Levi’s earnings disappoint … Boohoo highlights strains e-commerce is facing … BNPL beats the market … Supermarkets are seizing the fashion market … EU retail sales face continued headwinds
BNPL Beats the Market
The $132 billion Buy Now Pay Later (BNPL) market could surge to nearly $3.7 trillion by 2030 as more consumers take advantage of ways to pay for goods and services in interest-free installments, per Investopedia.
- PayPal Credit dominates the market with four times as many users as the next largest BNPL provider. Klarna is the second largest provider, followed by AfterPay and Affirm.
- Use among Gen Z is expected to rise to almost 50% by 2025.
- As of last year, 360 million people around the world used BNPL, a number that could almost triple to 900 million by 2027, according to Juniper Research.
- Apple Pay is launching Apple Pay Later this month.
- Default rates at major BNPL providers holding steady at 1% or less, consistent with long-run averages, per Investopedia.
Competitive Advantages: cheaper (no interest) than credit cards (av. 24% interest), simpler approval process and more flexible.
Growth Outlook: Asia is seen as the fastest growing market for BNPL due its acceptance of electronic payment platforms. India is expected to be a high potential market, with the number of BNPL users expected to reach 116 million by 2027, from 25 million in 2022, per Juniper Research.
FINANCE
Levi’s (USA) reported Q3 revenue was flat at $1.51 billion and slightly below analysts expectations of $1.54 billion. Net income fell 94% to $10 million.
- Sales fell in N. America and Europe, but rose in Asia driven by China.
JCPenney (USA) reported Q2 net sales fell 10% to $1.6 billion. Net income fell 65% to $36 million.
Boohoo (UK) reported H1 sales fell 17% to £729 million ($892 million), while losses rose to £26.4 million ($32.3 million).
- The e-commerce retailer warned that sales will fall by 12-17% this year due to competition from rivals like Shein as well as the return to physical stores.
- Rising logistics costs were blamed for the decline in earnings.
PODCAST
Why Early Stage Investment is a Fast Growing Asset Class
Rising interest rates have changed the game. After a near 20 year run, VC funds and Angel investors have left the market.
However there are still opportunities for investing in startups. It’s just that now they are a bit different.
In this podcast, Charles Sidman, Founder and Managing Partner of ECS Capital Partners, shares his experience investing in over 50 startup or growth companies.
You’ll Learn:
– The risks associated with this asset class and how investors can protect themselves.
– How investors can unlock the potential of early-stage companies for maximum financial returns.
– Why he favors ‘deep tech’ enterprises over other enterprises. And how he evaluates their potential to scale and determine their true competitive advantage.
MARKET INSIGHTS
Supermarkets Seize the Fashion Market
While most brands are laser focused on the competition from fast fashion, they might be wise to also take a lot at the inroads that supermarkets are making into fashion.
What started as an add on category to boost sales, has evolved into a serious category for supermarkets.
Serious not just in terms of sales growth, but also in terms of the investment supermarkets are making in elevating their apparel brands.
From better quality to attractive store displays, supermarkets are going to win a growing share of the market that is on a budget but wants something better than what fast fashion is offering.
In the UK, Sainsbury’s is now rolling out fashion hubs in some of their stores, featuring their own and third party brands. … Read more
Best Selling Fabric Directions for AW 2024-25
New fabric developments are giving brands an opportunity to elevate their collections – and create apparel that consumers want to buy!
MARKETS
Eurozone retail sales fell by 1.2% month-on-month in August, after several months of stagnation. Headwinds for retail remain as real wage growth is still negative and consumers are currently still favouring services, per ING Bank.
UK families have spent almost all of the extra cash they saved during the pandemic amid ‘clear signs’ of an economic slowdown, according to Ben Broadbent, the Bank of England’s deputy governor. He added that discretionary spending had weakened a lot.
He expects the jobs market to weaken and for inflation to continue to ease.
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