As per Allied Market Research’s new report, titled, ‘Maternity Wear Market,’ COVID-19 outbreak has led to a decline in sales of maternity wear across the globe. The main reason for the decline is disruption in export and import activities all over the globe. Disruption halted trade of major clothing and apparel exporters China and India. Customers are not getting their products on online channels.

However, after the lockdown ends, the industry is expected to see an upward growth and products will also be easily available on retail outlet as well as e-commerce platform. The maternity wear industry is expected to boost market growth. However, low birthrate remains an obstacle in the growth of this industry.

Alaska, Washington, and Monaco have recorded the lowest birthrate, hampering the growth of the maternity wear market in these regions. North America holds the maximum revenue of maternity clothing wear because of celebrity influencers over social media and high disposable income. There is high demand for formal wear in North America because of a large number of population being women, which again boosts the need for maternity clothing during pregnancy. Asia-Pacific is also a potential market for maternity wear because of increasing pregnancy photoshoots, which increases demand for purchasing branded maternity wear in countries like India and China.

These countries also have high birth rates, which, in turn, increases the need for maternity wear, boosting sales and revenue of this industry

Strengthening its international presence, fashion start-up Stylumia has entered new markets such as the United Kingdom, Australia, and New Zealand. The company has appointed Gautam Kotamraju as the country head for United Kingdom operations while for the Australian and New Zealand markets it has partnered Evanpoynt which offers AI-driven business solutions in merchandising and supply chain for retailers.

As per Ganesh Subramanian, Founder CEO, Stylumia, Kotamraju’s 20 years plus experience will help the startup understand and serve the local market. On the other hand, Evanpoynt will offer a good mix of people with proven market understanding, deep technology, and business development experience combined with a passion for retail and Stylumia’s vision. With a combined worth of around $100 billion per year, the UK and ANZ fashion, footwear, and accessories market is a significant addition to Stylumia’s global growth ambitions, Subramanian added.

Ganesh Subramanian, former Chief Operating Officer, Myntra founded Stylumia in December 2015 in Bengaluru after working on Myntra’s artificial intelligence fashion solutions. The business aims to increase sustainable production and business practices in the fashion industry.

Founded in 1989 by Louis Vuitton owner LVMH and French billionaire Bernard Arnault private firm L Catterton has launched a blank-check firm to raise about $250 million in an initial public offering. As per Business of Fashion, The firm has launched a special purpose acquisition company (SPAC), L Catterton Asia Acquisition Corp to target firms in the consumer technology sectors across Asia. Led by managing partners of L Catterton Asia, the SPAC will sell 25 million units, made up of shares and warrants, priced at $10 a piece on the Nasdaq.

L Catterton currently has $22 billion in assets under management and has invested in companies such as Indian telecom firm Jio, exercise bike maker Peloton Interactive Inc and online used car seller Vroom Inc. A SPAC is a shell company that raises money in an IPO to merge with a privately held company that then becomes publicly traded as a result. SPACs have emerged as a popular IPO alternative for companies looking to go public with less regulatory scrutiny. Credit Suisse is the underwriter for the offering.

Jharkhand government plans to sign a MoU with apparel exporter KPR Mills to provide workforce to the company. The MoU entails, Jharkhand will provide KPR Mills 12,000 laborers to expand production lines, including a new mill in Tirupur in Erode district. Most of these laborers will be women. In the first phase, the company will hire nearly 2,000 women.

KPR Mills will provide these laborers a monthly remuneration of Rs 12,000 and take care of their food and lodging. Led by Hemant Soren, Chief Minister, the Jharkhand government is working on a method to document laborers going out of the state and monitor their financial conditions and well-being. It has also pledged to provide jobs to most of the returning migrants within Jharkhand.

A Muthukumar, Labor Commissioner, said based on calls made by them, around 4.5 lakh migrant workers had returned to their homes last year. Through the Jharkhand State Livelihood Promotion Society (JSLPS), the government has been able to map the skills of 20,000 migrant workers. It now plans to find suitable employment opportunities for them.

The department plans to period visits at the production units of the Coimbatore-based company to assess the condition and well-being of the workforce which will be hired.

As per Cirilo Marcolin, President, Confindustria Moda, small and medium sized fashion companies showed a great ability to react despite the dramatic situation faced by the sector in 2020. The association includes 64,300 fashion companies. The Associations preliminary estimates of Italian fashion sector revenues show a drop of 26 per cent to €72.5 billion in 2020 as against consolidated sales of €98 billion in 2019, with only 8 per cent of the sector’s companies registering growth last year.

Marcolin ascribed the decrease to COVID-19’s impact, along with production halts during the lockdown last spring and a drop in demand and production besides issues like sourcing from foreign countries, including Asia. As per the association, only 26 per cent of interviewed companies expect an increase in the first quarter of 2021, while others projected an average 18.4 per cent drop in first-quarter sales and a 10 per cent fall in the second quarter. Overall a rebound is expected in the second half of the year provided vaccines are widely distributed and travel bans are lifted.

In terms of employment, 50 per cent fashion companies said they reduced their workforce in 2020, despite Italy’s extraordinary measure preventing businesses from laying off employees. The mandate is in place until March 31 but the new government helmed by Prime Minister Mario Draghi could extend it until next fall. In the first half of 2021, 39 per cent of associated fashion businesses forecast a further reduction in the number of employees and Marcolin was vocal about what he expects from the government, in which he expressed his trust.

After a challenging era, when its annual revenue shrunk $2bilion in the eight years since its acquisition, Adidas has finally put Reebok up for sale. In the past eight years, Reebok closed almost half its stores in North America besides deviating from its original aim of being a sportswear brand.

As per a Business of Fashion report, Adidas plans to sell Reebok at a steep discount on $3.8 billion it spent 16 years ago to buy the brand. The deal is expected to close in the first quarter of 2021 itself. As per the German business publication Manager Magazin, before the pandemic Kasper Rorsted, Chief Executive Officer, had sought €2 billion (about $2.4 billion) for the brand. However, post pandemic, this value has been downgraded to almost half.

Recovering losses

In the first nine months of 2020, Adidas’ revenues declined by 20 per cent year-on-year to €13 billion (about $16 billion). This decline was mainly driven by 22 per cent year-on-year drop in Reebok’s revenues. Hence, Adidas now plans to do away with Reebok and focus only on its core brand.

Through this sale, Adidas also aims to recover from its FY2020 Q3 loses, when China sales declined 5 per cent. As per Jamie Merriman, Bernstein analyst, the divestment will allow Adidas focus on its own operations and remove the lower margin business from the group.

Buyers interested in buying Reebok

Prospective buyers for Rebook include Chinese sportswear giant Anta and VF Corp., which recently acquired Supreme. Adidas may also consider other buyers like Percy Robert Miller, the rapper and entrepreneur known as Master P, with former professional basketball player and investor Baron Davis, as well as licensing giant Authentic Brands Group.

Reebok’s partnership with New York designer Kerby Jean-Raymond for a footwear range has helped it establish its credibility. With this partnership, Reebok has launched many new products and managed new projects. The partnership also helped the brand increase sales by around 20 per cent in December 2020 and January 2021, says Matt Powell, NPD Group. According to him, Reebok has an extremely strong value of the ‘80s and 90s product. Powell expects private equity firms to be interested in buying Reebok as well as footwear companies who aim to tap the retro trend. He also expects retailers looking for a strong in-house label to be interested.

Other buyers interested in buying Reebok include Master P and Baron Davis as they see opportunities for collaborations if the brand became Black-owned. The Authentic Brands Group also has its sights on this purchase as it already has a partnership with Shaquille O’Neal whose 1990s endorsement deal with Reebok had O’Neal had gained immense popularity.

The COSATU-affiliated Southern African Clothing & Textile Workers’ Union (SACTWU) has applauded the newly published textile rebate. As pr the union, this is an important concrete implementation component flowing from the signature of the Retail, Clothing, Textile, Footwear & Leather (R-CTFL) Masterplan which was signed by the industry's social partners on November 6, 2019, at the 2nd Presidential Investment Conference.

The rebate provision was published by the Deputy Minister of Finance on February 5, 2021. The publication was preceded by an intense four-month period of industry bilateral negotiations between SACTWU and other stakeholders in our industry pipeline. This process culminated in a historic agreement between the parties, which decisively resolved a over four decade deadlock on this matter.

The rebate provides woven fabric to be imported duty free for the local manufacturing of garments, provided that procurement commitments are made to local textile producers. Such imported fabric can only be used by companies that are signatories to the R-CTFL Masterplan and are compliant with minimum labor standards.

The employer association signatories to this agreement represent more than 75 per cent of SMME companies in the clothing manufacturing industry, and labor (SACTWU) represents 90 per cent of workers employed in these SMMEs.

As per an India Ratings and Research report, China’s demand for India’s cotton has pushed domestic yarn prices higher. Led by a strong export and moderate domestic demand during December 2020, India’s yarn production increased in January 2021.

Exports during the month increased in high single digits YoY due to healthy demand from neighboring countries. Cotton yarn prices increased 15 per cent MoM and 30 per cent YoY, resulting in higher gross margins. Higher cotton yarn demand is attributed to the global supply curbs on Xinjiang region (China) cotton, which is benefitting Indian domestic spinners. The report estimates exports to be moderate during January-February 2021 with likely shutdown of mills ahead of Chinese new year. It expects demand to resume by March 2021. As a result of this expectation, cotton prices surged by 7-10 per cent MoM during January 2021, led by a strong export demand for cotton yarn.

International prices rose 13-17 per cent YoY, led by the buoyant China demand for US cotton, which is having a rub-off effect on cheaper Indian cotton prices. However, apparel exports declined in December 2020, after recovering over September-November 2020 on a YoY basis due to the impact of a second wave of COVID-19 in the US and Europe.

As per the report, this would also impact the near-term order book position of ready-made garment exporters for the upcoming fashion season. Already in November 2020, knitted apparels volumes remained stagnant with realizations gaining by high single digit yoy basis; on the contrary, woven apparels volumes increased by 8.2 per cent and realisations fell substantially yoy basis. During 2020, India exports to the US fell by 20-25 per cent YoY in both volume and value terms, the report said.

As per COVID-19 Brand Tracker of Workers Rights Consortium, despite the EU and German Governments providing a €113 million or Tk 3000 (€29.31 euro) per month for eligible Bangladeshi workers for three months, only 3,266 workers benefitted from the ILO’s Call for Action scheme. Launched in April 2020, the Call for Action was a well-timed initiative for brands as this was at the height of the cancelled orders crisis, a time when brands were cancelling orders with garment manufacturers in countries such as Bangladesh, Pakistan and India.

The initiative urged employers, workers, retailers and major brands would form an international working group – convened by the ILO – to address the already serious damage to the garment industry caused by the COVID-19 pandemic.

Signatories to the initiative included the Sustainable Apparel Coalition, adidas, H&M and Inditex as well as unions including IndustriALL and ITUC. The initiative covers only eight countries, and in only four of those are garment workers currently slated to receive cash transfers under a global multi-donor ILO initiative, with funding from the German Federal Ministry of Economic Cooperation and Development (BMZ).

A Chinese court has granted Burberry preliminary injunction against Xinboli Trading (Shanghai), owner of the Chinese brand Baneberry, for trademark infringement. As per Business of Fashion, A fast growing brand in China, Baneberry has opened 40 new stores in the last 18 months besides increasing its e-commerce business.

The Suzhou Intermediate People’s Court found that, although Baneberry legally obtained trademarks for its name and logo in 2009 and 2011 respectively, Burberry’s name and logo were already well-known at that point, having been in use internationally for more than 100 years. Trial is still underway and no final ruling has been made. Although permanent injunctions are a relatively common outcome in China for cases where intellectual property infringement is proven in court, preliminary injunctions, such as this one, granted while the case remains ongoing, are rare.