In first two months; Jan-Feb 2020, according to the data from National Bureau of Statistics, the man-made fiber industry saw a freefall in profits by 74.78 percent,  PET fiber down by 132.01 percent and polyamide fiber (Nylon) down by 15.64 percent in profits. The total number of man-made fiber companies running in ‘red’ accounts for 48.7 percent. Profit/Sales ratio is reduced to a poor 0.48 percent in the troubled two months.

The growth and fall in man-made fiber industry considerably depends on consumption market of the midstream and downstream products. China’s retails in January and February fell by 30.9 percent in shop sales for the category of garments, shoes, caps (hats) and knitwear. The brick-and-mortar sales doesn’t seem to have necessarily diverted to the e-commerce retail which also met with a 16.1 percent drop in wearable goods online, thus significant drop  rippled nearly all the manmade fiber related supply chain and products. 

The individual drop was in Cotton blended yarn 42 percent, chemical fiber made yarn 29.46 percent, cotton blend fabric 52.37 percent, fabrics made of manmade fiber staple 22.96 percent, nonwoven 11.02 percent and in the tire cord fabric 4.14 percent. The export also shrunk for all the textiles and apparel in the country in the first two months that saw a downfall of 20 percent, consequently impacting on the manmade fiber industry.

Production:

The national stats show an obvious drop of man-made fiber production by 13.64 percent to turn out 7.2723 million tons in January and February. The breakup sector wise is as in viscose staple for 448,300 tons, a drop by 33.71 percent, PET fiber for 5.5889 million tons, a decrease by 11.92 percent, polyamide fiber (Nylon) for 508,600 tons, a fallout by 27.11 percent, and polyurethane fiber (Spandex) for 122,300 tons, up by 4.18 percent as a result of rising market demand for coarse-denier Spandex for the ear-loop of face masks.　

International Trade:

The import and export of manmade fibers both faced slide down with exception of  few product lines. As the data from Chinese Customs shows, the first two months of the year witnessed 114.500 tons in imports, down by 17.2 percent which reflected sectorwise drop  in PET staple for 25,400 tons and PET filament for 15,000 tons, both fell respectively by 8.59 percent and 6.85 percent. To be more specific, polyamide filament registered an import of only 9600 tons, a freefall by 34.27 percent, and viscose staple by 27.46 percent for 25,700 tons.

On the export side, China shipped out 638,800 tons of manmade fibers in January and February that saw a descent by 12.33 percent, more specifically, PET staple for 109,900 tons, a 24.11 percent sliding down, and PET filament for 366,900 tons, 14.06 percent less than the previous growth in the same period last year. The show down picture is also seen in the export of polyamide filament for 39,800 tons with 4.41 percent drop, but in the viscose filament and polyurethane fiber, both enjoyed growth up by 20.36 percent and 9.69 percent, respectively.

Investment in fixed assets

The investment plummeted by 35.7 percent in the first two months of this year, 31.9 percentage points lower than the corresponding months last year because some big projects under construction were called to a halt in case of coronavirus spreading.

Economic Profit and Loss

According to the data from National Bureau of Statistics, the man-made fiber industry slided down with a freefall by 74.78 percent in profits of 397 million Yuan, break up for important sectors like PET fiber down by 132.01 percent and polyamide fiber (Nylon) down by 15.64 percent in profits on balance sheet reports. The number of companies running in red accounts for 48.7 percent of the total man-made fiber companies eligible in the national statistics system with the loss of money up by 39.49 percent.

With the sharp fall in profits, the profit/sales rate is reduced to a poor 0.48 percent as the sales income itself ran into a predicament with a significant fall by 28.39 percent to finish with 83.584 billion Yuan in the troubled two months.

A glimpse of Manmade Fiber Production in 2019 (Jan.-Dec.)

Contributed by Mr. ZHAO Hong

He is working for CHINA TEXTILE magazine as Editor-in-Chief in addition to being involved in a plethora of activities for the textile industry. He has worked for the Engineering Institute of Ministry of Textile Industry, and for China National Textile Council and continues to serve the industry in the capacity of Deputy Director of China Textile International Exchange Centre, V. President  of China Knitting Industry Association, V. President of China Textile Magazine and its Editor-in-Chief for the English Version, Deputy Director of News Centre of China National Textile and Apparel Council (CNTAC), Deputy Director of International Trade Office, CNTAC, Deputy Director of China Textile Economic Research Centre. He was also elected once ACT Chair of Private Sector Consulting Committee of International Textile and Clothing Bureau (ITCB)

When Prime Minister Narendra Modi extended the nationwide lockdown till May 3, most of cotton mills in India were shut down. However, the government allowed some spinners in Uttar Pradesh, Gujarat, and Punjab to resume production. A small number of spinners resumed work with operating rate ranging between 10 to 50 per cent, mainly focused on fulfilling recent contracts.

Despite this, production has not resumed to its full capacity due to the lack of workers and orders. Some factories have decided to shut down their operations after completing domestic sales and a small number of export orders.

Lackluster market with bleak shipments

Even before India entered into a lockdown, cotton yarn market was still lackluster with bleak shipments in spite of liberating policy on Indian yarn mills operation. As CCF Group Index reports, the price of Indian forward cotton yarn kept sliding with prices of yarns mainly exported to China, such as Indian carded yarn, combed yarn and open-end yarn declining since February. Prices of combed 32S dropped from $2.96/kg to $2.47/kg; those of carded 32S dropped from $2.59/kg to $2.29/kg, and of OEC10S fell from $1.66/kg to $1.52/kg.

Rapid decline in spinners’ profits

The spot price of Indian cotton also declined from Rs 39,400/maund at the start of Chinese New Year holiday to Rs 37,100/maund. Although this reduction was a result of depreciation of Indian rupees, profits of Indian spinners also declined rapidly. Based on the one-month and two-month cotton stocks, these spinners suffered losses about 10cents/kg.

Declining prices fail to stimulate orders

Cargo prices declined during the period as did the prices of spot imported yarn. The prices of Indian carded 32S declined to 19,100yuan/mt from 20,600yuan/mt in February. Compared to prices in United States dollars into RMB after-tax price, these prices failed to stimulate forward yarn orders. Since the outbreak of the epidemic, however, the prices of these yarns in United States dollars have fluctuated rapidly.

Lockdown leads to decline in orders

The social stock of imported yarn before the lockdown was at an all time high, and shipments were not fast. The operating rate of downstream fabric mills was around 30 to 40 per cent, much lower than that in same period last year. Post lockdown, the willingness of imported yarn mills to order cargos is unlikely to significantly improve before the orders of the fabric mills are improved. Due to the initiatives launched to prevent the spread of COVID 19 outbreak, it will take some time for Indian yarn mills to resume work. As the prices of Indian cotton and cotton yarn prices have been falling, the theoretical profits of spinners are mostly at a loss. Even transactions are limited due to poor shipments in the spot market.

Though the operating rate of Indian yarn mills is gradually recovering, it would be difficult for them recover to 100 per cent.

As the work from home culture grows across the world, Fashion Snoops women’s wear editor and head of intimates and loungewear Patricia Maeda and Nia Silva, Fashion Snoops’ materials editor, expect a few key apparel trends to wash over the loungewear and intimates categories in the next 18 months.

As per the trend, comfort will be the backbone of these categories with the required quality achieved through thoughtful, sustainable and aesthetically pleasing designs.

Restoring comfort

Maeda says one of the growing trends is of restoration of comfort. As the need to disconnect and rest is becoming increasingly relevant among millennials they are seeking products that facilitate calm. Hence, sleepwear and loungewear are becoming an essential part of their self-care regime. Silva points out, touch-centric fabrics work such as textured yarns with fuzzy irregularities and fluffy aspects communicate comfort to such consumers.

Maeda opines, skin friendly fabrics rule as soft sleepwear sets made with lightweight, refined natural materials enhanced with smooth cool-touch yarns are preferred by consumers. According to her, softening treatments can be added in the finishing process of these sets to boost the fabric’s comfort level. She also believes that fibers like Supima cotton are essential, not only to ensure the comfort of these sleepwear sets but also for their material strength.

The restore trend also touches on growing trend for restorative travel kits. These practical kits include items like socks, sleep masks and base layers and are often made with hidden functions, like temperature-regulating fibers.

Function over fashion

The second trend is of ‘bare’ and back to basics. As more people are taking a proactive attitude to enhancing the quality of their life, they prefer back to basics functional lingerie that offer a no-fuss comfortable wear. Maeda advises designers to eliminate uncomfortable elastic waistbands and underwire as well as pared-down concepts that reduce the number of chemicals and dyes on the wearer’s body. Soft breathable materials, including those made with man-made cellulose fibers like modal and Tencel, are key to success with consumers. She also reveals that sustainable stretch fibers by Roica and fibers made from citrus byproducts are picking up momentum.

Key items in the bare trend include lingerie sets, like triangle bras and hipster panties, in neutral colorways. Silva also indicates a growing interest in sheer fabrics amongst consumers. According to her, these fabrics emphasize the idea of second-skin intimates. For loungewear, the trend focuses on effortless dressing one-piece garments—either a roomy jumpsuit or cozy romper.

Spurt in street wear styles

Fashion Snoops touts the ‘Back to Street’ trend to be the next evolution of athleisure. This new category of all-purpose fashion offers consumers versatility, practicality and sophisticated style. The trend is spurred on by the growing number of freelancers and part-time employees who are creating the “gig economy” and by lifestyles that require people to wear multiple hats in a single day.

Tapping luxury through minimalistic trend

This trend emphasizes on the quality and luxury of a garment. Silk and satin, high-stretch ribbed knits and elements from fashion like Lurex threads and plush velvets are the preferred materials in this trend.

Key items include athleisure staples like joggers remade in silk, sweater dresses, cashmere sets and tops that play with sculptural volume like big sleeves and cinched waists. Focusing on practical and minimalistic aesthetic, this trend includes thoughtful details, like robes with waist-tie pockets.

To help organisations improve pandemic preparedness and accelerate an economic rebound post COVID-19, the World Economic Forum (WEF) has released ‘Redesigning Trust: Blockchain Deployment Toolkit’, which enables leaders to maximise benefits and minimise risks of the technology. The first of its kind toolkit is the culmination of more than a year of efforts to capture best practices from blockchain deployment across industries.

Drawing on the global expertise of more than 100 organisations, including governments, companies, start-ups, academic institutions, civil society, international organisations and technology and supply chain experts, the toolkit helps companies manage the complexities of deploying this new technology and will accelerate its positive impact.

The toolkit has been piloted in a variety of different contexts by organisations developing blockchain solutions within their supply chains, including the Abu Dhabi Digital Authority, Hitachi, Saudi Aramco and a number of small and medium enterprises.

The aim of this toolkit is to maintain and strengthen the resilience of global supply chains.

L Brands has amended its revolving credit facility to ensure liquidity in light of the ongoing coronavirus pandemic. The parent company of Victoria’s Secret reduced its 2020 capital expenditures from its original forecast of approximately $550 million to approximately $250 million.

It also reduced its spring inventory receipts by approximately 45 per cent at Victoria’s Secret and 20 percent at Bath & Body Works versus last year. The Columbus, Ohio-based apparel group is not paying rent as the Covid-19 pandemic continues to force store closures across North America and globally.

Since the beginning of the COVID-19 crisis, L Brands has announced a number of measures to strengthen its financial flexibility including suspending its quarterly cash dividend as of the second quarter of fiscal 2020, and making a substantial reduction in capital spending and other expenditures.

In particular, it is reducing the base compensation of senior vice presidents and above by 20 percent, while CEO Leslie H Wexner and other members of the board of directors will take no cash salary at all.

Most of its store associates including those currently not working to support the online businesses or who cannot work from home have been furloughed since April 5, 2020.

The Secondary Materials and Recycled Textiles Association (SMART) in the United States has urged the Kenyan government to reverse its recent COVID-19 related ban on the import of used garments and shoes, saying all available research on the novel coronavirus shows they do not pose a threat to people who wear such garments or footwear.

The Kenya Bureau of Standards (KEBS) notified representatives of SMART, a non-profit association of for-profit businesses in the textile reuse and recycling industry, on April 1 that the country’s import of used garments and shoes had been suspended until further notice. KEBS implemented the ban as a precautionary measure to prevent the spread of the COVID-19, a decision made under the false pretenses that the virus can be transmitted through used footwear and textiles

According to guidelines issued by the US Centres for Disease Control and Prevention (CDC), mitigating whatever small risk might be present on soft, porous surfaces like textiles is easily addressed by laundering the textile according to manufacturer instructions in warm water.

This advice is supported by the fact that countless hospitals and other medical facilities are utilising reusable linens and personal protective equipment and hospital apparel to protect healthcare workers that are treating patients infected with COVID-19.

Furthermore, used clothing that is shipped overseas is typically in transit for weeks, if not months at a time–far longer than the virus has ever been shown to survive on even the most hospitable non-porous hard surfaces.

In order to navigate the challenges presented by the ongoing health crisis, HanesBrands, the Winston-Salem, North Carolina-based owner of brands has reduced its discretionary spending and capital expenditures, cut salaries and furloughed specific employee groups, as well as managing its inventory and supply chain production. These measures are expected to result in a $200 million saving in 2020. The company also intends to secure around $500 million in debt financing.

HanesBrands reported a loss in its first quarter as a stronger than expected performance early was undermined by the escalation of the coronavirus pandemic. For the first quarter ended March 28, 2020, the company announced a net loss of $7.8 million, or $0.02 per diluted share, down from earnings of $81.1 million, or $0.22 per diluted share, in the prior-year period.

The group’s quarterly net sales totaled $1.32 billion, representing a 17.1 per cent decline compared to the $1.59 billion reported by the company in the same period in the previous year. Along with the negative impact of the ongoing global health crisis, sales were also affected by HanesBrands’ exit from its C9 Champion mass program and DKNY intimate apparel license, which together represented around $94 million in revenue in Q1 2019.

Sales declined by 14 per cent in the company’s international segment, 11 per cent in its US innerwear segment and 29 per cent in US activewear. Before mid-March, the innerwear and activewear segments were performing better than expected, but both have since suffered a significant negative impact due to the Covid-19 pandemic.

HanesBrands’ international segment was impacted both by wholesale declines and the temporary closure of its brand stores, approximately 1,000 of which (out of a total 1,200) are located in international geographies. However, the company’s sales from its online channels increased by 5 per cent in the first quarter.

Robert M Young, the trustee of The Philippine Exporters Confederation (Philexport) has revealed that post COVID-19, garment retailers in the country aim to focus on selling their remaining inventory. He urged the government to improve internet and manufacturing technology capabilities in the country.

He also urged the government to continue its negotiations for free trade agreements (FTA), especially with the US. According to him, selected goods such as garments, apparel, wearables can enter the US tax-free. This will encourage foreign buyers to buy more from Manila.

Post COVID-19, consumers will likely be more conservative in buying clothing. He expects garment orders from retailers to reduce by about 50 per cent as already 50-70 per cent of recent orders have been cancelled by buyers.

Columbia Sportswear Company predicts a significant decline in net sales and an operating loss in its second quarter. First quarter sales of the Portland, Oregon-based outdoor apparel and sportswear maker declined 13 per cent year over year due to the pandemic. For the first quarter ended March 31, 2020, the company’s net sales totaled $568.2 million, down from $654.6 million in the comparable period in the previous year.

Its quarterly net income declined by 100 per cent to $0.2 million, or $0.00 per diluted share from $74.2 million, or $1.07 per diluted share, in the prior-year period.In order to deal with the problems presented by the current health situation, Columbia has implemented a number of measures to enhance financial liquidity and preserve capital. These initiatives include the expansion of the company’s domestic credit facility, the suspension of its quarterly dividend and share repurchases and the reduction of planned capital expenditures, with capital outflows expected to decrease by at least $130 million in 2020.

The company has also introduced cost containment measures, such as compensation adjustments, employee furloughs, the reduction of demand creation speed and the minimisation of discretionary expenditures, all of which is expected to result in a $100 million decrease in 2020 operating expenses.

The dismal performance of Chinese apparel and textile factories due to lack of orders is now forcing factories’ owners to extend their holidays to save operational and overhead costs in order to survive. As China Customs Statistics (CCS) reveals, China’s textile and apparel exports declined by 15.13 per cent on Y-o-Y basis to clock $15.43 billion revenue in March 2020.

Textile yarns and fabrics declined by 6.32 per cent and exports of the same valued at $8.92 billion, while the export of apparel and accessories plunged by 24.83 per cent to earn $6.51 billion revenue.

Apparel exports from China fell by 20.3 per cent to clock $14.27 billion of revenues in the first two months of 2020 and the continued dip in March which indicates the country doesn’t have significant export orders to cater to.

In order to stop the pandemic, majority of apparel markets put a hold on their retail operations resulted in a drastic fall in Chinese exports even in April. The orders, which Chinese factories worked once they resumed operation in March, were pre-holiday orders. However, majority of these orders couldn’t be shipped due to overseas outspread of COVID-19 and resulted in overall decline.

Textile manufacturers located in Jiangsu, Henan and other manufacturing clusters did not receive new export orders and domestic orders were sluggish too till mid-April.