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India is aggressively repositioning its economic engagement with Afghanistan, zeroing in on the textile and apparel sector as a high-potential avenue for mutual growth and regional stability. This push is fueled by Kabul’s urgent need to strengthen its domestic textile ecosystem and New Delhi’s established position as the world's second-largest cotton producer.
Capacity building and investment outlook
Recent high-level talks, including the visit of the Afghan Director General of Economic Relations, have cemented plans for technical support and skill development for Afghan cotton farmers. Afghanistan, which imported a substantial USD 742.8 million worth of textiles and clothing globally in 2024, sees India as a critical partner to address its supply chain gaps. India, already the second-largest supplier, exported USD 68.7 million in textile products to Afghanistan in 2024. The renewed focus promises to elevate India’s market share significantly.
"Our goal is self-sufficiency and job creation through the textile chain," stated an Afghan trade official, highlighting the government’s commitment to an "economic-oriented policy." This commitment is backed by enticing incentives, including a proposed five-year tax exemption for new industries and a nominal 1% tariff on raw materials and machinery.
The connectivity challenge While the market opportunity is large, the primary challenge remains logistics. The recent activation of air cargo services on the Kabul-Delhi and Kabul-Amritsar routes, coupled with calls for better utilization of Iran’s Chabahar port, aims to ease shipment issues. This improved connectivity is vital for Indian textile majors, which can leverage their expertise in spinning and garment manufacturing to establish joint ventures or supply raw materials, mirroring the success of initiatives like the SEWA (Self-Employed Women's Association) vocational training centres previously established in the country. The successful navigation of geopolitical and logistical hurdles will be the defining factor in transforming this bilateral textile vision into a multi-million-dollar reality.
The Prada Group is accelerating its most significant strategic move in its 112-year history—the €1.25 billion acquisition of rival Italian luxury house Versace from US-based Capri Holdings—by appointing heir Lorenzo Bertelli as its future executive chairman. The appointment signals a direct injection of the Prada family’s successful turnaround strategy, particularly the revitalization playbook used for its younger brand, Miu Miu, into the lagging Versace brand.
The high-stakes luxury consolidation deal that returns Versace to Italian ownership is set to close on December 2, 2025. The Prada Group is completing the €1.25 billion (approx. $1.4 billion) all-cash acquisition of Versace from US-based Capri Holdings, a move widely viewed as an attempt to create an Italian counterweight to French giants LVMH and Kering.
The turnaround challenge and Miu Miu blueprint
Prada’s move is predicated on the belief that Versace, despite its iconic status and global recognition, is significantly underperforming its potential. The brand’s revenue fell by 15.0% to $193 million in Q3 Fiscal Year 2025 under Capri Holdings, highlighting the urgency of the intervention. Bertelli, who successfully helmed Miu Miu’s recent surge (with retail sales growing 93% in 2024 and a further 41% in the first nine months of 2025), is expected to replicate its model: a blend of sharp product repositioning, renewed narrative focus, and engagement with younger consumers.
Prada aims to leverage its superior industrial capabilities, retail execution, and operational expertise to stabilize the house known for its bold, maximalist aesthetic, creating a formidable Italian luxury conglomerate with pro-forma revenues exceeding €6 billion. While analysts note Prada's mixed M&A history, the group remains financially strong, reporting 19 consecutive quarters of growth as of September 2025. The challenge for Bertelli will be harnessing Versace’s strong brand equity to deliver commercial results without diluting its distinct, high-fashion DNA.
The recent launch of a state-backed compensation fund in Uzbekistan, designed to absorb the costs of Better Cotton Initiative (BCI) certification for local producers, signals a major tectonic shift in the global fibre and yarn market. Uzbekistan, which was formerly subject to an international boycott, has successfully transitioned into a fully integrated textile powerhouse, now achieving 100% domestic processing of its raw cotton into yarn.
This pivot from raw fibre export to value-added manufacturing, supported by new government incentives, directly eliminates the primary financial barrier for cotton clusters seeking key international sustainability credentials.
This strategic policy move is expected to inject a massive, newly certified cotton supply into the global marketplace, directly challenging major yarn-producing hubs across South and Southeast Asia. The sudden availability of ethical Uzbek cotton at a cost-competitive price point intensifies the competition for spinning mills worldwide and will likely exert notable downward pressure on global yarn pricing, particularly in the certified fibre segment. With leading global apparel giants publicly committed to sourcing BCI-certified fibre, the ease of entry for Uzbek supply accelerates a fundamental re-alignment of supply chains. As the nation targets $7 billion in textile exports by 2028, this fund solidifies Central Asia's position as a dominant, vertically-integrated player in the responsible apparel sector.
The highly anticipated overhaul of Britain's import system is set to reshape the competitive landscape for apparel retailers. Following intense lobbying from domestic giants, the Treasury has confirmed plans to scrap the “de minimis” duty exemption on low-value parcels (under £135), a move forecast to generate approximately £500 million ($655 million) annually for the exchequer. The decision directly addresses concerns from legacy high-street brands who argue the historical tax exemption created an uneven playing field, allowing tariff-free entry for direct-to-consumer imports.
Strategic challenge for Ultra-Fast Fashion
For overseas platforms, this regulatory pivot requires a significant supply chain reset. Ultra-fast fashion like Shein’s historical success—shipping low-value goods like a $5 accessory or £12 dress directly to the consumer, will now incur the new levy. Industry data indicates over 1.6 million low-value parcels enter the UK daily under the current threshold, representing a massive volume now subject to duties.
George Weston, CEO of Associated British Foods (owners of Primark, a brand historically reliant on high-volume, low-margin, in-store sales), commented, "This move closes a loophole that has disadvantaged British business." While the full implementation is delayed until 2029, the announcement accelerates the pressure on global players to either absorb the cost or decentralize logistics closer to the market to maintain their aggressive growth plans.
Rieter, a global leader in short-staple fiber machinery, is accelerating its transformation into a diversified powerhouse by preemptively restructuring its organization ahead of the planned CHF 713 million acquisition of OC Oerlikon's Barmag division. This strategic maneuver is designed to create a single-source system provider for both natural and man-made fibers, positioning the combined entity as a major force in the evolving $52 billion textile machinery market.
The ‘Dual-Fiber’ strategy and synergies
The key restructuring, effective January 1, 2026, involves merging its existing Machines & Systems and After Sales divisions into a new Short-Staple Fiber Division. Upon the anticipated completion of the Barmag acquisition in the fourth quarter of 2025, the Barmag business, a market leader in man-made fiber equipment with CHF 734 million in 2024 sales will be integrated as the new Man-Made Fiber Division. This move directly addresses the market trend where synthetic fibers now account for over 60% of textile machinery revenue, offering Rieter a crucial presence in high-growth segments like filament spinning and nonwovens.
The company projects annual savings of nearly CHF 30 million from operational streamlining and aims to enhance its technology leadership by intensifying development between its core Rieter business and specialized component brands like Accotex and Graf.
Navigating industry cycles and financial outlook
Rieter's decisive action comes amidst a persistently weak market environment characterized by geopolitical uncertainty, which has pushed several customer projects into 2026. The company recently adjusted its full-year 2025 sales forecast (excluding Barmag) to approximately CHF 700 million (down from up to CHF 800 million), with a projected negative net result due to acquisition and restructuring costs (CHF 30-35 million one-off charge).
CEO Thomas Oetterli states the combined entity will form a "market leader" whose structurally higher margins in the man-made fiber business are expected to enhance Rieter's through-the-cycle profitability, creating value for shareholders who supported the transaction's financing through a capital increase.
For over a decade, Lululemon Athletica embodied everything the premium athleisure revolution stood for technical mastery, community-driven branding, and an almost cult-like customer following. Its rise was clean and uninterrupted, a masterclass in premium positioning. But 2025 has delivered an uncomfortable reality check. The brand that once defined the category is now battling a simultaneous slowdown in its core North American market and mounting pressure to reinvent its product engine without losing the premium halo that made it a global phenomenon.
The company is not in crisis. Far from it, internationally, Lululemon remains a juggernaut nowhere more so than China. Its balance sheet is strong, margins remain healthy, and its store network is expanding. Yet beneath the surface, the brand is confronting an important truth: the machine that propelled years of hyper-growth is no longer self-sustaining in North America. Shoppers are fatigued. Competitors are hungrier. And product cycles that once felt timeless now read as repetitive. This is Lululemon’s first real inflection point.
North America stalls as tariffs bite
For a company that earns more than two-thirds of its revenue in North America, the latest quarterly numbers land like a warning shot. In Q2 FY2025, total net revenue grew 7 per cent but only because the international business carried the weight. In its home market, growth is almost at a standstill.
Table Lululemon Q2 FY2025 performance
Q2 Fiscal 2025 Result Implication Total Net Revenue Growth +7% (to $2.5 billion) Overall growth is slowing but still positive, buoyed by international. North America Revenue Growth +1% Near-stalled growth in the core market. North America Comparable Sales -4% (Decline) Direct evidence of falling demand and customer fatigue. International Net Revenue Growth +22% Primary engine for achieving the 'Power of Three x2' strategy. China Comparable Sales +17% Highlighted as a key high-growth market. Full-Year Revenue Guidance Revision From $11.15B-$11.30B to $10.85B-$11.00B Reflects lower expectations due to U.S. softness and tariff costs.
The table paints a stark divergence: while China grows at double digits and new global markets accelerate, the US is posting its weakest performance since the mid-2010s. Compounding the slowdown is an unexpected cost shock. With the removal of the de minimis exemption on imports, Lululemon now faces meaningful reciprocal tariff impacts. CEO Calvin McDonald has quantified this at 220 basis points of gross margin erosion, or $240 million in fiscal 2025 alone. The stock market delivered its own verdict: Lululemon shares are down over 50 per cent YTD as of October 2025, its sharpest sell-off since going public.
How predictability became a liability
For years, Lululemon’s formula worked beautifully: timeless silhouettes, high fabric quality, and periodic introductions of new colors or capsule collections. But the consumer is changing and so are competitors. Lululemon’s predictable playbook, once a strength, now feels stale to many long-term customers. CEO Calvin McDonald has admitted that the brand’s lounge and social categories 40 per cent of the total mix “became too predictable.” The symptoms were visible to anyone watching the brand closely:
Stale offerings: Core categories remained dominated by repeated silhouettes and a limited color palette, making once-beloved staples feel unexciting.
Slow trend response: While smaller brands like Alo and Vuori were sprinting to claim emerging microtrends, Lululemon lagged behind. The pickleball boom, the explosion in women’s golf apparel, and the rise of aesthetic-driven loungewear all delivered opportunities that Lululemon failed to seize quickly.
Quality question marks: Loyalists on Reddit forums and social media have complained about discontinued fabrics, thinning leggings, inconsistent sizing, and a perceptible shift away from performance-first design. For a brand built on technical precision, even perception issues can be damaging.
Fewer store visits, higher prices, more dupes
Store-level data points make the slowdown sharper. Customer traffic in US stores is down 8.5 per cent YoY, a clear reflection of waning product excitement. And in a high-inflation environment, Lululemon’s $98-$128 leggings are increasingly competing with $25 dupes on Amazon, TikTok, and big-box retailers.
Competitors today span every price tier. For example, Vuori dominates softness and versatility. Alo owns the social-media aesthetic. Athleta pushes performance credibility. Zara and Gymshark outpace Lulu in speed-to-trend. The premium athleisure category Lululemon once built is now swarming with challengers.
A crowded arena of giants and specialists
To understand Lululemon’s present-day threat matrix, it’s important to examine the competing brands grouped by type.
Table: Major competitors
Competitor Type Brands Core Focus/Edge Against Lululemon Global Sportswear Leaders Nike, Adidas, Under Armour, Puma Scale and Brand Recognition: Massive global market share, superior distribution networks, and a performance-first heritage. They can offer a wider range of technical products and cross-category penetration (e.g., footwear, major sports). Premium Athleisure & Lifestyle Alo Yoga, Vuori, Athleta (Gap Inc.), Sweaty Betty Specialized Niche & Design: Brands like Vuori have surged with a focus on versatile, incredibly soft, "everyday" athleisure that mimics the comfort of Lululemon's core fabrics. Alo Yoga capitalizes heavily on a stylish, celebrity-driven, social media-friendly aesthetic. Athleta offers a strong high-quality alternative, backed by Gap's scale. Value & Fast-Fashion Fabletics, Gymshark, Zara, Private Labels (e.g., Costco) Price and Speed: Offer similar aesthetics and often "dupes" of popular styles at significantly lower price points (e.g., Fabletics' subscription model). They can respond more quickly to fleeting social media trends.
Despite the challenges, Lululemon maintains a strong competitive position built on four core pillars.
1. Premium brand loyalty and pricing power: Lululemon has fostered a quasi-cult following and a strong community connection (e.g., through in-store yoga classes, brand ambassadors). This high brand affinity allows it to command premium prices that competitors often struggle to match without losing credibility.
2. Superior material innovation (the science of feel): The brand is renowned for its proprietary, high-quality technical fabrics (Luon, Nulu, Luxtreme), which provide a superior fit, comfort, and performance that is difficult for competitors to replicate consistently, thus justifying the premium price.
3. Direct-to-consumer (DTC) model: With over 780 company-operated stores and a strong e-commerce platform, Lululemon maintains full control over pricing, inventory, and the customer experience, reducing reliance on third-party retailers and protecting its premium image.
4. International growth engine: The successful execution of its ‘Power of Three x2’ strategy, aiming to quadruple international revenue by 2026, has made its global segment (led by China) a vital growth counterbalance to the sluggish North American market.
Lululemon’s most important gamble in a decade
Leadership knows the brand must change. And fast. The company has initiated the most sweeping overhaul of its creative and product strategy since the early 2010s. The centerpiece of this revival is Global Creative Director Jonathan Cheung, whose appointment signals a shift toward faster, more expressive, more fashion-forward design.
The new product mandate is to increase new style penetration from 23 to 35 per cent by Spring 2026; launch new sub-lines like Loungeful and Big Cozy; integrate AI-led design tools to speed trend recognition and prototyping; expand into more lifestyle-driven categories without diluting performance DNA. If this works, Lululemon can reignite the North American business and reclaim leadership in premium athleisure. If it doesn’t, the brand risks confusing loyal customers while failing to win over new ones. Analysts widely agree, the 2026 product reset will determine the next decade of Lululemon’s growth path.
Levi Strauss & Co. (LS&Co.), the nearly 175-year-old denim pioneer, is forging its next chapter by strategically embedding Artificial Intelligence into its operations. Following robust Q3 2025 results; net revenues up 7% to $1.5 billion and a record gross margin of 61.7%, the company is accelerating its shift to a Direct-to-Consumer (DTC)-first model, targeting a $10 billion retailer goal. The most recent and central initiative is the partnership with Microsoft to develop an integrated agentic AI platform centered on a "super-agent."
Rewiring the apparel workflow
This next-gen super-agent, powered by Microsoft Azure and embedded in Teams, is designed to unify and automate complex corporate workflows across IT, HR, and operations, with an internal rollout planned for early 2026. This move is part of a broader strategy where AI is also directly enhancing the customer-facing retail experience. The company has already launched 'Outfitting,' an AI-driven styling feature on its app that provides personalized recommendations, and is expanding STITCH, an AI assistant for store employees, to 60 US locations. As Chief Digital and Technology Officer Jason Gowans states, "AI sits at the center of that pivot... elevating employee creativity, unlocking productivity and helping us deliver connected, memorable experiences."
The DTC-First growth challenge
The new agentic AI platform acts as a critical operational backbone to support the aggressive DTC growth plan, which saw e-commerce revenues jump 18% in Q3 2025. By streamlining internal processes, the super-agent tackles the challenge of managing the massive influx of data from a growing DTC channel (46% of total net revenues). Microsoft’s Nick Parker notes, "Their commitment to purposeful innovation is redefining retail excellence." The combined internal efficiency and personalized consumer experiences are the key to Levi’s ambition, moving beyond its iconic 501 Jeans to become a head-to-toe lifestyle apparel brand known for agility and operational excellence.
Brand management powerhouse Marquee Brands has announced the acquisition of Stance, the innovative lifestyle sock and underwear label, positioning the group firmly in the rapidly growing premium apparel accessories sector. Founded in 2009, Stance is globally recognized for transforming the mundane sock into a high-margin fashion essential, leveraging bold design and successful collaborations with sports leagues and cultural figures. The addition of Stance expands Marquee’s collective retail sales footprint to $4.5 billion.
ULAC partnership and category entry
The acquisition’s immediate strategic thrust is driven by a global licensing partnership with United Legwear and Apparel Co. (ULAC), which will manage Stance’s product design, development, and distribution worldwide (excluding China). This structure targets the global socks and underwear market, which is projected to expand at a Compound Annual Growth Rate (CAGR) exceeding 7% through 2030, fueled largely by athleisure adoption.
Marquee’s plan is to immediately push Stance into new activewear and footwear categories. While the licensing model offers accelerated expansion, the core challenge remains, as Marquee CEO Heath Golden noted, preserving Stance's signature creative identity and "cultural touchpoint" while achieving mandated global scale.
Topshop, the iconic British youth fashion brand founded in 1964, is slated for a major global relaunch in 2026, including a rapid expansion into twenty new international markets. The move is the first major strategic initiative since ASOS sold a 75% stake in the label to investment firm Heartland in 2024, forming a joint venture aimed at bolstering the brand's global retail presence beyond its digital anchor.
Digital anchor, physical reach
The expansion is central to the JV's strategy to capture new demographics. Having returned to the French high street and secured a UK partnership with John Lewis, the focus shifts to leveraging the brand’s pre-existing appeal in new territories. The parent company, ASOS, reported a 60% rise in Adjusted EBITDA (to £132m) in FY25, driven by a strategic shift toward higher-quality sales. The Topshop relaunch is positioned to capitalize on this renewed financial discipline.
Margin growth meets maximalist demand
This global push faces a complex retail environment where the BoF-McKinsey 2026 forecast predicts only low single-digit growth. The challenge lies in balancing affordability with the high quality needed to justify improved gross margins, which ASOS successfully lifted by 370 basis points (to over 47%) last year. A spokesperson stated, "We are merging profitability with purpose, ensuring the 'cult denim' and expressive styles Gen Z craves are accessible but also deliver sustainable margin." The case study of its successful UK physical return signals appetite for the brand’s nostalgic yet maximalist aesthetic globally.
The Government of India is set to immediately trigger the $2.81 billion Export Mission Framework (EPM) guidelines this week, a move acting as a financial shield for the textile and apparel industry facing unprecedented US tariff shock. The sector, responsible for significant employment, saw a double-digit decline in October, with apparel exports shrinking 12.88% year-on-year, primarily due to the steep 50% tariff imposed by the US since August. This immediate injection aims to stabilize the reeling industry.
Direct financial blitz for MSMEs
The six-year, ₹25,060 crore EPM is structured around two sub-schemes: Niryat Protsahan (₹10,401 crore) and Niryat Disha (₹14,659 crore). The focus of Niryat Protsahan is a direct financial blitz for Micro, Small, and Medium Enterprises (MSMEs), which comprise a large part of the textile value chain. Measures include interest subvention (subsidy on loan interest) and collateral guarantees to ensure affordable trade finance. This direct fiscal support is crucial to help MSMEs sustain orders and avoid mass layoffs, addressing the challenge of costly capital compared to rival exporting nations.
Technical Textiles: The resilient growth bet
A new angle of the government's strategy is the powerful bet on Technical Textiles—specialized products like medical gear and construction fabrics, which offer higher margins than traditional apparel. The EPM's non-financial arm, Niryat Disha, will fund international branding and quality compliance, accelerating diversification away from traditional, highly competitive markets.
The EPM is set to fast-track the sector's goal of reaching $100 billion in T&A exports by 2030 by focusing on such resilient, future-ready products.
