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Hello, and welcome back to Retail Brew’s regularly scheduled fashion dispatch, where we recap some fashion highlights each week. This week, a fast fashion retailer reported it’s in debt, and a denim brand put a lawsuit to rest.
Boohoo faces debt
UK-based fast fashion brand Boohoo is in deep debt—to the tune of £95 million—as of the end of February, the company said in its annual report, published Wednesday. Losses were up 76% year over year, reaching 160 million pounds. The online retailer has slashed more than 1,000 positions as sales slipped 13% YoY. CEO John Lyttle attributed the losses to high inflation and a dip in consumer demand.
Why this matters: While luxury retailers are feeling the burn of a spending pullback, Boohoo’s plight indicates that even fast fashion brands aren’t exempt from shoppers battling inflation. While some, like Zara parent Inditex, have somehow managed to maintain consumer interest, others are clearly struggling.
Levi’s lawsuit comes to a close
American clothing company Levi Strauss, which sued Italian luxury brand Brunello Cucinelli in January, has settled its lawsuit. The trademark dispute alleged Brunello Cucinelli was selling apparel sporting “nearly identical” copies of Levi’s famous rectangular pocket tab, first trademarked in 1938. The lawsuit was dismissed after settlement talks between the two brands.
Why this matters: Copyright and trademark infringement lawsuits have become somewhat commonplace in fashion over the last few years. Take Hermès, for example, which sued artist Mason Rothschild in 2022 for allegedly creating NFTs that closely resembled its iconic Birkin bag. The luxury brand ultimately prevailed in the case.
Puma sales grow
Amid near constant news of fashion retailers struggling with rising costs, here’s something positive: Puma notched an uptick in sales, matching estimates, the retailer said this week, thanks in part to some iconic styles from the ’70s and ’80s making a comeback. The sportswear group’s shares went up 4% on the news.
Why this matters: Puma’s sales bump comes as larger sportswear brands, including Adidas and Nike, have indicated challenging times ahead. Earlier this year, Nike announced cost-cutting measures, including cutting 1,700 jobs, and in December, it lowered its profit outlook for the year. Likewise, Adidas warned of waning demand in North America, and lowered its sales forecast below analyst expectations.