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WWDInternationalTradeShowsSECTION II Traffic Jam The calendar is filled with an array of trade fairs in the first half of 2013 and organizers hope to have packed houses like the one at this Bread & Butter show in Berlin. PHOTO BY STEFFI TAGGELT/©BREADANDBUTTER.COM PHOTO BY 2 WWD WEDNESDAY, NOVEMBER 14, 2012 SECTION II WWD.COM INTERNATIONAL TRADE SHOWS Waiting Out Euro-Zone Woes rather than the increasingly By SAMANTHA CONTI cash-strapped and cautious The European debt crisis locals, while the middle-mar- dampens the first-half outlook. LONDON — Anyone wondering about ket continues to suffer. the future of Europe could always “Overseas visitors are have a glance at German Chancellor driving sales growth and Angela Merkel’s diary. will continue to drive it over Earlier this month, she told a the Christmas period,” said regional meeting of her Christian Michael Ward, managing di- Democratic party in Berlin that the rector of Harrods, during a sovereign debt crisis in the region roundtable breakfast spon- would last “at least” five more years. sored by Walpole, the organi- “Whoever thinks this can be fixed in zation that aims to promote one or two years is wrong,” she said. British luxury brands. Few would disagree. In September, Ward said the Chinese, consumer confidence remained broad- African, Thai, Indonesian ly flat in Europe, according to the and other Far Eastern European Commission, while consum- tourists want superluxury ers’ unemployment expectations wors- brands, while the middle ened. European households’ expecta- market is disappearing. tions about their financial situation That’s just one reason why and savings over the next 12 months Marks & Spencer is having remained broadly unchanged. problems. In its latest finan- “Most of Europe is in recession cial report, the widely regard- right now, and I don’t see how fashion ed bellwether for high-street and clothing can escape the effects sales reported a 9.7 percent of the economy,” said Nick Hood, a slide in pretax profits and a continued bleak out- look for U.K. spending. the shoe brand, and with Topman for a “A key part of the gross margin ex- Burberry’s sales “Recent trading has been series of Harris Tweed jackets and ac- pansion story for European apparel have flourished. volatile,” said chief executive cessories. retailers over the past 10 years has officer Marc Bolland. “This, While the higher end of the market been the removal or loosening of cloth- coupled with continuing pres- is thriving, the struggling middle mar- ing import quotas from outside the sure on consumers’ disposable ket could soon come under new cost EU [European Union], which has led incomes, makes us cautious pressures. to increased imports from low-cost about the outlook for the rest According to a recent report by manufacturing countries, particu- of this year.” Bernstein Research entitled “European larly China,” said the report. “While PPR, with brands ranging Apparel Retail: Apparel Cost Inflation in European apparel retailers have ben- from Gucci to Puma, encap- China and the Gross Margin Problem,” efited from these lower costs over the sulates the polarization in the the benefits of cheap production in past decade, the key question going market. Last month, Puma re- China may have reached their peak. forward is whether there are more ported an 85.1 percent slide in sourcing gains to be had, or whether third-quarter net profits, re- costs may begin to increase, pressuring flecting the impact of restruc- retailers’ gross margins.” turing measures designed to The Bernstein study said savings offset a sharp decline in sales are likely close to peak levels for the in crisis-hit Europe. Puma industry and that apparel input cost plans to shut around 80 stores, inflation is “increasingly likely” over mainly in mature markets, and the next five years. has already started cutting Hood of Company Watch said jobs, particularly in Europe. Bernstein’s projection sounds about By contrast, third-quarter right. revenues at PPR’s luxury di- “I don’t think input prices are going vision climbed 24.3 percent, to go down,” he added. “If labor costs fueled by Gucci, YSL and are rising in China, it’s only a matter of Bottega Veneta. time before they’re rising in Vietnam, A similar story applies to too, one reason why there’s more and the fabric firms that are set to more talk about bringing manufactur- show over the next six months. ing back to Europe.” Laurent Garigue, who sup- And that could be one of the engines business analyst at Company Watch, plies high-end women’s fabrics to Harris Tweed said 2012 was its driving the recovery in Europe, for a London-based firm that monitors major British, French and Italian best for production in many years. which Merkel and others are hoping. retailers’ and other companies’ finan- fashion houses, said over the past few cial health. “By general consensus, years every client has increased the the U.K. is having its worst year since quality of fabrics it buys. 2008, and the victims are the special- “There’s been a marked shift high- ist retailers without good online of- er,” Garigue said. “Even the high end ferings. Fashion is polarized between has moved up a notch.” Primark and the luxury brands, while He added that his clients are order- M&S [Marks & Spencer] is a perfect ing smaller numbers of units at higher example of how the middle market is prices. suffering.” “Four years ago, the big question Primark is a key player in the value from clients was ‘How much?’ Today, fashion retail sector, with more than the question is ‘Is it beautiful?’ Price 240 stores in the U.K., Ireland, Spain, is no longer the overriding factor,” said Portugal, Germany, the Netherlands, Garigue, who is founder and owner of Belgium and Austria. the namesake British company. “There “The feeling in the U.K. is that are no taboo prices, the product just there will be a major correction, with has to be beautiful.” almost every major retailer cutting Similarly, the Harris Tweed back on its number of stores,” Hood Industry Forum said last month that added, with companies opting for mul- 2012 had been its best year for produc- tichannel growth outside the U.K. and tion in almost 15 years. Europe. It expects total production to reach European sales at big brands such more than 1.1 million yards of cloth as Burberry are flourishing due to the by the end of the year. Over the past Chanel’s Rue Cambon store in Paris. international, big-spending traveler year, it has collaborated with Clarks, PIASECKI/FILMMAGIC MARC PHOTO BY 4 WWD WEDNESDAY, NOVEMBER 14, 2012 SECTION II WWD.COM INTERNATIONAL TRADE SHOWS The Ethical Fashion Show. Paris Salons Primed for Foreign Visitors Bijohrca, the international jewelry ex- around 85 percent of foreign visitors. By LAURE GUILBAULT hibition to be held from Jan. 18 to 21, Messe Frankfurt France has scrapped and Maison & Objet, from Jan. 18 to 22. the Ethical Fashion Show, which would PARIS — Despite a depressed global The shows will take place amid a have taken place in January. economic context, trade shows organiz- gloomy outlook for the French mar- “We noticed that there are not enough ers in Paris are forecasting that footfall ket. According to data from the French companies in France interested in the for the first half of the year is going to be Fashion Institute, or IFM, sales of wom- ethical fashion sector,” Scherpe said. on par with last year, thanks to an uptick en’s ready-to-wear dropped 5.8 percent He added that Messe is looking to in visitors from emerging markets. in the first seven months of the year and bring back the salon with a new format, Many shows under the Paris sales of men’s rtw were down 2.5 percent. geared to consumers this time, prefer- Capitale de la Création umbrella, “Even the luxury end of the market is ably in Paris in May. the collective that groups some of the seeing a settling,” said François-Marie Another change to the Paris scene French capital’s leading trade shows Grau, general secretary of the French comes from Who’s Next, slated for and events in fashion, accessories Women’s Ready-to-Wear Federation. Jan. 19 to 22. The banner “Who’s Next ative agency La Part des Anges. and design, are upping their fashion In 2012 overall, Grau expects rtw sales Prêt-à-Porter Paris,” encompassing six “We have editions of the show in ante to generate interest. Initiatives to fall at least 2 to 3 percent. Exports are areas, will become “Who’s Next Paris.” Hong Kong and Shanghai. We wanted range from the creation of a new event, a sweet spot, however. French women’s “We dropped ‘Prêt-à-Porter’ to high- to regroup all of them under the same Tranoï Preview, to the return of Maison apparel exports to the U.S., for instance, light that we have as many accessories logo to [capitalize on the] Interfilière d’Exceptions by Première Vision and a jumped 47.5 percent in the first six brands as ready-to-wear brands,” a brand,” said Taya de Reyniès, lingerie new logo for textile fair Interfilière. months of 2012, according to the IFM. spokeswoman for the show explained. division director at organizer Eurovet. Others like Salon International de Michael Scherpe, president of Messe There are about 2,000 brands, split Première Vision, with a three-day la Lingerie hope better dates for their Frankfurt France, the organizer of the equally between apparel and accesso- session running Feb.