Beyond apparel
Global Investor, 01/2016
Credit Suisse

Global Investor 1.16, May 2016

Expert know-how for Credit Suisse investment clients



Beyond apparel

Julie Saussier Fashion companies can be a good investment – but

beware overexposure and supply chain. Kurt Zihlmann Technology and

fashion: Will they ever be truly compatible? Claudia Banz It’s not

all glitz and glamor in the fashion industry: fast fashion comes at a cost.

Christian Schindler How the advent of e-commerce is transforming

the fashion industry supply chain.

Important information and disclosures are found in the Disclosure appendix

CS does and seeks to do business with companies covered in its research

reports. As a result, investors should be aware that CS may have a conflict of

interest that could affect the objectivity of this report. Investors should

consider this report as only a single factor in making their investment decision.

For a discussion of the risks of investing in the securities mentioned in

this report, please refer to the following Internet link:


Responsible for coordinating

the focus themes in this issue

PATRICIA FEUBLI joined Credit Suisse

in 2013 as a senior economist for Swiss

Industry Research at International Wealth

Management, based in Zurich. Previously,

she worked as a research associate at

the University of Zurich and was a

research fellow at Stanford University.

She holds a PhD in Economics from

the University of Zurich.


analyst of Credit Suisse in the International

Wealth Management Division. He

specializes in macro themes, megatrends

and sustainable investing and has published

widely on those topics. He is a CFA

charterholder, received his MSc from

the Barcelona Graduate School of

Economics and previously worked as an

economist for the Swiss National Bank.

ULRICH KAISER is a senior financial

analyst at Credit Suisse in the International

Wealth Management Division, covering

the technology sector. He joined Credit

Suisse in 1993 and has 28 years of

experience in the securities and banking

business. He received a Master of Economics

from the University of Constance,

Germany, and is a CEFA charterholder.

JULIE SAUSSIER is a senior research

analyst in the Global Equity team,

covering the consumer discretionary

sector. She has 14 years of experience

as a research analyst and joined Credit

Suisse in 2015. She holds a Master’s

in Business and Management from

the University of Paris Dauphine and

a Master’s in Corporate Finance

from the EM Lyon Business School,

France, and is a CFA charterholder.

Giles Keating

Vice Chairman of Investment Solutions & Products

and Deputy Global CIO

“It is the cheap cloth, the cheap cotton and rayon fabric … that are

the typical achievements of capitalist production, and not as a rule

improvements that would mean much to the rich man. Queen Elizabeth

[the First] owned silk stockings. The capitalist achievement does

not typically consist in providing more silk stockings for queens, but

in bringing them within reach of factory girls.” Joseph Schumpeter,

Capitalism, Socialism and Democracy, 1942.

It is no coincidence that Schumpeter’s brilliant analysis of how

innovation drives capitalism uses an example from the fashion industry

to illustrate one of the most fundamental trends driving consumer

behavior: as incomes rise, luxuries reserved for the upper classes

become widely affordable. Marketing spreads fashion globally, with

brands often promoted by famous personalities. In a next stage – which

we seem to be in the midst of – the countermove toward re-individualization

sets in, illustrated by the young, innovative designers from

around the world in this Global Investor.

The fashion industry also epitomizes globalization of production.

Textiles typified industrialization in 18th-century Manchester, and

William Blake’s “satanic mills” have reappeared in places like Savar

Upazila in Bangladesh. Thankfully, the worst of globalization is being

confronted by some of the best, as scientists, entrepreneurs and

political leaders unite to improve environmental and labor standards.

Leading actors in this transformation have contributed to this Global

Investor, along with those propelling innovations like 3D printing, which

are pushing the frontiers of individualized fashion design and production

while e-commerce transforms supply chains and distribution.

Fashion provides an extraordinary platform for the creation and

growth of businesses, some growing gradually to global scale through

retained earnings, others tapping capital markets for rapid expansion.

As a result, many well-known names are listed on major bourses while

others are held privately, whether in Italy or Nigeria. And in the

fast-moving business of fashion it is not just the models on the catwalks,

but also investors who must be on their toes. I hope that this

Global Investor helps you plan investment strategies while also being

enjoyable, especially since I am now stepping aside after the privilege

and pleasure of three decades at Credit Suisse and a dozen years as

overall editor of Global Investor.


TEXT BY REBECCA ARNOLD Historian, The Courtauld Institute of Art





is Oak Foundation

Lecturer in History of

Dress and Textiles

at the Courtauld

Institute of Art in

London. She has

lectured and written

extensively on 20th

and 21st century

fashion, including

“The American Look:

Fashion, Sportswear

and the Image of

Wom en in 1930s and

1940s New York”


Seemingly unconnected events

conspired to trigger the modern

fashion industry’s beginnings in

the 17th century. On one hand,

Louis XIV’s moves to boost French luxury

trades laid the foundations for Paris’ domination

of exquisite, handmade designs, patronized

by the social elite. On the other, inventions

to improve British textile production set

in train what would become the Industrial

Revolution, which would speed up and

multiply fashion production for centuries to

come. Twin forces were therefore at play –

one focused on individual style, the other

pushing toward collective identities formed

by readymade clothes.


But these movements were not enough

to create a fully functioning fashion system –

it is not just the clothes themselves that

conjure an industry, it is also the way they are

represented and publicized. Although there

were fashion plates in the 17th century, it was

not until the 1770s that regular editions of

fashion magazines appeared. These brought

together selections of hand-painted plates,

and columns describing socialites’ outfits

worn to recent events. Details such as those

contained in “The Ladies Magazine” helped

to disseminate fashion information, and,

importantly, inspired women to follow fashions

by asking their dressmakers to make

gowns for them that mimicked what they

saw. Each season during this period, the most

influential Parisian dressmakers sent two

dolls out to smaller towns across Europe and

beyond to display their latest work – one doll

in the most extravagant design for evening,

the other in a simpler style for daywear. Along

with the popular habit of describing dress

seen while traveling in letters to friends and

family, fashions spread and new trends grew.

Textile producers, and gradually during the

19th century, readymade manufacturers,

became suppliers to an eager audience. The

earliest readymade garments had been simple

and functional – for sailors and slaves from

the 17th century onward. But by the later

19th century, stylish clothes were also in the

newly popular department stores.


Again, there were twin, though separate,

events that helped to propel the fashion business’

development from the 1850s onward.

In France, Englishman Charles Frederick

Worth united art and commerce in his hugely

influential couture house, which, patronized

by Empress Eugenie herself, consolidated

Paris’ haute couture industry as the center of

new styles and luxury. In America, the Civil

War meant vast armies needed readymade

uniforms – requiring sizing systems and

understanding of how to design and manufacture

on a large scale.






As in the 17th century, impulses from

both the luxury trades and industry were essential

to shape the global, multilevel fashion

business that would emerge during the 20th

century. Once chain stores began to emerge in

the 1920s, the fashion business was set to

exploit the potential of readymade fashions.

Fueled by the boom in visual and popular

culture, Hollywood-led trends, fashion

illustrations by Georges Lepape, and photography

by Edward Steichen, for example,

brought the latest styles to men and women

across the globe. Couturiers including Coco

Chanel added further glamour to the industry,

with sports-led designs that inspired copies

of their simple, chic designs to be produced

internationally – all supported by an increasingly

professional infrastructure that streamlined

every stage from production to publicity.

It is upon these foundations that the

globalized fashion business of today was built.

In the past 30 years, the process has accelerated

and become multicentered – with

production outsourced, cities from Rio to

Mumbai hosting fashion

weeks to promote

homegrown talent,

and social media

and e-commerce

creating new ways

for fashion to be

experienced and sold.

Global Investor 1.16


Sellers of dreams

It can be both fascinating and terrifying,

depending on if you’re an observer or a

participant. Roger Tredre takes us behind

the scenes of the fashion industry.


The rise and fall

of fashion companies

It’s essentially a high-stakes balancing

act. Julie Saussier explains why supply

chain efficiency is so crucial in the fashion

industry to achieving long-term success.


Evolving industry –

a work in progress

China is struggling to establish a domestic

fashion sector. Selina Sia explores

the factors that continue to hold it back.


Global apparel retail market 2015

It was worth USD 1.378 trillion last year.

Who are the biggest retailers? How do

demographics, e-commerce and sustainability

influence it? See our infographic.


Less is more

Dr. Claudia Banz discusses the part of the

fashion industry that’s rarely seen – the

dark and ugly side, where garment workers

and the environment are the losers.


Handshake of hope

The fashion apparel and textile sector is

heeding the call for sustainability.

Emanuel Büchlin outlines what’s happening.


How will digitazation influence

fashion and the way we shop?

Going digital has been truly transformative.

Ulrich Kaiser examines the effects being

felt in the fashion industry.


Clothing must have a soul

It is, as they say, a material world.

Kurt Zihlmann expands on the fascinating

frontier where technology is yielding

new materials and even newer ways of

producing them.


The effect of e-commerce on

the fashion supply chain

Global economic integration and the

e-revolution, says Dr. Christian Schindler,

have transformed the global supply chain.


06 Milk

08 Digital printing

59 Smart tailoring

61 Air dyeing


07 Children

11 Men

14 India

15 Sports

22 50+

24 Supply chain

26 Advertising


10 Vassilis Zidianakis

17 Ali Ansari

27 Mason Jung

33 Ellen Sideri

53 Forrest Jessee

58 Valérie Lamontagne


12 Jeans


13 Avenue 32

52 Vfiles


16 Virtual reality models

23 Self-healing fabrics

51 3D printing

60 Wearables

62 Color-changing fabrics



18 Part I: Lanvin

54 Part II: Prada

64 Disclaimer





In the quest for sustainable

apparel, even

food products have

a role to play. Qmilk,

a German company

founded by microbiologist

and designer

Anke Domaske, spins

silky fibers out of

sour cow milk that

can be added to conventional

fibers for

an improved result.

Essi Johanna Glomb

and Rasa Weber, of

the Blond and Bieber

studio in Berlin, are

using microalgae

to create a “biological

color palette” for

dyeing clothes. They

also built their own

printer to apply

the colors to fabric

(see the QR code

below). Algal dyes

change on exposure

to light, but that’s

part of their charm.

Modern Meadow, a

start-up, is going

one step further –

developing a biomaterial

alternative to

leather based on

animal cells and tissues

that involves no





Watch a video on how

designers use ecofriendly

algal pigments

to print fashion fabrics.




The fashion press

recently announced

Karl Lagerfeld’s

launch of a kids’ line

in spring 2016. While

labels such as Dior,

Burberry and Ralph

Lauren have had

children’s lines for

some time, these

have attracted more

attention in the media,

with VIPs dressing

their children in their

favorite labels,

like mini versions of

themselves. Brands

such as Burberry also

frequently include

children in their advertising.

We see this

more as a marketing

initiative, where the

brands try to cater to

all the needs of

their exclusive clientele,

and it gets press

coverage. Harper

Beckham, the four-yearold

daughter of David

and Victoria Beckham,

already is the subject

of a blog devoted

to writing about her

looks, and she has

several million fans on

Instagram. There are

children-only fashion

brands, such as the

French label Bonpoint,

one of the most popular

children’s clothing

brands in the world.

Bonpoint celebrated

its 40-year history

in 2015 and launched

a couture collection

that same year. It has

been running fashion

shows for eight

years. Bonpoint has

its own workroom

and atelier team who

prepare the prototypes,

under its artistic

director, with

four collections a year.

Bonpoint has now

expanded into Asia

and sells the same

collection all over

the world. Michelle

Obama was photographed

in Paris

visiting a Bonpoint

store with her daughters.

Kate Moss

dressed all of her

bridesmaids in Bonpoint

at her wedding

in 2011. Bonpoint

was acquired by EPI

(Européenne de

Participations Industrielles)

in 2007 and

had sales in the

EUR 40 million range

at the time. Fashion

companies such as

Zara have also transformed

kids’ wear

into fashion items,

copying kids’ fashion

brands such as Bonpoint

or more grownup

looks. This is

a lucrative business.





Watch an interview

with Mary Katrantzou

on the impact

of digital printing.




Forget polka dots,

stripes and rows

of leaves. The new

digitally printed

fabric patterns are

more like, well, artwork.

Invented in the

1980s, digital printing

lays down an entire

image on a piece of

fabric in much the

way a printer transfers

an image to a

piece of paper. Some

designers use urban

images they’ve taken

with their iPhones.

The technique is both

more sustainable (it

uses less water) and

less labor-intensive

than traditional screen

printing. Digitally

printed fashions have

only recently become

a fixture of the

runway, but they have

contributed to a new

enthusiasm for prints.

Among the pioneers

are the late Alexander

McQueen, whose

Plato’s Atlantis collection

of scaled- serpent

prints caused a stir

in 2010, Mary Katrantzou’s

“hyper- real”

prints and pioneering

Bruno Basso and

Christopher Brooke’s

bold styles.








V . A . S . S . I . L . I . S

Z . I . D . I . A . N . A . K . I . S

is a Greek artist, curator and the Artistic Director of Atopos cvc.

He studied ethnology and anthropology as well as history and civilization

at the École des Hautes Études en Sciences Sociales, Paris.

What do you see as the global

trends (e.g. digitalization)

influencing today’s fashions and

the fashion market?

I believe that one important trend

that influences fashion nowadays is

the subject of gender and sexuality.

The androgynous look is not simply

hype or a trend as I believe that

gender ambiguity, either as a case of

identity or a lifestyle, has affected

fashion immensely.

How are these trends changing

fashion and the fashion market?

In many cases, we have designers who

keep creating men’s collections only,

yet their clothes might quite often

be worn by women who are fashion-conscious

and confident. One

example is British fashion designer

Craig Green, one of Atopos’ favorites.

Furthermore, our new office intern,

Jonny Seven, has brought to my

attention the cases of Vetements and

Hood By Air, two labels that have

overturned the lines between femininity

and masculinity. Of course,

this does not mean that women’s

collections or labels will become

obsolete, but certainly trends

and the fashion market in general

have changed in certain ways.

Where do you get inspiration

for your designs and collections?

As I am an artist and curator, not

a fashion designer, I leave the

inspiration for collections to others.




Typically, a brand caters

for women, with

men’s business on

the side. But there

are some successful

concepts where

the men’s business

is the starting point.

Hugo Boss was a

male-only business

until it started developing

a women’s

line in 1998. Its

women’s wear business

still only represents

10% of sales.

Tom Ford, well

known for his time as

designer at Gucci,

finally launched his

own Tom Ford line

in 2006, with a male

focus at first, and

later introducing a

women’s line. Berluti,

owned by LVMH, a

high-end male shoemaker,

launched a

ready-to-wear line a

few years ago.

Berluti, which generated

EUR 30 million

in sales in 2011, has

added more than

EUR 100 million to

this figure after expanding

its product

offering and global

store network.

Menswear now has a

biannual event focusing

solely on British

men’s fashion called

London Collections

Men, launched in 2012

and covered by press

and buyers from

50 countries. New

York started a dedicated

men’s fashion

week (the New

York Fashion Week)

in July 2015.

Quoting the CEO of

British Fashion Council,

the menswear

equivalent of the London

Fashion Week,

the global menswear

market is now worth

USD 440 billion.







Today, the fashionsavvy

will spend more

than USD 200 on a

pair of jeans, but

denim’s humble past

is long forgotten. It

was originally made

for the working class.

In 1873, Levi Strauss &

Co. used rivets to

improve the durability

of denim overalls.

In the 20th century,

denim gradually

became a uniform of

rebellion, worn by

biker gangs in the

1950s and by hippies

in the 1960s. By the

1970s, blue jeans were

mainstream fashion

wear. Calvin Klein

made them a status

symbol by adding his

name to the back

pocket. “Vogue”

editor Anna Wintour

further elevated jeans

to haute couture

when she put a model

in a stonewashed pair

on the cover in 1988.

From work wear to

high fashion, blue

jeans’ versatility have

made them a fashion

classic. In 2015,

3.06 billion pairs of

jeans were sold

globally, according

to Euromonitor International.

The top five

markets for jeans are

the US, China, Brazil,

Russia and India.




Denim – the rising price

of a fashion classic in USD


Zara mid-rise




Levi’s 711

skinny jeans

(Lone Wolf 78


J Brand 23110

Maria in


after dark

Victoria Beckham

super skinny



Chimala cropped

Japanese selvedge

jeans in used 435

light wash






Avenue 32 is an

online platform for

lux ury fashion.

It offers established

designers as well

as young talents the

opportun ity to sell

their design pieces

under one umbrella.

On Avenue 32, the

fame of well-known

design meets the

freshness of young

artists. Even though

Avenue 32 takes care

of logistics and

photography, designers

keep control

over sales. Instead

of selling a stock

of their collection to

Avenue 32, designers

pay a commission

to the company for

each piece they sell

on the platform.

This reduces the risk

of Avenue 32 being

left to shoulder

the cost of unsold

collections, and

allows it to present

pieces from yet

unknown designers.

“A lot of magazines,

like ‘Vogue,’ won’t

feature designers

unless they have a

stockist where customers

can buy,” says

Roberta Benteler,

Avenue 32 founder.


Total sites link to website










The Indian fashion

industry is set for

strong growth with

favorable demographics

and rising

income levels

driving demand for

apparel and highend

fashion. Fashion

trends in India take

their cue from the

West, as this gives

customers social appeal

and results in

many successful domestic

brands imitating

foreign names

and styles, such

as Franco Leone and

American Swan, or

foreign brands being

licensed. India enjoys

skilled low-cost labor

and an abundance

of raw materials. The

industry is highly

fragmented with a low

share of organized

retail. Aditya Birla

Fashion, one of India’s

fastest- growing

branded apparel companies,

has grown

by consolidating its

market leadership

with its own brands at

the lower-end

and later introducing

premier international

labels. Raymond,

the largest branded

fabric and suiting

manufacturer, has developed

a vast distribution

network and

acquired labels. Page

Industries, an innerwear

company, has

grown rapidly under

the licensing business

model. Several

international companies

like Marks &

Spencer, Zara, Benetton,

and Tommy

Hilfiger have already

established a strong

foothold in India.







Many popular fashion

brands have had

de dicated sports lines

for some time, such

as Ralph Lauren and

Hugo Boss.

Uniqlo has a tennis

player as its global

brand ambassador to

position the brand

as the ultimate functional

wear. Even

at the luxury end, Tom

Ford is already developing

a sports line

to expand the reach

of the brand. On

the catwalks, many

models are wear ing

training shoes and

there is soaring

demand for designer

trainers. Sports as

a lifestyle is here to

stay and fashion

brands will capitalize

on this. Sports

brands such as Adidas

are also developing

fashion lines,

with Adidas using

the designers Yohji

Yamamoto or Stella

McCartney to develop

lines of designer

sports fashion. When

Puma was bought

by the luxury goods

group Kering in

2007, the objective

was to transform

the brand as a sports

lifestyle brand. But

Puma entered a difficult

period after having

been overexposed

on a fashion spur.










You may never fly to

the moon or swim with

dolphins in the ocean,

but if virtual reality

(VR) lives up to its

promise, you may be

able to do other things

that you never thought

you could, such as

being on center stage

in a fashion show,

without even having

to leave your home.

The fashion industry

could be the next

place to receive a

dose of this farreaching


In the VR fashion

demo (see the QR

code below), you

can see the realistic

cloth simulation as

runway models pose

at the end of a virtual

runway. The concept

behind VR fashion

is that users could

import a 3D scan of

themselves and see

exactly how garments

would look and fit.

A further step could

be producing heat

maps on a user’s

avatar, which would

show exactly where

the garment was too

tight or too loose.

If you don’t like what

you see or if it doesn’t

fit, you can adjust it

or move to another

pattern. Finally, hit the

“buy” button and the

garment with your

exact pattern and fit

will be produced and

sent to your home.




Enjoy a front row view

of the VR modeling

catwalk by using

the QR code above.





A . L . I

A . N . S . A . R . I

is a German-Persian fashion designer, product manager and trend scout. His

vision is to share his knowledge, experience and expertise and to support

cultivating creative consciousness in companies as well as academic institutions.

What do you see as the global

trends (e.g. digitalization)

influencing today’s fashions and

the fashion market?

The speed in which digital technology

has risen in just two decades has

had a huge influence on today’s fashion

and global fashion markets.

Omnipresent and all-consuming.

A “must have,” a “must do” and a

“must follow.” In contrast to our

superemotional, sensitive and human

need for retreat and the proper time

to grow. Through experience, learning

and applying.

The middle path of bridging and

connecting seems to be vanishing.

Either you are in or out. There is

no in-between. We clearly embrace

the future here and now. Not

waiting for it to present itself in time.

The power of acceleration allows

us to teletransport into a multitude of

conceptual realities of the future.

The process of developing products

in the fashion industry pays tribute

to this very clear direction at all

stages of product inspiration, concept,

sourcing, prototyping and

presentation through to production

and delivery.

How are these trends changing

fashion and the fashion market?

A few trends emerge out of this

perspective of eliminating anything

in the middle ground.

Craftsmanship and the power of

“DIY” underline our urge to make and

evolve while creating an idea, developing

a product as a team in its own

time and environment. Using original

tools and digital technology.

A counterreaction derives from

the socio-cultural need for new depth

and purpose. Self-exploration via

mindfulness, spirituality and deep

reflection draws great strength

out of calmness and contemplation.

Attending to inner rhythms and seeing

the primal effects of nature. Being

open to the power of the elements

and inspired by their natural diversity.

People are looking for new beliefs.

Play and entertainment is another

big theme. Less time working and

much more time escaping the daily

routine of duty and responsibility.

In the arts, absurdism is a powerful

indication of this tendency. An

experimental approach that combines

opposites into an abstract work.

In fashion it blends totally different

directions in collections and

design concepts. None is interlinked

or connected but very clearly takes

a different standpoint in choice of

material, color, silhouette and creative


Where do you get inspiration

for your designs and collections?

Observing the rhythm and rhyme

of everyday urban life. And moving

into it and out of it. Traveling to

international metropolises and their

surrounds as well as being in the


Changing my view and perspective

by diving into the pulse and regularly

jumping out of it. Sensory perception

of the balance. Of extremes and seemingly

unimportant things.

Online research into the multilevels

of cultural communities. Letting

architecture, art, music, liter a ture,

journalism and design become a

multilayered display of the daily echo.

Witnessing society and cultural

change in young and old generations.

Above all, finding peaceful time in

nature to sort, digest and understand

the overflow of the impressions

given by this kind of trend research.



So unmistakably

Lanvin. At the Museum

of Decorative Arts in

Paris, we see a fullscale

reconstruction of

one of the Rateaudesigned

rooms at the

Lanvin family home.









For almost a century, French fashion house Lanvin was revered for its fashion creations, perfumes and home décor items.

But since the 1960s, the company has lost some of its cachet. Founded on a Frenchwoman’s love for her

daughter, the company now sits in the hands of another woman, based in Taiwan. Will we see a renaissance of sorts?



Mother and daughter in

silhouette: the iconic Lanvin

logo adorns this 1930s

vintage perfume bottle.

As the oldest French fashion house still in

operation today, the House of Lanvin

maintains a delicate balance between

the design traditions of its unique heritage

and the necessity of a thoroughly modern

approach. Drawing on art, exoticism, color and

culture, Lanvin’s philosophy has always been one

that embraces all the subtle nuances of a lifestyle,

rather than just the formalities of fashion.

The company’s founder Jeanne Lanvin (1867–

1946) began her design career as an apprentice

milliner in 1883. After training at the salons of

Madame Félix and Suzanne Talbot, Lanvin established

her own millinery workshop on Paris’s illustrious

rue de Faubourg-Saint Honoré in 1889. Following

her marriage to Italian nobleman Count

Emilio di Pietro in 1895, she began to design and

make clothes for the couple’s daughter, Marguerite

Marie-Blanche. Lanvin’s friends and clients began

to request copies of the child’s garments for their

own children, and the overwhelming success and

demand for the beautiful clothes soon prompted

Lanvin to establish a womenswear line in 1909. Later

that year, Lanvin was admitted to the Chambre

Syndicale de la Haute Couture, the prestigious

­governing body of Paris’s flourishing haute couture

industry, thus formalizing her status as a couturière

and confirming her power and influence within the

early 20th-century fashion world.

The 1920s saw Lanvin expand her burgeoning

design empire to include menswear, sportswear,

makeup, home décor and dedicated lingerie and

fur divisions, underlining her philosophy that fashion

was not solely a mode of adornment but an

all-encompassing lifestyle. The hugely successful

fragrance company Lanvin Parfums was founded in

1924, with popular perfumes including “My Sin”

(1925) and the signature scent “Arpège” (1927),

which was inspired by her daughter’s love of music.

as the brand’s signature shade was equally personal.

Inspired by a Fra Angelico fresco glimpsed by

Lanvin in Florence, Italy, the vibrant lavender hue

was subsequently incorporated into the design of

perfume bottles, packaging, clothing and interiors,

including her Paris apartment.

Lanvin continued to develop signature shades

such as “Velazquez green” and “Polignac pink,”

founding a dye factory in Nanterre, France, in 1923.

As a frequent traveler and avid collector of antiques

and objets d’art, Lanvin drew inspiration from rich

Oriental embroideries, Japanese kimonos, luxurious

velvet and sequined textures and motifs evocative

of exotic cultural heritage. Closely associated

with the Art Deco movement of her time, Lanvin

became renowned for her intensely fragile yet heavily

hand-embellished dresses in pale, clear colors,

whose light fabrics and neat waists reflected the

freedom of the post-corset age.


In 1937, at the age of 70, Lanvin was appointed president

of the Haute Couture committee of the Paris

Exhibition and, two years later, was elected the

Paris representative at the New York World’s Fair.

Throughout the Second World War, Lanvin was one

of several couture houses who continued business,

despite strict regulations regarding materials and

growing financial uncertainty. Lanvin, along with a

group of couturiers including Elsa Schiaparelli and

Cristobal Balenciaga, attempted to reestablish her

business in Biarritz following the German occupation

of Paris in order to export products to the United

States. Shortly afterward, however, the French government

capitulated, exports were frozen, and the

scheme collapsed.

After Lanvin passed away in 1946, ownership of

the company transferred to her daughter Marguerite,

who had been closely involved in the management

of the business for four years previously. When

Marguerite herself passed away in 1958, the company

passed to her cousin Yves Lanvin. The company

entered a period of relative obscurity, intensified by

the rise of dominant ready-to-wear labels such as

Yves Saint Laurent in the 1960s. Lanvin’s loyal couture

clientele continued to turn to the house they

had patronized for many years, but both the aesthetic

and business structure of the company were

increasingly archaic and uninspiring.

Although it is still well known today for its

perfumes, the Lanvin name was first

established on the outstanding couture

skills of company founder Jeanne Lanvin.

Pictured here, we see a ribbed voile

full-length romantic-style wedding dress

with a matching hat – both of her design.


Lanvin remained an internally funded family-run

business until 1971, when American pharmaceutical

manufacturer Squibb acquired the company’s cosmetics

division. However, Squibb were disappointed

by Lanvin’s performance in the face of growing

competition from other prominent cosmetics companies,

and Lanvin bought back its independence

in 1979. The company continued to struggle to successfully

revitalize its increasingly antiquated image

and, after reporting losses of USD 17.5 million in

1988, British banking company Midland (now part

of HSBC) acquired a significant share of the company.

Despite reporting a USD 53 million profit following

this restructuring, the brand remained largely

unsuccessful, with designer Claude Montana’s

first collection for the label being widely derided by

the fashion press. A year later, Midland sold its

Jeanne Lanvin was famous for creating

dresses which were made of delicate

light fabrics in pale clear colors with

hand-stitched embellishments.


Lanvin’s close relationship with her only child has

always remained at the heart of the brand’s identity,

most notably through its logo, which depicts a

mother and daughter in silhouette. The illustration,

inspired by a 1907 photograph of Jeanne and Marguerite,

continues to adorn Lanvin products today

as an expression of the brand’s spirit and emotion.

Jeanne Lanvin’s adoption of an intense blue color

Jeanne Lanvin (born Jeanne-Marie Lanvin)

1867–1946. The iconic French fashion

designer is pictured here reviewing sketches

in her design studio in France.


stakes in Lanvin to Orcofi, an investment group

owned by the Vuitton family. In 1994, leading cosmetics

empire L’Oréal began a takeover of the

Lanvin company, purchasing a 50% stake which

increased to 66% in 1995 and finally reached 100%

in 1996. In 2001, the company was taken private

again after being purchased by investor group

Harmonie S.A.

Under Harmonie’s directorship, Moroccan-

Israeli designer Alber Elbaz was appointed as the

label’s artistic director in 2001. The charismatic

Elbaz had previously undertaken design stints at

Guy Laroche and Yves Saint Laurent, but his role at

Lanvin allowed him to come into his own, and his

collections immediately received widespread praise.

Combining luxury and femininity, Elbaz transformed

Lanvin into a blend of tradition and modernity.

Acknowledging Lanvin’s unique heritage, the designer

employed classic shapes on both his womenswear

and menswear collections, while simultaneously

using unexpected fabrics and silhouettes in

order to update them for a new generation. Oversized

costume jewelry, ethereal eveningwear and bright

prints led Vogue International’s Suzy Menkes to

describe Elbaz as “every woman’s darling,” cementing

the brand’s popularity and influence.



A model walks the runway

during the Lanvin

Fall/Winter 2013 Readyto-Wear

show as part

of Paris Fashion Week

on 28 February 2013

in Paris, France.


In 2010, Swedish global high-street fashion chain

H&M announced that Lanvin would become the

latest in a series of luxury designer collaborations.

By this time, high-end and mass-market collaborations

were regarded as a powerful and mutually

beneficial retail and marketing tool, with notable

examples including Valentino’s 2010 range for Gap,

and Stella McCartney’s long-term collaboration with

Adidas, launched in 2004. H&M’s first collaboration

project – a sellout capsule collection by Chanel

designer Karl Lagerfeld in 2004 – boosted the company’s

monthly revenue by 24%. However, discrepancies

between the average H&M customer’s budget

(mainline dresses can retail for less than USD 10)

and the prices required to maintain a luxury brand’s

superior quality and fit meant that subsequent

collab orations with brands such as Jimmy Choo and

Roberto Cavalli failed to generate the same level of

revenue growth. Lanvin’s limited-edition range of

brightly colored cocktail dresses and quirky accessories,

however, was more successful. The collection,

whose prices reached USD 350, sold out in

the UK within hours, and the company reported an

8% increase in worldwide sales that month. Despite

previously being adamant that he “would never do

a mass-market collection,” Elbaz stated that H&M

had approached him “to see if we could translate

the dream we created at Lanvin to a wider audience,

not just a dress for less … what intrigued me was

the idea of H&M going luxury, rather than Lanvin

going public.” The boost provided by Lanvin’s involvement

has set a precedent for subsequent successful

sellout collaborations with Versace (2011),

Isabel Marant (2013) and Balmain (2015).


Elbaz unexpectedly departed from Lanvin in October

2015 for undisclosed reasons, but it was confirmed

in an official statement that he had been

discharged at “the decision of the company’s majority

shareholder” Shaw-Lan Wang of Harmonie

S.A. The designer’s long-term tenure as creative

director had undoubtedly been successful, revitalizing

its aesthetic, attracting high-profile fans such

as Michelle Obama and Nicole Kidman and in 2014,

the year prior to his departure, the company also

reported estimated revenues of USD 321 million.

Designer Alber Elbaz

walks the runway

during the Lanvin for

H&M Haute Couture

Show at The Pierre

Hotel on 18 November

2010 in New York City.

However, this once-rapid growth had begun to slow

and market sources speculated that Shaw-Lan Wang

was seeking additional financial support from a

major luxury group, to the reported frustration of

Elbaz. His parting statement, however, insisted that

Elbaz was satisfied with what he had achieved during

his 14 years at the brand: “Together we have met the

creative challenge presented by Lanvin and have restored

its radiance, returning it to its rightful position

among France’s absolute luxury fashion houses.”

In March 2016, Lanvin announced that Bouchra

Jarrar, a French couture designer who has previously

worked for Balenciaga and Christian Lacroix,

would become Lanvin’s new creative director. Jarrar

is now faced with the challenge of overcoming the

company’s recent turbulent period and restructuring

its team. After Elbaz’s departure, Lanvin’s 330

employees initiated a series of strikes and protests,

demanding a meeting with owner Shaw-Lan Wang,

who resides in her native Taiwan, to discuss reinstating

Elbaz. The financial and sartorial future of

Lanvin thus depends on Jarrar’s ability to revive the

label’s image, reverse declining sales, and offer its

clientele a fresh new aesthetic.




Lanvin posted revenue

of EUR 206 million in 2014.

Breakdown is shown in %









While many famous

50-plus women

endeavor to dress

and live as if they

were still in their

thirties, fashion has

nevertheless stopped

ignoring the 50-plus

woman, with designs

that are not too short,

too tight or too

revealing. Beyoncé’s

mother, Tina Knowles,

started a post-50

fashion Iine that was

available at Wal-Mart

in 2010. In 2015, the

glamourous daytime

TV presenter, Lorraine

Kelly, unveiled her

first catwalk-inspired

clothing range for

50-plus women in

the UK, designed for

JD Williams, a fashion

retailer with an emphasis

on plus-size

clothing. The 50-plus

female fashion

market is worth GBP

2.5 billion per season

in the UK and is a

fast-growing sector.

So far, however, fastfashion

retailers such

as Zara and H&M

have not developed

dedicated lines,

probably a testimony

that 50-plus remains

a small niche.










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Efficient management

of the supply chain

is absolutely critical

to delivering what’s

been termed “fast

fashion,” based on the

just-in-time model of

inventory control.









The use of celebrities

in fashion advertising

has increased in

recent years. From

Chanel to Louis

Vuitton or Burberry,

we all have images of

celebrities representing

the brand more

than the specific

items advertised.

With the use of celebrities,

companies not

only advertise their

latest products but

also brand values by

“creating the buzz.”

The use of Mikhail

Gorbachev in a Louis

Vuitton advertising

campaign received

the kind of attention

and buzz that is regarded

as a measure

of success these

days. The extensive

use of Kate Moss or

Cara Delevingne in

fashion advertising

now has more to do

with the way they

inspire customers.

Celebrities understand

it well and take

the opportunity to

develop their own

fashion lines. Kate

Moss is developing

a line for the UK label

Topshop. Beyoncé

has her own line.

Victoria Beckam successfully


from a singer to an

influential designer.








3 /6

M . A . S . O . N

J . U . N . G

is a fashion designer based in London. His conceptual projects have appeared

in exhibitions and installations, including recent presentations at Museum

Boijmans Van Beuningen and Dover Street Market Ginza. He is senior lecturer at

Brighton University and visiting tutor at the Royal College of Art.

What do you see as the global

trends (e.g. digitalization)

influencing today’s fashions and

the fashion market?

Popular culture and amateurism.

With the development of online culture

in the last decade, the world

has become closely linked, and things

can be shared easily and widely.

Anything followed by many people

acquires commercial value, and

popularity is an empirical measure

of success in modern society.

To obtain broader popularity, things

need to be easy and understood

by people without a trained sensibility.

The border between “amateurism”

and “professionalism” is blurred. This

is, on one hand, a positive phenomenon,

but at the same time could be

dangerous when immature views

or knowledge are shared by the masses.

We can witness many influential

bloggers and celebrities who have become

designers without mastering

their art.

How are these trends changing

fashion and the fashion market?

The popularity-centric culture has

been homogenizing and democratizing

many things – values, opinions

and even aesthetics. Especially in fashion,

collections and designs became

less distinctive while brands

carry on intensive PR activities.

Naturally, in reaction to this there

is a growing demand for individual

and original design and genuine

quality. Fashion labels that present

heterodox ideas and approaches

will respond to the demand and

gradually influence the mainstream,

I hope.

Where do you get inspiration

for your designs and collections?

Thoughts and emotions from my own

experience. In particular, “restriction”

has been the main source of

my creations. I have explored it in

men’s sartorial culture, in which we

have established forms like tailored

jackets and other conventions.

I like to use irony to reveal ideas

in a secretive and satirical way and

try to express aversion to uniformity

through the beauty of garments.







While industry watchers once got their thrills from expecting

the unexpected, the unexpected now goes beyond clothing

to include how it is conceived and produced. E-commerce, fashion

bloggers and fast fashion are having a profound impact. Roger

Tredre reflects on the inner workings of a high-risk business.


The general public is also entranced

by the subject of fashion.

ROGER TREDRE It is. I was at the

Victoria and Albert Museum here in London

yesterday, which has just launched an exhibition

about the Renaissance artist Sandro

Botticelli – “Botticelli Reimagined.” But even

at this exhibition, which I expected primarily

to be a chance to look at lots of glorious

old masters from 500 years ago, what did I

see in the first room? A Dolce & Gabbana

suit with a Botticelli print on it.

Who or what shapes fashion?

ROGER TREDRE Fashion is shaped

by a multitude of forces. In technical industry

terms, the core event that gets the

next season rolling is Première Vision, which

takes place in Paris twice a year. It’s

a huge trade show, where designers of all

levels in the clothing industry go to see

the new fabrics and colors being proposed

by the leading and most influential manufacturers,

across Europe, but also worldwide.

And when you get closer to the launch

of a product in the marketplace …

ROGER TREDRE … then the whole

marketing machinery clicks into gear. Fashion

is about the selling of dreams. That is why

fashion companies invest so much into marketing

and promotion, which now extends

to sweet talking and being nice to bloggers,

sponsoring celebrities to wear clothes and

GISELLE WEISS What distinguishes

the fashion industry from other major


ROGER TREDRE Fashion defies a lot of

the usual rules of the business world. In the

past, companies have tried to apply a kind

of McKinsey approach to creating collections

and selling fashion. And it hasn’t really

worked. Even now, with fashion e-commerce,

big data and sophisticated algorithms to

understand the consumer better, there’s always

an element of chance. That’s what

makes fashion endlessly fascinating to observe.

If you work directly in the business,

that’s also what makes it quite terrifying.

You’ve called fashion the driving force of

modern consumer culture. How so?

ROGER TREDRE Back in the year

2000, I was editor in chief for the online

trends service WGSN. We discovered

that the service wasn’t just useful for the

fashion industry, but for every product

category connected with fashion or interested

in fashion in some way. There’ve been some

interesting interviews recently with Tim

Cook at Apple comparing what Apple does

with what a fashion company does, and

the importance of design in the process.

And because technology is the fastest-growing

product category in the world, the influence

of fashion there is fascinating. Indeed,

if you understand how fashion ticks, you can

apply that knowledge to other industries,

such as cars, food and retail more broadly.

“If you understand

how fashion

ticks, you can apply

that knowledge to

other industries, such

as cars, food and

retail more broadly.

paying designers extraordinary amounts of

money to make bold statements on the

runway that capture the imagination and sell

the dream to consumers. Not that consumers

will rush out tomorrow and buy a 2,000

euro jacket they’ve just seen. But the

affluent young and not-so-young will buy

the fragrance the next time they’re

pa s s ing through a duty-free. Or they will

buy the handbag or the shoes. Accessories

and fragrances are at the core of actual sales.

Apart from these relatively affluent people,

how would you describe the interplay of


fashion makers and consumers in shaping


ROGER TREDRE Consumers are now

in a more powerful position than ever before

because of the power of the Internet and

the ability to like and dislike. And also the

extent to which they are using the old-fashioned

retail environment as a showroom

experience where they can wander around,

try on things, take a few pics, share them

with friends and then go home and buy the

items cheaper online. At the same time,

despite the best efforts of NET-A-PORTER

or ASOS in the UK market, nothing quite

matches the thrill of going into a beautiful

shop. Consequently, retail is adding cafés,

adding drama and building bigger flagships.

How is the evolution of the mass market

affecting the luxury segment?

ROGER TREDRE If you’re in the business

of luxury, you’ve got a problem in

competition from the high street who are

now able to use better-quality fabrics,

are creating more fashion-forward designs

and are even able to add in elements of

handiwork that were previously only associated

with the luxury sector. Nonetheless,

luxury brands are also lifestyle brands and

well aware of it. And they want to capture

a share of the mid-market. “Masstige” –

“mass market” plus “prestige” – is a phrase

that’s been used quite a lot in recent years.

In 1992, you wrote that uncertainty in the

industry internationally had dampened

many wilder spirits. What was going on?

ROGER TREDRE Japan, which had been

a key export market at the luxury end,

was no longer growing at the same pace.

The question was where growth would

come from, and the answer was China. It

took a good decade, though, before China

began to deliver in the way people hoped.

What challenges is the industry facing?

ROGER TREDRE One of the biggest

talking points for the industry at the moment

is whether we need to change the timetable

of fashion. In the late 1990s, the emergence

of Inditex – the Spanish company

that owns Zara – introduced the concept of

fast fashion, the idea of stores injecting

new product into shops on almost a weekly

basis. This presented a major challenge

for everyone in the industry: companies,

designers and producers would have to leap

on it immediately and make it happen.

And now?

ROGER TREDRE It’s reached the stage

where some high-end companies, including

Roger Tredre

is currently pathway leader in fashion

journalism (MA Fashion Communication)

at Central Saint Martins, University

of the Arts London. He is also a senior

consultant for the Beijing Academy

of Creative Arts. From 1999 to 2007,

he was editor in chief of Worth Global

Style Network (, the international

fashion industry online trends

and research service.

Burberry (most notably at London Fashion

Week), are proposing a see-now, buy-now

approach to the concept of a fashion show,

where the consumer will be able to watch

the fashion show on the Internet and place

an order and get the clothes almost instantly.

How likely is that to happen?

ROGER TREDRE If it is adopted across

the industry, it will need a complete rethink

in terms of the production process. I don’t

think it will happen. A lot of the bigger

players in continental Europe have already

suggested it’s a bit of a gimmick and

“Consumers are

now in a more powerful

position than

ever before because

of the power of the

Internet and the ability

to like and dislike.”

that part of the mystique and allure of

selling dreams is the idea that you see these

clothes in the fashion show and then you

have to wait.

Is the distinction between fashion and

apparel worth making?

ROGER TREDRE Apparel needs an

injection of fashion. I mean, what’s apparel?

It’s essentially basics. Take the case of

Uniqlo – a Japanese retailer with huge ambitions

that has enjoyed a meteoric rise in

recent years. When it first came to the UK,

it was purely apparel-focused. But once

you’d bought an item, you didn’t need to go

back to the shop again for a very long

time. The company realized that apparel

without any fashion sprinkled into the mix

was dullsville. Uniqlo has since had a

whole series of collaborations working with

designers to inject a fashion element in

what is still quite a basic range of clothing.

How is fashion understood and

misunderstood in society?

ROGER TREDRE If you believe the

Zoolander movies, fashion is full of ludicrous

figures who drink a lot of champagne,

do drugs and behave generally outrageously.

And it’s true that, from the outside, the

fashion runway season is super- glamorous.

But inside it are a lot of people who

work very, very hard. I’m always amazed at

the commitment and the length to which

people will go in the fashion industry.








It’s all about the key factors of supply and demand. For fashion companies,

the secret to achieving long-term success lies in effectively managing both their

supply chain and distribution channels, while at the same time keeping a

very close eye on maintaining brand image – be it the apparel labels they sell,

or the company brand itself.


hile brands can come and

go as they become unfashionable,

fashion companies

have emerged with branded stores,

but no branded products, and become a

worldwide success. The key to succeed as a

fashion company is the efficiency of the

supply chain.

The importance of the supply chain

The unbranded fashion company Zara, owned

by Inditex, and to a lesser extent H&M are

fashion houses. Their stores are branded, but

their clothes are not. They sell fashion. Zara

has shaken the fashion world with its fast

supply chain, allowing it to de-risk fashion

and sell at full prices, which is the key to a

fashion company’s profitability and value.

The old model for an apparel company

was to design a collection, produce prototypes,

send it to production (most often outside

the company) and have it delivered to

stores – with the whole process taking a year.

When the product reached the store, the

company might have missed the latest fashions

of the season, but would still have to

promote and sell its stock because the orders

were already passed on to its suppliers for

most of the collection. This process is called

a “push” system. For more on the supply

chain, see p. 48

Zara reinvented the supply chain by first

waiting to see the fashion shows of the highend

fashion labels (usually around six months

ahead of a season) in order to gain an idea

of the fashions for the next season. After

that it designs and produces garments all at

the same location in its headquarters in

Spain and, within a few weeks, delivers the

products to the stores. Zara owns its supply

chain and all of its stores, whereby the stores

report what is and what is not selling, so that

Zara only produces what is in demand. Its

designers are on the street or watching the

Internet blogs to see the new fashions, so

that the collection can continue to evolve

during the season. This fast model avoids

making fashion mistakes and having to sell at

a discount.

All apparel manufacturers, from Benetton

and Vögele to the high-end fashion labels,

have had to learn from this model and try to

adapt their supply chains accordingly. H&M,

which designs in Sweden, but then outsources

production to Asia in order to reduce

costs, has had to evolve as well. While H&M

is more about price than fashion, for its fashion

part it has relocated production closer to

the market in order to be faster. For the jobs

it outsources to Asia, H&M imposes quicker

deadlines to shorten the supply chain. It has

also developed capsule collections with

well-known fashion designers to create more

interest in the company.

Japanese retailer Uniqlo, purchased by

Fast Retailing in 2005, has an excellent inventory

control system, and puts the right

product at the right time in the right location.

However, Uniqlo has a small number of designs

that tend to be more simplistic and

practical than those of Zara or H&M. It manufactures

its clothing in Japan, but also outsources

some work to China. Uniqlo organizes

sports events to create interest for its

brand with tennis player Novak Djokovic as

its global brand ambassador.

More exclusive fashion brands tend to

have less efficient supply chains and lower

volumes, and hence returns are more difficult

to generate. The most promising ones tend

to be acquired by large luxury groups that can

use their negotiating power for advertising or

real estate to help improve returns.

Globalization of fashion

While luxury goods companies have been

successful selling their products around the

world, fashion companies have also become

global. H&M has its roots in Sweden and was

first successful in Northern Europe, but has

since successfully expanded into Southern

Europe, China and the USA. Global growth

opportunities allow it to add 10% more stores

per annum. Zara was originally successful in

Southern Europe and Latin America, but later

expanded into Asia, Russia, and other emerging

markets, and has now entered the USA.

It also adds 8%–10% more stores per annum.

Inditex has grown into the world’s largest apparel

company, with more than EUR 20 billion

in sales and a market capitalization of EUR 90

billion. H&M generates around EUR 20 billion

in sales and has a market capitalization of

EUR 50 billion. Each company holds more than

5% market share in only a few markets. See

also the article on fashion in India, p. 14

The pitfalls of fashion

While successful models have emerged, the

history of fashion is marked by failures too.

One of the most common pitfalls is to become

overexposed. Under new CEO Michael Jeffries

in the 1990s, Abercrombie & Fitch became

the top brand for teenagers. Stores with loud

music, the smell of cologne, teens dancing on

the floor, and a popular logo led to worldwide

success. But when the logo became overexposed,

it lost its teen appeal and customers

moved away. The company has now been

struggling to revive the brand for the past five

years. For a related article on fashion marketing

and advertising, see p. 26

The jury is out for US fashion designer

Michael Kors. After being one of the fastest-growing

brands in recent years, the

World’s largest apparel retailers

Both companies showed similar market cap values

until 2010, when Inditex (Zara) took a more

vertical trajectory, while H&M continued at its

previous pace. Source: Bloomberg

in EUR bn








May 01

Inditex market cap

May 05 May 10

H&M market cap




Rise and fall of

Abercrombie & Fitch

History reveals a series of ups and downs for

Abercrombie & Fitch share price over the past

15 years. While it initially recovered from the

sharp plunge suffered in 2009, another threeyear

downward trend followed. Source: Bloomberg

Past performance is not an indicator of future performance. Performance

can be affected by commissions, fees or other charges as well as exchange

rate fluctuations.

in USD



















Abercrombie & Fitch share price







Creating value at Burberry

While averaging a relatively flat profile between

2002 and 2008, market cap increased sevenfold

over the next three years. After peaking at just

over GBP 8 bn in 2014, the trend was downward

in 2015. Source: Bloomberg

in GBP bn

















Burberry market cap









wave of popularity seems to be declining

along with sales. Kors handbags were highly

coveted and the company went into aggressive

store expansion and developed a broader

assortment of products to capitalize on its

success. Kors went public in late 2011 at a

share price of USD 24. The share price peaked

at close to USD 100 in the summer of 2014.

Once again, the brand grew too aggressively

and became overexposed, and shares of Michael

Kors have plunged to their lowest levels

in years. The company is now closing stores,

de-emphasizing logo products, and focusing

on the higher end to regain its aura.

The success of a brand lies in its longevity

and resilience. Hermes is a great example

of a conservatively managed and expanded

brand and why the company attracts one of

the highest valuations in the luxury goods

sector. The Birkin bag created in 1984 is still

one of the most coveted handbags, even by

fashionistas. The key to its longevity – a waiting

list of up to six years to buy the bag!

Burberry is a great example of an old raincoat

brand that was successfully rejuvenated

under a new CEO, Rose Marie Bravo, from

1997 to 2000. The check logo subsequently

became overexposed with the British football

fans wearing Burberry products and cheap

copies spreading everywhere. But, with

Christopher Bailey as a new designer since

2001, the brand has been repositioned and

successfully elevated to become a fashionable

luxury brand. The logo became more

subtle and popular again. Advertisements

featuring Kate Moss redefined the image of

the brand. Higher-margin accessories, fragrances

and babywear were added. A GBP

200 million brand in 1997 was turned into a

GBP 6 billion brand. But not every brand can

stretch itself into new product categories.

For more on new markets for kids, men,

sports and 50+, see pp. 07, 11, 15 and 22 respectively

In conclusion, fashion companies can be

worth investing in when they are riding a

successful trend, or conservatively managed,

or recovering from a setback. But, to avoid

long-lasting pitfalls, beware of overexposure

and brand fatigue, and take a close look at

the supply chain behind the model. Selling at

full prices is the key for profitable growth.

Globalization offers great growth opportunities

for successful companies.

We thank Nandeep Karande from Credit Suisse Business

Analytics (India) for his contribution to this article.

The jury is out for Kors

The share price of Kors doubled in 2012 and

did so again in 2013, and continued rising in

2014. But unfortunately for the high-end fashion

designer, the apex was followed by an equally

sharp drop in share price after the brand grew too

aggressively, and suffered from overexposure.

Source: Bloomberg

Past performance is not an indicator of future performance. Performance

can be affected by commissions, fees or other charges as well as exchange

rate fluctuations.

in USD










Dec 11 Dec 12 Dec 13 Dec 14 Dec 15

Michael Kors share price

Julie Saussier

Julie Saussier is a senior equity

research analyst at Credit Suisse

Investment Solutions and Products,

covering the consumer discretionary

sector. She has 14 years of experience

as a research analyst and joined

Credit Suisse in 2015. She holds a

Master’s in Business and Management

from the University of Paris Dauphine

and a Master’s in Corporate Finance

from the EM Lyon Business School,

France, and is a CFA charterholder.




4 /6

E . L . L . E . N

S . I . D . E . R . I

is founder and CEO of ESP Trendlab, a division of Ellen Sideri Partnership,

a trend research and consulting agency located in New York City

that detects and analyzes cutting-edge design trends for over 1,000 leadership

brands worldwide.

What do you see as the global

trends (e.g. digitalization)

influencing today’s fashions and

the fashion market?

The free flow of information and

technology-at-large are changing

everything, including the fashion

marketplace worldwide, and the

dynamics of the world are causing

changes in established systems

created in the past. There is a true

anti-establishment movement

taking place, not just in politics but

also challenging publications,

press/media in general, workstyles,

marriage, childbearing, sexuality,

medicine, health, exercise, food

trends and so much more. This is

a new moment, similar to the 1960s

and 1970s, where the past is being

disrupted. Periods like these have

such an intense impact; they

change our lives forever. You do not

have to be a soothsayer to know

that change is upon us! We all feel it.

How are these trends changing

fashion and the fashion market?

All of these challenges to the

past are bringing new methods and

thinking, new lifestyles and

therefore new possibilities for apparel

and fashion-forward design. The

tech boom, 3D design, function built

in to fashion, new fabric and

material options, seasonless design

and shopping online only begin

to touch on what we perceive as real

change emerging in the fashion

business now, and even more so in

the future.

Where do you get inspiration

for your designs and collections?

As a forecaster, we look at many

things for inspiration, like the

runways, retail trends, color and

design, art, media, pop culture

as well as design movements outside

of fashion, like technology trends,

science, architecture and religious

currents. All can provide signs

of change to a keen observer. But we

also need to look beyond all of

that to the bigger picture to define

consumer trends, cultural trends,

political movements, lifestyles and

other currents that are shaping

the world at a much higher level.

The search for freedom across the

planet, global warming, fair

trade and the emerging countries all

have an effect on the inhabitants

of our global community. We factor

all of this into our thinking and use

it for inspiration.








While China’s manufacturing sector has flourished, finding the same degree

of success in the retail sector has proven elusive – particularly in the domestic

fashion industry. Consumers prefer foreign brands, supply and distribution

can be problematic, the market is fragmented and competition, as always, is fierce.

As the development of China’s retail market started quite

late compared to its upstream manufacturing sector,

the products from the manufacturing sector have been

more sophisticated than their retail counterparts. The

country’s garment manufacturing sector has not only been supplying

China, but also the rest of the world since the seventies – products

are not only tailored to the mass-end, but also to the high-end markets,

in the form of both OEM (original equipment manufacturer), ODM

(original design manufacturer) and branded products. For the example

of jeans, see p. 12 With more than 10,000 suppliers in China manufacturing

for Wal-Mart, the majority of Wal-Mart’s merchandise has

been made in China, including garments. Other mass-end brands like

Gap, Levi’s, H&M or Uniqlo have all had their share of fashion made

in China. High-end brands like Armani, Bally, Dolce & Gabbana, Marc

Jacobs and Prada have also had their fair share of fashion made in

China in recent years. Branded fashion like Ports 1961, which is

designed and made in China, has even made its way to the fashion

weeks in New York City, Paris and Milan. Despite the recognized

craftsmanship and manufacturing skills, there still seems to be a lack

of nationwide domestic fashion brands at the retail end in China,

especially for the high-end market, where mostly foreign brands are


Branded fashion chain retailing in China in the nineties competed

mostly on basic ready-to-wear items, when pricing and product materials

were emphasized more than style and colors. Riding on the

developed manufacturing base and in order to compete on price,

brands like Giordano and Bossini introduced just-in-time product

delivery to points of sale where inventory was kept to a minimal level


to save on costs. These companies mostly introduced their offshore,

foreign product experience into domestic China, which worked well

for a while until their retail sales network did not expand quickly enough

for various reasons, including the challenges of a highly fragmented

supply chain, as well as the unorganized retail market in the country.

For a related article on the fashion supply chain, see p. 48 The operational

challenges quickly eroded profits for these retail chains that

were already operating with thin margins.

Competition gathers strength

As consumption growth in the country accelerated over the past

20 years, especially after China joined the World Trade Organization

in 2001, competition in the retail market has intensified and taken the

form of both domestic, manufacturer-turned retailers as well as foreign

new entrants. The sportswear brands like Anta, Dongxiang and Lining,

and menswear brands like Lilang and Septwolves, are all domestic

manufacturer-turned retailers in China. Most of these brands were

“... there still seems to be

a lack of nationwide domestic

fashion brands at the retail

end in China, especially for the

high-end market.”

not listed until after 2007–08. In addition to the retail outlets run by

the brands themselves, most of them also operate through wholesale

systems in order to capture market share within a shorter period of time.

With the lack of direct inventory management while working with a large

and unorganized wholesale system, product sales for most of these

brands were challenged in 2011–12 when retail sales growth last

peaked in China. For more on mens- and sportswear, see p. 11 and

15 respectively

Foreign new entrants in the fashion retailing market include most

global fashion brands, all the way from mass-end to high-end, i.e.

from Abercrombie & Fitch, H&M, Tommy Hilfiger, Uniqlo and Zara to

Armani, Burberry, Chanel, Hermes, Louis Vuitton, Prada and the like.

In order to build brand awareness, most of the global fashion brands

set up their retail flagship stores mainly in first-tier cities in China,

where population and the concentration of wealth have been aboveaverage.

Since all media and many entertainment companies are

based in Beijing, the most affluent fashion events are often held there.

For more on fashion marketing and advertising, see p. 26 In contrast

to Beijing, where media appeal has been the focus for fashion events,

Shanghai has been the fashion capital of China, where most global

brands host more than one store in major shopping districts and malls,

while small fashion brands and local designers fill the vintage streets.

The Shanghai Fashion Week has been held every year since 2003,

where leading designers as well as new talents present their products

and test the Chinese market.

Since the global fashion brands have mostly dominated the highend

market in China, most of the domestically-groomed fashion retailers

are focused on the mass-end in order to avoid head-on competition

with the established brands. With a lack of chain-retailing

experience, most of them do not enjoy enough brand loyalty in order

to gain critical mass in China. Therefore, none of them are able to

claim any meaningful market share in the fashion-retailing industry

in the country. The local retail chains that have grown enough to be

recognized at the mid-to-high-end markets, e.g. Esprit and Ports

1961, are mostly brands adopted from abroad – Esprit was founded

in California, USA, in 1968 and Ports was established in Toronto,

Canada in 1961. Since China is a geographically diversified country

with various cultures across different provinces and scattered wealth,

nation-wide recognition can be hard to achieve for consumer brands

where competition has been fierce. Fragmentation is one noticeable

characteristic of China’s retail market, which is almost the same for

the upstream supply chain.

Finding a niche

In addition to the commercial fashion produced for retail chains, niche

designers in China who are determined to build their own labels have

also started to emerge over the past ten years, leveraging on the

wealth effect among consumers as a result of the country’s prolonged

economic growth. These designers typically cherish the Chinese traditional

ethnic embroidery in their designs, which requires time and

skill to produce. Therefore almost none of them are producing in large

volumes. The fashion designer Ma Ke, personal designer of China’s

“In addition to the commercial

fashion produced for retail

chains, niche designers have also

started to emerge over the past

ten years ...”

first lady, Peng Liyuan, is a typical niche designer whose Wuyong

fashion label has become almost as famous as herself since the first

lady’s outfits have been shown on national prime time TV during her

overseas visits to other countries. Guo Pei is another fashion designer

known for the eastern touches in her collections, which frequently

involve extensive embroidery work.

These days, as the hunger for big global brands is declining, especially

in large major cities like Beijing and Shanghai, demand for more

innovative and authentic fashion designs is increasing, which may

support the growth of niche and affordable fashion in the future.

To compare fashion in India, see p. 14

Selina Sia

Head of Greater China Equity Research

+852 2841 4036



trilli n

Global apparel

retail market 2015

In 2015, the value of the

global apparel retail market

was USD 1.378 trillion and

equaled Spain’s GDP in 2014.

Source: Marketline, World Bank



3.7 USD bn


8.2 USD bn


USD bn



6.2 USD bn


7.6 USD bn


11.4 USD bn


USA 11.07%

20.3 USD bn


World’s biggest

fashion retailers

in 2014

Six of the world’s ten

biggest retailers of

private label apparel

(private labels cover the

whole value chain from

retailing down to producing)

are US retailers.

In 2014, their aggregate

sales were USD 51 bn.

Gap, the biggest US

private label retailer and

world’s number three,

accounted for a third

of these sales.

Source: Fast Retailing

13.9 USD bn


16.4 USD bn


17.9 USD bn


15 %

The rise of emerging countries

The fashion industry benefits from the increasing

wealth of emerging markets’ middle classes.

In 1996, H&M stores could only be found

in Europe. In 2014, H&M generated 15% of its

sales in emerging markets. Source: H&M

United Kingdom 7.5%

France 6.92%


of total H&M

sales 2014

Sweden 4.8%

Netherlands 4.1%

Italy 3.94%

Spain 3.78%

Switzerland 3.7%

Belgium 2.2%

others 8.3%

Germany 19.8%

Norway 3.0%

Austria 2.9%

Denmark 2.8%


The importance of e-commerce will increase

With ongoing digitalization, the importance of e-commerce has risen rapidly

over the last few years and will further increase in the future. However, it is

unlikely that brick-and-mortar stores will vanish. Retailing is rather heading

to cross-channeling, i.e. the seamless and interchangeable use of online and

offline channels to sell to and interact with customers. Source: US Census Bureau

Sustainability – it’s worth it

Increasingly, consumers expect companies to act socially responsible and

to either use recycled materials or to invest in projects to lower poverty

or exploitation. For companies, investing in sustainability may be lucrative:

an increasing share of consumers are willing to pay extra for sustainable

products. Source: Nielsen

























East / Africa



2011 2014

Share of survey respondents who are willing to pay extra for products and

services from socially responsible companies



in USD















Share of consumers who purchased at least one product or service

in the past six months from a socially responsible company

China 38.6%

EU 25.6%

Total US Apparel

and Accessories

Retail Sales

in USD billion


Share in world

clothing exports

Leading exporters

of clothing 2013

China and the European Union are the world’s two

main exporters of clothing, accounting for almost

two-thirds of global clothing exports. In 2013,

the European textile industry counted around

185,000 companies employing 1.7 million people.

Key players are Germany and Portugal.

E-commerce share

in % of Total

US Apparel and


Retail Sales

Source: World Trade Organization, World Bank, Eurostat, European Commission

Bangladesh 5.1%

Vietnam 3.7%

India 3.7%

Turkey 3.3%

others 20%

Demographic aging may dampen fashion

US households’ total expenditures on clothing increased between 1990

and 2014. This had a positive effect on fashion market growth. However,

because older people spend less money on clothing than younger ones,

demographic aging may have dampened the increase in market size in the

last couple of years and may continue to do so. Source: US Consumer Expenditure

Survey, US Bureau of Labor Statistics, US Bureau of Economic Analysis

Average annual US household expenditures on clothing

by age of reference person; adjusted for price changes

















25 25–34 35–44 45–54 55–64 65–74

In 1990, households

with a

reference person

younger than

25 spent more

money on clothing

than households

with a

reference person

aged 65 to 74.

In 2014, it was

the other way


Expenditures are

highest in households

with a

reference person

aged 35 to 44.

In 2014, these

households spent

USD 2,250 on

average (1990:

USD 2,287).

Average annual

expenditures rose

from USD 961

in 1990 to

USD 1,417 in

2014. This is still

USD 833 less

than a household

with a reference

person aged

35 to 44.

75 and







Fashion apparel can make us feel serious, chic, or even sexy,

showing that we are in tune with the times. What’s in today is

already passé tomorrow. This has its price. But it’s the environment

and laborers that pay. An exhibition at the Museum für Kunst und

Gewerbe (MKG) in Hamburg examined the dark side of fashion …



curated the exhibition “Fast Fashion.

The dark side of fashion.” What motivated

this exhibition?

CLAUDIA BANZ We see ourselves as

both a fashion museum and a design

museum. After that horrible accident in

Bangladesh – the collapse of the Rana

Plaza garment factory – occurred in 2013,

we were all in agreement that we needed

to deal with this topic.

What did you have in mind?

CLAUDIA BANZ From the outset we

didn’t want to mount a conventional fashion

exhibition. Rather, we wanted to engage in

a critical design dialogue, which is what we

do at our museum. And a critical design

dialogue also always asks questions about

production conditions and aspects of sustainability.

As work on the exhibition progressed,

we then had the idea to thematize the

side of the fashion world that normally isn’t

in the foreground – the unglamorous side.

What problem areas did you encounter?

CLAUDIA BANZ One major issue is

ecology. For instance, some 20,000 different

chemicals are employed along the

textile value chain – from the natural resource

all the way to recycling or downcycling

– ranking the textile industry among

the world’s seven most polluting industries.

What other ecological problems do you see?

CLAUDIA BANZ Water plays a key role,

in all respects. One of those is the squandering

of water, because it takes an enormous

amount of it to produce the resources used

to manufacture textiles. This is particularly

“We have to be conscious

that by importing

clothing, we are

bringing chemicals

that are actually

prohibited in the EU

into Europe through

a backdoor.”

true for cotton, but also for animal wool

because livestock requires drinking water

and grazing land, which in turn needs water

itself. Then there is polluted wastewater

caused by all those chemicals used in

producing textiles. We have to be aware

that when we import clothing, we open a


backdoor into Europe for chemicals that are

actually prohibited in the EU by the REACH

regulation but are not outlawed in the Asian

producer countries.

What about protection for workers?

CLAUDIA BANZ The textile and

clothing industries are mainstays of the

economy in countries like Bangladesh,

Vietnam and Indonesia. It isn’t in the interest

of politics, and it’s even prohibited

in some places, for workers to form labor

unions or to demand a minimum wage,

for example. The risk is just too great

of the entire industry pulling up stakes and

moving to a place where clothing can be

manufactured even more cheaply, such as

Myanmar or Ethiopia, or Africa in general.

Most industries historically evolve

from “dirty” production to more

sophisticated, less-polluting manufacturing

practices. How is the fashion industry

any different?

CLAUDIA BANZ One possible impediment

is that the textile industry is a socalled

pioneer industry, which means that a

business can be set up with relatively little

expense. A few sewing machines in a

factory hall suffice. The positive flipside is

that the textile industry gives many people,

especially women, an opportunity to work

and earn a little money. More safety standards

are also being fought for, but as we

all know, in the end it’s always about profit.

Who is responsible for the excesses

of the mass fashion industry?

CLAUDIA BANZ That’s a very big

question to which there is no easy answer.

I see four relevant parties: producers and

entrepreneurs, politicians, designers and, of

course, consumers all bear a major respon ­

sibility. Consumers should wield their power

much more forcefully, for instance by voting

with their feet and not shopping in stores

that don’t carry any sustainable products.

It is not only companies that have a duty;

everyone bears some part of the blame.

The responsibility associated with

consumers mainly has to do with the price

of clothing. Are the ideas of “cheap” and

“sustainable” contradictory?

CLAUDIA BANZ Our exhibition also

explored precisely this question of how

clothing can be so inexpensive. It is a fallacy

that fashion apparel necessarily becomes

more expensive when wages are raised.

Wage, production and transportation costs

make up only a very small part of the

end price; marketing expenses and profits

Dr. Claudia Banz

The doctor of art history and author of

numerous publications has headed the

art and design collection at the Museum

für Kunst und Gewerbe (Museum of

Art and Crafts) in Hamburg since 2011.

She previously worked as a curator at

internationally renowned museums such

as the National Museums in Berlin,

the Dresden State Art Collections and

the Kunstpalast museum in Düsseldorf.

account for the lion’s share. So the main

issue is the profit margin. Sustainability and

cheap prices thus don’t negate each other.

But a rethinking of economics has to take

place, and that’s a real problem.

Does that go for cheap mass merchandise

as well as for luxury fashion apparel?

CLAUDIA BANZ Our research revealed

that in Bangladesh, for example, T-shirts

produced for the cheap fast-fashion

industry and for fashion labels in the upper

price segment are manufactured in the

same factory. That’s a bitter realization.

“Companies are

committed in principle

… to sustainable

production at all

stages of the textile

value chain.”

The New York Times recently reported

that the luxury goods industry has

begun to place greater importance on

sustainability. Do you agree?

CLAUDIA BANZ Yes, in principle companies

are increasingly espousing transparency

and, in this context, are increasingly

taking a stand for sustainable production at

all stages of the textile value chain.

“Directors for sustainability” are being

hired to employ “cleaner” materials,

make work environments safer and take

climate change into account.

CLAUDIA BANZ It’ll probably be around

five years before we can judge the earnestness

of these efforts. By then we’ll be

able to make an interim appraisal. And

let’s not forget that sustainability has since

become a lifestyle issue.

Meaning …?

CLAUDIA BANZ Marketing departments

have recognized that there’s a lot of money

to be made by invoking sustainability or

even purportedly sustainably manufactured

products. It always sounds good when

something is “sustainably manufactured,”

but very few seals of approval really do

any good. Still, if sustainability is a lifestyle

choice today, then the fashion apparel

business is perfectly positioned to develop

genuinely sustainable production practices

over the medium term. The knowledge

and possibilities to do so already exist.


The only question is whether companies

are truly interested in making it happen.

When we speak of sustainability, are

we talking mainly about production

conditions or about the materials used?

CLAUDIA BANZ Sustainability is about

everything: sustainable materials, sustainable

production practices and, of course,

social sustainability or fair compensation.

But doesn’t sustainable fashion also have

the reputation of being a little homespun?

CLAUDIA BANZ The term “sustainable

clothing” does in fact conjure up memories

of the 1970s, of jute instead of plastic,

which is why this branch of the fashion

industry has been labeled “eco-frumpy.”

Unjustly, though, because the look of sustainable

fashion has

evolved incredibly in

recent times.

For instance?


Since 2006 Berlin’s

Fashion Week

venues have included

a Green Showroom.

There you

can see that the look

of sus tainable

fashion is in no way

inferior to the original.

Moreover, fashion design colleges

are increasingly integrating the subject of

sustainability in their curriculums. That’s

a very encour aging development because

designers also bear a responsibility.

Can you really reconcile fashion and

sustainability? After all, compared

to clothing that is essential for survival,

fashion apparel requires additional

resource and labor inputs.

CLAUDIA BANZ Since the start of

the 20th century, prominent sociologists

like Werner Sombart have always conceptually

linked the need to clothe oneself

with the desire to look fashionable. The

result is perpetual consumption, in the name

of fashion and capitalism. But of course

we must ask ourselves: How important is

fashion at all? Isn’t it actually superfluous?

Aren’t those questions that society

as a whole must face?

CLAUDIA BANZ Rethinking on the

part of designers is indeed called for. And

this rethinking, in turn, must then spread

throughout society. We have to decide how

much we really need, particularly with

regard to the fast-fashion industry, which

“Our exhibition

explored the

question of how

clothing can cost

so little.”

cranks out a new collection practically

every ten days.

New needs are created continuously.

CLAUDIA BANZ Yes, which makes the

question of whether I need a complete new

outfit every month all the more important.

The motto could also be: Less is more!

Li Edelkoort, the well-known Dutch trend

researcher, once proclaimed that “fashion is

dead.” Her colleagues were horrified!

But her opinion is that designers need to

start thinking again more about clothing

and less about fashion.

“Scarcity and excess” was also a topic of

the exhibition. What did you show?

CLAUDIA BANZ We visually demonstrated

how much clothing we buy and how

much we discard.

In Germany, for example,

27 kilograms

of new clothing is

purchased per capita

each year while

almost 15 kilograms

of clothing gets

discarded. The average

in Europe is

20 kilograms of new

clothing purchased

per capita per annum

and almost 8 kilograms

of used clothing thrown out.

What happens to the discarded clothing?

CLAUDIA BANZ Clothing disposal has

turned into a global commercial industry, as

impressively shown by the wonderful film

“Unravel” directed by Meghna Gupta. The

film is about Panipat, a city north of Delhi,

which is the site of the world’s largest

used clothing dump. Downcycling takes

place in Panipat on a grand scale. Secondhand

clothing that is still wearable gets

processed into ultracheap throw blankets.

As you said, the dark side of fashion

concerns all of us. What were some of the

most surprising responses you received

from visitors to the exhibition?

CLAUDIA BANZ The feedback was

consistently positive. But one elderly woman

made the biggest impression on me. She

was deeply moved by the exhibition, particularly

by the fate of the textile-working

women, who earn very little. This prompted

her and her friends to collect around 70,000

euros, which they then donated to an

NGO that works to improve social conditions

for female textile workers. That impressed

and pleased me enormously.






Sustainably produced fashion apparel is chic and hip today. Eco-fashion benefits

customers in stores and cotton farmers in the field. Small labels

and big retailers demonstrate that money can be made with eco-fashion.

BY RUTH HAFEN Freelance writer


here is hardly anything that we allow to come closer to

our bodies than cotton. It is the raw material for 40% to

50% of all textiles and the most used natural fiber. Compared

with synthetic fibers, cotton is very absorbent,

capable of absorbing up to 65% of its weight in water. Cotton fabrics

rate as being pleasant to the skin and hypoallergenic. As good as the

properties of cotton fibers are, it is problematic to produce them. The

biggest problem is water consumption. World Wildlife Fund International

(WWF) designates cotton a “thirsty crop” alongside rice,

sugar cane and wheat. The WWF calculates that it takes more than

20,000 liters of water to produce one kilogram of cotton (which yields

something like one T-shirt and a pair of jeans). A remarkable amount

of insecticides and pesticides are also used to grow cotton. Although

cotton is cultivated on only around 2.4% of the world’s farmland, the

crop accounts for 24% of insecticide and 11% of pesticide usage

worldwide. This, in turn, pollutes groundwater, posing a hazard to

human health. For more on dyeing with air, saving gallons of water,

see p. 61

From Aral Sea to salt flat

The Aral Sea is a testament to exactly how thirsty cotton plants are.

Since the middle of the 20th century, water has been diverted from

rivers feeding into the Aral Sea in order to irrigate vast cotton plantations

in both Kazakhstan and Uzbekistan. Since 1960, the Aral Sea

has lost some 85% of its surface area and more than 90% of its

volume. Once the world’s fourth-largest inland body of water, the Aral

Sea is now a salt flat. All that remains of Aralskoye More, as Russians

call it, are two outsized puddles. The desiccation of the Aral Sea


is widely considered to be one of the worst-ever ecosystem catastrophes

caused by humans.

Given these alarming facts, it’s not surprising that more and more

consumers and manufacturers are taking a stand for ecologically

sustainable products. American fashion entrepreneur Yael Aflalo is

one of them. Aflalo, a former model who is currently a fashion designer

and the CEO of Reformation, a “rare hybrid of fast fashion and

sustainability” (Forbes), which she founded in 2009, describes in a

guest essay posted on the moment that she renounced

conventional textile manufacturing: It was during a factory tour in

China, where she witnessed firsthand the working and environmental

conditions that prevail there. When she later learned how much water

it takes to make a single T-shirt, she resolved to use sustainably

produced textiles to manufacture her clothes. “We make killer clothes

that don’t kill the environment,” proclaims her brand’s tagline. Reformation

generated sales revenue of USD 25 million in 2014, and its list

of paying customers includes “It” girls like Taylor Swift and Rihanna.

Even better, supermodel Karlie Kloss was one of the investors in the

second round of financing that raised USD 12 million in April 2015.

For more on smart tailoring, see p. 59

Becoming the market leader with organic cotton

An example from Switzerland shows that sustainability in the textile

sector is an important issue for major retailers too. Coop’s Naturaline

label has already been in existence since 1993, and it has exclusively

used organic cotton since 1995. After Coop did pioneering work in

the food sector in Switzerland with its Naturaplan label, it followed

up by rolling out the Oecoplan brand of cleaning and hygiene products

in the non-food sector. Right from the launch of Naturaline, it was

clear that Coop would work together with a partner, Remei AG, which

produces sustainable textiles made of organic cotton and organizes

the entire process from the size chart to delivery. The alliance between

the two companies was symbolically sealed with a handshake in an

Indian cotton field. Tanzania was later added as a cotton supplier.


bioRe ® standard = The textile label is a hallmark of

the organic cotton fabrics manufactured by Switzerlandbased

Remei AG. The bioRe ® standard regulates

the processing of the organic cotton grown under the

bioRe ® farming projects in India and Tanzania.

SA8000 = The Social Accountability 8000 standard

was developed in 1997/98 by the US-based NGO

Social Accountability International (SAI). It is based on

the UN Declaration of Human Rights and on recommendations

by the International Labor Organization

(ILO). SA8000 is an internationally accepted certification

standard with an array of strict norms that include

the implementation of humane working conditions,

freedom of association and the prohibition of child

labor and discrimination.

SA8000 verifies compliance with minimum social

standards in manufacturing enterprises and governs

certification of factories worldwide, which is granted

by independent certification bodies.

Source: Lexikon der Nachhaltigkeit (Dictionary of Sustainability)

Company portraits

Coop = Founded as a cooperative in 1864; name

changed to Coop in 1969. Largest retailer and wholesaler

in Switzerland. The Coop Group encompasses

retailing subsidiaries in Switzerland and wholesaling

and production subsidiaries in and outside Switzerland.

Its consolidated revenue in 2015 amounted to

CHF 26.9 billion.

bioRe ® Foundation = Founded in 1997. Promotes

organic and biodynamic farming and supports needy

farmer families in countries of the South; bioRe

India Ltd. and bioRe Tanzania Ltd. work directly with

cotton farmers.

Reformation = Founded in 2009. Fast-fashion apparel

made of sustainable fabrics, consisting in part of

new creations based on vintage garments. Sales revenue

of USD 25 million in 2014.

Remei AG = Founded in 1983. Headquartered in

Rotkreuz, Switzerland. Produces sustainable

textiles made of organic cotton. Sales revenue of

CHF 23.1 million in 2014/2015.


But why cotton at all? Emanuel Büchlin, the head of textile sourcing

at Coop, says: “An incredible 25 million tons of cotton gets planted

each year, accounting for a third of all textile fibers and 75% of all

natural fibers. Between 70% and 80% of our products are made of

cotton.” This gives the company a sense of ecological and social

responsibility. And why Tanzania of all places? “Tanzania is a relatively

big cotton-producing country, but what’s most important is that

production there is 100% free of genetic modification. Naturaline

wants to produce non-GMO clothing. We have cotton from India and

Tanzania that is grown and processed in accordance with the bioRe

sustainability standard. The genetic engineering issue is gradually

becoming a problem in India because well over 97% of the cotton

cultivated there is genetically modified.” In contrast to conventional

“An incredible 25 million tons of

cotton gets planted each year,

accounting for a third of all textile

fibers and 75% of all natural fibers.”

cotton production, crops are rotated between cotton, chili peppers and

corn on the fields operated by the bioRe Foundation, from which Remei

AG sources its cotton. This benefits the soil and is becoming an

increasingly popular practice, Büchlin explains. Moreover, he says,

Coop places importance on keeping as much of the manufacturing

process as possible in the cotton’s country of origin. From there product

is then shipped by sea to Switzerland for final production, he adds.

Alongside ecological and economic aspects, sustainability also

encompasses the social aspect, which is equally as important to Coop.

Around 7,000 farmers are currently employed in the Coop cotton

project in the fields in India and Tanzania, a number that Büchlin

proudly cites. “We put people in the foreground also in the textile

value chain. That’s why our textile processing is protective of worker

health and of the environment. We insist on adherence to all of the

core ILO norms. All producers and suppliers in the Naturaline value

chain must be audited to at least Business Social Compliance Initiative

standard and obtain SA8000 certification in the medium term.

We have hired an external company to verify SA8000 compliance


Women lead the way

More and more consumers are giving thought to where their food and

clothing comes from and to how this affects the climate. Movements

like Slow Food and veganism are prime evidence of this. And customers

today are increasingly willing to pay more for equitably produced

goods. Büchlin defines Naturaline’s core target group as being

“modern fashion-conscious women who place importance on the way

in which things get made.” And Coop uses a face well-known to

Switzerland in its marketing. Former Miss Switzerland Melanie Winiger

has been the brand ambassador for Naturaline since 2008, and

since 2014 has been creating for the label “comfortable fashion apparel

for people who have their own style and care about environmentally

sound, equitable production.” Winiger’s declared goal is to guide

fair-trade eco-fashion out of the “silk, wool and bast- fiber corner.”

Emanuel Büchlin

has worked for Coop for more than

20 years. As the company’s head

of textile sourcing, he sets strategic

procurement guidelines and implements

them in contact with business

partners, government authorities,

associations and NGOs. He co-founded

Coop Naturaline and heads the

operations of this very important asset

for Coop. He has been a member

of the bioRe Foundation’s board of

trustees since 2013.

When Naturaline entered the market, Coop had to subsidize the product

line. Büchlin says that Coop “would not have been able to bring

these items onto the market at full cost recovery. That’s different

nowadays. Today we are absolutely competitive. We are situated in a

mid-range price category, but our ecologically and equitably produced

products remain 20% to 25% more expensive.”

Büchlin still sees growth potential for Naturaline in Switzerland.

Naturaline products currently generate around 60 million Swiss francs

of annual sales revenue, but Coop plans to boost that to 100 million

by 2020 by internationalizing the Naturaline product range in collaboration

with Remei AG. A look at the Naturaline strategy through

2025 reveals that Coop also continues to emphasize cotton, though

it definitely sees potential for cotton blends with modal and other

rayon fibers. An additional line with certified organic silk has already

been launched.

What can other industries learn from the fashion apparel and textile

sector when it comes to sustainability? Resource-conserving processes,

human rights and worker satisfaction stand in the foreground

for Büchlin. Aflalo urges companies to view sustainability not as an

added benefit, but as a standard. She thinks that smug calls for

customers to forego consumption are unrealistic. It is businesses’ job

to meet the demands of sustainability, in her view.

This article is based in part on an interview with Emanuel Büchlin.








Until recently, the fashion industry has been all about looking good – with feeling good as a

psychological by-product of successfully projecting a particular image. But with the advent of smart

garments and fabrics, “feeling good” takes on a new dimension: into the field of physical health

and wellness. The fashion industry has been slow off the mark to integrate technology, but we are

now just beginning to see what may prove to be the ultimate union of both form and function.


he impact of technology on fashion is nothing new at all –

it already has a long tradition. The timeline of clothing and

textiles technology includes major changes in the manufacture

and distribution of clothing. Innovations include manmade

materials such as polyester, nylon, and vinyl, as well as features

like zippers and Velcro. In 1969, Gore-Tex was invented, admittedly

driven by chemicals. Nowadays, the digitization of the economy and

society impacts fashion more and more. A very simple example is an

RFID (radio-frequency identification) chip built into the garment, which

enables you to track the path of the garment from production to the

retail store, and shows you that you bought a brand product and not a

fake. An additional benefit is you can easily retrieve it if you misplace it.

Fashion industry not quick enough to embrace technology

Nowadays, the compatibility of technology and fashion provides more

food for thought and a vision for the future spanning from e-retail

through e-textiles or smart fabrics to 3D printing. Computer design is

already being used in the production of clothing, and prototypes of

3D-printed fashion can be seen at fashion shows or in online videos.

Francis Bitonti, a digital fashion pioneer from New York, has recently

focused on applying advanced manufacturing techniques to fashion,

jewelry and accessories, including a 3D-printed dress for Dita von

Teese and a pair of 3D-printed shoes. He was very vocal in berating

the mainstream fashion industry for not being quicker to embrace

technology. For more on 3D-printed clothing, see p. 51

E-commerce is already effectively in place, but could experience

another boost. Replacement items such as underwear and jeans are

already being bought via the Internet, mainly driven by cheaper prices

and, to a lesser extent, shopping time saved. It is an easy process,

especially if you know your size. But imagine you have a specific brand

in mind, or are even thinking about having something tailor-made. The

future holds a solution: Have your body scanned and use the mea­


surements when visiting the virtual retail store online. The items you

purchase will then be sent straight to your door.

Robotic mannequins to take your body measurements

A pioneer in innovative biorobotics and the virtual fitting room is, founded in 2010 and acquired by Rakuten Inc. (a global

leader in e-commerce) in July 2015. The company is receiving lots of

publicity these days after launching a partnership with the retailer

Hawes & Curtis. Its virtual fitting room helps to solve the single biggest

problem for apparel e-commerce, i.e. that consumers cannot try the

clothes on before they buy them. The site’s shape-shifting robotic

mannequin takes your body measurements and mimics your shape

so that you can see exactly how clothing would fit you. The site has

been such a success that clothing sales at online German retailer

Quelle increased by three times, and the number of clothing returns

fell by 28%. For more on the virtual fitting room, see p. 16

Revolutionary e-textiles

Another revolutionary development is e-textiles, also known as smart

garments or fabrics, which enable digital components to be embedded

in them to provide added value to the wearer. In an article on

dated 7 May 2014, on the future of fabric, author Rebecca Gaddis

quoted Rebeccah Pailes-Friedman of the Pratt Institute as saying

that “what makes smart fabrics revolutionary is that they have the

ability to do many things that traditional fabrics cannot, including

communicate, transform, conduct energy and even grow.”

One example is therapeutic textiles. Skin is the only organ of the

body that comes directly in contact with garments. Since clothes stay

in contact with the skin for the longest time, developing fabrics that

can heal or protect the skin or even the body would add more value

to them. Therapeutic textiles provide new approaches and are slowly

gaining importance because of their many benefits and positive results.

“The compatibility of technology

and fashion provides more

food for thought and a vision

for the future spanning from

e-retail to e-textiles …”

Your underwear is an integral part of your wardrobe, and you are

probably very selective when you buy it. In the future, you will become

even more selective once you learn what your underwear and other

garments can do for you in addition to making you feel comfortable

and well dressed. One day, instead of looking into the mirror, you will

be able to ask your clothes how you feel. For example, your underwear

may tell you if you are coming down with something before you know

it yourself, or notify others if you have fallen over or help doctors

diagnose and treat illnesses. The next generation of wearable technology

aims to embed sensors in your clothes so that you only need

to get dressed to start monitoring your health.

The functions required for personal health have a strong overlap

with those of sports and sports training. In general, the idea is that

information on the wearers’ physiology, e.g. heart rates, respiration

rates, body temperature, biochemistry and activities are recorded and

stored or continuously transmitted to a clinic in order to help monitor

their health. In this way, people with long-term health issues can work

“What makes smart fabrics

revolutionary is that they have

the ability to do many things

that traditional fabrics cannot,

including communicate,

transform, conduct energy

and even grow.”

on gradually improving their health. Other people with chronic illnesses

could stay at home instead of in hospital, but still have high-quality

health supervision. How does it work? Smart fibers with sensors are

knitted straight into the fabrics. With conductive or optical sensors

woven into T-shirts, shorts and underwear, smart clothes will be able

to pick up a greater range of body signals at much higher sensitivities

than rigid sensors, such as clip-on sensors or wristbands. For a related

article on wearable technology, see p. 60

In the future, technology will change the way we perceive fashion

and the way we shop. The sooner we grow accustomed to these innovations

and inventions the better. But never fear – at the end of the

day we will presumably continue to wear fashionable clothes – just

from different materials.

Ulrich Kaiser

Research Analyst

+41 44 334 56 49

A coating of herbal extracts on the fabric can provide a remedial

value. These fabrics play an important role in relieving stress, rejuvenating

or curing skin ailments, and can even help you sleep better.

Your underwear tells you when you are not well



Ten years ago we heard predictions that

we’d soon be able to use our clothing to

recharge our cellphones, but today we’re

still constantly searching for the next

power socket. Has the fashion industry

missed out on the digital revolution?

KURT ZIHLMANN An incredible lot

has happened precisely in the area of smart

materials! But photovoltaic textiles capable

of converting light into energy are still a

challenge. In a technological respect, on

one hand, because the functionality of the

fabric mustn’t be impaired by the cuttingto-size

and sewing involved in the clothing

manufacturing process. The design side,

on the other hand, poses the question of how

technical the look of clothing may be. Are

we willing to wear Star Trek-like apparel?

What are the trends?

KURT ZIHLMANN We differentiate

between functional wear and fashion wear.

For functional sports and protective apparel,

research goes into materials that provide





Digital technologies are revolutionizing the fashion industry with

new materials, new printing techniques and new sales channels.

Above all, they are accelerating production speed. Yet designers

and consumers are still also seeking emotion in fashion apparel.

And that takes craftsmanship, experience and time.


safety, that keep us warm or cool, or that

protect against ultraviolet radiation. Another

really exciting area is the future role that

clothing might play in the field of medicine.

The Swiss company Schöller, for instance,

is working on textiles that are capable of

delivering pharmaceutical agents to the body.

And in the fashion world?

KURT ZIHLMANN That’s more difficult

to gauge. The trends will probably tend to

revolve more around textiles that are capable

of changing their physical feel, shape

and chromaticity. Imagine owning a garment

whose color or pattern you can control with

your moods.

Aside from materials, where else have the

new technologies already brought tangible

benefits to the fashion industry?

KURT ZIHLMANN The biggest developmental

leap in production has occurred

in the area of cutting out fabrics. In the

1980s, cutting technology was adopted

from the aircraft industry, where the objective

was to cut out sheet metal as precisely

as possible to save material and thus money.

Based on that technology, the clothing

industry developed a variety of automatic

machines that can quickly and precisely

cut out textiles using knives, lasers or

waterjets. The use of such machinery today

has become thoroughly routine – textiles

are hardly ever cut out by hand anymore.

Enormous progress has also been made in

the area of digital printing. Whereas a

hundred meters of fabric per pattern used

to have to be woven to be cost-efficient,

today just a few meters can be printed.

Technology as a cost factor?

KURT ZIHLMANN Not just that; digital

printing also enhances individualization.

It gives small enterprises entirely new access

to pattern samplings and fabrics because

almost any material can be printed, and

very rapidly to boot. At the same time, this

technology is exerting an impact on different

professional fields. Originally, fabrics

were conceptualized by textile designers,

but today fashion designers can actively

co-create them. This gives rise to new,

fruitful interfaces between the parties

involved. And there is exciting cooperation

with artists. Art is a source of inspiration

for fashion apparel in any case…

…like when one thinks, for instance,

of Iris van Herpen’s 3D-printed dresses,

which are works of art more than they

are wearable fashions. What benefits does

3D printing bring to the fashion industry?

KURT ZIHLMANN It enables new forms

and volumes to be experimented with in

the creation of clothing. Moreover, in certain

“Originally, fabrics

were conceptualized

by textile designers,

but today fashion

designers can actively

co-create them.”

instances, the prototype of a garment or

accessory can be printed out instead of

being sewed or manufactured some other

way. However, the range of 3D-printable

materials is still very limited at present.

Today’s 3D-printable substances are mostly

plastics, rather rigid materials that you

wouldn’t necessarily want to wear – but

that will change soon.


And what about the costs?

KURT ZIHLMANN High-quality 3D

printing is still very expensive, with enterprise-grade

printers costing between

150,000 and 250,000 euros. The printers

are very maintenance-intensive, and the

material is expensive and has a short

lifespan. But once materials that are more

attractive to the touch come into existence,

3D printing will become more interesting,

particularly to rapidly mass-produce

accessories and jewelry. Sports footwear

manufacturers have already been employing

this technology for a few years now to

make prototypes, and in the meantime

have also started to use it in serial production

of individual shoe components such

as soles.

I will be able to print out my own

sneakers at home one day?

KURT ZIHLMANN Here, as well, the

difficulty lies in the materials. A sneaker

consists of around 20 different components

such as high-tech breathable materials,

fasteners etc. In the near future, it will

hardly be possible to print materials of

this degree of complexity. But you certainly

will be able to print out a simple plastic

gardening boot as soon as 3D printers reach

a reasonable speed, installation space

requirement and price.

The new technologies have accelerated

the pace of production, haven’t they?

KURT ZIHLMANN They definitely have.

Production speed is also being increased by

3D visualization, which is being utilized

more and more. It enables you to examine

the cut of a garment, to simulate materials

and even occasionally to skip over one

or two prototypes. Moreover, it aids communication

between production sites and

countries. Designers, for example, use

3D visualization to ensure that garment cuts

developed in Asia match their designs.

But isn’t this technology, too, just a tool

that doesn’t replace any conventional

work stages?

KURT ZIHLMANN Yes, it is, because

what counts most in the fashion industry is

haptics – how something feels – and I can’t

judge by touching a display screen whether

a material doesn’t just look good on a body,

but also feels good. Clothes have a soul,

and designers want to feel it. They want

to hold garments in their hands, they want

to see how a person moves in them, they

want to be able to ask the model whether

he or she feels good wearing the garment.

Kurt Zihlmann

The director of the Institute of Fashion

Design at the FHNW Academy of Art

and Design in Basel is a professor of

product development and a specialist

in design and production processes

enabled by new technologies. He places

importance on employing digital technologies

situationally without neglecting

craftsmanship expertise.

What do webstores mean for

the fashion industry?

KURT ZIHLMANN Like with other

consumer goods, customers often seek

advice and try on clothes in brick-andmortar

stores, but then order online from

the cheapest supplier. That puts a lot of

“…customers often

seek advice and try on

clothes in brick-andmortar

stores but then

order online from

the cheapest supplier.”

companies in a really tough position. Or

consumers do their ordering directly in

webstores and after trying on the clothing

at home, simply send back the items they

don’t want. This ecological senselessness

gives me pause. On the other hand,

webstores open up fantastic opportunities

for young, aspiring designers by giving

them quick and easy access to the market.

How are body scanners changing

the shopping experience?

KURT ZIHLMANN Those were hyped

20 years ago, but never caught on. When

someone walks into a store wanting a

custom-tailored garment, that’s a special

moment. They reach out to the salesperson,

and when the measurements are taken,

physical contact ensues just like during a

visit to a hairdresser or barber, and often

very private matters get discussed. A body

scanner can’t replicate that. Most people

don’t want to stand half-naked in a machine,

as the time gain is minimal compared to

measuring by hand, which requires as few

as around 15 measurements for a wellfitting


You uphold values of craftsmanship.

How do you get your students technologically

fit for the market of the future?

KURT ZIHLMANN Our students have

access to all the new technologies, from 3D

printers to specialized machinery for cutting

materials to size. But what’s important to

me is for technology not to dictate the

concept, but for the concept to determine

the appropriate technology. Technologies

are merely tools; what counts in the end is

the object, or the garment, that people

will wear.

GLOBAL INVESTOR 1.16 — 48 So what exactly happens at the very nexus of global geopolitics, global








economic integration and the maturation of the digital age, including

e-commerce, Big Data and social media? The world’s fashion industry is proving

a fertile ground for discovering the answer, as the entire fashion supply chain

is being completely transformed.



he fashion industry is truly a

global industry with a rather long

and complex supply chain – from

fibers (natural and man-made)

and yarn production via fabric formation and

finishing to garmenting, designing and retailing.

Not too long ago, the fashion industry

was a rather “local” industry in the sense that

most textiles and garments were designed

and produced in relative proximity to the

end-consumer market – fashion products

bought by European consumers were mainly

produced within Europe and/or in the immediate

periphery, such as in Turkey or North

Africa. The same was true for North and

South America, Asia and Australia.

Since the late 1990s and early 2000s,

the fashion industry around the globe has

been faced with structural and rather disruptive

changes. These changes stem from

different directions – global economic integration

(globalization), technology (e-commerce,

digitization) and sustainability (social

and environmental concerns) – and are in

many ways interconnected.


in North America with the North American

Free Trade Agreement (NAFTA).

In this context, an additional acceleration

and hence a disruptive change to the fashion

industry was certainly the phasing out of the

Multi-Fibre Arrangement (MFA) at the end of

2004, together with the accession of China

into the WTO in 2001. The MFA regulated

the world trade in textiles and clothing from

1974 through 2004 by imposing quotas on

the amount developing countries could export

to developed countries. After 2004, trade in

textiles and garments was not restricted by

quotas anymore, but integrated into the regular

WTO framework of tariffs. China’s entry

into the WTO marked another disruptive

change simply due to the fact that a country

with around 1.3 billion people suddenly became

part of the global economy.

The impact of these two major developments

for the fashion supply chain was farreaching.

Suddenly, an enormous pool of

highly motivated workers became available at

relatively much lower costs. As a consequence,

more and more retailers and fashion

brands around the world started sourcing in

Asia in general, and China in particular. In

1990, China’s textiles and clothing exports

amounted to USD 16.89 billion (8% of global

textile and clothing exports). In 2000, textile

and clothing exports had already reached USD

52.21 billion (15% of global textile and clothing

exports). Data from the World Trade Organization

show that by 2014, Chinese textile

and clothing exports had soared to USD

298.27 billion, or a global share of 38%.

According to the International Textile Manufacturers

Federation publication “International

Textile Machinery Shipment Statistics”

(2015), investments in new textile machinery

in China skyrocketed in the last decade. In

the year 2000, investments in new spinning,

texturing, weaving and knitting machines in

China’s textile industry represented around

20% of global investments. In the following

years, this number jumped to 50%–60% in

spinning machines, 65%–75% in texturing

machines, 60%–80% in weaving machines,

60%–75% in circular knitting machines and

40%–80% in flat knitting machines. In other

words, every year since 2004 on average

more than half of all new textile machines

were installed in China.


With the spread of the Internet in the 1990s

and the acceleration of the number of Internet

users together with a higher speed in the following

years, new opportunities opened up

for everyone. Suddenly, the Internet not only

offered possibilities to display products and

services, but products could also be increasingly

ordered online. While e-commerce

seemed initially to be limited to a few categories

of products like books, DVDs and CDs,

this changed tremendously. As a consequence

of continuous and significant technological

progress in the past 15 years with

regard to applying new technology (e.g. mobile

phones, touch screens, apps, 3D animations,

e-payment systems, etc.) people can

now buy all sorts of products and services via

the Internet, including textiles and apparel.

According to a 2013 report by Euromonitor

International on global apparel distribution and

market performance, Internet retailing of apparel

in 2007 was only 3% of total retail sales.

In 2012, this share had already doubled

A new wave of global economic integration

started after World War II with the establishment

of international institutions like the International

Monetary Fund (IMF) and the

predecessor of today’s World Trade Organization

(WTO), the GATT (General Agreement

on Tariffs and Trade). The main objective of

these new institutions was to facilitate

cross-border investments and trade of goods

and services among countries around the

world. Alongside these international institutions,

regional economic integration also intensified,

whether in Europe with the European

Economic Community (EEC) which

eventually became the European Union (EU),

or the European Free Trade Area (EFTA), or

Shipped short-staple spindles 2000–14

Following China’s joining the World Trade Organization in 2001, domestic textile production –

and as a consequence the requisite investment in new textile machinery – took an immediate and

sustained leap. Source: ITMF

in m









2000 2002 2004 2006 2008 2010 2012 2014

World China


and was showing the fastest growth rates

compared to all other retail channels such as

specialist retailers, department stores and

grocery retailers.

In this context, it is important to note that

in Asia – and especially China – Internet retailing

is expanding rapidly. As reported by

Reuters news agency, at last year’s Singles’

Day (11 November), Alibaba, the largest Chinese

web portal, generated a record-breaking

USD 14.3 billion in sales in China, the biggest

online shopping day in the world. In terms of

value, this is how much US citizens spent online

on Black Friday and Cyber Monday combined.

In terms of volume, it is even more.

While, in the past, e-commerce was limited

to personal computers and laptops, the emergence

of mobile phones and other mobile

devices with which one can access the Internet

has made it possible to search and order

online while on the move (m-commerce). Another

distribution channel that retailers are

currently looking at is so called “s-commerce,”

which refers to social media commerce. The

fashion industry is constantly adapting to

these technological changes and most of

them have developed a multichannel strategy,

whereby fashion products are offered in various

ways both off- and online.

The new technological possibilities surrounding

the Internet also had other important

consequences. New brands suddenly did not

necessarily require classical distribution channels

anymore. They could simply open an Internet

shop. Consequently, the number of brands

has increased manifold in recent years. Customers

are offered a greater variety of products

and can increasingly specify parameters

they wish to purchase. New technologies such

as digital printing, digital showrooms and body

scanners in combination with e-commerce

have led to the possibilities of mass customization.

Customers can benefit from these

new technologies as they enable more individualized

products to be ordered online.

Another important trend to consider is

the digital functionalization of the fashion

industry, referred to as “wearables.” Textiles

and garments are increasingly becoming the

medium for the compilation and subsequent

analysis of what is commonly referred to as

Big Data, for example in both the health and

sports industries. In other words, digitization

will lead to more cross-industry cooperation

and collaboration in the future. The digitization

of the fashion industry, of which e-commerce

is a central component, is a megatrend that

offers many challenges and opportunities for

the fashion industry. Those companies within

the industry that quickly and efficiently

adopt new technologies and act to develop

new business models will benefit.


While global economic integration and new

technologies have been promoted by governments

and companies, respectively, sustainability

is a megatrend that is based on the

perception of consumers – albeit only a few

in the beginning – that economic globalization

and technological progress cannot be disconnected

from social and environmental conditions

around the world. Consequently, a few

retailers and brands in the fashion industry

started in the 1990s to develop and produce

fashion products that met certain social and/

or environmental requirements. Since the possible

negative implications of global change

have become mainstream concerns, sustainability

has become a major issue that the

fashion industry needs to take into account.

Interconnections and contradictions

The fashion supply chain is shaped by many

forces that have an effect on each other and

often contradict one another. The process of

increased global economic integration and the

rise and proliferation of e-commerce provide

the fashion industry and its customers with

more choices at lower costs. While consumers

welcome an increased selection, attractive

prices and good services, they are also

starting to pay more attention to sustainable

aspects of the production, transportation and

recycling of products. Since consumers are

increasingly concerned about negative social

and environmental aspects, they are demanding

more transparency and traceability with

regard to their purchases. In turn, this offers

new opportunities for companies that focus

on sustainable aspects. Producing and sourcing

in the proximity of the respective end-consumer

markets is becoming increasingly important.

The opportunities for consumers to

inform themselves about producers and products

alike and to comment and act via social

media channels have an important impact on

the fashion industry as far as image, credibility

and profitability are concerned.


The Internet in general, and e-commerce in

particular, are still transforming the entire

fashion supply chain. Twenty-five years ago,

the fashion industry was mainly driven by producers,

retailers and designers. In the meantime,

the industry is mainly driven by consumers

and the use and application of all kinds of

new digital technologies. For example, only

ten years ago, the idea of a body scanner was

still far-fetched. Today, consumers can use

digital (fit) technologies like a body scanner

to try on clothes or check sizes, fit or style,

both in brick-and-mortar as well as online

shops. Furthermore, consumers are increasingly

able to design their own garments by

choosing fabrics, colors, prints, style, etc.


On the other hand, digital technologies

also enable small, new or ethical fashion

labels to suddenly gain access to markets

around the globe. As far as production of

fashion is concerned, new digital technologies

also reduce the costs of small production lots

and especially customized products. These

new digital technologies are leading to a much

more diversified and fragmented textile fashion

industry along the entire fashion supply

chain from production to distribution. The

fashion industry as a whole is still adapting to

these ongoing changes and there is little

doubt that it is still at the beginning of this

new digital age.

Dr. Christian Schindler

Graduating in 1994 with an economics

degree from the University of Fribourg,

Dr. Schindler joined the Federation of

German Wholesale and Foreign Trade.

He later earned his doctorate from

the Institute for Economic Policy at

the University of Cologne. Dr. Schindler

was appointed economist of the

International Textile Manufacturers

Federation in 2004, and promoted

to Director in 2006. He was elected

Director General as of 1 January 2007.





How is 3D printing

affecting the fashion

industry? Would you

like to design and/

or produce your

clothes and shoes

by yourself? If so,

welcome to the world

of 3D printing in

fashion, and goodbye

to textiles made of

traditional fabrics. As

simple as the answer

is, reality tells us

something different.

Currently, 3D printing

in general and 3D

printing in fashion are

not yet as disruptive

as they may appear

in theory since they

still face many obstacles.

One of them

is the limitation of

“printable” materials

or fabrics; another

is the length of the

associated printing

process. We thus

believe that 3D printing

may not offer an

alternative to traditional

fashion manufacturing,

but could

complement it at

best. Many designers,

such as Iris van

Herpen, are already

involved in 3D printing,

and brands such

as Adidas or Nike are

experimenting with

printing customized

shoes, which could

become a market.

To be successful with

this trend, a makeover

of the business

strategy is a precondition.


tailoring done robotically

either in stores

or via the Internet

appears to be a futuristic




You can find out more

about 3D printed

clothing by using the

QR code above.






VFiles is a platform

where young fashion

designers, photographers,


artists, hair stylists,

models and musicians

can create their

own profile and present

their work to the

public. It includes an

online and brick-andmortar

shop where

the young talents’

designer pieces can

be bought. Moreover,

young artists can

apply for the VFiles

off-schedule “runway”

events at the semiannual

New York

Fashion Week (there

were 1,000 applications

for the fall/

winter 2016 runway).

The online community,

the VFiles team

and mentors (e.g. the

design director of

Calvin Klein menswear)

then choose a

couple of designers

to show their collections.

These runways

are crowdfunded

and fully produced by

the VFiles community,

including stylists

and artists. The VFiles

summer 2016 runway

attracted over 600

international journalists,

celebrities and

VFiles community

members. “My goal

is to change the

way people think

about fashion forever.”

Julie Anne

Quay, VFiles founder.






F . O . R . R . E . S . T

J . E . S . S . E . E

is a designer, educator and founder of Forrest Jessee Studio, which works

with institutions and artists to produce digital and print material.

What do you see as the global

trends (e.g. digitalization)

influencing today’s fashions and

the fashion market?

Methods of production in fashion

have drastically changed in the past

10 to 15 years. Mass customization

is now a possibility that has entered

every designer’s head, whether or

not it is reflected in their work. The

world is really just entering the Digital

Age, and I sense that we are

only at the tip of the iceberg. It’s like

any other age in history – the Bronze

Age, Industrial Age and so on – and

this age will span several generations.

I think designers have really just discovered

digital tool kits, but have not

yet fully understood how to harness

them. The onslaught of the Digital

Age has been so sudden that we are

scrambling to really grasp the potential

to truly change the way things

are designed, made and con sumed.

The influence right now is mostly

loose experimentation – attempts to

push the limits of what we can do

and begin to understand future possibilities.

So, I see a lot of fumbling, a

lot of successes and a lot of mistakes.

It is a time I think designers should

really feel free to experiment and not

be afraid of the awkward or unusual.

How are these trends changing

fashion and the fashion market?

I find the most interesting designers

right now are challenging

the 120-year-old model of the Paris

runway. The runway model molded

fashion into a discipline that ex hibits

trends, and I see that has defined

fashion for many years. Designers who

are separating themselves out are

producing fashion that builds in a

different utility into the garment.

This allows it to have a life beyond

the trends of one season. The digital

tools used in print design, architecture,

sculpture, photography and

many other disciplines can start

a conversation with fashion and

produce new typologies.

Where do you get inspiration

for your designs and collections?

I was originally trained as an architect,

and all of my projects take

an interdisciplinary stance. Part of

my process of understanding space

is through the lens of other disciplines.

I almost have to step outside

of what I know to understand it

better. So, I would say that a lot of

my inspiration comes from other

design practices.



The inner sanctum of

the Prada Fashion

Store in New York. The

Rem Koolhaas design

forms an integral part

of the unique Prada

shopping experience.








Under the guidance of an initially reluctant Miuccia Prada, and husband Patrizio Bertelli, the Prada name

has come to be globally synonymous with simplicity and luxury, innovation and classicism. Though seemingly

­incompatible elements, they define the look that is seductively understated, and sometimes subversive.



For Prada, the conceptual has always lain

at the heart of both its philosophy and its

design aesthetic. Adopting an intellectual

approach to design and presentation, the

label’s designer Miuccia Prada born 1949 has subsequently

transformed her family’s Milanese luxury

leather goods company into a powerful and influential

global fashion brand. Steering away from the

conventional ideas of surface beauty favored by her

contemporaries, Prada draws upon her interests in

art, film and wider culture to produce an intelligent

and multifaceted vision of femininity.

The Prada company began life as a luxury luggage

business founded by Miuccia’s grandfather

Mario Prada in 1913, where it was based in the exclusive

Milanese shopping establishment Galleria

Vittorio Emanuele II, favored by the Italian aristocracy.

The company was granted the title of “Official

Supplier to the Italian Royal Household” in 1919,

thus authorizing the use of the House of Savoy coat

of arms and knotted rope motif that has endured

as the company’s trademark logo.

Initially reluctant to become involved with the

family business, which had been taken over by her

mother Luisa upon Mario’s death in 1958, Prada

Miuccia Prada has consistently shunned conventional

notions of surface beauty, infusing her designs with an

intellectual and multifaceted vision of femininity.

obtained a doctorate in

political science from the

University of Milan before

training as a mime artist.

Her love of fashion has little

to do with her design

heritage but, instead, was

focused around constructing

and experimenting with

a sense of individual identity

out of the clothes she

wore herself. As she explained

to The Independent

in 2015, “It started at

a very personal point …

I always accepted my love

for clothes, but I didn’t

want to enter into the fashion


Despite this lack of any

clear business aspirations,

Miuccia came to the helm

of the Prada company in

1978, seeking to modernize

and reimagine its aesthet ic

while, simultaneously, disregarding current design

trends. In fact, Prada does not simply desire to be

original, to break away from the idea du jour – she

insists on it, stating “Too many times I don’t do

something because somebody else did it.”

In 1987, she married leather goods entrepreneur

Patrizio Bertelli after meeting him a decade earlier

at a trade fair. Shortly after their meeting, he joined

the Prada company in order to overhaul its business

structure, and is now co-CEO of the company alongside

his wife, making them one of the most powerful

partnerships in both the fashion and business

worlds. When Miuccia inherited the company, sales

were up to USD 450,000 and, with Bertelli assuming

the financial management of the business, Prada

was allowed time to focus on perfecting the brand’s

new aesthetic.


In 1985, Prada launched her first successful line of

bags, a range of understated, utilitarian black nylon

handbags and rucksacks, infusing synthetic fabrics

with a newly glamorous appeal. This now iconic

range of bags formed the antithesis of the logosaturated

accessories popular in the 1980s, allowing

its inherent minimalism to stand out while the

brand’s triangular metal logo remained subtle. This

underlying philosophy subsequently shaped Prada’s

design aesthetic, combining clean lines with innovative

fabrics, proudly manufactured in Italy, in order

to unite luxury and wearability. Despite the popularity

of the products, financial success was initially

slow. The combination of high prices, minimal

advertising and internally-generated funding led

Prada and Bertelli to seek out wholesale accounts

in high-end department stores and boutiques.

Her first ready-to-wear womenswear line,

launched in 1988, received unenthusiastic reviews

deriding the seemingly lackluster aesthetic of its

predominately black palette and minimalistic

shapes. By this time, however, Prada was already

an internationally recognized brand, owing to Bertelli’s

cautious expansion strategies. Boutiques had

begun to open in prominent shopping destinations

across Europe including Milan, Madrid and Paris,

before moving into Asia and the United States. The

powerful yet feminine lines of this collection’s functional

tailoring elevated the brand’s desirability, and

transformed it into the aspirational label of choice

for a new generation of active, modern women. Its

Prada pursues a passion for contemporary

art, design and architecture. At Prada’s

chic Epicenter concept store in Tokyo,

Japan, the Herzog & de Meuron design

aims to meld culture and consumption.

minimalism was revolutionary amid a decade awash

with conspicuous luxury, setting a precedent for

Prada’s signature formulation of her own trends,

rather than merely reinterpreting fashion’s preoccupations

of the moment. As a backlash toward

using fashion as an external signifier of wealth and

status began, Prada inexplicably captured the mood

of a gen­eration seeking a more intellectual concept

of feminine beauty. Menswear and sportswear collections

followed in 1993, promoting a more discreet

style of dress focused around a dark palette and

characteristically Italian details: knitted polo

shirts, wide-sleeved jackets and pointed shoes

cemented Prada’s craft-based innovations as new,

modern classics.

In 1993, following the launch of her first menswear

collection, Prada launched a secondary womenswear

label, Miu Miu, named after Miuccia’s childhood

nickname. The label was distinguished by its

more whimsical aesthetic, younger target market

and more affordable price point. Through its printed

dresses, pastel-colored handbags, embellished

footwear and Rococo-inspired costume jewelry, Miu

Miu’s witty formula blends together nostalgia and

modernity. Prada handpicked young actresses such

as Kirsten Dunst as the models for Miu Miu’s advertising

imagery, projecting a playful vision of femininity,

one often tinged with a poignant sense of irony.

The Fondazione Prada in Milan, Italy,

fosters ideas and creative practices in art,

architecture and science. It aims to

promote the value of culture in society.



In the late 1990s, Prada sought to acquire a port folio

of leading luxury brands in the manner of companies

such as LVMH and the Gucci Group. An investment

in shares in the Gucci Group in 1997 led industry

analysts to speculate that Bertelli was attempting

a takeover of the company. This never materialized,

but shares in brands including Helmut Lang, Fendi,

Jil Sander (purchased in 1999 for a reported USD

100 million) and English footwear brand Church’s

soon followed. In 2001, Prada sold their 25.5% stake

in Fendi to LVMH for a reported USD 225 million in

order to help ease a buildup of debt caused by such

continuous investment (a debt reportedly totaling

GBP 1.2 bn). By 2006, Prada had sold Helmut Lang

and Jil Sander, alongside a 45% stake in Church’s.

In 2011, Prada listed 20% of its shares on the Hong

Kong stock exchange. Today, Prada Group comprises

Prada, Miu Miu, Church’s and Car Shoe, inventor

of the original driving moccasin with rubber-stud-perforated

uppers. In March 2014, Prada

also acquired 80% of Angelo Marchesi, the historic

Milanese pastry shop, with an eye to expanding

its celebrated imprint. A second shop was opened

on Milan’s Via Monte Napoleone in 2015.

While such investments underlie the company’s

business structure, Prada’s passion for contemporary

art, architecture and film remains at the

forefront of the creative vision of Prada and Bertelli.

Fondazione Prada, founded in 1993, was established

in order to nurture both the ideas and creative

practices of artists, architects, filmmakers and

thinkers. Over the last two decades, the foundation

has been responsible for over 60 projects among

solo shows, group and research exhibitions and

special commissions in cities ranging from Milan

and Venice to Tokyo, ­Paris and London, alongside

film festivals, dance performances and conferences.

The institution’s mission statement asserts

that they “embrace the idea that culture is deeply

useful and necessary as well as attractive and engaging.

Culture should help us with our everyday

lives, and understand how we, and the world, are

changing.” With the opening of an exhibition venue

located in Ca’ Corner della Regina, a spectacular

18th-century palazzo on the Grand Canal in Venice,

in 2011 and of a new permanent cultural complex

designed by OMA in Milan in 2015, Fondazione Prada’s

range of knowledge has been expanded with

the aim of sharing new ideas and cultural stimuli.


In 2012, Prada was the subject of a major fashion

exhibition entitled “Schiaparelli and Prada: Impossible

Conversations” at the Metropolitan Museum

of Art in New York. Here, an imaginary dialogue was

established between Prada and the late fashion

designer Elsa Schiaparelli, a fellow Italian renowned

for her avant-garde vision and Surrealist inspirations.

Both designers have sought to deconstruct

conventional ideas of beauty in a style that has

­become known as “ugly chic.” As Prada explained

in one of the interviews drawn on for the exhibition:

Fashion fosters cliches of beauty, but I want to

tear them apart. An important aspect of my work is

exploring what beauty means today.” This is an

approach clearly shared by the two women: both

are known for their exacting, and sometimes difficult,

natures and staunch refusal to conform to

any prescribed notion of style, beauty, femininity

or sexuality. Schiaparelli’s design signatures also

often find a degree of resonance in Prada’s own

designs, as she draws on her witty formula of

­cartoonish prints, cheeky motifs and her “anti-fashion”


Whether it’s a model striding the catwalk

at a Prada seasonal fashion show in Milan,

Italy or a Hollywood starlet standing on

the red carpet at the Oscars, Prada designs

are sure to turn heads.

The following year, a creative collaboration with

British artist Damien Hirst displayed particularly

potent echoes of Schiaparelli’s aesthetic. The project,

entitled Entomology, produced 20 exclusive

handbags auctioned in aid of charity, each featuring

both real and bejeweled beetles on an iconic Prada

handbag shape. Miuccia’s approach to the limitededition

range was characteristically subversive: “I

said, ‘Listen, I don’t want to do a bag.’ So I did a

bag that was so repulsive! It was so repulsive that

no woman would put a hand on it!” The bags,

however, sold out and were enthusiastically embraced

by the fashion press – unsurprising given

that 80% of Prada’s 2011 sales came from leather


Regular collaborations with photographers and

directors such as Steven Meisel and Glen Luchford

have also produced a series of iconic advertising

imagery and short films that imbue Prada’s designs

with cultural relevance. Similarly, the contribution

of several key dresses to director Baz Luhrmann’s

2013 film adaptation of “The Great Gatsby” cemented

the significance of Prada’s modern reinterpretation

of femininity. Despite occasional design

criticisms and periods of financial complications,

Prada continues to position itself as one of the most

influential and globally successful fashion brands

of today. It draws its strength from its merging of

simplicity and luxury, innovation and classicism,

allowing it to continually blur the boundaries between

the conceptual and the commercial.

In 2012, Prada was

featured as the subject

of a major fashion

exhibition. Pictured

here, an installation

from the “Schiaparelli

and Prada: Impossible

Conversations” exhibition,

which was organized

by The Costume

Institute of The Metropolitan

Museum of

Art, in New York, USA.




Prada posted revenue

of EUR 3.55 bn in 2015

(including wholesale,

retail and royalties)

Breakdown shows retail

sales in 2015, by region

in EUR million







Middle East


Far East



Breakdown shows retail

sales in 2015 by product

in EUR million














V . A . L . É . R . I . E

L . A . M . O . N . T . A . G . N . E

is a French Canadian artist-designer and PhD scholar researching “Performative Wearables:

Bodies, Fashion and Technology” at Concordia University, where she teaches

in the Department of Design & Computation Arts. She is the owner and designer at 3lectromode,

a wearable electronics atelier based in Montreal.

What do you see as the global

trends (e.g. digitalization)

influencing today’s fashions and

the fashion market?


• 3D printing (hard, soft, zero-waste)

• On-demand fabrication

• Customization

• Local production

• DIY (Ikea idea to clothing)

• Reuse / recycle / repair (Petit h)

• Reduce washing (instantly sanitized

through air/sun, etc.)

• Seamless design to house technology

(integrated telecommunications /

renewable power)

Sales and distribution

• Showrooms with integrated direct

home delivery (no more lugging bags)

• 3D body scanning / avatars

(transferable from store to store)

• Seamless purchase from online

runway shows

• Searchable algorithms for streetwear

photos (you can immediately buy

what you see someone wearing)

• “Real” advertising: Instagram


Fashion as experience / community

vs. old model of product sales

How are these trends changing

fashion and the fashion market?

• Consume less

• Consume made-to-fit

• Consume and share

• Consume immediately (from runway)

• Consumer as designer

• Consume in collectives p2p

(not corporations)

The future of fashion will be less about

consuming and more about experiencing.

How this will take effect will come about

through a radical inversion of the clientcompany

relationship. Co-creative

spaces, technologies and applications

will provide new platforms for customers

to create bespoke designs on demand.

A transparency of production chains and

fabrication will follow suit. Where and

how things are made will become more

important, along with their “carbonfootprint”

afterlife. Objects’ material

and historical transformations will be

inscribed in our experience of them,

i.e. we will know the provenance of

materials, fabrication and legacy. In that

process, we will also leave our

mark on these objects’ histories and

future uses. Fashion and technology

will become an ongoing process

communicated over time and space.

Where do you get inspiration

for your designs and collections?

• History

• Literature

• Poetry

• Art

• Music

• Politics

Art and history are the greatest inspiration

for fashion. Fashion that lives in

the vacuum of the moment is dangerous

because fashion is also a political force:

of gender, of race, of power, of economics

– and we can use that force to create

change. Fashion is always straddling

the past, present and future. I used to

have an argument with my father about

how the future would look: Would it be

Terry Gilliam’s “Brazil” (1985) or Ridley

Scott’s “Blade Runner” (1982)? To me it

has become both: absurd and dystopian,

light and heavy, in the future and in the

past, atemporal and ironic, beautiful

and ugly, frivolous and all-important.







The Japanese kimono

and the Indian sari are

garments of arresting

beauty. And inasmuch

as they are made

from a single piece

of fabric, they use

fabric efficiently. Now

designers are trying

to apply the same

idea to the creation of

clothes like dresses

and jeans. So-called

zero waste design

takes aim at the 15%

to 20% of fabric that

the apparel industry

estimates ends up

in landfills. How? By

creating garment patterns

that fit together

like jigsaw puzzles.

By draping fabric

rather than cutting it.

And by taking waste

bits of material and

using them as decorative


Finally, “direct pattern

on loom” technology,

invented by Indian

designer Siddhartha

Upadhyaya, is an

approach to garment

construction that

weaves pieces directly

on a jacquard loom –

no need to spread,

mark or cut.




Watch the video for a

tutorial on how to

design fashion with

zero waste.





Wearable technology

has made major

inroads in fashion,

due to a growing installed

base of mobile

devices (especially

smartphones), as well

as component cost/

performance improvements,

an established

software ecosystem

and new apps/business

models. Wearables

are rapidly

evolving from singlefunction,


devices to

what we believe will

increasingly become

multifunctional, constantly


smart/aware devices.

We see a market

potential of about

USD 40 – 50 bn. Wearables

will have a significant

and pervasive

impact on the economy

in coming years.

Apparel has been

early to adopt wearable

technology – first

in the form of wristwatches,

but more

recently with fitness

monitors like the

Fitbit. The primary

purpose to date has

been to boost customer


with athletic/ fitness

brands with the

potential to cannibalize

the USD 56 bn

watch market. But

let’s be more futuristic.

At some point, our

clothes will be able

to use our bodies as

a power source, enabling

us to charge

smartphones and

tablets – if we still

have such devices.

Smart fabrics that

harvest kinetic energy

in order to create

electricity are already

being turned into

fashion wear.



SEE P. 44

Installed base of

computing products

can support

wearables adoption

Source: Company data,

Credit Suisse estimates








2010 2015E


Mobile PCs







Textile dyeing is a

water-intensive process.

For example, it

typically takes 60 to

80 liters of water

to dye one kilogram

of cotton. Moreover,

according to the EU’s

Retail Forum for

Sustainability, together

textile dyeing and

treatment account

for 20% of industrial

freshwater pollution.

No wonder, then, that

the search is on for

water-friendly alternatives.

A company

called ColorZen has

found a way to modify

the molecular structure

of cotton to

­enable efficient coloring

with less water.

AirDye, developed

by the Debs Textile

Corporation, uses up

to 95% less water

than conventional

dye methods by

transferring dye to

polyester fabric using

printing machines.

And Dutch company

DyeCoo employs

pressurized CO 2 to

transport powder

dye into polyester

fabric, with no need

for water at all.




Watch a video on

an innovative textile

process for dyeing

fabrics without water.






Imagine you’re on

your way to an important

date and you

notice your jacket

doesn’t match your

pants. It’s too late

to go home and

change your clothes,

so you just touch

your jacket or whistle

a tune and magically

it changes color.

Crazy yes, but possible

thanks to an invention

of Hungarian

designer Judit Eszter

Karpati called

“Chromosonic.” This

is an experimental

electronic textile that

can change color and

pattern in response

to touch and sound.

Aesthetic examples

of smart textiles

include everything

from fabrics that light

up to fabrics that

change color. Some

of these fabrics gather

ambient energy by

harnessing vibrations,

sound, heat or EUV

(extreme ultraviolet

radiation). For

example, colors are

white indoors, but

change colors instantly

when exposed to

daylight. New media

artist and fashion

designer Amy Winters,

the woman behind

the Rainbow Winters

brand, has worked

with such smart

textiles for several

years now.



You can find out more

about color-changing

materials by using the

QR code above.



Patricia Feubli

Research Analyst.........................................................

+41 44 333 68 71.......................................................

Patricia Feubli joined Credit Suisse in 2013 as a senior

economist for Swiss Industry Research at International

Wealth Management, based in Zurich. Previously, she

worked as a research associate at the University of Zurich

and was research fellow at Stanford University. She holds

a PhD in Economics from the University of Zurich.

> Pages 10, 13, 16, 27, 33, 36–37, 41–43, 48–50, 52–53, 58

Jonathan Horlacher

Research Analyst.........................................................

+41 44 332 80 17........................................................

Jonathan Horlacher is a financial analyst for Credit Suisse

in the International Wealth Management Division. He

specializes in macro themes, megatrends and sustainable

investing, and has published widely on those topics. He

is a CFA charterholder, received his MSc from Barcelona

Graduate School of Economics, and previously worked

as an economist for the Swiss National Bank.

> Pages 08–09, 12, 38–43, 59, 61

Ulrich Kaiser

Research Analyst.........................................................

+41 44 334 56 49.......................................................

Ulrich Kaiser is a senior financial analyst of Credit Suisse

in the International Wealth Management Division, covering

the technology sector. He joined Credit Suisse in 1993

and has 28 years of experience in the securities and

banking business. He received his Master of Economics

from the University of Constance, Germany, and is a CEFA

charterholder. > Pages 17, 23, 44–47, 51, 60, 62

Julie Saussier

Research Analyst.........................................................

+41 44 333 12 56.......................................................

Julie Saussier is a senior research analyst in the Global

Equity team, covering the consumer discretionary sector.

She has 14 years of experience as a research analyst

and joined Credit Suisse in 2015. She holds a Master’s in

Business and Management from the University of Paris

Dauphine and a Master’s in Corporate Finance from

the EM Lyon Business School, France, and is a CFA

charterholder. > Pages 07, 11, 15, 22, 26, 30–32

Selina Sia

Head of Greater China Equity Research.........................

+852 2841 4036.........................................................

Selina Sia is the Head of Greater China Equity Research

at Credit Suisse, having joined the company in 2015.

She has over 20 years of experience as a research

analyst covering Hong Kong and Chinese equities. She

graduated from the University of Washington in the

USA with a Bachelor of Business Administration majoring

in Accounting and Finance, and is a qualified Certified

Public Accountant. > Pages 14, 34–35

Giles Keating

Vice Chairman of Investment Solutions & Products

and Deputy Global CIO.................................................

+41 44 332 22 33.......................................................

Giles Keating is Vice Chairman of Investment Solutions &

Products, Deputy Global Chief Investment Officer and

the Investment Committee’s Vice Chair. He joined Credit

Suisse in 1986. He was a Research Fellow at the London

Business School and has degrees from the London

School of Economics and Oxford, where he is Honorary

Fellow. He chairs Tech4All and techfortrade, charities that

use technology to reduce poverty. > Page 03

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by changes in economic, financial and political factors (including, but not limited to, spot

and forward interest and exchange rates), time to maturity, market conditions and volatility,

and the credit quality of any issuer or reference issuer. Any investor interested in

purchasing a structured product should conduct their own investigation and analysis of the

product and consult with their own professional advisers as to the risks involved in making

such a purchase.

Some investments discussed in this report have a high level of volatility. High volatility

investments may experience sudden and large falls in their value causing losses when that

investment is realized. Those losses may equal your original investment. Indeed, in the case

of some investments the potential losses may exceed the amount of initial investment, in

such circumstances you may be required to pay more money to support those losses. Income

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the investment may be used as part of that income yield. Some investments may not be

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commissions, fees or other charges as well as exchange rate fluctuations.

Financial market risks

Historical returns and financial market scenarios are no guarantee of future performance.

The price and value of investments mentioned and any income that might accrue could fall

or rise or fluctuate. Past performance is not a guide to future performance. If an investment

is denominated in a currency other than your base currency, changes in the rate of exchange

may have an adverse effect on value, price or income. You should consult with such advisor(s)

as you consider necessary to assist you in making these determinations.

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trade in the market or whether such market will be liquid or illiquid.

Emerging markets

Where this report relates to emerging markets, you should be aware that there are uncertainties

and risks associated with investments and transactions in various types of investments

of, or related or linked to, issuers and obligors incorporated, based or principally

engaged in business in emerging markets countries. Investments related to emerging

markets countries may be considered speculative, and their prices will be much more

volatile than those in the more developed countries of the world. Investments in emerging

markets investments should be made only by sophisticated investors or experienced professionals

who have independent knowledge of the relevant markets, are able to consider and

weigh the various risks presented by such investments, and have the financial resources

necessary to bear the substantial risk of loss of investment in such investments. It is your

responsibility to manage the risks which arise as a result of investing in emerging markets

investments and the allocation of assets in your portfolio. You should seek advice from

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in an emerging markets investment.

Alternative investments

Hedge funds are not subject to the numerous investor protection regulations that apply

to regulated authorized collective investments and hedge fund managers are largely

unregulated. Hedge funds are not limited to any particular investment discipline or trading

strategy, and seek to profit in all kinds of markets by using leverage, derivatives, and

complex speculative investment strategies that may increase the risk of investment loss.

Commodity transactions carry a high degree of risk and may not be suitable for many

private investors. The extent of loss due to market movements can be substantial or even

result in a total loss.

Investors in real estate are exposed to liquidity, foreign currency and other risks, including

cyclical risk, rental and local market risk as well as environmental risk, and changes to the

legal situation.

Interest rate and credit risks

The retention of value of a bond is dependent on the creditworthiness of the Issuer and/or

Guarantor (as applicable), which may change over the term of the bond. In the event of

default by the Issuer and/or Guarantor of the bond, the bond or any income derived from it

is not guaranteed and you may get back none of, or less than, what was originally invested.


The information and opinions expressed in this report (other than article contributions by

Investment Strategists) were produced by the Research department of the International

Wealth Management division of CS as of the date of writing and are subject to change

without notice. Views expressed in respect of a particular security in this report may be

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department of Investment Banking division due to the differences in evaluation criteria.

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