NewsNNNNNNNNNNNNeeeeeeewwwwwwwwwwwwwssssssssNNNNNNNNNNNNeeeeeeewwwwwwwwwwwwwssssssssNNNNNNNNNNNNeeeeeeewwwwwwwwwwwwwssssssssNNNNNNNNNNNNeeeeeeewwwwwwwwwwwwwssssssss

Fashion System,A Country Hallmark

The Innovator'sTen Commandments

Spring -Summer 2015

ClothingMap

Geeks on topof the world

a Editorialaaaaaaaaaaaaaaaaaaaaaaaaaaaayear for Getting Close to the Consumer:for Innovating and Exporting

Stepping away from economic con-siderations in order to focus on the customers, to reinvent oneself and to grow in the market: this is the call given to the fi ber, textile and clothing sector this 2015.

The year progresses with an increa-singly stronger sector which has un-derstood that their competitive strate-gies, although they cannot be outside of economic particularities, may use instruments such as productivity and competitiveness to tap into the local market and ensure long-term sustai-nable growth.

Today, more than ever, the use of technological tools that allow for two-way dialogues with consu-mers is imperative as they allow an increase in the supply of niche pro-ducts that are innovative and func-tional and which enable you to po-sition yourself in local markets and even delve into some more stable international markets that display good opportunities such as Mexi-co, United States, Canada and Peru.

There are clouds on the horizon such as tax reform, which will im-pact businesses with higher corpora-te taxes; infl ation, though still low, was above expectations, along with lower consumption.

The growth of links with users in order to know them better, meet their needs, create new products and ser-vices and implement strategies that allow for growth must be the cha-llenges facing the Fashion System this 2015.

Similarly, the Government has an signifi cant challenge which is to make progress in the fi ght against contra-band, the greatest scourge of the in-dustry and a delicate problem for the country due to its association with as-set laundering. It's time to take action.

Carlos Eduardo Botero H.Executive President Inexmoda.

201502

digital news

+Lift and turn left

Follo

w u

s

Quality production, innovation

and looking for new markets

are parts of the formula

for continued growth and

strengthening oneself within

this industry.

Luxury sport. The comfort and practicality of sports are mixed with brightness, transparencies, the contrast of materials and sophisti-cated details that turn an afternoon of sport into an evening with friends or a night out partying. White, black and grey are accented with bri-ght colors such as gold and silver.

Sun + surf + tropic. The sea and the jungle mer-ge to create a tropical atmosphere. Surfboards, tiki bars, the sun and the sea are recreated with a sophisticated touch to give a breath of fresh air to summer. Where bright colors combined with earthy and neutral ones are the main trend.

Botanical expedition. Organic shapes, plants, fl owers, leaves, herbal and botanical expeditions are refl ected in fabrics and very natural styles in which mid-tones like pink, emerald, ultraviolet and toxic green are mixed with pastel colors along with black and white.

Macrotrends

+

TRENDY

Spring - Summer 2015 Looks, colors, textures, schemes and the fi nishing touches of the happiest and most colorful season of the year.

Crossing the border. The Wild West concept of last season crosses the border and takes up the folklore and the colorfulness of Mexico. Typical otomies (embroidered by hand with typical decorative fi gures) and handiwork of fl owers bring color to the new cowgirls with bright, strong tones that contrast with white and black.

Lift andturn right

SNEAK PREVIEW

Medellin will be the capital of entrepreneurship

Although still a year away, Medellin is already preparing to be, in 2016, the best host of the World Entrepreneurship Congress. To this end, the city and Andi are working hand in hand monitoring the previous edition held in Moscow (Russia) in 2014 and this year in Milan (Italy) from the 16th to the 19th of March.

Tomás Cipriano Mejía, secretary of Economic Development in Mede-llin, affi rms that the city is prepared to receive between 4,500 and 5,000 visitors during this event in March 2016, as it counts with adequate hotel infrastructure, and there are new projects in this area that will enable the accommodation of the amount of people who come to the city.

The event will boast lecturers of global stature on the subject of entrepre-neurship and it is hoped that this conference - attended by entrepreneurs, leaders and investors from 175 countries - will contribute to the objective of turning Medellin into the Latin American capital for innovation and en-trepreneurship by 2021.

Los invitados 2015Eze Vidra, general partner of Goo-gle Ventures, investment arm of risk capital for Google.Amy Cosper has been invited to speak about business initiative, head publisher for Entrepreneur magazine. Another woman, Maria Contreras-Sweet, administrator for small businesses from the United States and member of the Barack Obama cabinet, will speak on business initiative and its importan-ce for countries. Tayeb Kamali, vice director of the Superior University for Technology of the United Arab Emirates, will also be attending.In addition to conducting the annual meeting of the Global Week for En-trepreneurship which includes 157 countries, Israeli startup Breezome-ter which won the Startup Open will be presented as well as the Global Entrepreneurship Index which measures the entrepreneurship ecosystems of 130 countries.

HistoryIn 2009 in Kansas City (United States) hosted the fi rst World Congress of Entrepreneurship organized by the Kauffman Foundation.Hosts have included: Dubai (United Arab Emirates),Shanghai (China), Liverpool (United Kingdom), Rio de Janeiro (Brazil) and Moscow (Russia).The Municipality of Medellin and Ruta N are working toge-ther to construct a Technologi-cal District of 115 hectares in 2023 that will generate 29,000 direct jobs with the seating of national and foreign companies.

In 2016, Medellin awaits between4,500 and 5,000 attendees for theWorld Entrepreneurship Congress.

Backstage

Clothing MapJeans are the most versatile of all clothing items, they look good on everyone, and incidentally, they are the most sold item of clothing in the world. Sales are considered to be more than $56,200 million USD annually.

Globally

In Colombia

Every second,

60 pairs of jeans are sold in the world, that is to say, close to 2,000 million a year,which represent reve-nues of more than $56,200 million USD.

The manufacture of a pair of jeans requires: 800 gr. of cotton and 25,000 liters of water for each kilo of cotton produced.

Real Madrid and Manchester United are the football teams that sell the most jerseys each year: 1,400,000. They are followed by Barcelona with 1,150,000.

China, with 10,600 million pairs, is the largest shoe producing country in the world, representing 56% of the world total. Exporting 80% of its production.

Within the country, the brassier was the pro-duct which had the greatest growth in sales in 2014 with 16%.

Slacks or women's trou-sers increased their sales by 15.36%. The sale of men's trousers improved by 15.1%.

Men's clothing such as shirts, underpants and blue jeans, raised their market share by 14%, on average.

Women's blue jeans increased their sales by 13.1%.

Clothing prices increased in the country by 0.21% in 2014. In Medellin the rise amounted to 0.20% and in Bogota, 0.19%.Neiva, Pereira and Bucaramanga were the cities in which the prices for clothing had the greatest fall: 0.04%, 0.19% and 0.10% respectively.

Last year, fashion consumption within the country was ta-llied at $19.95 billion.Pasto, with $135,145, was the Colombian city with the greatest monthly expenditure on clothing among the 13 provincial capi-tals. The national average was of $43,419.

Between the large capitals, Medellin registered a monthly per capita fashion expenditure of $76,298, Barranquilla $69,949, Cali, $65,573 and Bogota, $65,555.

Last year, Bogota had 27.1% of the clothing market of the coun-try, followed by Medellin with 15.8% and Cali with 8.9%.

SNEAK PREVIEW

Fashion System,

A Country Hallmark

Comprehensiveness is the common denominator in countries which have the most established fashion sys-tems in the world: Italy, France, England and Brazil -who is just now taking its latest and most compelling steps.

The State, academy, entrepreneurs and economic sec-tors are headed towards the same path while leaning on the cultural elements that differentiate one nation from another and they set trends, customs and habits.

¿How have they achieved this? A fashion system is the result of knowing and leading the essence of a country towards fashion: beliefs, lifestyles, colors, ancestral creations and other elements that are expressed through cosmetics, music, cinema, art, among others, and which are purposefully considered for produc-tion, distribution channels and advertising for companies of several sectors, even those that are not part of the fi ber, textile and clothing sector.

This happened in Italy when Prêt-à-Porter fashion, em-bodied in good taste, elegance, innovation and attention to detail were elevated to the great collections of clothing, accessories, jewelry, leather goods, cosmetics, automobiles, home textiles, magazines, furniture and other goods from designers and small-to-medium industrial companies. These were slowly joined by cosmetics, art, cinema and

Clothing, designers, music, cinema, art,gastronomy and production are expressions of glamour in France, of excellence and style in Italy, of the urban and revolutionary in England andof Samba and soccer in Brazil. These countries integrate their idiosyncrasies to a fashion system for everything and for everyone.

music. Additionally, the movement was backed by state, academic and fi nancial support for the production and development of raw materials, la-bor, technology and exports.

Under this trend, Italy and later the rest of the world now breathes, un-derstands and uses high-end fashion and style which bore and sustained great designers, companies and con-glomerates such as Prada, Gucci, Mar-zotto, Max Mara, Missoni, Valentino, Versace, Armani, Ferré and Moschino.

Fashion is not only refl ected in clothing and accessories, it leaks into other industries that speak the same language of seasons, trends, colors, collections and design labels.

WHY DO IT?

To reach the identifi ed consumer. Incorporate the concepts of seasons,

trends, colors, collections and design hall-marks to the production of other industries.

Create products that sell because they cannot be found in other places.

Find price enablers for value added items. Establish public private and academic links

in favor of innovation and the idiosyncrasies they want to display through fashion.

Link agricultural production to the needs of the industry.

Obtain the endorsement of a fi nan-cial sector that understands and shares the goals of the industry.

Create production alliances between one or more production chains.

Endorsement of mass media. Access to state benefi ts in taxes, entry of raw materials and imports.

How to create a Fashion System in ColombiaThe fi rst step is to specify our identity with creations from the heart and the imaginative scope of the country.

The result would be that designers, media, educatio-nal programs, technological tools, shops and marketing represent society as a whole, highlighting its leaders and satisfy users who identify with fashion.

Everyone became adept at selling concepts and lifestyles more so than clothing or goods and, together with Milan, Rome, Naples, Florence and Verona, they became fashion genera-ting centers.

In France, fashion also became a system and infected the State and the supply chain. Glasses, watches, elec-tronics, telephone and the automoti-ve industry have this hallmark of gla-mour and have obtained the benefi t of resources, innovation and partner-ships of public and private sectors.

Brazil is on a similar path. In 2009, it created a state policy for the development of innovative initiatives to increase the export supply, indus-trial production and employment through the implementation of the Brazilian diversity towards fashion in all sectors.

Fashionsystem

+

Showroom

That is the promise of Forever 21, one of the more infl uential fast fashion brands in America, making you feel edgy, modern and young while listening to Taylor Swift and Katy Perry playing in the the aisles of their store, while thinking that that the pair of jeans on display are suffi -ciently practical and contemporary for that trip to South America that you have in mind. That is the way you want to see yourself. You are not just buying; you are looking for a brand that understands that you are cosmopolitan and a traveler, and designs your clothes accordingly.

This, creating a consumer identity with a brand, the selling of a lifestyle and not of a product, is not a new concept, but instead it is essential for competing in the fashion industry, as is proposed by Tom Julian, di-rector of Strategic Business at The Doneger

Group, "We must involve the brand with the lifestyle of individuals of this millennium."

In that sense, that identity and identifi -cation with a lifestyle is no longer just one more component of market strategy (along with price, quality and creativity), instead it can become the most important item for de-termining if your brand is successful or not. They are not going to choose based on the quality of your products (that is taken for granted), however, they will do so because you represent what your customeris or wants to be, and because the shopping experience is always pleasant: it involves scents, textures, sounds and a store design that makes you feel like you are in the right place.

“The consumer longs for the intangible and this is why here in Inexmoda we have

What does theirbrand promise?

I do not sell clothes; I am offering a feeling. Which one? To feel once again like a 21 year old urban girl that is part of the top number 1 of the Billboard charts, who wears her hair down and is carefree; she who feels beautiful and powerful using a simple pair of jeans, cowboy boots and tops with no patterns like the ever-young do, beautiful and modern like Kristen Stewart and Emma Stone.

EmotionalConnection

been talking about innovation in the busi-ness model, because product battle is a thing of the past. Today, the most spectacular bu-siness developments are based on technolo-gical development, in the creation or inno-vation of business models. No longer is the product the key, it has to be very good. Focus is placed on how to take it to the customer and what is its ease of use," states Luz Adria-na Naranjo, director of Strategic Transforma-tion at Inexmoda.

To understand what the customer wants and what their lifestyle consists of means that you have to know them and analyze them thoroughly. To achieve this, compa-nies will certainly need to explore other fi elds which in the past seemed to not be an integral part of the fashion industry, such as anthropology, sociology and psychology. In addition, no longer will they be able to pas-sively wait for customers to arrive, they will have to look for them wherever they live and function in society: in the workplace, univer-sities, parks they go to, places they eat and streets they cross.

“I must mention the case of Sony and its waterproof MP3. Beyond the fact that it is a good product, the surprising aspect is in how

they reach their customers. The sale of the product is not carried out through traditio-nal technology stores, but instead through vending machines, packaged inside water bottles making you aware in advance of the product's power,” adds Luz Adriana Naranjo as an example.

Consumers nowadays are unfaithful, over-informed and want more for less. Dressing does not constitute a necessity, or at least not a basic necessity linked to pro-tection, but linked to their corporate image, identity, status and lifestyle. The big inter-national brands (Forever 21, Uniqlo, H&M) and nationally (Gef, Tennis and Onda de Mar, among others) understand this.

Which does your brand promise its consumers? Why should they choose your brand and not a different one? These ques-tions demand solid answers, especially in markets such as Colombia where the GDP per capita has multiplied by three in the last three years and where the middle-class in this same period went from 15% to 30% of the population. How are you going to cap-ture this potential market?

1. Associative capacity for connecting aspects from different industries. It is not enough to only know the fashion business.

2. The ability to question things and thus con-sistently ask the right questions and not fea-ring the answer to "What if it does not work?"

3. The ability to observe in order to read the customer through the eyes of an anthropolo-gist, sociologist and psychologist. Speak less and make decisions based on not what we like, but on the customer's needs.

4. The ability to try new things: to not fear be-ing wrong. Taking risks.

5. Being open to networking: to know people from other cultures, ways of thinking and doing things. Being open to interaction with different people and having the ability to step into the consumer's shoes and to understand their lifestyle as well as their needs, but not just what is on their mind, but in their heart. Customers look for products that generate experiences and fulfi ll their needs.

5 CHARACTERISTICS OF AN INNOVATIVE BRAND

forever 21

+

Showroom

The Innovator's Ten Commandments

Claudio Chiaromonte, executive vice-president and general director of the Walt Disney Company Latinoamerica, gives 10 pieces of advice for becoming a creative company.

“In the world of retail,

the consumer's experience

is essential. They decide

when, where and what

they want to buy”.

Claudio Chiaromonte

1. Always design products while thinking about the consumer.

2. Explore. Find all the possible connections to an idea. Think fi rst about the problem that needs solving.

3. Focus on the goal and therefore avoid getting lost or drifting into an initia-tive that that differs from the main goal.

4. Simplify. It is more diffi cult to achieve something simple than something complex because decision making is hard. If you cannot explain it in a sim-ple way it is because it is not yet well understood.

5. Fail and learn. Well capitalized errors can be a source of growth and creati-vity. Fail, but learn quickly.

6. Quality is the best business plan. It must be an indispensable attribute, even with consumers of the lowest strata.

7. Honesty. If we lie to ourselves, the consumer will let us know. Selfi shness and pride is the worst of sins: it is deadly.

8. Teamwork and sweat. Nothing happens thanks to a single person within an organization; the truly important thing is the teamwork.

9. Enjoy yourself. Do it with desire.

10. Think big. Dream of something that is tangible and meaningful, that will change the consumer's life.

TRENDY

Geeks, On top

of the world

Yes, we are speaking of geeks who are a little bit nerdy and a little bit freaky. This type of individual moves like a fi sh in the water in pop culture -vintage and a little bit of an outsider-, in the technological industry and in social networks. He lives in a world of nostalgia for the recent past and constant excitement for the future.

He is passionate about cutting edge video games (Call of duty) and those from long ago (Pac-man), the cinema (from Interstellar to King Kong), series (that they watch on their computer but not on television), and books of epic fantasy, to be more precise.

Geeks are creative, curious, insightful and intelligent, able to recount the complete casts of the many fi lm ver-sions of Batman, whilst programming computer softwa-rethat predicts the value of the dollar for the next few months, while managing a successful YouTube account.

Why? Because geeks recognize and live the best of both worlds -past and present- and they have no pro-

Pay attention to this individual who, although still seen with distrust and awkwardness, has the potential to create multimillionaire companies, to handle the most challenging technological challenges with supe-rior skill and, most importantly, who has the gift of pointing to the future with their index fi nger because they are already there.

blem moving between both. The new does not necessarily replace the old and both can co-exist: they are a living example of this.

The geek is a consummate collector and is willing to pay a lot for objects that would otherwise be thrown away without hesitation: a Betamax tape of Star Wars or a Nokia 8110 (the one that appeared in the 1999 Matrix movie).

He is an outstanding (and self-taught) student. He may have a software company, or one related to technology and the Inter-net, even before graduating from university (or high school: the smartest). A geek has the ability to fi x any malfunction on your digital device. He will solve in minutes what you could not resolve in days: that unres-

ponsive cellphone and that dead operating system are minor problems in his mind.

Geeks can be quite consumeristic. They energize, refresh and inspire many compa-nies today that are on the lookout for their high consumption and trendsetting capa-cities. And these days, they have acquired a good reputation: they are intelligent, usua-lly bilingual, connected to the world, con-temporary, modern and able to talk about almost anything.

The spaces they inhabit are full of ob-jects and accessories of a particular and curious nature. They may not purchase sneakers being promoted by the world's best current athlete but they will buy, in every color, a shirt that has the famous Einstein face with his tongue sticking out, and probably also buy, by the dozen, mugs displaying Nikola Tesla or Isaac Newton or Steve Jobs (if you recognize these three na-mes, then you are close to understanding the geek culture).

They will not hesitate to acquire or add to their collection anything that reaffi rms

Facts

+

their passions and their identity as outsi-ders to the mainstream and very close to theoutsider, because geeks are proud of being who they are and they shout it out to the world.

If they were called weird, freaks, nerds, misfi ts and even anti-socials before, to-day they are validated, respected and even envied. They are trendsetters, occupying news headlines and they must be paid clo-se attention because they are the biggest fashion consumers in the world.

WHAT DO THEY BUY?They do not hesitate to purchase whatever eccentric and peculiar gadget enters the market. From an Apple watch, to a super powerful quad-core computer, to a Rubik's cube in braille. They dress comfortably, because they are seated in front of a screen for long periods of time, but this is not a synonym of cheap and old-fashioned. Just look at how Steve Jobs imposed dark turtle necks, and how Mark Zuckerberg interviews the President while wearing a sweatshirt, a polo T-shirt and tennis shoes.

SHOWROOM

The End

In 2014, clothing purchases grew 10% and fashion consumption reached $19.95 billion. According to projections by Raddar, in 2015 clothing purchases may rise to 7% and 8% and sales fi gures in apparel would fall to between 6% and 4%.

The explanation has to do with the fact that economic behavior is cyclical and this year could call for a decline. Additionally, elements such as devaluation, the pre-election period, a probable tax reform and the outcome of the peace negotiations may be infl uential.

In the case of devaluation, for example, the local industry will have a competitive advantage, because imports will be more ex-pensive and surely exporting companies will have a great year. The challenge will be to satisfy demand because the industry will recei-ve volume requests that it is not accustomed to.

“The country has to work because the domestic industry is not ready. It has neither the levels of productivity and competitiveness, nor the brands," said Camilo Herrera, president of Raddar, althou-gh he stresses that companies such as Studio F, Grupo Crystal and Arturo Calle, among others, have been doing their research for several years now and can respond appropriately to the situation.

Similarly, the fall in oil prices will cause a domino effect in many manufacturers by decreasing production costs in countries such as China. The garment textile industry will have to seize their opportunities and, if it can produce more and meet the require-ments of the domestic market, it will generate more jobs and this will drive a growth in demand.

Other issues that may complicate strong performance would be contraband and a new tax reform which could potentially discou-rage investment and affect the positive outlook.

What to do?It is true that threats exist, but the way out is none other than to do things well. The best guarantee for growth is to have a good product. Thus, if prices rise or fall, the superior quality and consumer preference will maintain brands on the market.Additionally, companies will need to explore more mature and stable markets such as Mexi-co, the United States, Canada and Peru where Colombian products have potential room. International brands will continue to arrive and, although the fi nancial climate favors local com-panies, this is only a temporary advantage.“It is a year in which there will be opportunities, but one must be more strategic and creative in order to capture the consumer and connect them with brands," says Carlos Eduardo Botero, CEO Inexmoda.

2015 will be a good year for the textile apparel sector, but it will not match the performance of 2014. Quality production and exploration of markets are some of the strategies the industry requires.

A Year for Improvement

The Latin American market makesup the bulk of Colombian apparelexports, with

USD239.5 million, whereas in textiles the number is

USD 227.8 million.