The EU's apparel imports from Bangladesh increased significantly by 35.69% in 2022, reaching $22.89 billion from $16.87 billion in 2021. Bangladesh is now the largest supplier of readymade garments to the EU. The overall EU apparel import figure in 2022 stood at $102.09 billion, a YoY growth of 20.97% from $85.23 billion in 2021.

China, the top apparel supplier to the EU, achieved a YoY growth of 17.01% to $30.14 billion in 2022, up from $25.76 billion in 2021. Turkey and India also witnessed growth rates of 10.09% and 21.02%, respectively. Meanwhile, Vietnam saw a 35.28% growth in its apparel imports to the EU, with Pakistan, Cambodia, and Morocco also witnessing significant YoY growth rates.

The unit price of apparel items also increased by 11.95% to $17.27 per kg, with Bangladesh's unit price remaining the second-lowest among the top ten suppliers, ahead of only Pakistan. In comparison, China, Turkey, India, and Vietnam all saw their unit prices grow, with China's unit price at $23.09 per kg, the highest among the top ten suppliers.

Manufacturers have noted that Bangladesh's cost of manufacturing has not gone up, but the apparel sector is facing inflationary pressures and high production costs due to the ongoing Russia-Ukraine war. Despite this, manufacturers remain optimistic about Bangladesh's future prospects in the apparel sector, with the country's growth rate outpacing China's. Bangladesh holds a 23% market share, and its position as the largest supplier of readymade garments to the EU is expected to continue to grow.

The textile industry in India has expressed concerns over the Bureau of Indian Standards' (BIS) pending certification for overseas manufacturers of viscose staple fibre (VSF).

The BIS will issue a certificate to VSF manufacturers who comply with its standards (IS17266: 2019), and the hallmark will become mandatory from April 1st. However, industry sources have pointed out that several variants of VSF are imported, which may cause a shortage in availability of the fibres.

Many overseas manufacturers who have applied for the certification are yet to receive it. Moreover, those who have placed orders for the fibre and are awaiting shipment will not be able to take delivery when the goods reach India without the hallmark, which will significantly impact textile manufacturers in India.

The industry has requested that the BIS expedite the certification process and implement the Quality Control Order only after all issues are sorted out. Furthermore, the BIS certificate will become mandatory for a few polyester items from April 3rd, but many manufacturers have not yet obtained the certificate.

The delay in certification may result in a shortage of fibres and increased costs for manufacturers. The textile industry is already struggling with the impact of the pandemic, and this delay may further hamper its recovery. The BIS needs to take prompt action to address these concerns and ensure that the certification process is completed as soon as possible.

Nike has to walk its talk of “Just Do It” as it witnesses an 11 per cent slide in profits from December 2022 to February 2023, compared to the same period 12 months ago. As it reported a profit of $1.2 billion the stated three-month period, robust popularity contributed towards it but profits dropped as increasing logistic costs and larger inventory brought it down.

The good news is its home base, the North Americas, remained loyal to the brand, where it did well but the not-so-good news is that sales in post-restriction China not only did not pick up but actually dropped by eight per cent. Globally, the brand increased its footwear sales by 20 per cent and the apparel portfolio’s sales upped five per cent compared to last year. Its global revenues increased by 14 percent at $12.4 billion

Challenges Nike faces

Greater China remains a worry for the brand as this is its third largest market in terms of revenues. Analysts are of the opinion Nike and other international sportswear brands have to contend with post Covid Chinese consumer being offered local brands that are cheaper and having come out of a crippling lockdown, the Chinese consumer is counting their yuans as many personal financial factors have made consumers just as weary of spending on non-necessary items like their European counterparts.

Nike’s operating costs rose 12 per cent to hit $3 billion due to strategic technology investments and wage-based expenses. During that period, gross margin dropped to 44.3 per cent due to logistics and freight costs. The drop was also attributed to low margins in Nike’s direct business following high markdowns.

International foreign exchange rate against the dollar have affected Nike’s pricing policy as higher product input costs and increased freight and logistics are responsible for dragging down profit margins.

However, Nike Chief Financial Officer Matthew Friend is upbeat as he says Nike has worked hard to manage its inventory successfully and is positioning the brand as a sustainable one with more opportunities to grow profit. He emphasizes compared to fellow-competitors Nike had done well in reducing a larger inventory level with effective promotions worldwide, ensuring movement of footwear and apparel. The flipside was supply chain problems in 2021 prompted retailers to ramp up deliveries in 2022. However, retailers struggled to align product supply with demand. Excessive quantities of merchandise had forced retailers to liquidate goods at low prices.

Analysis firm Third Bridge says, the challenges are really not that serious the sports footwear industry continues to remain robust as it heads into the first half of 2023, despite consumers tightening purse strings.

One quarter doesn’t make Nike a flop

In terms of overall profit growth, Nike remains not only profitable but also posts healthy profits year on year. The brand’s gross profit for 12 months ending February 28, 2023 was $22.200 billion, a 2.63 per cent increase year-over-year. Annual gross profit for 2022 was $21.479 billion, a 7.6 per cent increase from 2021 and the annual gross profit for 2021 was $19.962 billion, a 22.91 per cent increase from 2020.

While Greater China, its third largest market remains a region of concern, its two largest markets, the North Americas and EMEA remains buoyant as do the Asia Pacific and Latin American markets. In year ending 2022, Nike made a much more significant profit than its nearest rival Adidas which is burdened with cash outflow issues more than Nike is.

Levi's faces criticism after teaming up with Amsterdam-based digital studio Lalaland to use artificial intelligence (AI) to generate images of computer-generated models wearing its clothing, as reported in The Telegraph London.

The aim of AI usage was to offer customers the chance to see how the clothes look on models that most resemble them, with the intention of boosting diversity and sustainability.

However, the company's move was widely criticised for neglecting real people of colour and offering false diversity. It was argued that the AI-generated models "feel like a way to cut out diverse models that deserve representation, jobs and exposure".

Designers and bloggers blamed as digital blackface that suggested usage of AI for white models and putting more money into the pockets of a diverse workforce.

Levi’s responded that AI would never fully replace human models but could help create a more diverse and inclusive customer experience.

Indonesia's Ministry of Industry is rolling out a machine restructuring program worth approximately $318,000 this year to help boost the competitiveness of the textile and textile products (TPT) industry amid global uncertainty.

The program, which focuses on the fabric industry, is expected to involve 13 companies and encourage the use of modern, efficient, and eco-friendly machines and equipment in line with the "Making Indonesia 4.0" roadmap. The budget will be used to provide reimbursement of price discounts of 10% for imported machinery and equipment or 25% for domestic ones.

The program has proven to improve the productivity, efficiency, and quality of TPT products, with 23 companies benefiting from it in 2021 and 2022. The TPT industry has performed well despite global pressures, with its export value reaching $13.83 million in 2022 and contributing 1.03% to the national GDP.

The machine restructuring program is expected to help improve the quality of the companies and the textile industry in general.

H&M, the world's second-largest fashion retailer, has reported a surprise operating profit of 725 million Swedish crowns ($69.73 million) for the December-February quarter, despite weak demand due to soaring inflation.

This figure comes as a surprise to many, considering that analysts in a Refinitiv poll had predicted a loss of 1.10 billion crowns. H&M has credited the earnings boost to the consolidation of its second-hand platform, Sellpy, which contributed approximately 1 billion crowns to the company's earnings.

Although the company has shown signs of controlling its costs, it is still struggling to compete with major rival Inditex, which owns brands such as Zara. While Inditex has been successful in luring customers back to in-person shopping after the pandemic, H&M's cost-conscious base has been reluctant due to inflation eating into purchasing power.

Despite the unexpected operating profit, H&M's first-quarter revenue, published on March 14, was worse than expected, with sales increasing only slightly and missing most estimates. However, the company still faces challenges in competing with its rivals and keeping up with changing consumer behavior.

Global clothing retailers, including Fast Retailing and Marks & Spencer, are discontinuing their outsourced production in Myanmar due to concerns over human rights violations, labor issues, and operational difficulties. The military coup in February 2021 has resulted in the departure of many foreign firms, particularly those with joint ventures with local partners connected to the military. Some clothing brands continue to outsource production to small factories in Myanmar; however, some are leaving due to their inability to improve the country's rock-bottom wages and severance benefits under the local system.

Fast Retailing, which owns the Uniqlo casual wear chain, is the most recent company to leave Myanmar, removing its partners from its list of garment and processing factories. Muji also plans to end sourcing of down jackets and other items from Myanmar by August. Marks & Spencer announced last year that it would exit by March, and Primark has also stated that it is leaving Myanmar.

The daily minimum wage for factory workers has remained at 4,800 kyat ($1.68 at market exchange rate) since 2019, and workplace conditions remain unaddressed under military rule. Increasing power outages and logistics breakdowns pose risks to the management of product deliveries.

The European Union and the European Chamber of Commerce in Myanmar have established a network promoting appropriate levels of employment and will create a framework for monitoring labor conditions. However, responsible withdrawal is a challenge for global firms, and they typically avoid making any immediate decisions due to concerns for the many people in Myanmar who depend on international companies for their livelihoods.

The departure of foreign companies from Myanmar is likely to have a significant impact on the country's economy, which has already been affected by political instability. Clothing exports are a significant source of revenue for Myanmar, with the European Union, Japan, and the United States all reporting record-high imports from the country last year, totaling $4.7 billion. The loss of these exports could further destabilize Myanmar's already fragile economic situation.

As more brands leave Myanmar, consumers may start to demand greater transparency and accountability from the companies they purchase from.

G-Star Raw, a Dutch denim brand, has launched a 12-piece collection designed with the help of Midjourney, an artificial intelligence app.

The app works from prompts input by humans, in this case G-Star Raw designer. The collection was born from the brand’s creation of a digital fashion group, which aimed to explore the potential of AI in design as a creative outlet and a means of reducing waste.

The AI-generated collection includes a “world’s first garment” designed by AI and created in reality: the AI Denim Cape. The piece, made from premium raw denim, is a dramatic couture-like design with bulbous embellishments and functional layering.

It features futuristic 3D ‘G’ shapes on the arms, an adjustable waistband, detailed stitching patterns on the chest and subtle G-Star branding on the left interior section. The cape was created by hand in the G-Star atelier, and G-Star believes that the future of fashion involves enhancing the creative process with AI, rather than taking it over.

The brand plans to experiment more with AI innovation in the future.

Despite numerous initiatives promoting living wages for garment workers in the Global South, there is little evidence of any real progress being made, observe and uncover QUT researchers.

The QUT Centre for Justice Modern Slavery Research Group is calling on fashion companies to implement a worker-centered living wage into their purchase orders to truly improve wages for garment workers.

The researchers studied two credible methods for calculating a living wage for specific countries and conditions and found that leading fashion companies and their respective living wage initiatives do not use any meaningful method to calculate a living wage for their workers.

The Fair Wear Foundation (FWF) is the only organization providing a tool to use wage data to price a living wage into a garment's production costs. FWF was founded by activists, labor unions, and retail associations and attracts small fashion brand members striving to be ethical producers. The researchers emphasized that living wage calculations and initiatives must take into account the gendered nature of garment manufacturing and that fashion companies' business models rely on exploitative worker conditions, contributing to them by seeking the lowest prices in developing countries.

Governments in the Global South are afraid that companies will relocate to cheaper countries and suppress workers' calls for higher wages or unionization. The QUT researchers' findings highlight the need for a change in the fashion industry's approach to living wages, urging companies to prioritize fair wages that allow garment workers to meet basic needs like decent housing, food, healthcare, and education costs.

The researchers argue that until companies take responsibility for ensuring fair wages and working conditions, workers will continue to struggle to make ends meet.

The Ministry of Public Business Sector in Egypt is set to open new textile factories in July as part of its project plan to develop the spinning and weaving sector.

The project is being implemented by the Holding Company for Cotton, Spinning, Weaving, and Clothes, and aims to maximize the yield of long-staple and extra-long Egyptian cotton. Additionally, the project seeks to introduce transformational industries such as oil presses, fodder, and more.

The textile industry in Egypt is undergoing a comprehensive development plan that aims to uplift the spinning and weaving industry within the ministry's companies. The plan, which began in 2018, is set to be implemented over three years and will include the development of cotton spinning companies through weaving, dyeing, and processing.

The ministry stressed the need to improve the costing and pricing systems for the products, develop an effective marketing plan, and open new export markets during his meeting with the company's board of directors and employee representatives.

With these new factories and the comprehensive development plan in place, the textile industry in Egypt is set to make significant strides towards achieving this goal.