Happy Wednesday and welcome to a new issue of The Spin. Today, Ulrike Howe highlights the US apparel industry's reaction to the proposed Border Adjustment Tax (BAT), the rise of automation and AR in retail and the unexpected lust of Indian men for online shopping. Enjoy the read and feel free to share The Spin!


Target and Walmart face off on Border Adjustment Tax. At yesterday's hearing on the proposed Border Adjustment Tax (BAT) US manufacturing and retail executives testified before the House Ways and Means Committee. Most retailers forcefully reject the proposal, claiming it will increase tax rates and retail prices. According to Brian Cornell, CEO of Target Stores, the discounter’s tax rate would jump from 35% to 75%. The American Apparel & Footwear Association (AAFA) claims that the BAT provision would lead to job losses and bankruptcies, bring hardship onto low-income families and damage international trade relations. In contrast, former Walmart US President and CEO William Simon sees potential upside to the BAT, if "properly implemented."


Multinationals are under pressure. In the current political climate, large multinational companies are increasingly under threat from trade protectionism, regulators treatments and increasing demands for environmental, social and financial accountability. To adapt, large corporations should modify their corporate goals from short-term gains to long-term, socially and environmentally responsible strategies. In addition, large globally integrated enterprises could be converted into federations of quasi-independent subsidiaries. In India, for example, the largest multinationals already collaborate with the smallest startups.



The Arnault family's Semyrhamis SAS has filed a $12.5 billion simplified mixed offer for all Christian Dior shares it does not yet own. The filing with the French financial market authority (Autorité des Marchés Financiers) confirms the intent to divest the Christian Dior Couture division into LVMH Moët Hennessy Louis Vuitton, where Bernard Arnault serves as Chairman and CEO. The terms are in line with the the plans announced on April 25th, which was applauded by investors.

Balenciaga: Shaping Fashion One-hundred years after Cristóbal Balenciaga started his dress making business in Paris, London’s Victoria & Albert Museum is going to showcase more than 100 of the uncompromising couturier’s most influential designs. "Balenciaga: Shaping Fashion" is scheduled to run from May 27th until February 18th, 2018.


In India, men seem to enjoy online shopping more than women. Online retail is booming in India. With the increasing choice of fashion and apparel available online, eCommerce sites in the region have noticed increasing demand from male customers. At Amazon Fashion India, for example, about 60% of the orders come from men and only 40% from women. Indian online retailer Flipkart has seen a noticable increase in men’s apparel and footwear as well. Nearly 80% of Indian men spend on eCommerce compared to only 20% of the women in the region.


Augmented Reality is about to take off. Thanks to the involvement of social media like Facebook in mobile Augmented Reality (AR) the industry is expected to take off swiftly. 45% of US retailers expect to use AI within 3 years. By 2021 the sector could develop into a $60 billion, billion-plus user business. By then, over 80% of mobile AR revenue will most likely come from mobile network data, eCommerce, advertising, consumer apps and B2B sales. The social media platforms entering the mobile AR software market have billions of users and are great at migrating them to new features. Facebook's AR platform alone could be rolled out to Facebook Messenger's 1.2 billion WhatsApp's 1.2 billion and Instagram's 700 million monthly active users.

Rapid automation requires a new look at human resources management. Over the next ten years up to 7.5 million retail jobs in the US are at risk to automation, especially easily automated jobs like cashiers. This will affect about half of the 16 million Americans who currently work in retail, representing about 10% of the working population and about 6% of the gross domestic product. This development requires companies to emphasize human services and and adopt new, collaborative business models that allow employees, customers and communities to benefit.


Thought provoking fashion facts. Currently the global apparel industry generates around €1.5 trillion in revenue per year. By 2030, overall apparel consumption will increase by 63% to about 102 million tons. In the same time period, the volume of water used for apparel production each year is going to increase about 50% from 79 billion cubic meters in 2015 to 118 billion cubic meters. These and more compelling fashion facts are compiled in the "Pulse of the Fashion Industry " report. The increasing amount of packaging waste has already created new packaging minimalists who ship apparel in simple envelopes - to mixed customer responses.


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