Just when the fashion industry was getting back on its feet after two years of Covid-19 turmoil, deteriorating macroeconomics and turbulent geopolitical conditions globally have started weighing in heavily in the second half of the year and are expected to continue through 2023. The fashion industry in the post-pandemic phase benefited from a sharp burst of pent-up consumer demand despite challenges such as supply chain disruptions and a wary middle class of overspending.

Strong regional difference in inflation levels

Global industry revenues in 2021 grew 21 per cent year on year, while the average EBITA margin almost doubled, growing 6 per cent in early 2022, with 13 per cent revenue growth in the first half of the year. But all this fell apart, as high inflation hit unseen levels with Russian-Ukraine war, hike in interest rates, a sagging stock market, and job lay-offs globally all are now pointing toward a long and deep recession.

The recent State of Fashion 2023 report from McKinsey and The Business of Fashion says while global sales in the fashion sector are likely to shrink by 2-3 per cent in 2023, there will be a healthy potential growth sales of 5-10 per cent in the luxury fashion sector. There will be a strong regional difference within different sectors as although Europe will be struggling to swim against the recession tide, the US will be in better shape with 61per cent executives expecting the same or better conditions in 2023 as in 2022.

Fashion apparel market of the Middle East and some countries of Asia Pacific region are likely to grow in 2023 and many companies are planning to increase their operations there and are expected to become higher priority territories for many fashion brands. If brand retailers can improve their inventory position by early next year, they will be on an upswing instead of going into recession. However, a seesaw ride of a doom-and-gloom along with a high and happy spending mindset is predicted in 2023 as unpredictable consumer attitudes don’t always share economists’ and fashion experts' expectations. Things are looking up as the US has managed to evade the global recession wave so far and the mass market of China will hopefully swiftly reopen as the country relaxes its Zero Covid policy as the pandemic subsides.

The recent upswing in retail can be attributed to easing inflation as the headline number which shows the purchases of everything from televisions to watches to dish soap, fell 0.6 per cent in the US and 0.4 per cent in the UK in November compared to October. However, in the UK, clothing sales volumes rose 2.1 per cent in November while in the US, sales in clothing and clothing accessories stores dipped a relatively mild 0.2 per cent.

Activewear brands are still unaffected

“The bull case on 2023 remains centred on clean post-holiday inventory levels and margin visibility,” points out Wells Fargo retail analyst Ike Boruchow in a recent report. With health and wellness still, a priority segment after Covid, sports and activewear brands are relatively better off. Profit figures of sportswear giant Nike had plummeted in September due to late-arrival and off-trend merchandise and weak sales in China and it had to resort to a heavy discount mode to get rid of its excess inventory.

However, it paid off and the company recently reported stronger-than-expected sales and earnings with stocks soaring. With Nike demonstrating that excess inventory can be a temporary problem if dealt with in time, others like Nordstrom, American Eagle, Vince and Urban Outfitters among others have also underscored their efforts to reduce inventory in recent earnings calls. A global recession may still be on the cards but it’s still on the backburner giving retailers hope that all may be well soon.

Cotton and textile mills in Pakistan are curtailing production. Due to the worldwide economic recession and low demand, they don’t find it feasible to continue with full production in their plants.

Their operational feasibility is further affected by the high cost of doing business. Part of the curtailment of spinning operations is also due to BMR activities in line with their policy of adopting the latest technologies.The ongoing economic slowdown is continuing to tighten its grip on Pakistan’s industrial sector.

Pakistan faces multiple challenges, including rising debt, low foreign exchange reserves and an energy shortage, pushing companies to either shut down or limit their operations.The textile sector, which remains Pakistan’s largest generator of export receipts, is feeling the heat of the economic slowdown as well. Spindles are expected to restart operations after an improvement in market conditions. Also textile mills in Pakistan face a severe energy crunch and the subsequent suspension of gas supply. Pakistan earlier sought more gas imports on deferred payments from Qatar to restore gas supply to the textile industry on an urgent basis.

A 26 percent upsurge in the export of textiles during the fiscal year 2021-22 was made possible only due to the supply of energy at a regionally competitive tariff.

India is being positioned as a global leader in technical textile manufacturing. Research proposals are being invited for funding for design, development and manufacturing of machinery, tools, equipment and testing instruments. Proposals are being invited from companies engaged in the manufacturing of any machinery (preferably textile machinery), textile/garment value chain manufacturers, research organizations, academic institutions (both public funded and private).

Indigenous development of state-of-the-art technical textile machinery and equipment is expected to support and enhance the manufacturing capabilities of high-end technological products and also play an instrumental role in driving India’s technology readiness level in technical textiles.

Since as of now high-tech machinery, equipment, plants, special tools and accessories are being imported, local skill will be tapped in design, engineering, fabrication and prototyping. Technical textiles is an advanced technology backed sunrise sector which is steadily gaining ground in India. These are functional fabrics that have applications across various industries including automobiles, civil engineering and construction, agriculture, healthcare, industrial safety, personal protection.

They are futuristic and a niche segment of textiles, which are used for various applications ranging from agriculture, roads, railway tracks, sportswear, health on one end to bullet proof jacket, fireproof jackets, high altitude combat gear and space applications on another end of spectrum.

To achieve a more sustainable future, the UK apparel industry must embrace technology, collaborate across the supply chain, promote employee well-being and win buy-in from the very top. So says business information company Textiles Intelligence.

Technology will form the backbone of the industry’s strategy of achieving sustainability. In fact, digital technologies will represent an essential component in the delivery of the change which the industry requires in order to realise a more sustainable future.For the most part, the technology already exists to support this, and it can help with a number of sustainability initiatives -- including supply chain traceability, reducing materials use, delivering greater business resilience through better planning, intelligent market management and channel allocation, and the adoption of new business models.

However, digital transformation can require significant investment. As a result, commitment to change needs to come from the top. Without buy-in at senior level and strategic implementation, digital transformation will not be achieved and initiatives will not succeed. Without top level support and an integrated transformation program, efforts may be hindered by a lack of alignment on targets and a failure to understand the changes to operating models and capabilities which are required.As well as digital technologies, the apparel industry must embrace collaboration if it is to achieve a more sustainable future.

The year 2022 saw many global retailers unveil concept stores to create a more intuitive and convenient shopping experience for customers.

E-commerce giant Amazon unveiled a physical apparel store called Amazon Retail. The store offers a personalised, convenient shopping experience where Amazon’s technology and operations make it easy for customers to find new styles.

The store features women’s and men’s apparel, shoes, and accessories. Multinational clothing brand H&M opened a first of its kind rotating style store which features a thoughtfully curated selection of the brand’s most fashionable styles, and the store also hosts exclusive programming and brand moments in a space designed to evolve throughout the year. Leading omnichannel retailer Kohl’s started Discover @ Kohl’s, a new store experience. Kohl’s Discover @ Kohl’s is a new feature that curates new and seasonally relevant brands throughout the store for the back-to-school season. The store shows a designated back to school area that highlights brands that not only offer unique products and supplies for the school year, but also incorporate a give-back purpose. Nike partnered with Topsports to open a brand experience store in China. The rise retail concept store owned by Topsports and Nike represents Nike’s first store developed in collaboration with a strategic partner in China.

Textile manufacturers and exporters of Karur want a textile wet processing park. They feel this will reduce the cost of wet process for exporters and manufacturers and make them competitive in the global market. They also want an integrated textile trade facilitation center to help market the products of Karur.

The textile clusters of Karur in Tamil Nadu have shown phenomenal growth in the last few years leading to an increase in the demand for skilled labor. Exporters in Karur expect to reach a sales turnover of Rs 25,000 crores by 2030.

Meanwhile Tamil Nadu has received several applications from representatives of textile units across the state to set up mini textile parks. Of these, 43 are from Karur district. Karur is a hub for quality made ups and home textiles in Tamil Nadu. Kay Ventures has teamed up with Hydra Micro Business Solutions to convert Karur into a global knitwear center.

Tirupur is another major cluster known for cotton knitwear. Though these towns are just 100 kms apart, the growth of Tirupur has been phenomenal. While Karur does an export turnover of Rs 4000 crores a year, Tirupur has breached the Rs 40,000 croremark. One of the key factors behind this stark difference is the difference in the size of the segments they cater to. The size of the clothing sector is many times more than the home textiles market. However, this is set to change because knitwear made an unnoticed entry into Karur sometime in 2016.

A denim mill from Pakistan has developed a technology which enhances operational efficiency and reduces resource depletion, cost and waste.

Rapid Clean, developed by US Denim Mills, is an eco-efficient alternative technology designed to replace water-intensive and pollutant fabric finishing processes. This smart technology allows the conservation of natural resources, ultimately playing its part in reduction of greenhouse gas emissions. The process curates fine-quality denim fabrics with an immaculate look and feel.The technique has been effective in producing sustainable and laser-adaptive denim fabrics with less resources and opening new horizons for design.

This concept has also enabled US Denim Mills to make black overdyed fabrics. The denim fabrics developed while using this technology are cleaner, brighter and softer. Its efficient features help shorten the garment finishing time, as this process improves the denim’s ability to adapt to lasers and supports a quick wash, thus reducing water and energy used in the process.

The characteristics of Rapid Clean technology make the solution perfect for both major denim fabric colors (blue and black). Rapid Clean has been able to drastically diminish resource outflow across the washing, de-sizing and overdyeing processes.A sustainable mindset has become an essential business need today, putting manufacturers under immense pressure to innovate eco-friendly manufacturing techniques at every possible stage

India’s exports of children’s wear grew 11 per cent from January 2022 to October 2022. From January 2022 to September 2022 India’s exports of children’s wear increased by 16 per cent.

The US has a 36 per cent share in India’s export values in the category, followed by UK (15 per cent), UAE (six per cent), Germany (four per cent) and France (four per cent). Among the top five destinations, children’s wear exports dropped significantly in the UAE market, by around 32 per cent, while exports to the US, UK, Germany and France tapped decent growth.The fall in the UAE market is a concern for Indian children’s wear exporters as exports have been falling despite the India-UAE free trade agreement that came into force in May 2022.

Clothing worn by children up 14 years is referred to as children’s wear. These garments are often composed of high-quality materials that provide comfort and breathability, and come in a wide range of colours and textures. The children’s apparel market in India is growing at five percent a year.The market is primarily driven by the rising number of nuclear and double-income households in India. Strong economic growth in recent years and increasing purchasing power, along with the changing spending patterns of parents with an increasing inclination toward providing their children with enhanced comfort and convenience, is boosting the sales of branded and high-quality children’s apparel.

Cambodia’s garment exports to Australia increased by 17 percent in the first nine months of the current year.

This has been mainly because of the Regional Comprehensive Economic Partnership (RCEP) of which both are members. The 15-nation free trade agreement of which both are members provides duty-free access to almost 90 percent of goods between member countries.

While Cambodia is a net exporter of finished garment products, Australia is a net importer.Still Australia’s share in total apparel exports from Cambodia is a mere one percent. It shows the vast opportunity for Cambodia and Australia to boost the trade volume between the two.The Australian market, meanwhile, prefers more casual garments compared to America and Europe.

Cambodia’s earnings from exports of garment products – clothes, footwear, and travel goods – during the January to September period this yearincreased by 24 percent. The US is the top importer of Cambodia’s garments, with a share of 34 percent. The garment sector is the largest foreign exchange earner for Cambodia, accounting for almost 60 percent of the country’s total export value. There was a nearly 40 percent growth from May 2022 to June 2022 for garments, footwear and travel goods exports from Cambodia.

The spring editions of Intertextile Shanghai Apparel Fabrics, Yarn Expo, and Intertextile Shanghai Home Textiles have been postponed by three weeks to the new dates of March 28 to 30, 2023.

A better turnout is expected due to easing pandemic restriction policies in China. The fairs will still be located at the National Exhibition and Convention Center where they were originally due to be held from March 8 to 10, 2023.

The rescheduling of the fairs is also expected to allow both local and international fair goers more time to prepare for their participation. Adjusting the spring show dates to the end of March is expected to provide enough time for exhibitors and visitors from local and abroad to plan for the fairs and capitalise on the ample international business opportunities brought by the reopening of China’s borders.

China recently eased pandemic guidelines including reopening the border and scrapping quarantine, testing on arrival, and health code requirements for travellers starting from January 8. In line with these measures, more international flights are resuming, while the border between Mainland China and Hong Kong is scheduled to reopen gradually by mid-January 2023.

These steps send a clear signal that China is ready to open up for international business.