Asia Fashion Weekly News Bulletin – ISSUE 10 Week of 14 April 2025
(1) LVMH overtaken by Hermes in market capitalisation as sales disappoint
LVMH was overtaken by Hermès as Europe’s largest luxury company by market capitalisation due to disappointing first-quarter sales.
(2) Shein Not Planning to Shift But Exploring to Build Additional Manufacturing Base in India through Partnership with Reliance
Reliance Retail and Shein’s partnership continues, with Shein exploring additional manufacturing in India to strengthen its supply chain without plans to shift operations.
(3) South Korean Textiles Company Accuses Shein of Copyright Infringement
NS International Textiles has filed a copyright infringement lawsuit against Shein in California, alleging that the fast-fashion retailer unlawfully reproduced its designs, seeking an injunction and damages for lost profits.
(4) Matchesfashion collapse leaves creditors short as losses soar past £50m
The collapse of Matchesfashion has left creditors, including luxury brands like Prada, Burberry, and Gucci, collectively owed £50 million.
(1) LVMH overtaken by Hermes in market capitalisation as sales disappoint
(Photo Credit: Reuters/ Gonzalo Fuentes)
LVMH lost its position on Tuesday, 15 April 2025 as Europe’s largest luxury company by market capitalisation, overtaken by Hermès. This shift was driven by investor pessimism following LVMH’s disappointing first-quarter revenue, which fell short of expectations due to reduced consumer spending in the United States and weak sales in China. LVMH’s shares dropped by 7%, resulting in a market capitalisation of €246 billion, compared to Hermès’ €247 billion.
Hermès, known for its luxury handbags and a wealthier customer base, was better positioned to withstand economic downturns. The brand maintains strict control over production, limiting annual price increases to 6-7%. In contrast, LVMH’s exposure to the lower end of the luxury market made it more vulnerable during this challenging period, particularly as its sales declined by 3%, well below the expected growth.
LVMH’s key fashion and leather goods division reported a 5% decline in sales, signalling a tough trading environment. This trend has impacted the broader luxury market, with significant share price declines across major brands, indicating a potential long-term downturn for the industry that could last over two decades.
News Source: https://www.reuters.com/business/retail-consumer/lvmh-shares-slump-after-luxury-giants-q1-sales-miss-forecast-2025-04-15/
(2) Shein Not Planning to Shift But Exploring to Build Additional Manufacturing Base in India through Partnership with Reliance
(Photo Credit: Outlook Business)
The growing trade tensions between the US and China are not expected to have an immediate impact on the partnership between Reliance Retail, an Indian retail company, and Chinese fast fashion giant Shein. While Shein is not planning to shift its operations, the company is exploring the establishment of an additional manufacturing base in India through its collaboration with Reliance. This partnership aims to strengthen Shein’s supply chain by positioning India as a key manufacturing hub.
Shein, relatively new to Reliance’s portfolio, has previously faced challenges in India, including a government ban in 2020 on Chinese-origin apps, but the partnership has since enabled Shein to launch its standalone app in the country.
The collaboration between Reliance Retail and Shein is designed to create an export‑oriented platform for India’s micro, small, and medium enterprises in the textile and apparel sectors. As part of this initiative, Shein has committed to transferring technology and providing operational support to integrate Indian manufacturers into its global supply network.
News Source: https://www.outlookbusiness.com/corporate/shein-not-planning-to-shift-but-exploring-to-build-additional-manufacturing-base-in-india-through-partnership-with-reliance
(3) South Korean Textiles Company Accuses Shein of Copyright Infringement
(Photo Credit: Yahoo News/ Shein)
NS International Textiles (NSI), a South Korean firm, has initiated a copyright infringement lawsuit against fast-fashion retailer Shein, filing the complaint in a California. The lawsuit alleges that Shein and unnamed manufacturers have created, sold, and distributed fabrics and garments that unlawfully reproduce three of NSI’s copyrighted designs.
According to the complaint, NSI has widely distributed fabric featuring the copyrighted designs within the fashion industry for several years and claims to have suffered financial losses due to Shein’s alleged infringements. The specific items mentioned in the lawsuit include a long-sleeve bodycon dress, a three-piece bikini set, and a long-sleeve A-line dress, although NSI notes that the list of infringing garments may extend beyond these examples.
NSI seeks an injunction that would prevent Shein and the unnamed defendants from using the allegedly infringed copyrights, along with claims for all profits gained by the defendants and losses incurred by NSI. This lawsuit is not an isolated incident, as Shein has faced at least 90 lawsuits alleging similar intellectual property violations.
News Source: https://www.yahoo.com/news/south-korean-textiles-company-accuses-221027956.html
(4) Matchesfashion collapse leaves creditors short as losses soar past £50m
(Photo Credit: Matchesfashion/ Retail Gazette)
The collapse of Matchesfashion has left creditors, including high-profile brands such as Prada, Burberry, and Gucci, collectively owed £50 million. The retailer, purchased by Frasers Group in December 2023, was placed into administration less than three months later. Frasers Group cited that Matchesfashion had consistently failed to meet its business plan targets and continued to incur significant losses despite receiving support from the group.
Documents filed at the Companies House revealed that the amount owed to unsecured creditors had risen by 62% from the initially estimated £31 million. Teneo, the administrator, explained that this increase was due to claims being submitted at much higher values than originally reported, with around 200 creditor claims omitted from the initial assessment. While £13.8 million has been settled for valid retention of title claims, remaining creditors, which include landlords and customers, are expected to recover less than £600,000 in total, equating to less than 2p in the pound.
In April 2024, Frasers Group acquired certain intellectual property assets of Matchesfashion out of administration, but this deal excluded £80 million worth of stock and the retailer’s remaining 250 employees. The situation highlights ongoing challenges within the retail sector, particularly for luxury brands, as they navigate financial instability and shifting market dynamics.
News Source: https://www.drapersonline.com/news/matches-collapse-leaves-creditors-50m-out-of-pocket
