Reebok is closing underperforming stores and allowing some licensing deals to expire. Meanwhile, it’s spent more on marketing. While Reebok’s revenue fell three per cent in 2018, its costs came down even more, and management expects the business to finally start expanding. The hope is that new footwear lines like the CrossFit Nano and the FloatRide Run will spur sales. The aim is to make sure that the brand heat is based on real products. But growth won’t come easily. While the brand’s fashion-focused classics line posted double-digit sales gains last year, that momentum was overwhelmed by a decline in the sports segment.

After years of efforts to make Reebok profitable again, Adidas wants to get more people to actually buy its products. It will speed up plans to cut Reebok's store network and focus on growing the business with wholesale partners, cutting the number of factory outlets in the United States by a half and limiting the number of FitHub stores. Reebok is a brand with an unmatched heritage with some of the most iconic footwear silhouettes in the industry, an authentic fitness brand. More than a decade after its acquisition of Reebok, Adidas as recently as a year ago was contemplating divesting the brand if it underperformed.

Ramco Fabrics will set up a yarn dyeing and weaving plant in Tamil Nadu in order to produce dyed greige fabric. For Ramco this is a value added step towards forward integration and will enable customers to get consistent quality of weaved yarn. The plant, which will be operational by the second quarter of 2019-2020, will require an investment of Rs 250 crores and will have an initial production capacity of ten million meters of greige yarn dyed fabrics per annum. In addition to this, the new facility will also cater to the fiber dyeing needs of Ramco melange products.

Ramco Fabrics is a division of Rajapalayam Mills and part of the Ramco Group. From its beginnings in 1938, Ramco’s textile division has emerged as one of the most successful groups of textile mills to symbolise an entity with a strong commitment to quality, innovation, and customer satisfaction. It has been a pioneer in adopting state-of-the art technology. Today, Ramco’s textile division has a spindle capacity of around 4,00,000 with an annual turnover of around 175 million dollars, deriving 60 per cent of its turnover from exports. The various brands under which the yarn is exported are Shankar, Mahabar, Oscar, New World, Ultima, Delight, Marvel, Elegant and Gemini.

Picanol revenues fell three per cent compared to the previous year. Gross profit percentage decreased from 23 to 22 per cent. Following an absolute record year in 2017, the weaving machines division again experienced an excellent year. Based on the well-filled order book at the end of 2017, it achieved a strong first half-year, with high demand for quality and technology resulting in strong sales. In the second half of the year, increasing geopolitical uncertainty in the markets caused a slowdown in the demand for weaving machines. The industries division also had another strong year, which was driven by weaving machines and this was mainly thanks to the strong growth in new projects. The industries division thus continues to contribute to the growing diversification of the group by fully focusing on castings and mechanical finishing, controller capacities and precision parts.

For 2019, Picanol is taking into account a slowdown in the global weaving machine market. This is due to the current macroeconomic and geopolitical climate, in which customers are more cautious and investment decisions might either be delayed or postponed. For the first half of 2019, Picanol expects a decrease in revenue of 25 per cent compared to the first half of 2018.

Banks and other foreign exchange dealers in Nigeria are prohibited from selling forex to any person seeking to import textiles and other clothing into the country. Instead the Central Bank of Nigeria would provide financial support at single digit interest rates to the textile sector to enable operators rejuvenate their capacities through refitting, retooling and upgrading of their factories. These initiatives are expected to help the textile manufacturing sector bounce back to service the domestic market and the export sector.

The measure is intended to reposition the textile, cotton and garment industry for job creation and development of the economy and restore the sector to its hitherto enviable position in the national economy and also save money spent on importing textiles and clothing. Other areas of expected support from CBN include the provision of high yield cotton seedlings and the development of textile industrial areas where stable electricity supply would be guaranteed.

The Nigerian textile industry in the 1970s and 1980s was the third largest in Africa. By 1987 the country had 37 textile firms operating 7,16,000 spindles and 17,541 looms. Between 1985 and 1991 it recorded an annual average growth rate of 67 per cent and was employing about 25 per cent of the work force in the country’s entire industrial sector.

Apparel Textile Sourcing (ATS) will be held in Germany from September 11 to 13, 2019. Attendees will get the opportunity to connect with 200 plus manufacturers from Europe, Asia and Latin America. European brands and retailers who visit the show will have the ability to meet exhibitors with numerous capabilities and finishing techniques. A China pavilion will provide visitors a balance of mass market manufacturers that can service larger programs, along with factories that service brands or retailers who have smaller programs. ATS efficiently showcases both Asian and regional vendors, in a setting that focuses on product development while addressing the major challenges in global sourcing.

What started as a trade show in Canada in 2016 has become the fastest growing fashion industry sourcing trade show organizer in the world. ATS expanded to Miami in 2017, filling a void for the industry focused on Latin America manufacturing. ATS events have now been called a key destination by sourcing professionals and buyers throughout the apparel supply chain. ATS trade shows also bring leading industry professionals, trade commissioners and government officials together into an open forum to interact with those shaping the current and future trade ecosystems in the apparel industry. Its matchmaking platforms are very helpful to both brands and retailers as well as manufacturers.

The British fashion industry is displaying signs of stress due to Brexit. A report by data firm IHS Markit reveals, the UK Services Purchasing Managers’ Index has indicated that Britain’s economy is set to grow just 0.1 per cent in the first three months of 2019 compared with the last three years.

As a result, retailers all over the nation are expected to suffer a shortage in staff, both in shops and warehouses. A new study by workforce management expert Quinyx in collaboration Development Economics and Censuswide found the shortage could have a significant impact on the UK retail sector.

Indeed, the yearly economic output of retail workers would be approximately £3.1billion lower by 2024 under a no-deal Brexit compared to an orderly Brexit scenario, representing a staggering 59 per cent decrease in output.

Filatex will augment yarn manufacturing and polymerisation capacity at its plants in Dadra and Dahej units from 3.28 lakh MT per annum to 3.65 lakh MT by next year.
The polyester yarn manufacturer, based in New Delhi, will also set up a captive power plant to reduce energy costs. The company, which exports manmade yarn to 34 countries, also plans a fabric plant to make fabrics from the yarn it produces. The yarn is used to manufacture carpets, rugs, tapes, ribbons and zippers. The company makes polypropylene multifilament yarn in dope dyed colors, which is widely used in all types of socks, hosiery, panty hoses and seamless garments.

Filatex is a pioneer in monofilament yarns for zippers, toothbrush bristles, velcro, magic fasteners and forming fabrics in India. FIL manufactures specialty polyester filament yarns, which have a high value addition as compared to normal denier synthetic yarns. One of the specialty yarns which Filatex manufactures is micro denier polyester filament yarn. This is an import substitute and its demand is growing at a very rapid pace because of its inherent strengths. These specialty yarns are used for high value added fabrics like artificial silk which are used for manufacturing high quality saris, dress materials, shirtings and other textile applications.

Bangladesh has a wait ahead for GSP from the United States. The main reason is Bangladesh has yet to make significant progress on labor rights. GSP is a US trade initiative designed to stimulate growth in emerging economies. This is achieved by offering duty free exports. Over the years, a number of countries have been suspended from GSP as they have failed to maintain GSP requirements. In most cases, countries regain their status once they take steps to address the issues.

The US suspended GSP facility for Bangladesh in 2013. After the suspension of the Generalised Systems of Preferences scheme, Bangladesh signed up for a 16-point action plan to get it back. Bangladesh's main export item to the US, apparel, is excluded from GSP. Bangladesh's apparel exports are subjected to a 15.62 per cent duty upon entry to the US whereas the duty for other countries is much lower.

Bangladesh was confident, significant progress had been made regarding workplace safety and workers’ rights. It tried convincing US decision makers that any previous worries should no longer prevent new trading ventures being created. The US remains Bangladesh’s largest export market. Bangladesh's exports to the US have doubled in the last ten years.

"A recent UBS Evidence Lab survey of chief financial officers (CFOs) in China and North Asia including Japan, Korea and Taiwan reveals that many Asian manufacturers are planning to shift their production facilities out of China. This shift presents a golden opportunity for India to become one of the preferred destinations for these manufacturers to set up bases. India’s lower production costs along with and an absence of tensions associated with a potential trade-war is likely to fuel its popularity amongst these nations."

A recent UBS Evidence Lab survey of chief financial officers (CFOs) in China and North Asia including Japan, Korea and Taiwan reveals that many Asian manufacturers are planning to shift their production facilities out of China. This shift presents a golden opportunity for India to become one of the preferred destinations for these manufacturers to set up bases. India’s lower production costs along with and an absence of tensions associated with a potential trade-war is likely to fuel its popularity amongst these nations. Its less complicated environmental laws and highly skilled workforce have already led its growing popularity as a preferred FDI destination over the past two years.

Ease of doing business and policy support

The UBS survey polled 244 respondents across various industry groups. Of this, 71 per cent respondents represented companies with less than Rs 5 billion in revenue. The survey revealed that around 85 per cent of respondents had received significant FDI enquiries and 87 per cent had received enquiries from Chinese manufacturers to collaborate in production.

India’s attractiveness as a preferred investment destination has increased significantly over the past three to four years mainly on account of its ease of doing business, financial penetration and policy focus. As per UBS Evidence Lab's CFO survey, India also lays out an improved outlook for the key success factors for various industries. The UBS India Industrials analyst’s ‘Infrastructure Availability Index’ has also indicated a significant improvement over the past 20 years.

Robust GDP growth expected, jobs creation on the anvil

The perception that Indian infrastructure is a major constraint in its growth is also untrue as India has a surplus power and ports capacity. Besides its lower production costs, the massive scale of its market also gives India an edge over countries as the country benefitted the most from the US-China trade war. These benefits along with its rising exports to the rest of world are likely to help the country achieve a GDP growth of over 8 per cent over next five years. This will also lead to the creation of around six million (including indirect) jobs per annum thus improving external stability and reducing currency volatility.

According to the survey, the sectors that are likely to benefit the most from this include apparels, chemicals, industrials, and electronics sectors. Industry leaders hope that though an increase in competitive populism could constrain the new government’s ability to pursue the opportunity through incentives or infrastructure building, interventions in form of increased labor demand do not offset the low-cost advantage that the country offers.

"In order to stay relevant among young consumers, traditional brands are disrupting their own offerings, and business models. The latest Business of Fashion–McKinsey State of Fashion Survey highlights, self-disruption as one of the top 10 trends for the fashion industry to watch out for in 2019. Two key forces drive this self-disruption: preference of younger consumers’ for novelty and advancements in digital technology and social media."

In order to stay relevant among young consumers, traditional brands are disrupting their own offerings, and business models. The latest Business of Fashion–McKinsey State of Fashion Survey highlights, self-disruption as one of the top 10 trends for the fashion industry to watch out for in 2019.

Two key forces drive this self-disruption: preference of younger consumers’ for novelty and advancements in digital technology and social media. According to a McKinsey survey, younger consumers are willing to set themselves apart through brands and follow with upcoming brands. Social media allows these challenger brands to disrupt the marketplace.

Disruption characterised by rapid growth and social media fluency

The disruption by challenger brands is characterised by rapid growth, social-media fluency, and e-commerce-focused distribution. Clothing brand Reformation, for example, has 1.1 million Instagram followers and makes almost 80 per cent of sales online. It pushes its green credentials and has a roster of celebrity endorsers, including Selena Gomez, Emily Ratajkowski, and Rihanna. The disruptor brand I.AM.GIA has a similar profile, with more than 600,000 Instagram followers and a strong celebrity following. Both are growing sales at high-double-digit rates.

Brands adopt levers to self-disrupt

Established brands acknowledge that challenger brands are often more nimble and effective at reaching young audiences. In response, the former are now turning to a series of levers to “self-disrupt”. One of these primary levers is brand makeovers which includes overhauling their approach to create an impression of having their finger on the pulse by refreshing their image. Burberry, for example, developed a new logo and monogram under Riccardo Tisci.

Heritage brands are turning to streetwear to create a cool image. In 2018, Louis Vuitton appointed Virgil Abloh, known for his disruptive streetwear brand Off-White, as its artistic director. This tendency to collaborate and flex a brand’s identity has now reached critical mass, and is expected to persist in future also.

Revamping business models

Numerous established brands are revamping their business models to reflect these evolutions. For instance, some are imitating the “drop” approach commonly used by streetwear labels to release smaller and more frequent collections that create rarity value and elevate anticipation.

Established luxury brands are also increasingly embracing digital channels as a primary—at times, exclusive—route to market. Following early disruptors Warby Parker and Everlane, Comme des Garçons launched its first direct-to-consumer-only brand in 2018 to expand its customer base. We expect more established brands to follow suit.

Launching accelerators and incubators

Established brands are also embracing disruption by launching accelerators and incubators to test new approaches in a more controlled environment. These are more flexible and less risky than M&A, enabling experimentation and offering the opportunity to accelerate business-model innovation when necessary. These initiatives help major players support innovators and absorb or adapt some of their most pioneering practices and ideas. Others are creating dedicated internal units to streamline the innovation process.

Brands will continue to innovate, leveraging their scale to fast-track capability building through M&A, accelerators, and innovation labs. The latter will help companies remain at the forefront of business-model innovation and respond to new fashion trends more quickly. It will be increasingly important to adopt agile ways of working and depart from the traditional operating model. Players will also work to streamline supply chains, enabling faster time to market.

In an increasingly fickle fashion environment, market leaders will need to take more risks to stay ahead. Fashion brands must learn to embrace a more flexible approach of business in areas from commercial models to the supply chain and distribution.