Gap has set up a new advisory council comprising a diverse group of change-makers championing inclusion. Dubbed ‘Power of the Collective Council’, the advisory board will help Gap provide access to the marginalized and vulnerable communities, drive awareness about them and advocate for their rights. The Council will focus on three strategic pillars: Community, Customer, and Employee, to leverage their specialized areas of expertise and amplify a core focus area of diversity and inclusion for Gap Inc.

One of the founding members of the council will be Aurora James, Founder, Fifteen Percent Pledge, and Founder and Creative Director, Brother Vellies, who will support the Community as the Council’s Economic Inclusion Advisor. The second member, Leonardo Lawson, an internationally renowned expert in luxury and fashion brand building, management consulting, and executive search will support the Customer pillar as the Creative Impact Advisor. He has a diverse background in fine arts, brand strategy, digital, and retail combined with expertise in building unique experience and partnerships.

The third member, Amber Cabral, an inclusion strategist, certified coach, speaker, and author of 'Allies and Advocates: Creating an Inclusive and Equitable Culture', will join the Council as the Employee Experience Advisor. She has been working with Gap Inc. since 2018, to advance internal inclusion efforts through employee workshops, executive coaching, and facilitated discussions.The new council will enable Gap Inc to further its equality and belonging commitments in the coming year.

The Omicron strain proved to be another speed breaker for fashion retailers as it forced them to reset their fourth quarter sales expectations. The wave added to retailers’ woes by hitting profit margins especially globally. As per a Women’s Wear Daily report, Lululemon’s revenues are expected to decline in the fourth quarter from its earlier range of $2.12 billion to $2.16 billion while diluted per share earnings are expected to decline in the range of $3.24 to 3.31. The brand experienced several Omicron related consequences including increased capacity constraints, limited staff availability and reduced operating hours in certain locations, adds McDonald

Supply chain constraints hit Abercrombie’s salesv Abercrombie expects fourth quarter sales to surge in the range of 4 to 6 per cent compared to a year ago. However, compared to the corresponding period in 2019, the brand expects sales to decline 2 per cent. The company’s gross profit rate is expected to be on par with 2019 levels. Despite receiving a positive response to its winter and holiday collections, Abercrombie’s shipments dropped due to supply constraints, states Fran Horowitz, CEO. The brand experienced rapid surge in inventory levels due to extended port and transportation delays. This led to a loss of sales for the brand as it did not have the required inventory, adds Horowitz.

Torrid faces supply chain constraints despite better inventory levels

Torrid Holdings also expects sales to decline to $305 million from the previously forecasted $335 million. The company’s sales are softening amid growing concerns over rising Omicron cases. As per Harvey Kanter, President and CEO, Destination XL, the brand faced supply chain disruptions despite being continually monitored and ensured better inventory flow to meet sales targets. Torrid Holdings’ structural changes have helped brand Destination XL post strong holiday sales both online and in stores, adds Kanter.

Brands reorganize operations

Fashion companies made several big changes in their businesses during the pandemic period. Guess used the crises to transform its business model further, says Carlos Alberini, CEO. Launched last year, the company’s global range is being well-received across the world. Guess also streamlined its infrastructure by closing about 170 stores and renegotiating leases on 400 of its remaining 1,052 stores

Digital only companies make survival difficult

The emergence of more digital and smaller companies that are also very agile is making survival for fashion brands difficult Jay Sole, Stock Analyst, UBS, recently downgraded Kohl’s Corp to sell and Abercrombie & Fitch & Co and Canada Goose Holdings Inc. to neutral. Companies plan a series of events during calendar year 2022 to catalyze downward EPS revisions and keep sentiment negative, US’ stores sales are expected to decline by 2 per cent this year, as per UBS analysts. Over all, the apparel retail industry is likely to face tough times ahead.

Aiming to become a global apparel hub by 2030 vision, Sri Lanka proposes to increase annual export earnings to $8 billion by 2025. The country achieved its highest five-year apparel export levels in January this year as earnings surged to $487.6 million from $452 million in January 2019.

Cooperation key to achieving goals

Strong performance indicates the industry’s ability to achieve its set goals by 2025, says Yohan Lawrence, Secretary General, Joint Apparel Association Forum (JAAF), Sri Lanka’s apex industry body comprising supply chain partners, apparel manufacturers, buying offices and representatives of international brands in Sri Lanka. The apparel industry can become a major contributor not just to foreign exchange reserves but also employment sector through close cooperation with all industry stakeholders, Lawrence explains.

The industry has also adopted certain safety measures to curb COVID-19 spread amongst employees. Around 65 per cent employees have been fully vaccinated. Apparel exporters have also adopted additional safety measures to curb the spread of the Omicron variant

Digital technologies to mitigate supply chain issues

The Sri Lankan apparel sector strictly adheres to all safety and health protocols, affirms Saif Jafferjee, Managing Director (MD), Lanka Garments. This helps it reduce COVID-19 impact and ensure business continuity, he adds. Sri Lanka also mitigates supply chain issues by adopting various digital product development technologies. Larger apparel firms in the country are collaborating with smaller companies to help meet export targets, adds Jafferjee.

Strong demand for apparels in the domestic market has resulted in a healthy pipeline of orders for upcoming months. However, the international apparel market looks challenging due to growing geopolitical tensions in Europe, adds Jafferjee.

The ongoing Russia-Ukraine war may affect India’s handloom and textile hub Panipat leading to a drop in demand for handlooms from the city. Currently, Panipat industrialists have orders worth Rs 4,500 crore from many European countries and Russia. The war may increase raw material costs, says Sanjeev Manchanda, President, Panipat Dyes and Chemical Traders’ Association. He urged the government to provide some relief on shipment charges and import duties.

Pritam Singh Sachdeva, President, Panipat Industrial Association adds, continuation of the war for a few more days may halt production in the city. The increase in raw material prices will make it difficult for industrialists to deliver pending orders on old prices, adds Manish Garg, Dream Collections, Panipat. Increase in crude oil prices will also affect trade and transportation, he adds. Local trader Bhim Rama adds, the sanctions imposed on Russia will also increase prices of petroleum products and chemicals causing loss to the dyeing industry. As per figures, Panipat exports handlooms worth Rs 12,000 annually from 10,000 small and large handloom units. Around 80% of these exports are directed to European countries.

After Bhadohi, Panipat is the second largest manufacturer of carpets in country. The carpet exporters here have to compete with Turkey and China.

Lenders to bankrupt textiles business Sintex have asked applicants Reliance Industries and Assets Care & Reconstruction Enterprise (ACRE) to submit an improved offer by March 2. The Reliance-ACRE team is one of four applicants which submitted draft resolution plans for Sintex Industries. The current offer from RIL-ACRE equates to a recovery rate of 36 per cent for lenders. However, it excludes the 15 per cent equity stake of the Sintex. The lenders will negotiate to try and increase their recovery rate in the deal.

The second bid offered by the RIL-ACRE team for Sintex was more than 10 per cent equity stake offered by the team in its previous resolution plan. The business offered Rs 3,405 crore including Rs 2,700 crore as an upfront payment to lenders and a 15 per cent equity stake to be paid upon the conversion of Rs 171 crore of debt into equity. Lenders hope to receive an offer exceeding the liquidation value of Sintex.

Production of diversified fabrics and growing consumption amongst middle-income group has caused Bangladesh’s annual textile sales to nearly double to $9 billion within a span of five years. As per a Daily Star report, a cut in dependence on fabric imports, new machines and expansion of middle-income group consumers have pushed growth of Bangladesh’s local textile and fabrics market. Women customers consume 40 mt. fabrics a year while males consume 35 mt. says Mohammad Ali Khokon, President, Bangladesh Textile Mills Association (BTMA)

Currently, 300 spinning mills, more than 10,000 small, medium and large weaving units and 1,200 dyeing mills produce textile and fabrics to meet the local demand, adds Monsoor Ahmed, CEO, BTMA. Fabarics worth over $2 billion are sold during Eid-ul-Fitr, the main sales season for local businesses. However, 60 per cent branded clothes for women are imported either through formal or informal channels as demand grow many fold during the season, adds Ahmed. Khorshed Alam, Managing Director, Little Group, informs, spinners and weavers are producing more polyester fabrics as China has cut back the production of the item because of the higher cost of production.

To enhance sustainability in fashion and apparel value chains in Europe and Africa, partners attending the United Nations Economic Commission for Europe (UNECE) - African Union (AU) Business Forum in Egypt, discussed the need to introduce new cutting-edge technologies. The seventh Business Forum between UNECE and EU was attended by 15,000 experts, members of governments, international organizations and professionals who discussed on the need to strengthen the sustainability of the fashion and garment industry.

Their discussions revealed, currently worth $31 billion, the sub-Saharan African apparel and footwear industry is expected to grow 5 per cent until 2024. Both organizations agreed to implement blockchain, a strategy to establish business collaboration between Europe and Africa in sourcing raw materials and exporting African designs.

The Business Forum also signed a joint Europe-Africa Business Declaration, aimed at influencing policy-making and business activities, and conciliating concrete actions for a sustainable fashion and textile industry. This declaration includes respect for environmental, social and governance (ESG) criteria in the face of the challenges of African exports, which may entail costs related to the need to strengthen human resources, management capacities and technological skills.

The suspension of container bookings to Moscow by shipping lines have left Bangladesh apparel exporters worried over shipments currently in the pre- or post-production processes. Bangladesh garment makers are skeptical about getting payments on completion of current orders as Black Sea waterways have been shut to Russian ships and the European Union also closed airspace to the country.

Russian banks also plan to cut-off from the main international payment system, SWIFT, making it difficult for the Bangladeshi exporters to get payments. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has therefore urged exporters not to accept any new orders for the Russian market.

Shahidullah Azim, Vice Prresident says, the association is worried about getting payments for the goods already shipped to Russian buyers as Russian banks might be cut off from SWIFT. He advised members to observe the situation and not receive any new orders. The associaiton has planned to organize a roadshow this year to explore the current Russian market. Mohammad Hatem, Executive President, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) also advised members not to accept direct orders from Russian buyers.

Russia imports around 80 per cent of clothing from third countries. Bangladesh is an emerging market for apparel exporters, adds Azim. According to the Export Promotion Bureau, Bangladesh exported $665.32 million to Russia in the fiscal year 2020-2021, of which, $607 million came from apparel and textile exports.

Tiruppur Exporters’ Association (TEA) has urged the Union Finance Minister to help the MSME units with liquidity. MSMEs in India are facing liquidity issues due to an unprecedented increase in raw material and cotton yarn prices in the last 15 months, says TEA. Around 95 per cent units in garment exports sector come under MSMEs and they need fresh infusion of funds to revive. The government should introduce a new scheme similar to ECLGS and permit MSMEs to avail of additional credit facility of 10 per cent to 20 per cent of the existing limit, it adds

TEA also urged the government to extend the Interest Equalisation Scheme on Pre and Post Shipment Rupee Export Credit that expired on September 30, 202 with retrospective effect (October 1, 2021). The Coimbatore District Small Industries’ Association sought new loan schemes for start-ups and extension of collateral free automatic loans for MSMEs to meet operational liabilities and restart businesses. It also insisted on the removal of high credit scores and security collaterals, which many small-time borrowers are unable to meet. Coimbatore and Tiruppur District Tiny and Micro Enterprises’ Association urged for a reduction in GST for job working engineering units to 5 per cent from 12 per cent.

A steep rise in crude oil prices amid the Ukraine crisis pushed acrylic fibre prices by Rs 5-6 per kg last week in the Indian market. The cost of acrylic yarn also increased by Rs 5-6 per kg during the week ending February 26 in Ludhiana, the country’s most prominent man-made yarn market. However, demand of man-made yarn remained weak due to poor buying from downstream industry.

Meanwhile, international cotton prices remained highly volatile along with other commodities due to the recent geo-political developments. Domestic demand for summer season remained low due to a drop in temperature. Export demand also remained weak as exporters have very few orders. Recent international developments are also adding to buyers woes due to uncertainty in garment exports.