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Coats Group sets “exciting targets” on back of strong 2024 results

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When a trading statement opens with “strong delivery, exciting medium-term targets with compounding cash and earnings growth” you know it’s going to be an easy one to write.

Coats Group

So London-listed industrial threads and footwear components manufacturer Coats Group delivered a stream of (mostly) positives for the year ended 31 December.

It led with revenues up 8% to $1.5 billion on a reported basis and 9% currency neutral (CER) as customer buying patterns normalised versus 2023 when businesses in general were impacted by pandemic-related  destocking.

Apparel and Footwear revenues grew 13% and 10%, respectively.

But Performance Materials failed to perform again, impacted by weakness across all North America end markets while there was also structural softness in North American Yarns, it admitted.

Back to the good: group adjusted EBIT rose 16% reported and by 18% CER to $270 million while the EBIT margin of 18% was ahead of the previously-announced 17% 2024 margin target. And that came despite in-year margin headwinds from that weaker PM division.

Strategic highlights included a continued outperformance against the industry in Apparel and Footwear with further market share gains (+100bps Apparel and +200bps Footwear).

There was also an extended global market leadership in 100% recycled thread products where revenue grew 144% to $405 million, “a further significant acceleration in industry adoption”, its noted.

Meanwhile, that troublesome Performance Materials division has seen its Americas manufacturing footprint “right-sized” in Q4 with the closure of the Toluca site “to align to structural softness in North American Yarns [that will] drive immediate margin improvement”.

As for Coats’ new medium-term targets, these include 5% average organic revenue growth; EBIT margins to grow to 19-21%; an expected generation of $750 million adjusted free cash flow over the next five years; maintaining a strong financial position; managed investment to sustain organic growth; and an increasing opportunity “to enhance value-creation through acquisitions”.
 
It added: “Based on current market conditions and normalised customer buying behaviour, we anticipate another year of financial and strategic progress in 2025, in line with market expectations.
 
“This guidance reflects continued organic growth for Apparel and Footwear, in line with the medium-term growth targets for these divisions. Organic growth in Performance Materials is expected to be modest with no expected recovery in the America’s Yarns. Margins in 2025 should benefit from further growth, improvement in Performance Materials and the final benefits from strategic projects, which will be balanced in part by some targeted reinvestment to drive long term growth initiatives.” 

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White Stuff launches archive collection as part of 40th anniversary celebrations

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Celebrating its 40th year, British lifestyle brand White Stuff is delving into its archive to launch a 17-piece collection called ‘Rewind ’85′. 

Toyah Willcox, Martin Kemp and Sinitta join The White Stuff call centre to take Rewind ’85collection orders

In a tribute to the brand’s original designs, the range “brings a modern twist to nostalgic customer favourites”. These include graphic tees, first sold to skiers in 1985, to ‘90s surfer-style’ half-zips.

And to mark the occasion, the brand also re-launched a hotline (“with the help of a few 80s icons”, including Martin Kemp, Toyah Willcox and Sinitta, taking calls at the brand’s call centre in Leicester) where customers were able to call in to order from the range before its 4 March launch online.

The launch also marks a nostalgic journey from when founders George Treves and Sean Thomas had the idea of designing and selling T-shirts in the Alps to fund their winter skiing trips, first sold from the back of an old Citroen 2CV. We’re told these original designs have since become “iconic”, with the tees and half zips “becoming firm favourites among those lucky enough to own them”.
 
To mark the anniversary, White Stuff also polled its customers via social channels to discover which past pieces they wanted to bring back from the archive. So the Rewind ’85 collection features curated garments across ski- and surf-inspired half zips and rebooted heritage tees, paying homage to the original references to the ‘Boys and Girls from White Stuff’ prints.

The collection is also “a love letter to both the original designs – which embody the relaxed, unique style at the heart of the brand’s roots – and customers who have cherished the designs for decades”.

So the art direction features nostalgic 80s and 90s office-style imagery and video, shared across the brand’s social channels (IG, Facebook, X and TikTok).

To complement the launch, 13 White Stuff stores – including in Manchester, Liverpool and Edinburgh — have also had their windows overhauled to feature the retro campaign.

In addition, the brand will use outdoor advertising across 13 locations and 139 sites in the UK from next week to showcase Rewind ’85 product on Cornish surfers and Scottish ski tourers.  

White Stuff CEO Jo Jenkins said: “We’ve built such a loyal customer base since White Stuff started… and while we’re proud to be the modern brand we are today, we never want to forget our heritage.”
 
Prices for the collection range from £30 to £65.

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Happy Zalando has strong 2024, expects more of the same in 2025

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Zalando issued an upbeat results report on Thursday, talking of expectations for “accelerating growth” in 2025 after a strong 2024 performance.

Zalando

And it talked up the key new partnership with the UK’s Next that was announced late last year. This year, Zalando’s ZEOS logistics operation is becoming the “partner of choice” for Next in fulfilling online DTC orders for most of continental Europe. The partnership, will see it introduce new fulfilment features “that will benefit all ZEOS clients in the future. These include advanced fulfilment capabilities — like virtual bonded warehousing — as well as enhanced onboarding and inventory management capabilities. ZEOS is also expanding its services to 10 additional European markets, where Next is already trading”.

Thursday saw the German e-tail giant detailing its expectations for the current trading year and it said its 2025 gross merchandise volume (GMV) and revenue should grow between 4% and 9%, “driven by the successful execution of Zalando’s ecosystem strategy across both growth vectors business-to-consumer (B2C) and business-to-business (B2B)”. That excludes an impact from its About You acquisition on either revenue or profits.

Meanwhile adjusted earnings before interest and taxes (EBIT) should rise to a range between €530 million and €590 million.

Zalando
Zalando – DR

2024 strength

That confidence comes after a buoyant 2024 as both GMV and revenue were in the upper half of the firm’s guidance range, with 4.5% and 4.2% growth, respectively. GMV reached €15.3 billion, while revenue was €10.6 billion.

B2C revenue was up to €9.657 billion from €9.301 billion. And B2B revenue was up to €952 million from €854 million.

Its adjusted EBIT jumped to €511 million from €350 million, which actually beat the updated guidance for €440 million-€480 million it had issued earlier.

The adjusted EBIT margin also rose from 3.5% in 2023 to 4.8% in 2024, “supported by strong operational efficiencies and a significantly higher B2C gross margin, which saw a year-on-year increase of more than 2 percentage points to 43.5%”.

Net income rose to €251.1 million from €83 million in FY23.

Zalando is now Diane von Furstenberg's exclusive retail partner in Europe
Zalando is now Diane von Furstenberg’s exclusive retail partner in Europe – Zalando x DvF

And it returned to active customer growth in 2024, with the number up 4.5% to an all-time high of 51.8 million. The number of orders rose to 251 million from 245 million and while average orders per active customer dipped slightly to 4.8 from 4.9, the average basket size rose to €60.90 from €59.80.

The company is aiming to “build the leading pan-European fashion and lifestyle e-commerce ecosystem along two growth vectors B2C and B2B” with co-CEO Robert Gentz saying that “our ecosystem strategy is progressing well and is our exciting new North Star”. 

In 2024, the company made “significant strides” in onboarding new, “highly relevant brands and assortments” like Versace menswear, Marine Serre, On running, and Fjällräven, enhancing its Designer and Sports offerings. In February, Zalando also became the exclusive retailer for Diane von Furstenberg in Europe. 

The e-tailer also improved product presentation through “elevated product detail pages, and is taking the product experience even further with tailored and innovative digital experiences such as its digital size advice for customers based on reference items and body measurements”. 

Since the initial launch in 2022, Zalando has also doubled the Adaptive fashion assortment, offering more than 600 styles in the course of 2024 — 170 more than the year before — across several categories, including footwear, sports and kidswear.

It has also expanded its “try before you pay” solution with “success” in Germany leading to expansion to eight more markets.

Lounge by Zalando
Lounge by Zalando – DR

And talking of expanding its initiatives to further markets, its Beauty proposition is to be expanded to Spain and Finland, so will be serving customers in 13 European markets. Meanwhile discount shopping club Lounge by Zalando is being expanded to five more countries in 2025, to be available in 22 markets.

Other developments this year include rolling out the company’s updated loyalty programme Zalando Plus further. The programme has already been successfully launched in Germany, Italy, Spain, France, the Netherlands, Switzerland, and Austria, and will be rolled out to most markets in 2025. 

Zalando will also expand its platform into new markets, launching in Portugal, Greece and Bulgaria.

The company is focusing on tech too and is piloting an outfit-builder experience called Stylelt, which allows users to style a complete outfit on the avatar of their choice, “letting them experiment with different looks and share their inspirations with friends, family, and followers”. 

Meanwhile, in B2B, it’s opening up its logistics infrastructure, software, and service capabilities “to be a key enabler for brands’ and retailers’ e-commerce transactions with its ZEOS operation system, regardless of whether they take place on or off its platform”.

We’ve already mentioned the big Next deal, but as well as that, ZEOS now serves 12 markets following the launch in Switzerland, Poland and Spain. 

Beyond that, merchants can now sell on 10 different channels, including brands’ own e-com destinations, as well as via nine marketplaces that collectively cover 85% of the total marketplace volume in Europe. 

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UK retail footfall stabilises in February, expect March weakness

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UK retail footfall throughout February showed “resilience amid seasonal and economic pressures” as retailers look [nervously?] ahead to the Spring Budget.

Image: Charter Walk, Burnley

That’s MRI Software’s take on retail visits across the 2 February-1 March trading period as footfall fell by 0.3% compared to last year in all UK retail destinations. The decline was driven by a 1.5% dip in high street activity.

“This aligns with trends typically witnessed in February and may be reflective of adverse weather conditions and transport disruptions impacting footfall”, the report noted.

But on a month-on-month basis, footfall numbers were more upbeat, rising 7.3% in all UK retail destinations “which aligns with historical trends observed each February as activity levels normalise following the post-Christmas slump”.

Weekday year-on-year footfall last month rose marginally (+0.1% year on year) whereas weekend footfall declined 3.8%, which “may well reflect shoppers urging caution in light of price increases”, MRI said.

Footfall trends over a 24/7 period also highlighted a core area of growth, with the early evening period (5pm–8pm) growing by 0.9% annually during February, “continuing the positive trend in the evening economy as consumers combine leisure, dining and retail experiences”.

However, that weekend footfall drop suggests “that shoppers may still be managing discretionary spending carefully in light of ongoing cost pressures”.

And MRI’s ‘Central London Back to Office’ benchmark also highlighted a 3.5% drop in footfall during February compared to last year, the first annual drop experienced in 11 months, it noted.

But it highlighted that the flu season, which has been especially disruptive in recent months, “is likely to have impacted people’s willingness and ability to visit busy retail destinations and offices”.

The report also said that “retailers remain optimistic” as 55% of those surveyed in its weekly ‘Insights from the Inside’ poll revealed sales during the February half-term holiday were higher this time compared to last year. It provided a boost for physical retail destinations, particularly shopping centres and high streets where footfall jumped 9% and 11.6%, respectively,

However, 58% of retailers contacted also expect March sales to be lower compared to last year as the Easter holiday shifts into mid-April.

“As the sector prepares for the upcoming Spring Budget, attention is turning to how financial policies may further influence consumer confidence and retail spending. Potential changes in tax, public spending, and household support will be closely monitored for its impact on disposable income and retail demand in the months ahead”, MRI concluded.

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