Slowly but surely, the fashion industry is getting back on its feet from the debris created by the pandemic that threatened the entire world. As per a Textile Today report, the industry is bouncing back from the crisis with manufacturers bagging large orders from buyers. Reopening of stores is also boosting sales of biggest fashion retailers including Inditex, H&M, Massimo Dutti, etc above pre-pandemic levels with customers flocking stores in huge numbers.
Sales increase but profit margins suffer
During the May-July period, Inditex sales increased 7 per cent to €6.99 billion. Sales of other leading brands also increased during the period as manufacturers got enough work orders. However, manufacturers failed to get the right prices for their orders from buyers which dented profits by a huge margin. Manufacturers’ profits also suffered owing to other issues like shorter delivery times offered by buyers while placing orders and a rush to ship their goods for Christmas sales.
For time-bound supplies, exporters usually deliver their products through air freight. This increases their import and export costs as COVID-19 has increased freight rates for shipping of goods. Also, the surge in air shipping has increased the number of scanners and flights. This is causing significant losses for Bangladesh apparel exporters as they are missing freight transport deadlines. To survive in a sustainable way, exporters need to ensure a sustainable profit and abstain from accepting all orders offered to them.
Cautious approach to protect exporters’ interest
A lucrative sourcing destination, buyers prefer Bangladesh for the cheap prices it offers. As per many market researches, buyers will continue to favor Bangladesh for its supplier driven policies. Exporters need to explore this opportunity to negotiate better prices. They need to present a united approach to buyers to ensure sustainable profit. A cautious approach while accepting orders will help protect their interests. They need to also keep in mind their capacity to deliver the required products on time. Only, this will help them boost their company’s and country’s image in the global apparel market.