GLMS SEC released a research report stating that by 2026, if global textile and apparel retail demand improves, apparel brands may enter a phase of passive inventory replenishment. Additionally, global sportswear leader Nike is at a critical juncture in its operational turnaround. Should recovery trends solidify, manufacturers deeply tied to leading brands could see order and valuation rebounds.
On the brand side, the firm remains optimistic about high-growth segments driven by structural demand shifts. In personal care and hygiene, consumer demand for premium lifestyles continues to rise, with significant growth potential for wet and dry wipes.
**Key Insights:** - **Retail & Export Trends:** From January to October 2025, China’s above-quota retail sales of apparel, footwear, and textiles grew 3.5% YoY, maintaining low-to-mid single-digit growth. October saw a 6.3% YoY increase, likely buoyed by seasonal trends. Online and offline channel disparities narrowed. - **Exports:** Textile, apparel, and footwear exports fell 3.3% YoY to $305.5 billion from January to November 2025, with declines accelerating since March. However, textile exports turned positive in November, while apparel and footwear declines moderated. Vietnam’s textile exports outperformed but also slowed sequentially. - **Sector Performance:** The CSI Textile & Apparel Index rose 15.1% YTD but lagged the SSE Index by 0.9ppt. Fund allocations to the sector dropped to 0.16% by Q3 2025, reflecting deepening underweight positions.
**Manufacturing Focus: Nike’s Supply Chain & Global Expansion** Global apparel retail diverged, with modest growth in the U.S. and UK but pressure in Japan. U.S. wholesale inventory declines eased, signaling potential order recovery for upstream manufacturers. Nike’s FY2026Q1 revenue decline narrowed to -1% (constant currency), with early signs of North American and distributor channel recovery. Manufacturers aligned with Nike may benefit from order rebounds.
Looking ahead, eased U.S.-China trade tensions and tariff relief could bolster manufacturing certainty. Long-term, firms with globalized production to mitigate supply chain risks may gain market share.
**Brand Opportunities: Sports & Outdoor, Premium Growth** Despite slowing quarterly growth, most domestic sportswear brands maintained positive sales in 2025Q1–Q3, with standout performers like Descente, Kolon, and Saucony. China’s outdoor performance apparel market grew at a 13.8% CAGR (2019–2024), reaching ¥102.7 billion in 2024, with local brands outpacing at 17.8%. The 2026 Milan Winter Olympics could further energize winter sports demand.
Meanwhile, cotton-based products like sanitary pads and wipes are entering a premium growth phase, with brands emphasizing safety and comfort poised to capture market share.
**Risks:** Tariff volatility, weaker-than-expected consumer demand, heightened competition, and raw material price fluctuations.
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