Global market leader in wood-based cellulosic fibers, the Lenzing Group posted a 25.7 per cent Y-o-Y revenue growth Q1, FY’22. Group revenue grew to €615 million, during due to a rise in demand for wood-based biodegradable specialty fibers and higher fiber prices. The group’s earnings before interest, tax, depreciation and amortization (EBITDA) decreased 7 per cent year-on-year to €88 million. Its EBITDA margin reduced from 19.3 to 14.3 per cent. Lenzing reported a 14.3 per cent growth in net profit for the quarter. Profit surged to €34.1 million, while earnings per share increased to €0.87.

Like the entire manufacturing industry, the Lenzing Group too was significantly affected by the extreme developments in global energy and commodity markets during the quarter. However, the group continued to focus on specialty fibers like Tencel, Lenzing Ecovero and Veocel that along with a positive market environment helped ensure a solid revenue and earnings trend. Gross cash flow increased 2 per cent to €86 million during the quarter. Cash flow from operating activities decreased 28.5 per cent to €79.7 million. The group continues to launch climate-neutrality initiatives across operations.

In 2019, Lenzing set a target to reduce its carbon emissions by 50 percent by 2030 and to become climate neutral by 2050. It also plans to generate electricity from renewable energies in future. Currently the group is involved in the construction of several photovoltaic systems at its site in Upper Austria.

Global economy is forecast to grow 3.6 per cent in 2022, predicts IMF. Currently, the manufacturing industry is being challenged by the deep recession caused by COVID-19, the Russia-Ukraine, global supply chain constraints, etc. Liquidity crisis are expected to persist in all regions relevant to Lenzing.

Lenzing also expects demand for environmentally responsible fibers for the textile and clothing industry as well as the hygiene and medical sectors to grow. However, the market remains challenged due to the rising energy and raw materials costs as well as disturbances in the supply chain.

Corinne Suder is the new Vice President-Events and Programming Department, American Apparel & Footwear Association (AAFA) effective from June 13. A Certified Meeting Professional (CMP), Suder has over 25 years experience and was earlier engaged as the senior director at AAFA. In her new role, Suder will preside over several annual events and webinars, as per a Textile World report. The events will align with AAFA’s Strategic Plan across the priorities of brand protection; supply chain and sourcing; trade, logistics, and manufacturing.

AAFA organizes all events under a capable leader to support members’ growth and sustain inclusive and diverse cultures, meet and advance ESG goals, and draw upon the latest technology. The association plans to continue engaging members through collaborative meetings, webinars, and a hybrid calendar of virtual and in-person events.

Suder joins AAFA’s senior leadership team that currently includes: Steve Lamar, President and CEO; Nate Herman, Senior Vice President – Policy; Maureen Storch, Senior Vice President – Membership; Natalie LaBella, Vice President – Communications and Marketing; and Agata Borradori, Vice President – Finance.

Last month, international brands and retailers decided to lift the ban on cotton grown in Uzbekistan. The decision came as a huge relief to the country as cotton is the main cash crop in Uzbekistan, one of the main pillars of its economy. As per a daijiworld.com report, cotton cultivation in Uzbekistan dates back a few centuries. The crop is important to Uzbekistan’s national economy. However, since its independence in 1991, Uzbekistan has been accused of using forced labor, especially child labor for harvesting of the crop.

Ban drives elimination of child labor in Uzbekistan

The accusation led to 331 international brands and retailers banning cotton products from Uzbekistan since 2011. The Cotton Campaign was established to improve human rights in Uzbekistan while International Labor Organization (ILO) allowed to monitor production in the country. The boycott also led to around two million children and a million adults being taken out of forced labor by the ILO. In its ‘2021 ILO Third-Party Monitoring Report of the Cotton Harvest in Uzbekistan’ based on 11,000 interviews with cotton pickers, ILO says, 99 per cent workers involved in the 2021 cotton harvest worked voluntarily. Majority of cotton pickers also reported a marked improvement in working conditions since 2020.

Reforms eradicate child laborv In a joint press briefing held in March 2022, the Ministry of Employment and Labor Relations of the Republic of Uzbekistan noted in the last five years, the country has launched a massive drive to eliminate forced labor from the country. A leading partner of the Cotton Campaign Coalition, the Uzbek Human Rights Forum also denies the presence of forced labor in the country.

This accomplishment is credited to Uzbek President Shavkat Mirziyoyev, who has initiated several labor reforms. In a decree issued in 2012, Mirziyoyev banned children from working in cotton fields. He also launched numerous reforms as the President of the country to modernize Uzbeistan’s former agricultural economic model and eradicate child and forced labor from. The government banned adults from being forced to work in fields. It abolished the quota system for cotton production and as recommended by the ILO and the World Bank, increased salaries. Eradication of forced labor also led to the lifting of the international ban on cotton by the International Coalition Cotton Campaign.

ILO move to boost cotton consumption

Jonas Astrup, Chief Technical Advisor, ILO TPM Project in Uzbekistan says, the labor market in Uzbekistan is being democratized with minimum wages being raised by the government. Despite lifting the ban, brands continue to source from buyers diverting from China. The brands that have banned Uzbek cotton included H&M, which acted on the advice of industry certification agent, Better Cotton Initiative. Other brands like Nike, Ralph Lauren, Gap and American Eagle Outfitters, also banned vendors and suppliers from sourcing products or raw materials from Xinjiang. The ban is likely to boost cotton exports from Uzbekistan and create jobs in the country.

Lifting the ban may also help stabilize global cotton prices by boosting both consumption and production. The move is also advantageous to India which expects cotton yield to decline this year. India can purchase cotton from Uzbekistan at affordable rates. This strengthen bilateral economic relations between the two.

As consumers sought to refresh their wardrobe post pandemic, they mostly shopped for denim, reflecting their desire to retain comfort in their ensembles. Comfort will continue to be a dominating factor in consumers’ clothing choices, says Elizabeth Spaulding, CEO, Stitch Fix. However, they may also add new styles in office wear. Hence, ‘business comfort’ is likely to emerge as the new office style, adds Spaulding.

Over 70 per cent consumers to opt for jeans as office wear

Consumers’ eagerness to restock their wardrobes offers brands and retailers significant opportunities to cater to changing preferences, avers Spaulding. As per a Stitch Fix survey, denim sales increased 30 per cent Y-o-Y this year. Sale of straight jeans increased 30 per cent while wide leg denim sale rose 79 per cent. The company also recorded a 23 per cent rise in sale of men’s relaxed fits while sale of straight leg jeans grew 21 per cent.

In the next few months, over 76 per cent consumers surveyed by Cotton Incorporated said, they plan to wear jeans more often than they do now. Titled, ‘Coronavirus Response Survey’, it showed, in the last one month, around 44 per cent consumers wore jeans to work.

Future dressing style to be hybridized

The survey also revealed, only 16 per cent consumers wore sweatpants at home last month. On the other hand, 39 per cent wore denim to office. The pandemic has casualized officegoers’ dress code with 25 per cent opting of less formal clothes to office. Employees capable of working remotely plan to adopt the hybrid style of dressing to office in future, shows a research report by Gallup. Stitch Fix also indicates a growing preference for denim, dresses and a combination of knit and woven garments in offices.

Denims to top purchases in next three months

Around 30 per cent respondents to the Coronavirus Response Survey said they plan to prioritize denims as their top clothing purchases in the next three months. This will followed by sweatpants at 27 per cent, activewear at 25 per cent and athleisure at 21 per cent.

Pent-up demand for denim jeans was highlighted when consumers returned to their offices and social gatherings, states the NPD Group. In 2021, sale of classic bottoms in the US increased 36 per cent to $18.4 billion. Sale of women’s jeans grew 9 per cent while men’s jean sale went up 12 per cent, as against 2019 figures. Jeans manufacturers continue to be leading innovators as they offer new styles and options to consumers to up their comfort quotient.

Kim Glas, President and CEO, National Council of Textile Organizations (NCTO) representing the full spectrum of U.S. textiles from fiber through finished sewn products, issued a statement on the US Trade Representative’s statutory four-year review of the China 301 tariffs.

According to this statement, NCTO has long advocated for the 301 penalty tariffs to remain on finished textile and apparel products from China. Not only do they increase the government’s negotiating leverage to address the Chinese government’s serious predatory trade practices that have hurt our domestic manufacturing sector and that of its free trade agreement partners for decades; they also send a strong message to China that the United States is committed to addressing systemic predatory trade practices that have undermined domestic industries and their workers.

For decades, China’s illegal actions have undermined virtually every domestic manufacturing sector and contributed to the direct loss of millions of U.S. jobs. These devastating state-sponsored practices, which include intellectual property theft, pervasive state-ownership of manufacturing, industrial subsidies, and abhorrent labor and human rights abuses in the Xinjiang region, have allowed China to dominate the global marketplace, which has had severe ramifications on American workers and our Western Hemisphere trade allies. As sourcing executives seek to de-risk out of China for these products, our sector is experiencing massive investment in the U.S. and Western Hemisphere supply chains. In fact, we expect approximately $1 billion of investment announced in the United States and Central America this year alone, as penalty tariffs have played a key role in sourcing shifts.

Tariffs are a reasonable and necessary mechanism to support U.S. jobs, offset unacceptable practices, and strengthen the national economy. They help partially level the playing field for American manufacturers and workers trying to compete against unfair and illegal trade practices – ranging from intellectual property theft, forced labor, to state-sponsored subsidies – that have been perpetuated by the Chinese government. These products have flooded the U.S. market and put our domestic producers and their jobs at risk and have significantly contributed to offshoring and the destruction of the middle-class jobs. It’s critical we maintain key negotiating leverage to address these predatory trade behaviors.

NCTO has also strongly advocated for a fair, transparent process to remove tariffs on certain limited textile machinery, chemicals and dyes that cannot be sourced domestically to help U.S. manufacturers compete against China.

The review process, which is required by statute and being undertaken by the U.S. Trade Representative’s office, will allow domestic manufacturers to weigh in on whether removing the tariffs will be harmful and trigger USTR to do a further review.

The Centre Government plans to launch the second edition of the PLI scheme, that would be dedicated to the apparels and garments sector The new scheme would have a lower investment criteria, to ensure that the entire Rs10,683 crore of incentives allocated under the scheme gets fully utilized and relatively smaller players can also benefit.

The Textile Ministry is projected to utilize a little more than Rs6,600 crore for the current investors under the scheme and has enough funds to invite a second round of applicants.

The Textile Ministry has approved the applications of three additional companies under the production-linked incentive (PLI) scheme for textiles, which includes Birla Fashion and Retail and RSWM of the Bhilwara Group, taking up the total number of selected applicants to 64.

Of the three fresh approvals, one application from RSWM, one of the largest yarn manufacturing companies in India, was under part 1 of the scheme. The minimum investment requirement under the first part is Rs300 crore with minimum turnover required to be achieved for getting incentive at Rs600 crore.

The other two approvals, one from Birla Fashion and Retail and the other from Pan Healthcare, are under part two, with minimum investment of Rs100 crore and minimum turnover required to be achieved for incentive is Rs200 crore.

Organizers of an established portfolio of fashion events including Pure London, Pure Origin, Scoop, and Moda at Spring & Autumn Fair, The Hyve Group plc,is launching a new fashion podcast, Fashion Questions, to give voice to a powerful network of fashion industry insiders.

Each episode of Fashion Questions will focus on a different question with a different change maker to understand their thoughts on what the answer could be. A range of experts and retailers are lined up to talk about everything from why we are still talking and not doing when it comes to the circular economy, to why is everyone so crazy about MiuMiu’s micro miniskirt?

Hosted by the newly appointed Editor for Retail UK at Hyve, LinaVaz, Fashion Questions will welcome a wide variety of guests, kicking off with Emily Gordon-Smith, Content Director at trends intelligence experts Stylus, who discusses the MiuMiu micro-mini trend phenomenon, the hedonist party and wellness trends. Forthcoming guests also include Doug Stephens, author and retail futurist, and Annick Ireland, Founder and CEO, Immaculate Vegan.

In the first quarter of 2022, the Lenzing Group was significantly affected by the extreme developments in global energy and commodity markets. Its revenue grew by 25.7 percent year-on-year to reach € 615 million in the first quarter of 2022, primarily due to continued high demand for wood-based biodegradable specialty fibers and higher fiber prices. Specialty fibers’share of revenue currently stands at 73.3 percent.

The earnings trend reflects trends in energy, raw materials and logistics costs, although the company’s continued focus on measures to improve structural earnings in all regions mitigated this negative effect. Earnings before interest, tax, depreciation and amortization (EBITDA) decreased by 7 percent year-on-year to € 88 mn. The EBITDA margin reduced from 19.3 to 14.3 percent. Net profit for the quarter grew by 14.3 percent to €34.1 million, while earnings per share amounted to € 0.87 (compared to €1.06 in the first quarter of 2021).

Gross cash flow increased by 2 percent to €86 mn in the first quarter of 2022, mainly due to the earnings trend. Cash flow from operating activities decreased by 28.5 percent to €79.7 milllion. Free cash flow amounted to- € 102.9 million (compared to - €99 mn in the first quarter of 2021, particularly due to investing activities in connection with the projects in Thailand and Brazil. Capital expenditure on intangible assets, property, plant and equipment and on biological assets decreased by 13.6 percent to € 182.7 million, of which approximately 44 percent was financed from cash flow from operating activities.

In the first quarter of 2022, the Lenzing Group was significantly affected by the extreme developments in global energy and commodity markets. Its revenue grew by 25.7 percent year-on-year to reach € 615 million in the first quarter of 2022, primarily due to continued high demand for wood-based biodegradable specialty fibers and higher fiber prices. Specialty fibers’share of revenue currently stands at 73.3 percent.

The earnings trend reflects trends in energy, raw materials and logistics costs, although the company’s continued focus on measures to improve structural earnings in all regions mitigated this negative effect. Earnings before interest, tax, depreciation and amortization (EBITDA) decreased by 7 percent year-on-year to € 88 mn. The EBITDA margin reduced from 19.3 to 14.3 percent. Net profit for the quarter grew by 14.3 percent to €34.1 million, while earnings per share amounted to € 0.87 (compared to €1.06 in the first quarter of 2021).

Gross cash flow increased by 2 percent to €86 mn in the first quarter of 2022, mainly due to the earnings trend. Cash flow from operating activities decreased by 28.5 percent to €79.7 milllion. Free cash flow amounted to- € 102.9 million (compared to - €99 mn in the first quarter of 2021, particularly due to investing activities in connection with the projects in Thailand and Brazil. Capital expenditure on intangible assets, property, plant and equipment and on biological assets decreased by 13.6 percent to € 182.7 million, of which approximately 44 percent was financed from cash flow from operating activities.

BSE listed R & B Denims reported Rs 2,844 million turnover in FY 21-22 with the Profit before Tax (PAT) growing 97 per cent Y-o-Y to Rs 280 million. The yearly PAT rose 108 per cent YoY, to Rs 217 million.

In FY 21-22, R & B Denim participated in Gartex Denim Show at Delhi as well as in Cairo that helped them add to current customer base and an increase in demand for products in overseas and domestic markets. The company’s exports grew 225 per cent from 220 million in FY 20-21 to 720 million in FY 21-22.

In domestic market, the company’s selling price increased from Rs 140 in FY 2020-21 to Rs 165 mainly due to selling premium quality denims and increase in profitability. Efficient inventory management helped the company increase sales, maintain prudent working capital and increased productivity. The company increased the proportion of premium products thereby strengthening margins.