Utenos Trikotažas to focus its investments on its most
While continuing its transformation, Utenos Trikotazas will focus its future investments on its core business, contract manufacturing and the development of innovative materials. This strategic direction, which generates the highest revenues and profitability, has been approved by the company’s board of directors. What’s moreAs part of operational refinement, investments in Utenos Trikotazas‘ Own brands, which generate a smaller share of revenue, will be significantly reduced or expand further by attracting investors.
Investments in a promising growth segment
“The move is timely and natural. For more than two decades, the majority of the company’s revenue has come from fabrics and knitwear for global brands. This area of activity generates the greatest added value and requires continuous investment in the latest sustainable material technologies and innovation in production processes. The global demand for exclusive and sustainable textiles continues to grow, and this is our greatest strength. Therefore, by devoting even more effort and resources to the development of environmentally friendly innovations, we aim to strengthen our position in global markets and ensure the company’s long-term profitable growth,” says Petras Jašinskas, director of Utenos Trikotažas.
High value-added production for global brands accounts for approximately 84% of Utenos Trikotažas’ revenue. The company has more than 50 foreign customers and its main export markets are Germany, Austria, Switzerland and Scandinavian countries. According to Mr. Jašinskas, being close to its customers – brand developers in Europe – allows the company to offer its partners rapid customized solutions, shorten their supply chain and become a reliable partner meeting the standards of highest customer service. As a result, the number of these higher value-added orders continues to increase for Utenos Trikotažas. In the first nine months of 2021, sales of custom knitted products of Utenos Trikotažas increased by 15% to EUR 16.4 million compared to the same period in 2020. However, during the same period, sales of the UTENOS and ABOUT brands owned by Utenos Trikotažas decreased by almost a fifth and amounted to 3.3 million euros.
The demand for the production of global brands remains strong and the maximum utilization of the production capacity of Utenos Trikotažas is expected this year.
ON – Investors are sought, the role of the UTENOS brand will fundamentally change
As part of the reorganization of the brand, the development of the sustainable and exclusive fashion brand ABOUT was launched last year by Aboutwear, a newly established company separate from Utenos Trikotažas. She is now actively seeking investors to develop the brand. The ABOUT brand already has strong international partners, from Bon Marché (France) to the very popular shopping platforms Zalando and Bootz.com. According to the CEO of Aboutwear, Giedrė Vilkė, innovative and sustainable materials made from food waste, coffee grounds or even banana leaves, which also have antibacterial, anti-allergic or even antioxidant properties and contribute to the skin regeneration, are hallmarks of the brand, giving it a competitive edge and a distinctive edge in a crowded market.
“ABOUT’s future prospects and possible rate of expansion will depend on the outcome of the search for new investors. We believe this brand has everything to be one of the most dynamic in the category in the near future. Investments are needed to further develop the D2C platform, localize countries and increase stock levels so that we can respond to bulk order needs very quickly,” says Vilkė.
With the growth of on-demand production, the contribution of own brand UTENOS to the overall sales structure will change significantly. The separate department currently dedicated to the development of the UTENOS brand will become an integral part of the organization, while the brand itself, in line with the sustainable Zero Waste ideology, will be dedicated to clothing collections made from quality materials. and durable that are not used in manufacturing. Statistics show that up to 30% of textiles inevitably remain unused at various stages of garment production. These quantities are too low for mass production, but are suitable for the small custom batches that will be the core of the revamped UTENOS brand. The reduction in volumes of UTENOS-branded products following the overhaul will lead to a review of the marketing channels. The e-store will continue, but there will be a reduction in physical stores during the year. To what extent and when will become clear in the first quarter of this year, following discussions with partners, which have already begun.
Chief Financial Officer, Utenos Trikotažas AB
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