US shippers are steering clear of East and Gulf Coast ports amid worries the 45,000 dockworkers at those trade hubs will go on strike again if their union leader does not land a new contract with employers by a Jan. 15 deadline.

The International Longshoremen’s Association labour union and the United States Maritime Alliance employer group had ended a three-day strike in October with a tentative agreement on wages, but left the thorny issue of port automation still to be resolved.

“Anything we expect that we need in the back half of January, we’re effectively diverting to the West Coast,” said Chris Peterson, CEO of Graco high chair and Crock-Pot cooker maker Newell Brands, referring to the period after the new contract negotiating deadline.

Peterson said the company switched a “couple of hundred containers” of critical materials to the opposite coast to get ahead of what he expects will be a second strike lasting, at most, two weeks.

The Oct. 3 deal between the ILA and USMX gave workers a wage hike of around 62 percent over six years and restarted work at 36 affected ports that handle about one-half of US ocean trade.

Remaining contract issues include automation, a key sticking point in negotiations as unions see it as a job-killer while companies view it as a path to better profit.

ILA union leader Harold Daggett wants employers to ditch automation projects that could threaten jobs, even though US ports risk falling behind key global rivals that are embracing technology.

While the union on Friday said it planned to return to the bargaining table next month, many shippers are skeptical that an agreement can be reached without again stopping work at key ports like New York and New Jersey, Houston and Savannah.

“I’m concerned that we could be right back where we were just a few weeks ago,” said Mike Steenhoek, executive director of the Soy Transportation Coalition.

Salvatore Stile, founder of New York-based freight forwarder Alba Wheels Up International, put the risk of a second strike at 60-70 percent and said his clients also are avoiding East Coast ports.

“The main issue has always been automation, not the money. I think it’s going to go hard core,” Stile said of union bargaining.

Atlanta-based Newell is again rerouting goods after arranging for hundreds of containers filled with items manufactured in Asia to arrive at West Coast ports instead of East Coast facilities in October.

Volumes at the dominant West Coast ports in Los Angeles and Long Beach touched new record highs this summer, when shippers like club store operator Costco and jeans seller Levi Strauss swapped coasts or moved extra goods prior to the original contract deadline on Sept. 30.

“I’ve not heard anybody saying that they’re going to have a quick shift back in allocations to the East and Gulf Coast based on the tentative agreement,” said Port of Los Angeles Executive

Director Gene Seroka, who added that October is shaping up to be another strong month.

Meanwhile, some strike-affected ports are still working to clear cargo ships that got stuck when work stopped.

Three weeks out from the end of the October strike, the total number of waiting container ships is 31 compared with 54 on the day after the strike ended, according to Mirko Woitzik, global director of intelligence for Everstream Analytics.

“Savannah and Houston are still pretty congested following the strike,” Woitzik said.

Retailers likely saved Christmas by rushing in goods early, said Matthew Shay, CEO of the National Retail Federation, which counts Walmart and Target - the biggest users of container shipping - among its members.

Still, the knock-on effects of the strike hurt communities across the country, Shay said. “We certainly don’t want to see that continue into the next year.”

By Lisa Baertlein, Doyinsola Oladipo and Jessica DiNapoli; Editing by Marguerita Choy

Learn more:

US Port Strike Comes to Temporary End

Dockworkers responsible for unloading shipments on the East and Gulf Coast ports decided to resume wage negotiations suspend their strike until Jan. 19, one day after it commenced.

Next Plc raised its profit guidance for the third time this fiscal year on strong sales, even as British consumer confidence weakens ahead of expected tax rises in Wednesday’s budget.

The British fashion and homewares company said that its annual pretax profit is now expected to top £1 billion ($1.3 billion) for the first time, up from previous guidance of £995 million. Next had already raised its outlook in August from £980 million.

Full price sales rose almost 8 percent in the third quarter compared with the previous year, helped by the early arrival of cold weather which encouraged shoppers to stock up on winter clothing, the company said.

Next shares rose 2.8 percent in early trading in London. The stock is up more than 50 percent in the past 12 months.

The improved outlook appears to be “driven by a combination of buoyant international expansion and good domestic traction,” James Grzinic, equity analyst at Jefferies, wrote in a note to clients. Next previously said its overseas business, where it sells clothes online in Europe, parts of the Middle East and Asia Pacific, helped offset some summer weakness in the UK.

“The online channel is likely to remain the main growth driver,” wrote Aarin Chiekrie, equity analyst at Hargreaves Lansdown, in a note. “It already brings in more than half of the group’s sales, and expansion overseas is still in its infancy.”

However, he added that given the potential size of the overseas markets where Next is gaining traction “there’s a big opportunity if Next can execute its expansion plans well.”

Next’s performance stands in contrast to the rest of the sector, with fashion retailers contending with weaker spending. Last month Associated British Foods Plc, which owns discount fashion retailer Primark, blamed unseasonable weather for a decline in footfall and softer volumes in the second half.

The results come just hours ahead of what could be one of the UK’s biggest-ever tax raising budget announcements. Rachel Reeves, chancellor of the Exchequer, is expected to raise about £35 billion a year in tax and welfare savings by the final year of the parliament, and propose another inflation-busting minimum wage increase.

Next’s Chief Executive Officer Simon Wolfson has previously warned that higher wages may result in store closures.

By Jennifer Creery

Learn more:

Next Loses Equal Pay Claim Against Mostly Female Retail Workers

An employment tribunal has ruled that British retailer Next Plc must pay over £30 million in back pay to 3,540 current and former in-store sales workers, predominantly women, who were found to be underpaid compared to their male warehouse counterparts.

H&M- and Vargas-backed polyester recycler Syre is aiming to bring its first commercial production plant online by the middle of next year.

The company launched earlier this year with high-powered backers and has already raised $160 million. It has laid out plans for an ambitious sprint to scale from pilot to industrial production of its textile-to-textile recycling technology within the next decade.

On Wednesday it announced plans to partner with polyester producer Selenis to expand an existing plant in North Carolina. With the addition of Syre’s recycling operations, the facility will be capable of producing 10,000 tonnes of recycled polyester by mid-2025.

”This is truly an important milestone on our journey to drive the great textile shift,” Syre CEO Dennis Nobelius said in a statement. The company is aiming to rapidly expand beyond this “blueprint plant” with ambitions to build 12 industrial facilities capable of producing more than 3 million tonnes globally by 2034.

Syre is racing to scale in a challenging market. The company launched shortly after Renewcell (another H&M-backed venture) went bankrupt, highlighting the technical and commercial hurdles that still face efforts to industrialise textile-to-textile recycling innovations. Renewcell was acquired out of administration in June and rebranded as Circulose.

The failure spurred a push to forge broader partnerships that could support innovators attempting to scale, which many see as critical to meeting the fashion industry’s sustainability goals. Syre launched with a $600 million take-or-pay contract from H&M.

Meanwhile, the company’s plans for a new plant are one of a flurry of new partnerships announced by recycling start-ups this week: Indian conglomerate Aditya Birla Group committed to buy up 5,000 tonnes of raw material from textile-to-textile recycler Circ; outerwear brand Arc’teryx partnered with LA-based recycler Ambercycle to start using its material from 2026; and Paris-based recycler Reju announced plans to team up with Goodwill and waste management company WM to develop infrastructure for textile collection, sorting, reuse and recycling in the US.

Learn more:

H&M-Backed Textile Recycler Syre Raises $100 Million

The joint venture formed by the fashion giant and green industry investor Vargas in March aims to start building two commercial facilities by 2025.

Prada Group continues to defy luxury’s downturn, reporting nine-month net revenues up 18 percent year-on-year.

Growth was powered by Miu Miu, whose wonky yet wearable wardrobe wrapped in a message of empowered girlishness for all ages fuelled retail sales that more than doubled in the third quarter, rising 105 percent year-on-year. The eye-popping expansion is all the more impressive as it comes on top of 58 percent growth last year.

Prada’s retail sales slowed compared to the first half of the year, but remained in positive territory. Third-quarter retail sales rose 2 percent year-on-year.

The group’s emphasis on innovative products and marketing activities that maintain its cultural clout has helped the group to continue to outperform rivals in a slowing luxury market, which has seen sales sputter for even the industry’s biggest and most powerful players. LVMH reported fashion sales down 5 percent in the third quarter; Gucci owner Kering’s revenues plunged 15 percent.

Prada, Hermès and Brunello Cucinelli are the only brands to have reported rising sales this quarter.

Stay tuned to BoF for updates on this developing story.

Stéphane de La Faverie will succeed Fabrizo Freda on Jan. 1 2025 as chief executive of Estée Lauder Companies, the company confirmed today.

de La Faverie has been with Estée Lauder Companies for over 13 years, serving in various leadership roles, mostly recently as executive group president, a position she held for two years. Before joining the company in 2011, he served as a senior vice president at L’Oréal. Additionally, William P. Lauder will step down from his current role as executive chairman, but remain chair of the board of directors.

His appointment confirms rumours from Monday, when the Wall Street Journal reported he had been selected.

It also puts to bed years of speculation. After Estée Lauder’s stock price began a continued slide in 2022, analysts began to question Freda’s leadership, which quickly led to questions over who would succeed him in the top executive role. Its stock is down more than 35 percent since the start of the year; its 2024 forecast, announced in August, missed analyst expectations again.

While the founding Lauder family own 38 percent of the common stock; they control 86 percent of voting rights, and analysts surmised that the family would prefer an internal candidate.

In partnership with Jane Lauder, the chief data officer who announced on Monday she would step down from her role and was thought to also be in contention for the top job, de La Faverie has been leading the Estée Lauder’s “profit growth and recovery plan” since 2023, designed to reboot the company’s flagging performance, with a focus on rebuilding core brand equity and improving its performance in Asia, a stubborn drag on its results.

The duo have already enacted several changes, including brand refreshes and marketing revamps on top brands like Mac Cosmetics and Clinique, and bringing some of its brands, such as Lab Series and Bumble and Bumble, onto Amazon to help the company transition from its historical over-reliance on department stores. ELC has also opened a new production facility in Asia to help streamline its ordering and inventory management.

In a statement, William P. Lauder said, “Stéphane’s deep-rooted industry and operational expertise, and his collaborative and dynamic approach, make him the ideal CEO to move us forward with speed, and urgency,” adding that his strategic vision drive long-term, transformational new approaches for the company.

Stay tuned to BoF for updates on this developing story.

The biggest challenge for the luxury sector today is not the general macroeconomic context or the weakness of key markets like China, but customer fatigue with a luxury industry that seems increasingly banal, Chanel Watches and Jewellery president Frédéric Grangié told Swiss newspaper Le Temps.

While the first two factors are cyclical and will pass, “the third factor is much more worrying, and explains why this crisis could last longer than others. One could call it the trivialisation of luxury; I call it ‘luxury fatigue’,” Grangie said.

“Customers are tired of being bludgeoned by luxury,” the executive added.

Exquisite, exclusive creations are at the heart of what keeps customers excited about and loyal to a luxury brand. An overly commercial approach to fuelling luxury growth has weakened the allure brands have held over many years. “Over-distribution is a major risk factor at the moment,” Grangié said.

Chanel has a more exclusive store network than its main competitors, including a footprint in China that is three or four times smaller, shielding it from dampened enthusiasm for luxury in the region, Grangié said. Family ownership that prioritises long-term choices is another strength.

Overall, Grangié warns the next two years will be difficult for the industry. “We’re going to have to be vigilant. But there will be an advantage for houses with exclusive distribution.”

Learn more:

Inside Luxury’s Slowdown

Economic headwinds, high prices and a lack of novel design are all weighing on what was previously fashion’s most dynamic segment. How severe is the slowdown and how long will it last?