Fashion
South East Asia year-end review 2025: Minnows under heat
In addition, strategic competition between the US and China adds complexity to the situation because many South East Asian garment factories depend on raw materials from China. Now they are under pressure to reduce this reliance while maintaining trade ties with both economic superpowers. The impact is felt most strongly by women in these countries. Around 70 per cent of garment workers are female, and the new tariffs threatened their already low income. Job losses directly affect the survival of their families.
Myanmar
Smaller garment-producing economies like Myanmar, Thailand and Laos came under intense pressure from steep US tariffs and shifting geopolitics.
Tariff hikes disrupted factory orders, accelerated closures, and threatened livelihoods.
Exporters were left to scramble for alternative markets, push trade negotiations, and rethink supply chains amid rising costs and dependence on China.
The 40-per cent tariffs on Myanmar exports took a heavy toll on the country’s garment industry, with foreseeable shut down of several factories. The tariff came into effect on August 1, and since then orders dropped sharply, leading to job losses, fewer overtime hours and eventual factory closures – at least four in the industrial zones of Yangon’s Hlaing Tharyar and Shwepyithar townships alone. The first to shut down was Twinkle (Myanmar), a factory that used to manufacture garments for US-based Callaway Golf and luggage maker Samsonite. Other closures included SDI Manufacture, Wan Xin Myanmar, and Eternal Fashion. In the past, factory closures used to be caused by electrical problems, raw material shortages or road closures but lately tariff became the major contributing factor. Over 700,000 workers are employed in Myanmar’s garment factories, with double that number in related industries. An estimated four times that number of family members depend on their wages, according to the Myanmar Garment Manufacturers Association (MGMA).
To counter the effects of the tariffs, some factories that previously catered to the US market started seeking orders from Japan, South Korea, and the EU.
Alongside the high tariff, Myanmar also faced heat from the ILO (International Labour Organisation) over violations of agreements related to workers’ rights, such as freedom of association and the elimination of forced labour.
Thailand
Thailand’s tryst with US reciprocal tariff began with imposition of 36 per cent rate on April 2. However, after successful negotiations, the US reduced reciprocal tariff on Thai goods to 19 per cent starting August 1. In September, Thai garment exporters called on the new government to pause wage hikes and accelerate EU FTA talks, noting that garments remain a labour-intensive sector employing some 600,000- 800,000 workers. Rising wages to 400 baht per day would disproportionately affect new and unskilled workers whose productivity remains low, also increasing costs for employers. In Thailand, labour and raw material expenses make up 60-70 per cent of total production costs for garment manufacturers. Since the US accounts for approximately 40 per cent of Thailand’s garment exports, the increased US tariff, up from an average 10 per cent to 29 per cent, threatened this key market. On the other hand, Thai exporters face EU tariffs averaging 10-20 per cent depending on the garment type, so securing an FTA with the EU was seen as an opportunity to open up trade with 27 countries, which will help in offsetting potential losses in the US market.
Laos
Although the European Union, especially Germany, has been the main destination for Laotian textiles, the US has long been among the top five export markets. This is when Laos exports to US is relatively small comprising a small number of factories which supply the American market. Driven by US trade deficit of over $760 million with Laos, US administration imposed one of the highest tariff charges of 40 per cent on the small Asian nation. To complicate things further for Laos, its supply chains are closely tied to China. The high tariff is estimated to effect around 20,000 or more out of nearly 30,000 workers which the garment industry employs, while representing around 13 per cent of export earnings, excluding natural resources. This number rises in case of companies’ closure. If US customers pull back, an estimated 35 to 40 factories may face disruption.
Laos is a regional base for garment manufacturing that supplies to many western brands. Production of mattresses is among the various segments that are severely affected by the tariffs. In recent times, the country has benefitted with the success of the China–Laos Railway, which has transformed Laos from a landlocked state into a regional logistics hub, significantly reducing shipping times and costs.
Fibre2Fashion News Desk (SB)
Total apparel shipments fell by 2.66 per cent year on year to $425.44 million in January 2026, compared with $437.07 million in the corresponding month of 2025. The performance underscored uneven global demand conditions that continue to influence sourcing patterns and order flows for Sri Lankan manufacturers.
Sri Lanka’s apparel exports declined 2.66 per cent YoY to $425.44 million in January 2026 amid weak global demand.
Shipments to the US and EU softened, while the UK remained stable with slight growth.
Other markets saw sharper contraction.
JAFF highlighted DCTS benefits and tariff changes while suggesting diversification and efficiency to sustain competitiveness.
Exports to the United States, the country’s largest market, decreased by 2.73 per cent to $165.11 million, while shipments to the European Union excluding the United Kingdom, declined by 1.93 per cent to $126.99 million. In contrast, exports to the UK remained broadly stable, rising marginally by 0.23 per cent to $61.71 million. Apparel shipments to other markets dropped more sharply by 6.07 per cent to $71.63 million.
JAAF noted that the UK’s steady performance offers a constructive signal for the sector, particularly as the revised Developing Countries Trading Scheme (DCTS), effective January 1, 2026, is expected to enhance sourcing flexibility and strengthen Sri Lanka’s competitive position in the British market.
The industry body also highlighted the introduction of a uniform 10 per cent temporary tariff in the US market as a relatively supportive development, reducing the impact of previously higher country-specific rates and providing greater short-term pricing predictability for exporters.
Commenting on the January outcome, JAAF said the moderate decline reflects ongoing volatility in global demand. The association emphasised that the industry remains committed to reinforcing resilience through market diversification, product innovation and operational efficiency, while collaborating with stakeholders to sustain Sri Lanka’s standing as a reliable apparel sourcing destination.
Fibre2Fashion News Desk (KUL)
Profitability remained robust despite a more challenging trading backdrop. Group EBIT stood at €913.4 million, broadly stable year on year (YoY), translating into a 29.2 per cent margin versus 29.5 per cent in FY24. Net profit reached €626.7 million compared with €639.6 million a year earlier, reflecting higher net financial expenses, while maintaining a 20 per cent margin.
Moncler has reported revenues of €3.13 billion (~$3.69 billion) in FY25, up 3 per cent at constant exchange rates, with net profit of €626.7 million (~$739.5 million).
Asia led regional growth, while DTC channels strengthened across brands.
Q4 revenues rose 7 per cent, driven by robust Moncler and Stone Island performance, as the group prepares for continued investment and leadership transition.
Regionally, the group recorded strong momentum in Asia, where revenues rose 7 per cent at constant exchange rates to €1.42 billion, supported by demand in China and Korea and a recovery in tourist flows. The Americas increased 5 per cent to €391.1 million, whereas Europe, Middle East and Africa (EMEA) declined 3 per cent amid subdued tourism-related traffic, Moncler said in a press release.
Channel performance highlighted the continued shift towards direct engagement. Moncler’s direct-to-consumer (DTC) revenues rose 4 per cent to €2.36 billion, accounting for nearly 87 per cent of brand sales, while wholesale declined 4 per cent as the group continued to enhance distribution quality. Stone Island’s DTC channel expanded 11 per cent to €226.4 million, whereas wholesale decreased 4 per cent.
The group’s financial position strengthened further, with net cash reaching €1.46 billion at year-end after dividend payments of €353.2 million. The board proposed a dividend of €1.4 per share and approved the consolidated sustainability statement.
Remo Ruffini, chairman and CEO of Moncler, said: “Moncler and its board of directors wish to express their most sincere thanks to Gabriele Galateri di Genola for his dedication and the highly valuable contribution he has made throughout his more than ten-year term of office. His significant experience, the vision developed over many years in senior leadership positions at leading industrial and financial organisations, as well as his constant commitment to good governance, have represented a key point of reference for our work. With gratitude, we extend our best wishes to Gabriele Galateri di Genola for the future.”
In the fourth quarter (Q4), the group delivered accelerated momentum, with revenues rising 7 per cent at constant exchange rates to €1.29 billion (~$1.52 billion). Moncler brand revenues reached €1.17 billion, up 6 per cent, while Stone Island posted €123.1 million, surging 16 per cent with double-digit growth across all regions.
Moncler’s DTC channel advanced 7 per cent despite a demanding comparable base in the quarter, supported by Asia and the Americas, while wholesale returned to growth, rising 2 per cent. Stone Island recorded broad-based acceleration, with DTC revenues increasing 16 per cent and wholesale climbing 17 per cent, partly reflecting delivery timing shifts from the previous quarter.
Looking ahead, the group emphasised continued investment in brand development and organisational strengthening, including the appointment of Leo Rongone as group chief executive officer from April 2026, as it seeks to sustain long-term growth and value creation.
Fibre2Fashion News Desk (SG)
The annual gross margin improved by 220 basis points to 57.6 per cent, while operating profit jumped 49 per cent to $702 million. Operating margin expanded 160 basis points to 10.7 per cent, reflecting strong profitability gains across segments. Net income attributable to equity holders increased 489 per cent to $427 million, or $0.76 per diluted share, with adjusted net income rising 131 per cent to $545 million, or $0.97 per diluted share.
Amer Sports has reported FY25 revenue growth of 27 per cent to $6,566 million with margin expansion and strong profitability across segments.
Q4 revenue rose 28 per cent to $2,101 million, driven by Technical Apparel and Outdoor Performance.
Despite higher growth investments, earnings surged and outlook remains positive, with the company projecting double-digit growth momentum into 2026.
Meanwhile, in the fourth quarter (Q4), the company recorded revenue of $2,101 million, up 28 per cent YoY, exceeding guidance and reflecting continued momentum across its portfolio. Segment-wise, Technical Apparel revenue rose 34 per cent to $1 billion, Outdoor Performance increased 29 per cent to $764 million, and Ball & Racquet Sports grew 14 per cent to $337 million, Amer Sports said in a press release.
The gross margin improved by 160 basis points to 57.7 per cent in Q4, while adjusted gross margin reached 57.8 per cent. Selling, general and administrative expenses increased 35 per cent to $988 million amid accelerated investments, particularly to support Salomon Softgoods growth initiatives. Operating profit climbed 18 per cent to $228 million, although operating margin declined around 90 basis points to 10.9 per cent due to higher growth investments.
Net income attributable to equity holders surged 752 per cent to $132 million in the quarter, translating to diluted earnings per share of $0.23, while adjusted net income rose 94 per cent to $176 million, or $0.31 per diluted share.
James Zheng, chief executive officer (CEO) of Amer Sports said, “Fourth quarter was a great finish to a breakout year for Amer Sports led by our flagship Arc’teryx brand and rising star Salomon, which surpassed the $2 billion sales mark. In 2025 we delivered 27 per cent revenue growth and more than 150 basis points of operating margin expansion, with double-digit growth across all segments, regions, and channels.”
Zheng added that he was pleased to announce Carrie Ask as the next Wilson President and CEO, describing her as a proven brand leader and C-suite executive with strong prior experience at Helly Hansen, Levi’s and Nike.
“Looking forward, we believe our unique portfolio of technical sports and outdoor brands is very well positioned for strong and profitable growth within the premium sports and outdoor market, which continues to be one of the healthiest segments across the global consumer landscape,” added Zheng.
Andrew Page, chief financial officer of the company, highlighted the group’s financial strength and investment strategy, stating: “We had another strong performance in Q4 with healthy sales growth, gross margin expansion and EPS despite our decision to accelerate investment behind Salomon. The strong sales and profitability profile of the broader Amer portfolio gives us the flexibility to accelerate resources behind the large Salomon Softgoods opportunity while still delivering great results at the Group level.”
He added, “Ending 2025 with only 0.3x net leverage and more than $700 million operating cash flow, we believe our financial foundation has never been stronger. Looking ahead, given the continued momentum from our highest-margin Arc’teryx franchise, accelerating Salomon footwear growth, plus the solid foundation of our equipment franchises, we are confident in our ability to deliver another strong financial performance in 2026.”
Looking ahead, Amer Sports expects FY26 reported revenue growth of 16-18 per cent, supported by favourable foreign exchange conditions, with gross margin projected at around 59.0 per cent and operating margin between 13.1 and 13.3 per cent. The company also anticipates continued segment growth, led by Technical Apparel and Outdoor Performance, alongside steady expansion in Ball & Racquet Sports.
For the first quarter (Q1) of 2026, Amer Sports forecasts reported revenue growth of 22-24 per cent, with operating margin expected between 14 and 14.5 per cent, underscoring sustained momentum as the company advances its growth strategy across premium sports and outdoor categories.
Fibre2Fashion News Desk (SG)
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