The predicted economic recession with a trade slowdown this year in the US and European countries has hit major garment export markets like Cambodia. And it is expected to have a far-reaching effect both on the country’s apparel industry and living standards of lower wage earners. Having always been dependent on garment exports as one of the largest foreign exchange earner accounting for almost 60 per cent of Cambodia’s total export value, the post-pandemic recession has hit the country hard.

Export figures expected fall further this year

Due to unfavourable global demand globally especially in the EU markets, the garment segment in Cambodia is expected to slowdown and clock in a growth of just 5.5 per cent this year from 14.5 per cent in 2022. “In its latest Global Economic Prospects report released in January 2023, the World Bank has cut its growth forecast for the US to 0.5 per cent and the EU to 0 per cent for 2023. The slow growth in these two important export markets for garments will significantly affect performance this year,” opined Jayant Menon, Senior Fellow with ISEAS-Yusof Ishak Institute in Singapore in an interview with Khmer Times.

After a fall of 6.1 per cent during pandemic times, the Cambodian garment industry was hopeful as it picked up with an identical 10.8 per cent growth in 2021 and 2022 as the world came back to normal. However, garment exports are expected to fall further to 5.5 per cent this year. Garment, footwear and travel goods segment are the biggest forex earning segment in Cambodia with around 1,100 factories and branches that boosts per capita income by giving employment to around 750,000 workers, mainly women.

US export keeps hope alive

However, not all industry analysts feel the situation is bad as they foresee Cambodian exports continuing to grow. As per World Bank’s recent data, the country’s goods exports grew at 28 per cent year on year (YoY) during January-August 2022. Exports of Cambodian garments to the EU will probably have a small impact, depending if the energy crisis in the EU is handled to a level where Cambodia can export, albeit at a lower level. Low growth across Europe in 2023 is a result of the spill-over effects from the Ukraine war along with strong downward revisions for economies mostly dependent on Russian gas.

The Euro economy which posted a growth of 5.2 per cent in 2021 and 3.1 per cent in 2022, is currently expected to grow only at 0.5 per cent in 2023 although the situation can be better soon, predicts the World Economic Outlook report of IMF.

Just last year, Cambodia exported garments, footwear, and travel goods worth over $9 billion. However, the EU decided in 2020, to withdraw tariff preferences under EBA. Yet, exports to the EU have been increasing continuously ever since, even though Cambodia does not have EBA and GSP.

The US apparel market remains a major destination for Cambodian exporters with many US fashion companies now placing more varied and different orders. The US was Cambodia’s largest export market accounting for 45.6 per cent of total exports last year. As more and more US fashion companies are focussing on expanding and diversifying their garment sourcing base after the supply chain disruption post pandemic, Cambodian garment industry remains hopeful they may be one of the beneficiaries.

Fashion’s eastern-most centre is the island nation of Japan. Seeped in a rich legacy, adherence to tradition, a fearless approach in the new world order, armed with innovation, Japan’s attitude is also expressed through its unique, bold fusion of design and colour palettes in fashion. More often than not, the West’s collections are often influenced by Japanese fashion trends. In light of the passing away of two top Japanese fashion icons Issey Miyake and Hanae Mori in 2022, the industry faced an irreplaceable loss.

So what impact did these events have on Japanese fashion? According to Vogue, 2023 will continue paying homage to these two national fashion heroes through vintage kimonos and the Issey Miyake pleats, distressed patchwork, popcorn tops and a casual and vibrant interpretation of the Mori suits. Nigo. The popular Tokyo-based designer known for his urban street-wear is now on the rise as he presented his first collection as the artistic director of Kenzo, an LMVH brand, in Paris last month.

As a country that ranks 11th in the world order of nations that have taken the cause of sustainability seriously, sustainable fashion is being spearheaded by local designers through use of traditional methods combined with innovative production technologies

Motta Nai or What A Waste

Originating from a Buddhist belief that every object has intrinsic value and should be utilized for its full life cycle, the credo has been threaded throughout national culture for centuries. “Mottainai and handmade culture is everywhere in Japan," points out Kaoru Imajo, Director, Japan Fashion Week Organization. A number of Japanese fashion labels are channeling these traditional ideas in the name of sustainability, embracing centuries-old garment production techniques and pioneering new technology to reduce waste and lessen environmental harm throughout the production process.

In direct contrast to Japan’s efforts towards sustainable fashion, the irony is that Chinese fast-fashion brand Shein chose Tokyo for its first brick and mortar store in the world. The outlet opened on November 13, 2022, in the busy fashion precinct of Harajuku and the collection is designed with young Japanese consumers in mind. Apart from fulfilling their D2C commitment in Japan, Shein is now establishing its physical presence. The store is being used as a physical showcase as no direct purchase is possible – customers scan the QR code at the store and have their product shipped home as Shein continues its digital first philosophy. The industry gossip is that Shein might issue IPOs in the US and Japan in 2024. Shein has refused to comment on this matter though.

Itochu plays to its strengths

Recent news has it that Itochu, the Japanese conglomerate is bringing back popular brands Edie Bauer and Forever 21 to Japan this year. Itochu also acquired master license rights to many other brands, including Eddie Bauer, L.L. Bean and Forever 21 in 2022. In April 2022, the company acquired majority stake in Dome Corp, which represents Under Armour in Japan, and formed a joint management system with the US sports apparel company. Itochu also obtained the marketing rights and license rights to Reebok in May. In 2019, the company tookover Descente and improved its management. Itochu has understood the growth of the athleisure and sportswear market since the onset of the pandemic and is actively pursuing establishing its acquired licenses and pitting itself directly against Nike, Puma and ASICS in 2023.

India looking to emerge a strong sourcing destination

Tapping into the Japanese market India’s Apparel Export Promotion Council (AEPC) is organising the first edition of Upnext India 2023, starting with a Reverse Buyer Seller Meet with Japan. Being held in Gurugram, India on February 10 and 11, more than 50 prominent Japanese brands including Sumitomo, Toyoshima, Marubeni, Mitsubishi, United Arrows and MYK Fashion will be attending to source readymade garments from here. Over 75 Indian RMG manufacturers have confirmed their participation. This initiative is supported by the Commerce Department under the Market Access Initiative Scheme.

And as says Naren Goenka, Chairman, AEPC, in light of the fact that Japan is the fourth largest garment importer in the world, with its apparel imports being stable even during pandemic and Indian apparel having duty-free access under the Indo-Japan trade agreement as against 9 per cent for Turkey and 9.5 per cent for China, it makes business sense for Indian readymade garment manufacturers and exporters to participate in this opportunity. With total garment imports of Japan of $23 billion, against India's exports of $0.22 billion, a strong Indian garment industry with its unique offerings has a huge scope for Japanese trading companies to source from India, it added. Goenka points out Japanese companies have two competitive advantages as apparel sourcing base -- sourcing cost and flexibility and agility.

The International Textile Manufacturers Federation (ITMF), as the international forum of global textile industry, is now in a state of flux as the business situation has changed in a post-pandemic world. The just released 18th ITMF Global Textile Industry Survey highlights the ongoing gloomy economic situation but expectations are high for the things to improve this year.

When ITMF tarted the Global Textile Industry Survey in 2021 after Covid abated, the business environment was at an all-time low. High inflation and rising interest rates around the world have been the current drivers of global economy but in 2023, the main problem of the textile supply chain seems to be high inventories at the brand and retail levels.

Unreliable demand in a post-Covid economy

With pent-up frustration among people stuck at home during the two Covid years, there was a surge in demand across the board for consumer durables and apparel once travel restrictions were lifted and economies opened up. Global and domestic brands across countries increased inventories to meet the sudden surge in demand. However, this was short-lived as inflation rose as Russia-Ukraine war pushed up energy prices, consumers pulled up their purse strings, demand slowed down and stocks piled up.

ITMF interviewed many respondents for this survey who confirmed global order intake has steadily decreased since November 2021 once the initial flush of post-Covid demand had waned. In January 2023, it was a negative indicator in all geographical regions around the world except North & Central America and fibre manufactures who saw increased orders for the first time since summer 2022.

The previously high global order backlogs had also been slow and steady in their decrease from 3.1 months in March 2022 to 2.4 months in January 2023. This could be attributed to most brands and retailers hesitating to place orders and add to their inventory with uncertain demand. Added to this were the disruptions in earlier supply chain during Covid years which helped in lessening order backlogs by improving global trade flows. This eventually led to a slight increase in global capacity utilization rate which was mainly driven by garment fibre producers and spinners.

China opening borders boosts demand

With members comprising companies and associations from the textile and allied industries, ITMF’s expectations in the last six months have soared with everyone being globally positive about the upcoming business economy in June 2023. The organization says, textile manufacturers can expect a better situation with countries being in a much better energy situation, prices for gas and other products in Europe and Asia going back to levels seen before the Ukraine war. Secondly and most importantly, the end of the Zero-Covid-policy in China with borders opening up is strengthening demand. China, as one of the largest importers of consumer goods, especially luxury apparels and the return of tourism has given an adrenaline rush to a sown-in-the-dump economy.

The Survey infuses optimism the global economy will see better growth than expected in 2023 which will benefit the textile fraternity and give a fillip to the apparel industry in general.

The Confederation of British Industry (CBI) has launched its first-ever business delegation to explore free trade agreement opportunities in India.

The delegation is focusing on key growth sectors where Indian and UK businesses can develop profitable partnerships such as innovation and sustainability.

The visit also aims to share knowledge on how to scale up unicorns to addressing ways to increase trade in green goods and services between the two countries and contribute to net zero ambitions.

This visit comes in the backdrop of the UK’s negotiating the seventh round of the free trade agreement with India. The potential FTA could boost trade with India by several billion pounds a year by 2035 and increase wages across the UK. With a free trade deal between the UK and India soon to be signed—and agreements such as the UK-India Young Professionals Mobility scheme already in place—UK businesses want to explore how to grasp the huge opportunities that India affords.

The CBI’s first ever delegation to India will put the promise of an FTA into practice—helping businesses develop links with key stakeholders and supporting UK firms to go for growth around the world. UK firms feel since India is on track to become the third largest economy, with a quarter of a billion middle class consumers by 2050, the free trade deal could unlock huge benefits for them.

For the fourth quarter orders for Italian textile machinery fell by 35 per cent compared to the same period in the previous year, says ACIMIT.

The drop from orders abroad was 17 percent while orders collected in Italy were 28 per cent lower than the figures drawn up in 2021.

The ongoing war between Russia and Ukraine, with its related consequences on daily business and trade, and a macroeconomic framework in which uncertainty prevails, have further negatively affected the orders intake. However declining energy prices and a slight fall in inflationare signs of improvement in the business of companies in the sector.

This proves that Italian companies have been capable of responding quickly to new market conditions, as has often happened in other historical periods. However, difficulties remain particularly in the areas of digitalization and sustainability. Creativity, sustainable technology, reliability and quality are the characteristics which have made Italy a global leader in the manufacturing of textile machinery.

Exports amount to more than 86 per cent of total sales. And 30 per cent of Italy’s revenue from the sale of textile machinery derives from the production of technical and innovative textiles. Manufacturers are looking forward to the textile machinery trade show Itma which will be held in Italy, June 8 to 14, 2023.

Premiere Vision will be held in France,July 4 to 6, 2023. The edition is evolving to meet the challenges of the fashion sector’s transformation, driven by the transition to sustainability, regulatory changes, the impact of the public health crisis on clothing consumption, the implications of the geopolitical crisis, the new needs of brands and buyers, adaptation strategies for supply chains, and the new challenges facing manufacturers.

The new edition will reveal an event that has been completely revamped to keep pace with the industry’s changing landscape. The edition’s new features include environmental sustainability as the new paradigm at the heart of its repositioning, the creation of an innovation hub, a revolutionary approach to fashion information and trend forums, and a new service policy for buyers.

After adapting its schedule in 2022, Premiere Vision has now taken a new direction in order to better align with evolutions in the global fashion market. Its privileged relationship with manufacturers and brands has enabled it to work hand in hand to build, test, and adapt a strategy that renews the show’s set-up and services and to accompany the industry’s ecological transition.

As the leading global platform for meetings, business, and communication for the fashion industry, Premiere Vision also proactively offers solutions for the sector.

Global fashion retailer C&A has warned Bangladesh’s C&A Textiles of legal action for using the same name and creating confusion.

The Netherlands-based C&A has been in business since 1841 and has been sourcing from Bangladesh for over three decades. About 156 garment companies in Bangladesh manufacture garments for C&A. The global brand under the C&A trademark trades in clothes, apparel, and accessories and has a reputation across the world. This name is registered in several countries around the world.

The multinational company has been sourcing from Bangladesh for a long time and so the name has become well known in the country. It says if the textile company does not change its name, legal action will be taken through court. Bangladesh-based C&A Textile, which is engaged in manufacturing textiles and garments, was registered in 2001 and has a factory in Chattogram.

The company ceased production in 2017 due to its owners' irregularities and loan defaults. Then in 2021, the Alif Group, another garment trader in the country, bought the company. Currently, Alif has managed to bring the company back to partial production. C&A Textiles got listed on the stock market in 2014. After the listing, the owners of the company exited by selling shares secretly.

British fashion giant Frasers Group has completed its acquisition of five brands from rival JD Sports.

Frasers had reached an agreement to buy 15 brands from JD and has completed the acquisition of five of the remaining seven brands: Cricket, Tessuti, Scotts, Giulio, and Choice.

The other brands include Base Childrens wear, Choice, Clothing sites (including Brown Bag Clothing), Cricket, Giulio, Kids Cavern, Missy Empire, Nicholas Deakins, Pretty Green, Prevu Studio, Rascal Clothing, Tessuti (including Xile), Scotts, Watch Shop and Top grade Sportswear (including Get The Label).

As for JD, this divestment will allow it to focus on its core premium sports fashion labels, which include JD Sports itself, as well as Size?, Foot Patrol, and Shoe Palace, among others. JD feels that the most significant opportunities lie in the continued international development of the group’s global sports fashion businesses.

Frasers’ fast-growing portfolio includes Sports Direct, House of Fraser, and Jack Wills. The group is pushing forward with its aggressive expansion strategy, which sees it snapping up smaller or struggling rivals and investing in more upmarket brands. In the past year the group has acquired Missguided, Studio Retail, and I Saw It First, among others, and has snapped up stakes in the likes of Hugo Boss, Mulberry, and N Brown.

The fashion industry is responding to the tragedy in Turkey and Syria.

Large areas in Turkey and Syria have been hit by multiple earthquakes. The death toll is rising and the images of the disaster area are moving around the world.

Turkey is one of the major production countries for clothing and textiles, with many factories located in the country.Marketplace giant Amazon has activated disaster relief capabilities and is responding by assisting Red Cross and other relief organisations with their urgent needs. Donated items will be sent by Amazon to its distribution center in Istanbul and then distributed further.

This action is just the beginning of the help Amazon intends to provide. In the coming days, it will work with local organisations and aid groups to identify needs and deploy Amazon's logistics and delivery system to assist with these needs. Amazon has over 2,000 employees in Turkey but has no locations in the disaster areas.

Various clothing and textile organisations from Turkey have launched relief campaigns and collection drives for items such as clothes, nappies, stoves and food. Turkey and Syria are prone to earthquakes. An example is the earthquake of 1999. Due to a combination of the disaster, economic problems and exchange rates at the time, the Turkish clothing and textile industry saw exports decline for the first time in thirty years. However, the industry recovered from the impact between 2000 and 2007.

Amann’s factory in Tamil Nadu, India is state-of-the-art in terms of resource conservation and sustainable processes and the first Amann production site worldwide equipped with a zero liquid discharge wastewater treatment plant.

This is the group’s first production site in India and it will begin operations in 2023. Zero liquid discharge is a wastewater management system that ensures that there will be no discharge of industrial wastewater into the environment. This will allow the entire production water to be recycled and reused completely.

Moreover, the plant will also have a green electricity profile as photovoltaic systems will cover the electricity demand of the whole plant. The investment into this green, state-of-the-art production site follows the highest demands in terms of sustainability.

Amann, founded in 1854 in Germany, is one of the leading manufacturers of high-quality sewing threads, embroidery threads for garments and shoes and smart yarns. The sewing and embroidery threads are manufactured exclusively in its own production facilities in Europe and Asia. Amann’s bonded sewing thread Outdoor-Pro was developed especially for extreme weather conditions. The bonded sewing thread made from high-strength polyester continuous filament is equipped with an environmentally friendly, PFC-free, water-repellent finish as standard. Outdoor-Pro has excellent resistance to UV radiation and allows for very good light fastness results.