FROM THE DESK OF DEBORAH WEINSWIG

There is magic to be found in Las Vegas! This week, the FBIC Global Research & Technology team attended the MAGIC trade show, which is held in Las Vegas twice a year, in February and August. Initially, MAGIC was exclusively a trade show for menswear. However, the event’s scope has been expanded and the producers now call it the world’s largest fashion marketplace. It comprises expositions for 11 unique communities, including apparel, footwear, accessories and manufacturing. In addition to menswear, the show now features womenswear, clothing for juniors and children, footwear, accessories and resources. The PROJECT section of the show is designed to appeal to all attendees. It features contemporary apparel and accessories for men and women and focuses on forward-thinking, out-of-the-box designs. Covering the entire global supply chain, the SOURCING expo includes participants from more than 40 countries, linking designers, brands and retailers. The TENTS community showcases a curated selection of luxury and designer brands for men, and the products on display feature elevated levels of quality, design and price. The WWDMAGIC community shows young contemporary and juniors’ ready-to-wear, women’s sportswear and accessories in collaboration with Women’s Wear Daily magazine. The COLLECTIVE expo displays men’s fashion, including branded and licensed apparel for men and young men. The PROJECT WOMENS community offers a women’s-only fashion environment, and features Conscious Collection brands that support education, job creation, sustainable practices and a variety of other social initiatives. The POOL TRADESHOW features boutique-ready fashion and accessories and the CURVENV@MAGIC section shows fashion lingerie and swimwear. Footwear is a major focus at MAGIC. The FN PLATFORM community presents footwear brands that range from luxury to lifestyle for men, women, juniors and children, while the WSA@MAGIC community displays fast-fashion footwear for men, women, juniors and children. Finally, the PLAYGROUND expo showcases contemporary fashion for children. The show’s organizer, UBM Advanstar, produces two other New York–based shows: PROJECT, which focuses on contemporary menswear, and ENK International, which is a leading women’s and children’s contemporary fashion trade show.

Source: South China Morning Post

Source: US Census Bureau/Haver Analytics

• Total US retail sales increased robustly at the start of 2016, growing in January by 0.2% month over month (adjusted) and by 0.1% excluding autos.
• December’s numbers were also revised up. With the revised December figures, January’s retail sales represented the fourth consecutive month of positive results.
• Seven categories of retail spending—including motor vehicles, groceries, building materials and e-commerce—grew in January.

US RETAIL EARNINGS

Source: Company reports

US RETAIL HEADLINES

 Ralph Lauren to Bring Management of Distribution Site In-House (February 16) The Wall Street Journal

• Ralph Lauren is bringing a piece of its supply chain operations in-house as it reviews broader operations and management of its distribution.
• The shift, part of what Ralph Lauren says is a long-planned action, will move warehousing and inventory management services from a North Carolina distribution center run by XPO Logistics Supply Chain—an arm of XPO Logistics—into a new, far larger distribution center that the fashion retailer will operate itself.

 Virtual Reality Companies Look to Science Fiction for Their Next Play (February 16) The New York Times

• Tech companies have spent years developing better, cheaper devices to immerse people in digital worlds. Yet they are still figuring out how to make virtual reality the kind of technology that people cannot live without. For inspiration, they are turning to science fiction.
• At Facebook’s Oculus, a leading virtual reality company, a copy of the popular sci-fi novel Ready Player One is handed out to new hires. Magic Leap, a secretive augmented-reality startup, has hired sci-fi and fantasy writers. The name of Microsoft’s HoloLens headset is a salute to the holodeck, a simulation room from Star Trek.

 Apple Takes a Confident Step into Fashion with Its First Met Gala (February 15) The Verge

• In the era of laser cutting and 3D printing, this year’s Metropolitan Museum of Art Costume Institute Benefit, better known as the Met Gala, aims to explore the divide between humans and technology in fashion. Titled “Manus x Machina: Fashion in an Age of Technology,” the annual gala (and exhibition) is purposed with “unraveling the hand-machine conundrum” that sets handmade and machine-made fashion in opposition, according to Costume Institute Curator Andrew Bolton.
• Apple is the Costume Institute’s partner in the project, making this year’s gala more of a tech event than any previous one. This year’s event will likely represent a celebration of technology’s place in fashion rather than a challenge to the status quo.

 The Internet of Medicine Is Just What the Doctor Ordered (February 16) TechCrunch

• Technology, driven by the Internet of Things, could well hold the key to lowering medical costs, improving quality and making healthcare more personalized, accessible and affordable for the average patient.
• From a financial standpoint, the “Internet of Medicine” could soon exceed a trillion dollars a year—and revenue is likely to increasingly rely on recurring revenue arrangements.

EUROPE RETAIL HEADLINES

 British High Street Retailers See Increase in Footfall for the First Time Since July 2013 (February 15) British Retail Consortium

• The British Retail Consortium (BRC), the trade association for the UK retail industry, and Springboard, a British retail intelligence body, announced that average footfall in the UK rose by 1.2% year over year in January, across all types of locations. The figure was significantly higher than the 2.2% decline seen in December.
• While shopper numbers in retail parks increased by 5.2% year over year, growth in shopping centers was mostly flat in January, according to the BRC. High street footfall climbed by 0.2% year over year in January, its first increase since July 2013 and a notable recovery from the Christmas season, when footfall dropped by 4%.

 Kaufland to Follow Competitors by Launching Online by 2017 (February 15) Retailanalysis.igd.com

• German discount hypermarket chain Kaufland is reportedly planning an e-commerce launch by 2017. No details were given as to what kind of products it will sell online.
• Sales and Marketing Managing Director Marcus Rodermann was recently hired from online fashion retailer Heine, and Kaufland is reported to be looking for experienced online and e-commerce professionals. The online grocery market has been slow to take off in Germany: REWE launched a complete click-and-collect service in January 2016, and Amazon launched its Pantry service in Germany in October 2015.

 Aldi to Establish 5,000 New Jobs in the UK (February 15) Ft.com

• German discount retailer Aldi announced that it will hire 5,000 new UK staff as it opens 80 new stores in Britain in 2016. This will increase the number of UK stores to 700.
• The discounter recently announced plans to operate 1,000 stores in Britain by 2022. The enlargement is part of £600 million investment plan announced in 2014. Some of the stores are being built in more prosperous towns in the UK, reflecting the growing demand for discounters even among more affluent shoppers.

 NICE Move: Amazon to Acquire Italian Software Firm (February 12) Reuters.com

• Amazon’s cloud-computing division, Amazon Web Services (AWS), revealed that it will buy NICE, a software development company headquartered in Italy. NICE makes high-performance computing software and provides niche services to companies in the aerospace, automotive, energy, life sciences and technology industries.
• Amazon stated that it has signed the deal with NICE and that the acquisition will be completed by the end of the first quarter this year. However, it did not disclose the financial terms of the contract. This is Amazon’s second software vendor acquisition in six months; the first was Elemental Technologies.

 Metro Group Acquires Rungis Express (February 12) Company press release

• German retailer Metro Group announced that it will acquire Rungis Express, a food distribution company belonging to the Cool Chain Group. Metro stated in a press release that the brand and independence of Rungis Express will be retained after the takeover.
• Rungis Express is expected to complement Metro’s existing food distribution activities thanks to the former’s expertise in the segment and its strategic office locations in Austria, Poland, Portugal, Switzerland and Spain. The financial terms of the deal were not disclosed.

ASIA TECH HEADLINES

 Apply Pay Rumored to Launch in China This Week; France and Canada This Year (February 16) ZDNet

• On Sunday, a Chinese bank’s official WeChat account confirmed that Apple Pay would launch in China at 5 a.m. local time on Thursday. Apple had previously confirmed that it would launch Apple Pay in China sometime in 2016.
• Atlantic Equities Analyst James Cordwell told Reuters in December that the challenge would not be from Samsung Pay, which is retreating in the Chinese market, but from Alipay or WePay, which are more platform-agnostic and have a strong user base.

 Samsung Galaxy S7, Galaxy S7 Edge Preorders Will Ship with Free Gear VR Handset (February 16) ZDNet

• In a new report, Android World says the Galaxy S7 and Galaxy S7 Edge will be available for preorder on Monday, February 21. Both smartphones are said to come with a free Gear VR headset if preordered.
• A reliable mobile leaker known as Evleaks, after confirming the rumor in a tweet, further spoiled Samsung’s secret by sharing what are allegedly press images of the two smartphones, which will come in three colors—gray, black and gold—just like the iPhone 6s.

 Once China’s Smartphone King, Samsung Is No Longer Even in the Top Five (February 15) TechinAsia

• International Data Corporation reported that manufacturers shipped 117.3 million smartphones to stores in China in the fourth quarter of 2015, an 8% increase year over year. The firm said the increase was “partly driven by China’s annual Singles’ Day online shopping festival in November and Huawei’s strong shipments in the quarter.”
• Xiaomi retained the top spot for 2015 in the Chinese smartphone market, despite rival Huawei showing much stronger growth and Apple having a stellar year. OPPO rose to fourth in terms of number of units shipped, while Vivo came in fifth. Samsung, despite clinging to second position back in 2014, dropped out of the top five in 2015.

 Singapore Developing Plans to 3D Print Homes (February 15) e27.co

• A group of experts at the Singapore Centre for 3D Printing at Nanyang Technological University is currently developing plans to build the city’s future public housing by integrating 3D printing technology with a “LEGO-like” strategy for assembly.
• The most important component of the process, a printer large enough to build on such a scale, does not exist. Professor Chua Chee Kai, Executive Director at the printing center, explained that there is currently no 3D printer large enough to allow for such construction, and no printable concrete; both will have to be developed from scratch.

 Rakuten to Close Singapore, Malaysia and Indonesia Marketplaces and Lay Off About 150 Staff (February 12) TechinAsia

• Japanese e-commerce giant Rakuten will shut down its Singapore, Malaysia and Indonesia marketplaces by March 2016. It will also sell Tarad, an e-commerce site in Thailand that it acquired in 2009.
• Rakuten’s 2015 consolidated revenue was US$6.34 billion, up from US$5.31 billion the year before. Even as it withdraws from parts of Asia, the company looks set to double down on Japan and Taiwan, the two markets where it is performing well. At the same time, it plans to introduce its consumer-to-consumer marketplace mobile app, Rakuma, in Southeast Asia.

LATAM RETAIL HEADLINES

 Brazil Retail Sales Fell in 2015 (February 16) The Wall Street Journal

• Crippled by recession, high inflation and interest rates, the Brazilian retail market saw its first annual contraction of sales since 2003 last year. In 2015, retail sales volume declined by 4.3%, mostly prompted by a decline in sales of big-ticket items such as furniture and home appliances.
• Economists predict that retail sales will continue to contract in the country as unemployment continues to rise and credit remains tight. Brazil’s entire economy is expected to shrink by 3.3% this year.

  Brazilian Textile/Apparel Sector Pins Hope on Exports (February 12) WWD.com

• Despite a shrinking economy, Brazilian textile and apparel companies are hoping a rebound in exports will help offset domestic losses. The slumping Brazilian real caused exports to grow as the exchange rate fell and countries such as Argentina, Paraguay, Colombia and Mexico bought up Brazilian denim and knitwear products.
• Other Latin American countries buy the majority (nearly 65%) of Brazilian garments. Apparel and textile exports to Colombia will increase significantly as Brazil and Colombia negotiate a free trade agreement that is expected to close this year.

 Beauty News from Brazil (February 16) WWD.com

• Sales of cosmetics and personal care products in Brazil decreased by 6% in 2015, falling victim to widespread recession.
• Hair care remains a strong segment of the personal care industry, and dermo-cosmetics brands such as L’Oréal’s La Roche-Posay and Vichy, which have seen growth of around 20% per year, are likely to keep growing throughout the economic downturn.

 Éxito to Bolster the Latin American Apparel Industry (February 14) WWD.com

• Colombian hypermarket group Grupo Éxito announced plans to expand its apparel franchise in order to account for 10% of Latin America’s apparel sales by 2019. Éxito’s apparel business is already larger and more successful than that of its competitors Peruvian Jumbo and Metro.
• Éxito expects to drive growth by growing multi-channel sales and by expanding catalog and online traffic through the launch of Colombia’s retail portal, Cdiscount.com.co.

 Digital Couture? Check Out These Latin American Designers (February 15) NBC News

• Eleven designers from all over the Americas showcased collections before the official start of New York Fashion Week 2016 as part of Epson’s Digital Couture Project, in which designers were able to create their collections using direct-to-garment and digital dye-sublimation printing.
• Epson’s textile printers allow designers to draw any pattern or design and transfer it directly to any desired fabric at a lower cost and faster pace than can be achieved through traditional textile design.