and biodegradable properties of wool, qualities assured by the Woolmark brand. European weavers and spinners are optimistically predicting an increase in sales of yarn and fabric to China for domestic middle to upper middle market clothing brands who will use European mill label 'ingredient' branding to add value to local men's and women's wear. Gold Woolmark weavers are particularly keen to capitalise on this trend. SETTING SIGHTS WESTWARDS In the first of a regular feature article written by AWI’s Global Strategic Advisor Peter Ackroyd, we provide an insight into the trends in global apparel. Mr Ackroyd is President of the International Wool Textile Organisation and Chief Operating Officer of the Campaign for Wool. Peter Ackroyd, President of the IWTO and Chief Operating Officer of the Campaign for Wool.