On January 31, 2020, when Brexit came into force it was expected to ease trade relations between the Europe and the UK. But, one month since the conclusion of the trade deal, things are far from smooth for luxury brands in both regions. As a Vogue Business reports shows, 20 of 57 luxury brands that operate in both UK and Europe face delays in product deliveries. Additionally, customers are being burdened with unexpected duties and taxes on their products. Brands are being taxed for product returns, affecting their profit margins. Luxury firms like the London department store Fortnum & Mason and Kate Spade New York, are being forced to suspend sales to Europe, until things work out.

Increase in courier charges and import duties

Consultants and industry experts expect the situation to improve soon. However, they believe, Brexit has made trade between the two regions more costly. Simon Cotton, CEO, Jonhstons of Elgin says, it has increased courier charges between the two regions with firms charging over £4.50 for a parcel delivery between the UK and EU alongwith potential additional administrative costs. UK companies sourcing their products from outside Europe have to pay a duty on import of products besides an extra charge for exporting them. These products can achieve a tariff-free status only if they fulfill the complicated rules of origin, adds Aruni Mukherjee, Director-Indirect Tax, KPMG UK.

Troubled by this, retailers like John Lewis have temporarily halted exports to Europe while others have declined to pay the extra duties or taxes. Amazon has withdrawn its products from the Northern Ireland market though retailers like Robert Ettinger, CEO, of namesake brand has received several inquiries from brands for making products in the UK.

Product returns and trade shows

Besides being burdened with extra duties and taxes, retailers also face additional charges on product returns by customers. Post Brexit, a product returned by a European customer to a UK brand and vice versa attracts additional duties and taxes even the brand has already paid a duty while shipping the product. UK government advisors have recommended splitting the supply chain into two parts and handling shipments and returns separately with the UK and EU. However, such a solution is not feasible for smaller businesses like the womenswear brand Cefinn.

According to Adam Mansell, CEO, UK Fashion & Textile Association (UKFT), Brexit may also lead to an increase in freight levels once stores in the UK reopen, and brands move through stock imported before Christmas. Though European brands have not increased the average price of goods in their British online stores, their costs are eventually likely to increase as Mastercard plans to increase its fees for customers using a UK card to buy a product from an EU retailer, says data from BenchMarque by Deloitte.

The UK fashion industry and retail sector is yet to experience the full effects of post Brexit laws like the government’s abolition of its VAT (Value-Added Tax) retail export scheme. It may face further challenges post pandemic in the form of extra costs that retailers may have to bear for showcasing their products at European trade shows. The future for retailers certainly seems challenging.

According to new research by algorithmic merchandizing firm Nextail, the modern fashion CEO is digitally savvy and ecologically aware. The research surveyed the skill sets of over 100 newly appointed CEOs of leading fashion brands. The report also highlighted the growing number of women taking on the top job.

The report shows that despite COVID-19, businesses were planning for the future as much as attempting to deal with immediate issues, says Joaquin Villaba, CEO and Co-Founder, Nextail This is the second year running that Nextail has produced this report. According to it, the appointment process slowed down until after the first set of lockdowns were over. However, the priorities seemed to remain constant with deep fashion and a well-rounded retail background remaining the topmost priority, 63.7 per cent of hires had existing C-Level experience; while setting forward-looking priorities, such as digital transformation and sustainability.

Jeff Bezos will step down as Amazon CEO and become the company's executive chairman later this year. He will be succeeded by Andy Jassy, Founder, Amazon Web Services' (AWS).

This, even as the e-commerce company reported its third consecutive record profit and quarterly sales above $100 billion for the first time in the December quarter of 2020. Net sales rose to $125.56 billion as consumers turned to the world's largest online retailer for holiday shopping, beating analyst estimates of $119.7 billion, according to IBES data from Refinitiv.

Bezos, who started the company 27 years ago as an internet bookseller, will stay engaged in important Amazon initiatives, He joined Amazon in 1997 and has a MBA from Harvard Business School, according to the company's website. He founded Amazon Web Services (AWS) and grew it to a cloud platform used by millions.

Garment Industry experts believe that Union finance minister Nirmala Sitharaman’s announcement of setting up seven mega textile parks over the next three years could prove to be the much-needed push for India’s textile and apparel export industry, which has lost out to Asian peers over the past few years.

Sitharaman had in her budget speech said mega investment textile parks will enable the industry to become globally competitive, attract large investments and boost employment generation.

The plug-and-play model announced by the Centre will eliminate a huge requirement of capital expenditure and funds, said Rahul Mehta, chief mentor, Clothing Manufacturers Association of India.

The move is a big boost for the textiles industry in India. China is the largest supplier of garments to the world. Bangladesh and Vietnam have also come up really well because of low-cost structures and trade agreements. With the help of 7 plug-and-play parks, India could emerge as a strong global player in textile and garments exports, said Sanjay Jain, Chief Executive Officer, PDS Multinational Fashions

Setting up of textile parks along with the production-linked incentive scheme for technical textile and man-made fabric producers and reduction in customs duty for caprolactam, nylon chips and nylon fibre to 5 per cent will help apparel exporters enhance their share in global markets over the medium term, added Hetal Gandhi, Director-Textiles, CRISIL Research.

Emma Minto, Chief Executive Officer, Nike has joined footwear brand Crocs as its senior vice president and general manager, overseeing all operations for the Americas. As per a Retail Dive report, Minto has 16 years of experience at Nike in various leadership roles, most recently as vice president and general manager of Nike Women's, North America.

Crocs’ full year 2020 revenue estimates increased 12 per cent to a record $1.38 billion, more than its previous expectation for growth between 5 and 7 per cent. However, demand for office wear and occasion wear increased. The brand expects this demand to continue in future and revenue from casual wear to increase 25 per cent.

Crocs. is an American company that manufactures and markets the Crocs brand of foam clogs . The company has since established a considerable following with American middle school and high school students, with many opting for Crocs as school shoes.

After acquiring Shoe Palace in December 2020 for $325 million, JD Sports is now buying American sportswear and footwear retailer DTLR for $ 495 million. Of the total purchase amount, around $ 100 million will be used to repay existing debts. Peter Cowgill, Executive Chairman, JD Sports Fashion Plc,, believes the purchase will help JD Sports expand its presence in the north and East US. It is one of the few retailers that recorded good sales in the second half of 2020, which made the retailer increase profit guidance by a good number. DTLR has stores in the UK, Europe, Asia and Australia, and generates revenue of £4,717.8 million.

Established in 1982, it has 247 stores across 19 US states. Its purchase will help JD sports explore additional funding options to enhance its flexibility to invest in future opportunities. The acquisition is likely to conclude during the first quarter of 2021.

Getting a boost from consistently cold weather total sales of Uniqlo increased 1.8 per cent while its comparable sales (including online) rose 2 per cent year-on-year. The good results came despite four of the company’s Japanese shops remaining temporarily closed and as many as 159 were working for shorter hours due to the pandemic. The company’s business heavily depends on the weather conditions. Cool weather during summer and warm spells during winter strongly affect its sales. However, Japan witnessed a favorable weather during most of the pandemic period which helped the company boost business.

However, customer numbers and average purchases per customer were a little lower during January than they have been for the year to date. Uniqlo is a wholly owned subsidiary of Fast Retailing A Yamaguchi-based company it was founded in March 1949 in Ube, Yamaguchi.

In May 1984, it opened a unisex casual wear store in Fukuro-machi, Naka-ku, Hiroshima, under the name ‘Unique Clothing Warehouse’.[5] Initially, the brand was going to be registered as a shortened contraction of ‘unique clothing’.

Sanjay Jain, Chairman, ICC National Textiles Committee feels, 10 per cent basic customs duty on cotton imports will increase the cost of cotton shirts, dresses and home textile linen in India by around 5 per cent. As per Confederation of Indian Textile Industries (CITI), India imports up to 15 lakh bales of cotton annually vis-a-vis around 390 lakh bales of crop size cultivated in the country.

However, the reduction of 5 per cent BCD on caprolactum, nylon chips and nylon fiber and yarn will make saris, dupattas, kurtis and other apparels made of nylon yarn cheaper. In India, Surat alone produces 6,000 metric tons nylon chips – 37 per cent of total national production.

Rakesh Choudhary, a nylon chip manufacturer said, the reduction of BCKD on nylon chips, caprolactam and nylon yarn will reduce working capital requirement of weavers. It will also reduce the cost of production in tyre, fishnet, automobile and other technical textile sectors where nylon chips are used.

T Rajakumar, Chairman, Confederation of Indian Textile Industry (CITI) feels the 2021-22 Union Budget will propel future growth of India’s textiles and clothing industry. However, the 10 per cent import duty on cotton is a severe blow to future prospects. Rajakumar also hails the government’s decision to set up seven textile parks within three years under Mega Investment Textile Parks (MITRA). It will help create world class infrastructure with plug and play facilities to enable create global champions in textile exports.

The Production Linked Incentive (PLI) scheme for man-made fibres and technical textiles will not only make the textile industry globally competitive but also help it attract large investments and boost employment generation, adds Rajakumar further advising the government to reduce the customs duty on caproolctam, nylon chips and nylon fiber and yarn upto 5 per cent.

Rajkumar also welcomed rationalisation of exemption on import of duty-free items as an incentive to exporters of garments, leather, and handicraft items. The decision to allow women to work in all categories and also in night-shifts with adequate protection, as well as the modified definition of small companies: implementation of the 4 labor codes, minimum wages to all categories of workers, and all will be covered by the Employees State Insurance Corporation (ESIC) are steps in the right direction, Rajkumar said.

Ashwin Chandran, Chairman, The Southern India Mills’ Association (SIMA) appealed for the withdrawal of the 10 per cent import duty on cotton and cotton waste in order to sustain the global competitiveness of Indian textiles and apparel industry and prevent job losses, fall in the exports, and curb cheaper imports of value added products from the SAFTA countries like Bangladesh, Sri Lanka, etc.

Chandran opined, the duty will not benefit the cotton farmers as the normal import of 12 to 14 lakh bales per year accounts only around 3 per cent of Indian cotton production and consumption and such cotton is not produced in India. He added, the duty also defeats the government’s policy of addressing an inverted duty structure in the GST especially in cotton which attracts 5 per cent GST.

The import parity pricing policy being adopted by the indigenous fibre manufacturers during the two decades and the recent removal of ADD on PTA curtails the growth of the MMF textile value chain, he adds. It also affects the competitiveness of predominantly MSME based cotton textiles and apparel industry.

Chandran further stated, the MSME and decentralized nature of the yarn, fabric and garment manufacturers in the country are not in a position to take advantage of Advance Authorization Scheme which benefits only the vertically integrated units that account less than 10 per cent of the exports.

The Government had withdrawn the import duty on cotton during July 2008 consequent to the severe recession faced by the industry and also a Nation-wide bandh by the entire cotton textile value chain. When the import duty was there, the multinationals used to cover major volume of cotton and export and thereafter the industry had to import cotton at higher price and thereby the foreign exchange also got affected, he added. Therefore, he urged the Prime Minster to withdraw the 5 per cent BCD and 5 per cent AIDC and also 10 per cent BCD on cotton waste to sustain the global competiveness of the cotton textile value chain and make Aatmanirbar Bharat vision, a reality.

Chandran hailed the announcement of MITRA scheme aiming at developing seven mega textile park with plug and play facility and facilitate 40 to 50 leading textile players to become global champions. He has stated that Tamilnadu being the largest textile manufacturing State, is planning to develop three mega parks under MITRA, Andhra Pradesh and Telangana State are already having one such park each. He has stated that this would facilitate attracting large scale investments including FDI and JVs.

Welcoming the allocation of Rs700 crore for TUF Scheme and Rs.80 crore for SITP, Chandran hoped that the additional allocations would be made liberally based on the claims filed by the Ministry of Textiles.