Vietnam's exports declined by 10% year-on-year in the first seven months of 2023, but are expected to rebound in the fourth quarter as US inventories normalize and multinational companies relocate manufacturing to Vietnam.

The decline in exports was due to several factors, including high inventory levels in key export destinations, the conflict in Ukraine, and the ongoing COVID-19 pandemic. However, there are signs that these factors are starting to ease, which could lead to a rebound in exports in the coming months.

The US is in the process of normalizing its inventories, which will reduce the need for imports from Vietnam. Additionally, multinational companies are increasingly relocating manufacturing to Vietnam due to its strategic location and favorable business environment.

These factors are expected to lead to a rebound in Vietnam's exports in the fourth quarter of 2023. However, there are still some risks that could hinder this recovery, such as a global economic downturn or rising protectionism.

Overall, the outlook for Vietnam's exports is positive. The country is well-positioned to benefit from the relocation of manufacturing from China and the normalization of US inventories. However, there are some risks that could dampen the recovery, so it is important to monitor the situation closely.

Inditex, the Spanish multinational fashion group, is expanding its Zara Pre-Owned platform to France. The service, which allows customers to buy and sell secondhand Zara clothing, will launch on September 7.

The launch in France is the second for Zara Pre-Owned, which was first launched in the United Kingdom in November 2022. The company plans to expand the platform to all key markets by 2025.

Zara Pre-Owned is part of Inditex's sustainability strategy. The company aims to reduce its environmental impact by extending the lifespan of garments and reducing the consumption of new raw materials.

The platform offers a variety of services, including garment repair, online marketplace, and donation. Customers can also track their orders online and arrange delivery at their preferred Zara physical store.

The launch of Zara Pre-Owned in France is a significant milestone for the company. It is the first time that the platform has been launched in a major European market. The launch is expected to help Inditex achieve its sustainability goals.

Next, the UK-based clothing retailer, has finalized an agreement to acquire a majority stake in Reiss Group, a high-end fashion chain. The deal is worth £128 million ($162 million) and will see Next increase its ownership in Reiss from 51% to 72%.

The Reiss family will retain a 22% stake in the company, while the management team will hold the remaining 6%. The deal is expected to close in mid-October, subject to regulatory approvals.

Next has been steadily expanding its portfolio in recent years, acquiring other well-known brands such as Cath Kidston, Joules, and Made.com. The acquisition of Reiss is a strategic move for Next, as it will give the company a stronger foothold in the high-end fashion market.

Reiss has been performing well in recent years, with sales increasing by 26% in the 12 months leading up to the end of January. The company's online operations are managed through Next's Total Platform business, which also extends warehousing and distribution services to Reiss. This has helped Reiss to expand its international presence.

The acquisition of Reiss is a positive development for both companies. Next will gain a strong foothold in the high-end fashion market, while Reiss will benefit from Next's expertise in retail and e-commerce. The deal is also expected to create synergies between the two companies, which could lead to further growth in the future.

Last week, The Gap Inc. released its fiscal results for Q2 2023 ending in June. The lifestyle conglomerate ended the quarter with cash and cash equivalents of $1.4 billion, an increase of 91 per cent over previous year. A dive into details of fiscal performance shows in most segments, decrease is the common word, however slight that may be. 

A look at Q2 results showed net cash from operating activities was $528 million, year-to-date; net cash from operating activities less purchases of property and equipment, stood at $329 million. Also at the end of June, the ending inventory of $2.23 billion was down 29 per cent compared to last year. The year-to-date capital expenditures were $199 million. The corporation paid its second quarter dividend of $0.15 per share. Additionally, the board of directors agreed the paid dividend in the third quarter would be the same as the second quarter. It must be noted that the company’s annual yield in 2022 was 5.8 per cent. 

GAP, the all-American clothing brand founded by Donald and Doris Fischer in San Francisco in 1969 is a symbol of American informal urban wear worldwide. The Gap Inc. is its formal name and under it are equally famous American high street fashion brands: GAP, Old Navy, Banana Republic and Athleta.

Not so positive quarter

In Q2, Net sales saw a decrease of 8 per cent compared to last year at $3.55 billion while end of March 2023, the first quarter net sales was down by only 1 per cent. This downslide includes the 2 per cent point decrease in GAP’s China sales and a 1 per cent point decrease due to foreign exchange challenges. 

Comparable sales, also referred to as same store sales was down by 6 per cent, a further decline of 3 per cent compared to the first quarter of the year that ended in March. The report states online sales went down by 11 per cent this quarter compared to last year and contributed one-third of total net sales. Store sales decreased 7 per cent compared to last year. The company ended the quarter with 3,456 store locations in over 40 countries, of which 2,592 were company operated. 

In March 2023, The Gap Inc. had confirmed the closure of around 350 US stores by the end of 2023 and to date and it has officially closed 120 Banana Republic and 175 GAP stores across the country. A leading US-based reputed business journal had pointed out in May 2023 a general downturn of purchases from The Gap Inc’s lower end consumers worldwide was a key factor and the company despite management change at the beginning of 2023 has not been able to cater to this customer segment to drive sales. Additionally, all four brands under The Gap Inc., seem to suffer from poor choices in merchandising and procurement. The saving grace so far has been women’s wear for The Gap Inc. brands. 

Indeed, for the last two decades, the American clothing giant has tried hard just one thing as its panacea for everything – change in senior management. Did it work? Not really as all four brands are steadily losing the “all wholesome American” appeal for newer generations and instead of changing its positioning, its product portfolio and aligning with pop culture, yet another CEO, Richard Dickson is ready to play. Brand relevance doesn’t seem a priority.