Suppliers are relying on R&D to help them move away from price-focused selling
The denim market is ready for a rebound! At Kingpins Amsterdam (April 20-21), manufacturers and suppliers took R&D even higher than in previous seasons, rolling out an extensive showing of interesting new developments – the kind of innovation that is set to stir up the denim market, and convince consumers to buy more jeans.
No one’s denying that it’s a tough market, however, from the feedback we got, most suppliers have a very positive outlook for the coming seasons.
Yes, there’s still a lot of price pressure, but the focus has shifted to new development and better products, which goes hand in hand with changes in consumers’ preference. Consumers are buying fewer and better products. Major retailers, including some of the leading fast fashion brands, have picked up the signal. Manufacturers are responding to the demand by bringing interesting new development as well as upgrading quality and performance of their products.
An Improving Market
Overall, suppliers said that business is very stable. In certain markets, they are able to get very good growth, but no one is expecting to see the massive growth rates that they enjoyed in those heady pre-2009 days. Still, most manufacturers are very content to grow their businesses at a healthy and steady pace.
“Our business is definitely better than last year because of new fabric developments. For example, motorcycle and protective denim was launched a little more than a year ago and since then business has been going well,” said Giovanni Henssen, business development manager at DSM Dyneema. With the launch of their new motorcycle collection, Dyneema has sucessfully taken their sales to a new level, proving that the market is longing for something different.
“Actually this year is the best year ever in our company’s history. For the first quarter, we achieved all our targets. We also made the decision that we are going to invest in new rope dyeing machines. In addition, we are increasing our capacity, almost doubling the capacity this year,” said Murat Arioz, sales and marketing group director at Kipas Denim (Turkey). One of the bestselling products from Kipas is embroidered denim that is currently selling at Zara. Right now, our company is shipping out 100,000 meters of this denim fabric weekly just for this one brand.
“The European market is not growing in terms of volume, however in terms of price, it is getting more competitive. I believe that in the near future, with newer products, you can still give the market a boost. For the last two or three years, the EU market has been dragging its feet. This year, it looks much more positive,” said Vichai Phromvanich, board member and consultant at Absolute Denim.
“As far as the business goes, it’s more or less the same in terms of the quantity. But there is relentless pressure on price... We are still running at full capacity, but we have to bring down our costs,” Hasan Javed, director at Artistic Fabric Mills, told Inside Fashion. He also pointed out that innovation is driving sales. As a supplier, one has to bring something fresh to the table every season.
“Overall, business in China is much stronger than last year. Our platform in Mexico is somewhat weaker, and the US is the same... but our distribution has grown in China. We have very good business in the Japanese market, and we are serving the European market. We are not relying too heavily on one market,” said Kevin Reardon, Vice President of Sales at Cone Denim.
It All Comes Down to Innovation
The key word is innovation. Almost every supplier agreed that one has to be more innovative to survive in a market where competition seems to be coming from every corner.
“Innovation in terms of more stretch, in terms of comfort, in terms of performance – that’s definitely driving denim sales in today’s market,” said Mr. Javed at Artistic Fabric Mills. “Right now, our bestselling product is this fabric that uses Lycra Beauty from Invista. It’s what we call shaping or sculpting denim and right now it’s our bestseller,” he told Inside Fashion.
“To be innovative and price-competitive are the keys to driving the market today,” said Mr. Phromvanich at Absolute Denim.
“In today’s market, it’s the diversity – something innovative, something different - as well as being competitively priced. If you are very innovative, but you are too expensive, then there is not enough market demand for it,” said Mr. Phromvanich.
Apart from bringing innovative new products, suppliers are also upgrading their collections by using premium materials. As consumers continue to trade up, better products made with higher-end materials are becoming strong sellers.
“Supima cotton is very important for us. We offer a medium to premium collection, which means we are focusing on the medium to upper end of the market. We are not a basic denim producer and for us the sales are driven by Supima cotton, microstructures, and novelties,” said Carlo Bonomi at Carlo Bonomi Eccellenze Italiane Tessili.
“We have special products like technical denim, and functional denim. As a technical fiber, Dyneema has been used in technical applications for a long time, like water resistant fabric application. Now we are bring that technical aspect to denim. For us, that’s what’s really driving sales,” said Mr. Henssen. “Adding three to five percent of Dyneema to the fabric will double its strength, tear-resistance and durability, which is good for the life span of the garment,” he told Inside Fashion.
Retro look is coming back
The ‘Salt & Pepper’ vintage look is making a big comeback. The authentic-look has helped brands to move products on the retail selling floor the last few seasons, and now this trend is translating into even more orders for suppliers.
“The trend right now is very retro, the 80s, 90s look. This falls right into our specialty. It’s where Cone comes from … our heritage. As the saying goes, ‘What’s old is new again’,” said Mr. Reardon at Cone. “In line with the retro trend, we have a new open-ended selvedge from our US-based White Oak mill, which really gives you that salt & pepper look,” he told Inside Fashion.
“The salt & pepper vintage look is coming back – something that takes inspiration from the old Levis 501 in the 80s and 90s. It’s quite popular right now,” agreed Mr. Javed at Artistic Fabric Mills. “Products with a lot of stretch and good recovery are also part of our core line now and are also very important,” he said.
“During the last three years, authentic denim has become very popular in the market, with a lot of demand for salt & pepper. We have good products in this range,” said Mr. Arioz at Kips.
“The ‘back to the 80s’ looks, which is probably something you’re hearing quite a lot in the market, is also important for us. What makes it more interesting is we are combining it with something from just a few years ago to create a different appearance,” explained Mr. Phromvanich.
“We are a Japanese company, so everybody looks to us for selvedge denim. It’s our specialty item,” said Reiichiro Yoshida, section chief at Collect Division. The company has developed selvedge denim with different colors and constructions for the new season.
Sustainability is on Trend
“Everyone is talking about recycling, water saving, sustainable fibers like BCI or organic cotton. Sustainable or eco-friendly products are definitely very trendy now,” said Mr. Javed. “We also introduced our sustainable collection, which starts from the fiber and ends in the washing. We use recycled cotton and sustainable dyes and our factory is LEED certified, and has the highest rating in Pakistan. For washing, we have Jeanologia EIM Score,” he told Inside Fashion.
However, sustainability has its own problems. For suppliers, a lack of comprehensive and concrete standards makes it challenging to produce products that meet all customers’ demands. “Sustainability is a very important direction, but there are many different levels of sustainability. There are no benchmarks for this yet. We are saving water, we are recycling cotton, and we are using solar energy - we have a solar energy plant within our facility. It is sustainable for us, but at the end of the day, who is benchmarking those things?” said Mr. Phromvanich.
Despite the challenges and lack of clarity in terms of sustainable standards, the denim industry has made great strides in moving denim production in a cleaner and greener direction.