French sport retailer Decathlon, owned by the Mulliez group, has been accused by investigative journalism NGO Disclose and French TV programme “Cash Investigation” of having as a subcontractor in China a company exploiting Uighur labour, which Decathlon denies, and of sourcing cotton from the Xinjiang region, the AFP agency learnt on Thursday.
Mulliez-owned Decathlon has been accused by Disclose and French TV programme Cash Investigation of having as a subcontractor in China a company exploiting Uighur labour – Martin LELIEVRE / AFP/Archives
Decathlon has been accused by the two media outlets of sourcing textiles from Qingdao Jifa Group, a company that “relies on a forced labour network in China,” reported Disclose in an article published on Thursday morning.
In the Cash Investigation documentary to be broadcast Thursday evening, which AFP was able to view, a local executive stated that cotton stored at the warehouse of a company producing for Decathlon might come from Xinjiang, the region where the Muslim Uighur people are the main ethnic group.
Decathlon’s communication department confirmed it is sourcing goods from Qingdao Jifa, while also stating to AFP that “we strongly condemn all forms of forced labour. We are committed on a daily basis to ensuring integrity and respect for fundamental rights in our business operations and value chain, and we will not hesitate to react and take all the necessary measures if the facts were to be proven.”
The same source said that “100% of the cotton used by Decathlon in manufacturing its products comes from sources committed to sustainable practices, guaranteeing the absence of any form of forced labour, and including organic and recycled cotton.”
In the past, Xinjiang has been hit by bloody attacks attributed by the authorities to Islamists and separatists, and China has launched a huge security campaign in the region, labelling it as counter-terrorism. According to claims by NGOs and Western studies, which AFP wasn’t able to verify, Uighurs are being subjected to forced labour practices.
In 2020, the United Nations published an alarming report on the plight of the Muslim minority in Xinjiang. A publication that came in the wake of an alert issued in 2020 by the Australian Strategic Policy Institute, and was followed the same year by a document from the Center for Global Policy denouncing a more serious involvement of fashion industry players than previously reported. Amnesty International hammered the point home in 2021, after more than 180 associations and trade unions had formed the Coalition to End Forced Labour in the Uighur Region.
Cash Investigation mentioned products bearing the logo of the US pro basketball league, the NBA, of which Decathlon has been a partner since 2021. Decathlon claims to be licensed to sell products “in the livery of the NBA and its franchises,” and to do so “in over 1,700 Decathlon stores worldwide and online,” in Africa, Asia, Europe, the Middle East and Latin America.
The US Congress passed a law in December 2021 prohibiting all product imports from the Xinjiang region, unless companies in the region are able to prove that their manufacturing activity does not involve forced labour.
Cash Investigation is also interested in the legal status of the Mulliez family’s empire, which includes retailers such as Leroy Merlin, Kiabi, Flunch, Boulanger and Auchan, all controlled by the Association familiale Mulliez (AFM), a collective body that doesn’t identify as a consolidated group.
At the end of 2024, Auchan announced an extensive redundancy plan threatening 2,400 jobs in France, but other AFM-controlled retailers, like Decathlon, enjoy a more solid financial position, and the unions have called for redeploying Auchan employees in them.
Given the situation, Decathlon shocked its employee representatives by distributing €1 billion in shareholder dividends at the end of 2024.
Under Armour on Thursday raised its annual profit forecast again after topping quarterly results, as the sportswear maker reaps the benefits of dialing down on discounts and a recovery in demand in North America and Asia.
Reuters
Since returning as CEO in April, founder Kevin Plank has kept a tight leash on inventory of some products, pushed for fewer promotions and slashed its workforce.
Under Armour also introduced products such as Phantom Fore Golf shoes to fend off competition from newer brands including Roger Federer-backed On and Deckers Outdoor’s, opens new tab Hoka.
“Although the goal of resetting the brand to a more premium positioning while narrowing the focus to core fundamentals could prove to be a meaningful catalyst over the longer term, we believe it will take time to unfold,” said Sharon Zackfia, analyst with William Blair.
Under Armour expects annual adjusted earnings per share to be between 28 cents and 30 cents, compared with its prior forecast of 24 cents to 27 cents.
Shares of the company rose as much as 5% at $8.65.
Revenue in Under Armour’s North America segment, a major revenue contributor, fell 8% in the third quarter, after declining 13% in the prior quarter and 12% in the same period a year earlier.
In contrast, Nike, opens new tab in December forecast muted sales as the company scrambles to regain market dominance.
Meanwhile, Baltimore, Maryland-based Under Armour said the latest U.S. tariffs were not expected to have a significant impact.
It said about 3% of its goods imported into the U.S. come from China, and even less from Mexico. It has no manufacturing relationships in Canada.
Under Armour’s quarterly gross margins expanded by 240 basis points to 47.5%, with some support from lower raw material and freight costs.
Revenue fell 5.7% to $1.40 billion in the quarter ended Dec. 31, compared with analysts’ estimates of $1.34 billion, as per data compiled by LSEG.
Adjusted earnings per share of 8 cents, beat estimates of 4 cents.
Canada Goose Holdings trimmed its annual profit forecast and missed quarterly revenue estimates on Thursday due to choppy sales in key luxury goods market China, sending its U.S.-listed shares down 6% in premarket trading.
Canada Goose
Weak consumer spending in China, which is grappling with youth unemployment and a property crisis, has been a major concern for the luxury goods industry and has slowed demand recovery in the region, significantly impacting brands such as Canada Goose.
U.S. luxury retailer Estee Lauder, which bet on China, expanded a restructuring plan on Tuesday that involves up to 7,000 job cuts as the cosmetics giant grapples with persistent demand weakness, especially in Asia.
Toronto, Ontario-based Canada Goose saw revenues in Greater China drop by 4.7%, compared to the previous quarter’s 5.7% jump.
It expects fiscal 2025 adjusted profit of flat to low-single-digit percentage growth, compared to its previous forecast of a mid-single-digit rise.
The company’s third-quarter revenue fell to C$607.9 million ($423.59 million), from C$609.9 million a year earlier.
Analysts on average had expected revenue of C$620.9 million, according to data compiled by LSEG.
Excluding one-off items, Canada Goose posted a profit of C$1.51 per share, compared with an estimate of C$1.54 per share.
M&S delivered a shock leadership team update on Thursday — well shocking to outsiders as the company has apparently been working on the moves for a while — with news that John Lyttle, formerly CEO of Boohoo Group, will be joining on 3 March as MD of Clothing, Home & Beauty in a planned succession. He takes over from Richard Price who’s been in the role since 2020 and is “leaving M&S to pursue a portfolio career, following a handover period”, at the end of April.
M&S said Lyttle has “extensive retail and transformation experience, spending five years at Boohoo and nine years at Primark as COO”.
Maddy Evans, currently director of Womenswear, will also take on a broader role including Lingerie, becoming director of M&S Woman. Charlotte Davies, its director of Lingerie who recently joined from Hunkemöller where she was chief product officer, will report to Evans.
And David Brittain will join as director of Home & Beauty at the end of April from Amazon. He’s currently business development director, Amazon Fashion, Europe.
Additionally, Heidi Woodhouse, who’s director of Home, Furniture & Beauty will be leaving M&S after a handover period with Brittain.
CEO Stuart Machin said that “thanks to Richard’s leadership, the Clothing, Home & Beauty business is now on a much stronger footing with improved product. Style perceptions have increased consistently and our lead on quality and value has extended, driving growth in sales and market share. Richard leaves the business as a long-standing friend of M&S and we wish him the very best.
“That said, there remains much to do and so much opportunity in this next phase of our plan to reshape M&S for future growth. Changes under way to embed strategic sourcing partnerships, a modern planning platform and an efficient logistics network are nascent and there is lots to do to develop a truly omnichannel Clothing, Home & Beauty business.”
He also said that Lyttle “brings extensive experience in driving strong volume-based growth and supply chain transformation across store-based and pureplay retailers. His down-to-earth leadership style fits with our sleeves rolled up, ‘tell it as it is’ culture.
“John will be supported by a strong leadership team. Maddy Evans is transforming our Womenswear proposition and I am delighted to broaden her remit to include our trusted heartland of Lingerie. Bringing all of our Womenswear categories together will further improve our customer proposition and style credentials, and this change builds on the progress Charlotte Davies has already started to make.
“David Brittain is a great addition to the leadership team with a strong track record across Fashion, Home & Beauty in stores and online.”
Entertainment8 years ago