Labor shortages, disrupted supply chains, and surging freight fares are likely to disrupt Vietnam’s garment exports in H2, says VmDirect, a securities firm in the country. The social distancing rules imposed in several southern localities are likely to impact transportation of garment and textile materials in the country, says Troung Van Cam, Vice Chairman, Vietnam Textile & Apparel Association. Around 30-50 per cent of garment and textile factories in the country have already been forced to close down as they could not implement the stay-at-work mode. Some firms failed to fulfill orders, deliver goods on time, and have their contracts canceled. This led to their orders being shifted to foreign countries, Van Cham affirms.

If the pandemic was not contained soon, Vietnam could fall short of its annual export turnovers target of $39 billion. The export turnovers may reach only $33-34 billion this year, he emphasizes. Even if COVID-19 is controlled late August, number of employees in garment and textile enterprises is likely to drop by 35-40 per cent, adds Vu Duc Giang, Chairman, Vietnam Textile and Apparel Association.

Many garment and textile firms plan to transport materials from the south to the north to prevent supply chains from breaking. But they have to bear high transportation fees, Giang says. The most feasible solution now is to speed up vaccination among garment and textile workers in industrial parks and industrial complexes, he adds.

However, there is still room for Vietnamese garment and textile firms to compete and increase their market share in the U.S. and South Korea, given that major competitors like India and Myanmar are also struggling in their Covid-19 fight, says VnDirect.

Vietnam’s garment and textile posted an export turnover of nearly $23 billion in the first seven months of this year, an increase of over 50 percent year-on-year, surpassing Bangladesh to become the world’s second biggest garment and textile exporter after China, adds Du Giang.

Following continued rise in yarn price in Bangladesh local market for last one month, industry leaders BGMEA, BKMEA and BTMA have set the maximum price of mostly consumed 30 count yarn price at $4.20 a kg and 30s cotton combed yarn at $4.50 a kg. As per a New Age report, the decision was taken on the insistence of country’s readymade garment exporters who had been requesting the government for last few weeks to make the yarn import open through all land ports, alleging price of the item increased 50-60 per cent in the local market compared to international market.

Mohammad Ali Khokon, President, BTMA alleged the unusual price hike of yarn in the local market eroded their competitive edge on the global export market. He said the current global cotton index ranged between 93 points and 95 points and if the index exceeds 100 points, an upward revision of yarn price will take place in the local market and if the index goes down below 85 points, the price will be reduced, he said.

If yarn price in the local market becomes costlier than the international market, the RMG exporters would have to go for import to remain competitive, he added. Setting the price ceiling of yarn has eased the situation and apparel exporters are relieved from an uncertainty in calculating product prices for export, said Faruque Hassan, President, BGMEA

Beating all sales estimates, the luxury sector rebounded to historic heights during the second quarter of current financial year (Q2 FY21-22). Even as stores remain closed, and travel banned across the globe, sales of biggest luxury groups including LVMH, Kering, Richemont and Hermès surged well above the pre-pandemic levels during the quarter. As per a Business of Fashion report, sales surge can be attributed to the economic stimulus announced by various governments and the limited shopping options for consumers. The gradual reopening of restaurants and travel also helped drive luxury sales, despite them being competitors to the industry.

Luxury gap to widen

Sales by the largest luxury maker LVMH increased 120 per cent year-on-year during the quarter. Most of the group’s sales were dominated by brands Louis Vuitton and Dior. Sales of Louis Vuitton grew 40 per cent above 2019 levels. The brand’s first-half operating profit rose 44 per cent over 2019 levels to €7.63 billion ($9.1 billion). LVMH expects growth levels to continue as the brand and its struggling divisions start to recover.

Brands that were leading growth pre-pandemic took a bigger leap during the crisis, says Thomas Chauvet, Luxury Analyst, Citigroup. Though this gap between the winners and loser is expected to narrow in the next few years, it may cause a permanent shift in the industry’s landscape. French brand Hermes’ sales grew 33 per cent above the pre-pandemic level while profitability surged to new heights. In the first half of the year, the brand reported a 40 per cent rise in recurring operating margins compared to 35 per cent in 2019.

Exposure to travel retail boosts Kering sales

Growing exposure to travel retail and wholesale along with consumers’ declining interest in Gucci, helped Kering’s sales rebound in Q2. Sales of Saint Laurent and Bottega Veneta brands accelerated, during the quarter while first-half profits bounced back sharply to €2.2 billion.

Better operations control help Prada’s sales

Efforts to build a better controlled, full-price brand helped Prada’s sales surge 13 per cent in Q2. The brand’s operating profit in first-half of the year grew 11 per cent over 2019 levels to €166 million. Overall revenue declined 1 per cent from 2019 levels as the company continued to slash wholesale brands.

Moncler to focus on A/W season

Sales of Milan-based puffy-coat maker Moncler increased 5 per cent above 2019 levels. The company recently acquired rival brand Stone Island to accelerate sales recovery during Winter Olympics. It does not expect major revenue growth during Q2 and aims to focus on upcoming A/W season, says Piral Dadhani, Analyst, RBC.

Burberry sales rise over 2019

Burberry’s Q2 sales rose 1 percent though revenues fell 4 per cent. The company is working on a turnaround strategy to allay market fears over CEO Marco Gobbetti’s exit from the Florence-based Salvatore Ferragamo later this year. Travel retail leads to 10 per cent decline in Salvatore Ferragamo’s sales. The brand’s recovery remains impacted from high exposure to travel retail, a more formal aesthetic and general lack of brand awareness. Sales declined 10 per cent in Q2. Sales from other channels also declined though from directly-operated stores reached pre-pandemic levels in July.

India is the one of the largest cotton exporters in the world. Exports of cotton yarn and fabrics export account for about 23 per cent of India’s total textiles and apparel export. As per a CCF Group report, in May 2021, India exported cotton yarn worth 101.1 kt a 75.71 per cent rise year-on-year and 12.95 per cent month-on-month increase.

Bangladesh tops monthly yarn exports

Of India’s total yarn exports, shipments to Bangladesh increased to 37,642 mt in May 2021 from 30, 539,28 mt in April 2021. These accounted for 37 per cent of India’s total yarn exports. India’s yarn shipments to its second largest export destination China increased 12.95 per cent month-on-month to 21,750.91mt in May 2021 from 19294.2 mt in April 2021. These accounted for 22 per cent of India’s total global cotton yarn exports during the month.

Three largest destinations for yearly exports

Peru remained the largest export destination for India during the year with an increase of 587.9 per cent over previous year. Exports to Peru increased to 1,713.92 mt in May 2021 from 249.15 mt in May 2029. The second largest export destination was Bangladesh with an increase of 240.72 per cent over the previous year. India’s exports to Bangladesh increased to 37,642.25 mt in May 2021 from 11,047.82 mt in May 2020.

The third largest exports destination for Indian cotton yarn was Portugal with an increase of 123.34 per cent in May 2021. Exports to the country increased from 2,476.91 mt in May 2020 to 5,532.03 mt in May 2021.

Exports to China post 16.95 per cent yearly growth

On a year-on-year basis, shipments to China increased 16.95 per cent. Among products, exports of uncombed 8-25S/1 and combed 30-47S/1 yarn to China increased by 13.3 per cent and 23.1 per cent year-on-year respectively. In terms of month-on-month change, exports of combed 8-25S/1 declined by 36.38 per cent to 10,071 mt and those of 25-30S dropped by 34.09 per cent. Exports of combed 8-25S/1 and combed 25-30S/1 increased by 11.3 per cent and 10.5 per cent month-on-month respectively and declined by 9.1 per cent and 55.4 per cent year-on-year. Exports of combed 30-47S/1 declined the most by 57.1 per cent year-on-year with export volume of 2042mt.

Despite the pandemic, India’s cotton yarn exports grew both on a year-on-year and month-on-month basis. Bangladesh, China and Portugal remained the largest export destinations for India with exports to China also registering a marked increase despite the political standoff between the two countries.

Amazon.com Inc is plans to expand its brick-and-mortar presence in the US by opening large physical shops that will operate like department stores.

To span over 30,000 sq ft, some of Amazon's first department stores will open in Ohio and California. They will offer products from well-known consumer brands.

Amazon, which dominates the online shopping space, made its biggest bet in the brick-and-mortar format with its acquisition of upscale grocer Whole Foods in 2017.

Amazon also experimented with small physical stores for books and groceries in at least 13 U.S. states including California, Colorado, and Washington.

The e-commerce giant has benefited from a surge in online purchases from homebound shoppers as COVID-19 forced millions to stay indoors over the past year. Traditional retailers also saw online sales surge, though total sales fell as they were forced to shut stores, which make up the bulk of their revenue.

Steady vaccine rollouts are now encouraging more Americans to return to brick-and-mortar stores to buy clothes, footwear, and electronics.

Department store chains Macy's Inc and Kohl's Corp beat Wall Street estimates for second-quarter sales, and also raised their forecasts on full-year revenue and profit as buyers came back to stores and spent on perfumes, shoes, and apparel.

Swedish fashion retailer H&M has launched a new resale platform specifically for the Canadian market. H&M Rewear is a one-stop digital customer to customer (C2C) resale destination where Canadians can buy and sell any piece of clothing from any brand.

The H&M Rewear platform will allow sellers to search H&M products directly by putting in the product number found on the care label which then will give them access to pictures, descriptions, color from previous seasons through the H&M search bar. Additionally, H&M Rewear, which is being launched together with resale-as-a-service (RaaS) technology company Reflaunt, will advise sellers on prices through its price recommendation algorithm, helping the sellers determine the best competitive price and optimize their chances of selling.

H&M Canada will offer its sellers two ways of receiving payment. Sellers will have the choice between direct deposit or receiving an H&M gift card with an added 20 per cent value that can be redeemed at H&M online and in store. H&M Canada will also offer its members the option to resell their past purchases in one click through its "smart button.

The ongoing global pandemic has been particularly tough on small and less-competitive apparel makers in Bangladesh due to the unhealthy price-cut competition. Large and well-established suppliers have been able to survive and receive larger work orders from big garment buyers. However, these suppliers are being compelled to take on product designing and development, inventory management, stock holding, logistics, factory selection and multi-factory production planning, says a new research by the International Labor Organization. A study by the United States Fashion Industry Association (USFIA) highlights, competition amongst local suppliers in Bangladesh will increase in the next two years as US fashion companies’ will increase sourcing from the country.

In 2020, brands including Inditex, Fast Retailing, H&M, Nike, Adidas, Gap Inc, PVH, Hanesbrands, Levi's and LVMH – improved their market share in the region from 8.8 per cent in 2011 to 11.4 per cent in 2020.

Bigger players in focus to reduce lead times

Small entrepreneurs may find it difficult to survive this adverse business environment as the world’s largest apparel retailers' -- Amazon and Walmart have intensified their concentration on bigger sourcing and sales markets, adds the ILO study. Nike has also concentrated its supplier base from 631 factories in 2019 to 334 in 2021, shows the ILO study. Gap reduced the number of sourcing factories from 1,020 in 2010-11 to 800 only in 2020.

Such consolidation has been a long-term strategy adopted by brands to extend their supplier base by investing in newer markets. Post-pandemic, brands are likely to concentrate more on small and medium enterprises. Brands also plan to reduce their lead times and inventories by adopting 'made-in-cloud' technologies like the Mapped in Bangladesh (MiB), digital mapping technology that tracks the export-oriented RMG factories in Bangladesh.

Data from 400 MiB factories shows, Nike has reduced its supplier base from 35 in 2019 to 25 in 2021. However, the brand started sourcing from five new local factories in 2021. Adidas also reduced the number of factories it sourced from Bangladesh by 16 this year from 41 in 2019 while adding five new factories in 2021.

Factories with better COVID-19 responses gain

Buyers are shifting to factories and countries dealing more effectively with COVID-19 challenges and making timely shipments, adds Khondaker Golam Moazzem, Research Director, Center for Policy Dialogue (CPD). This is leading to big suppliers having better cash flow bagging more work orders. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) stats, show 351 big factories earned export revenues worth $12.29 billion in fiscal year 2019-20. Around 1,334 BGMEA-registered RMG factories earned revenues worth $19.32 billion during the year out of total $27.94 billion export revenues earned during the year.

Lotto Sport Italia (LS") has signed an agreement with WHP Global to market the global trademarks for iconic Italian sports brand Lotto; and LSI. Andrea Tomat, CEO will continue to operate the Lotto brand in the core markets of Italy, Europe, the Middle East, and Africa. Together, LSI and WHP will provide design, product development, marketing, and brand management services to Lotto's extensive existing network of over 50 global partners across the world who generate more than USD$400 million in annual retail sales.

The premier Italian sports brand established in 1973, Lotto is world-renowned for its innovative performance-driven footwear, apparel and accessories, which feature the signature double diamond logo. With an eye towards accelerating its dominance in the performance sportswear category, WHP and LSI will together invest in expanding into new markets and product categories while activating the brand through untapped digital channels and partnerships with world class athletes.

WHP Global is a leading New York based global brand acquisition and management firm backed by equity capital from funds managed by Oaktree Capital Management, L.P. and leverage financing provided by BlackRock. WHP owns and manages over USD$3.5 billion in retail sales across its portfolio of brands that includes Anne Klein, Joseph Abboud, Toys "R" Us, Babies "R" US and Lotto.

T-shirt imports by the US grew 37.97 per cent Y-o-Y to $ 9.78 billion during the January-June ’21 period, reports OTEXA. As per Apparel Resources, the volume of these imports surged by 46.37 per cent on a Y-o-Y basis to 287.62 million dozen during the period. Vietnam emerged the top exporter with exports surging by 21.82 per cent to $1.72 billion while exports from China grew by 43.59 per cent Y-o-Y to $1.56 billion.

Exports from India grew by 35 per cent Y-o-Y to $494.44 million in value while the volume of India’ shipment stood jumped by 55.2` per cent to 14.62 million from the same period of 2020. The volume of Bangladesh’s exports increased to 19.18 million dozen while value increased to $471.19 million, noting 62.85 per cent surge in values on yearly note. India’s unit prices of shipped T-shirt in H1 ’21 valued $33.82 per dozen, while the unit prices in case of Bangladesh hovered around $24.56 per dozen.

The government has constituted an eight-member committee to double production and quadruple the exports of handlooms in three years. The committee was set up by the Textiles Ministry under the leadership of Sunil Sethi, Chairman, Fashion Design Council of India. The committee will help the government achieve its target of increasing handloom production to Rs 1.25 lakh crore from Rs 60,000 crore and increasing handloom exports to Rs 10,000 crore from Rs 2,500 crore in three years’ time.

Members of the committee include Sudha Dhingra, Professor, National Institute of Fashion Technology; Shefali Vaidya, Freelance Writer, Influencer and Textile Expert; Anagha Gaisas, Owner, Saudamini Handlooms and Paithani revivalist; Suket Dir, Fashion Designer and Managing Director, SKA Advisors and Sunil Alagh, Former Managing Director and CEO, Britannia Industries; KN Prabhu, Paradigm International and Member, HEPC Executive Committee, and Hetal R Mehta, Chairman, Science Engineering and Technological Upliftment Foundation (SETU), Surat.

As per the statement, the panel would also put forth ways for collaboration of handloom weaver agencies with the designers, buying houses and institutions, organizations and exporters, and improving the marketing of products, improving input supplies such as raw materials, credit, technology upgradation, skilling and designs.