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This week in fashion news: US got tough on some of the biggest textile companies linked to labor violations in China, meanwhile a major luxury player sees sales rise after a luxury slowdown.
Major Chinese textile company banned in the US
Exactly 37 textile, mining, and solar companies have been hit as the US banned imports from several Chinese companies linked to forced labor practices and added them to the Uyghur Forced Labor Prevention Act Entity List. One key textile company, Huafu Fashion Co. (alongside 25 of its subsidiaries), was among them.
Why this matters: Banning imports from companies tied to the labor violations and human rights abuses in Xinjiang was first signed into law in December 2021. Many well-known retailers, particularly Shein, have since been under investigation both in the US and Europe for allegedly using cotton produced in the region.
Brunello Cucinelli shares rise
After months of doom and gloom for many in the industry, luxury has finally seen a major retailer turn a profit. We’re talking about the Italian luxury brand Brunello Cucinelli, which reported a 12.4% increase in revenues in 2024. The better-than-expected results can be credited to the brand’s double-digit sales growth in both the Americas and Asia.
Why this matters: If you’ve been keeping track of the ups and downs in luxury, you know that many mega retailers had sales downturns in 2024. That includes everyone from Kering (Gucci and Saint Laurent parent) to LVMH and VF Corp.
Abercrombie shares drop
While some retailers are kicking off the new year with good news, others aren’t quite there yet—namely, Abercrombie & Fitch, which was hit by a 7.4% drop in share prices in premarket trading this week in spite of a Q2 outlook that was better than expected after a good holiday sales season.
Why this matters: Although somewhat surprising, the dip in Abercrombie’s share price wasn’t a complete shocker. While the company has seen some growth over the past year—it reported a record net sales of $1.2 billion in November—the rate wasn’t quite on par with Wall Street expectations. Analysts projected stronger growth given some high sales numbers over the last few quarters.