The Latin American luxury sector is in a vulnerable state. Latest Euromonitor projections estimate, personal luxury goods sector in countries such as Brazil, Mexico and Argentina is likely to contract by approximately 6 per cent, 4 per cent and 3 per cent respectively. The World Bank also estimates economic activities in Latin America and the Caribbean region to drop by 7.2 percent of GDP.

Hence, luxury players in this region now pin their hopes on new or revised free trade agreements (FTAs) between Latin American countries and the EU and US. FTAs may shield the luxury sector in these countries from the damage caused by the pandemic and consequent global recession. Some analysts even hope these FTAs could boost consumption.

Opportunity to for double digit growth

One of these deals the EU-Mercosur agreement offers Latin American luxury brands an opportunity to grow in double digits. Diego Stecchi, Managing Director, Luxury Retail Partners and Former Regional Director, Ferragama-Latin America, believes the agreement enables Latin American luxury sector to grow by around 30 per cent besides cutting tariff peaks of 35 per cent down to zero on clothing and textiles.

However, the deal is currently mired in controversies due to Brazalian President Jair Bolsonaro's disregard for the Amazon rainforest. Bolsonaro’s controversial stance on a number of issues has made it unlikely for the agreement to be finalized in the near future.

Facilitating free trade in fashion

Like the EU-Mercosur FTA, the EU-Mexico FTA could also revive the confidence of Mexico's business partners, believes Luis Huacuja, Academic and Consultant- Politics and International Law. Not only would the deal facilitate free trade on all non-farming goods including fashion product but also enable European and Mexican firms to invest in each other’s markets including the luxury sector. The deal is likely to be commercialized within a year as it needs to be signed off by the European Parliament.

Deal with local taxes

Most of these FTAs aim at reducing tariffs in the luxury sector. However, they should also focus on the taxes in countries like Brazil, Argentina and Chile, says Paulo Chiele, Director, PRC Luxury Consultancy. Stecchi believes the elimination of local taxes will reduce production costs for luxury brands in these countries. However, brands should maintain prices and not lower them to preserve their value in consumer’s eye.

Another factor that complicates harmonization of prices in these countries is volatility of their currencies. With the pandemic making local currencies weaker, prices of luxury products are likely to rise by as much as 20 per cent in Mexico and 10 to 15 per cent in Brazil.

Boost product quality and e-commerce

For quicker recovery, luxury brands in Latin American countries should focus on growing their e-commerce operations, opines Stecchi. They should also emphasize on the quality of products, views Thiago Alonso de Oliveira, Chief Executive, JHSF Participações, the real estate firm behind Cidade Jardim in São Paulo and several other luxury shopping malls across Brazil. By nature, Latin Americans are indulgent shoppers, says Fabian Hirose, Strategy & Development Management Consultant. They like to enjoy their shopping experiences and their consumption culture cannot be eradicated so easily.

Textile Employees Union (INTUC) workers have been protesting against the National Textile Corporation (NTC) for not paying its management and mill staff their salaries during the lockdown. From March onwards, these mill workers have been paid only a fraction of their salaries and the management staff have not got their salaries for the month of June. This is despite the central government ordering all employers to pay full wages during the lockdown.

The annual budget for payment of salaries is Rs 350 crore, which means NTC requires Rs 29.16 crore monthly for salaries. There are 300 management employees and 7,200 mill staff working with NTC. In March, when the first lockdown was announced, the workers of NTC got only 75 per cent of their salaries. In April, they got 60 per cent and in May only 40 per cent of their salaries.

In March, the workers were only paid for the days that they worked. The average salary of a mill worker is Rs 8,000. They have not been paid for the month of June and are worried about the amount they will get this month. have been protesting in Tamil Nadu and Mumbai for full payment of the salary.

Informa Markets Fashion has cancelled its flagship New York-based fashion trade show, Coterie which includes Fame, Moda, Sole Commerce and the previously rescheduled Project and Children’s Club, which was scheduled to take place from September 22 to 24 at the Jacob K. Javits Convention Center.

The Coterie team will instead focus on providing an opportunity for business continuity via its new digital trade event, which will begin on September 1.

The Coterie New York marketplace draws a large audience of international and domestic brands, retailers and key industry executives. Given continued uncertainty around international travel and border restrictions, as well as the importance of health and safety, Coterie has decided to shift its focus this fall toward its digital trade event in partnership with NuOrder.

As reported last month, the partnership is part of a longer-term plan to support a synergistic physical and digital future for the fashion wholesale industry. This season’s digital trade event, running from Sept. 1 to Nov. 1, is an opportunity for continued commerce for the New York marketplace despite challenges around the physical event this year.

UK apparel brand Boohoo has been accused of keeping several of its factories across London open even during the lockdown phase – and most of them to sustain online orders for fashion label Boohoo. Labour Behind The Label, a garment worker’s rights group, has accused Boohoo factories of putting the lives of several garment workers at risk. The group claimed that these factories asked employees to come to work even when some of them were sick.

Also, workers alleged the factories flouted social distancing rules besides failing to provide basic needs like masks and sanitizers to the workers. Those who are wishing to isolate themselves are also being denied wages. Add to it, there are also complaints of many factories running in old dilapidated buildings – a big question mark on their compliance standards.

However, Boohoo has refuted these allegations saying that it has made available sufficient quantity of PPE, masks and sanitizers and that too at free of cost. It also said that it has always followed Government’s guidelines and ensured the safety of all its workers.

Vietnam’s General Statistics Office says, the total value of Vietnam's textile and garment exports in the first half of this year declined 15.5 per cent year-on-year to nearly $12.8 billion. The country exported majority of its products to the United States, the European Union, Japan, South Korea and China. In June alone, its textile and garment exports tumbled by 23.6 per cent on-year to $2.2 billion, reported Xinhua.

The Vietnam Textile and Apparel Association blamed complex developments of the COVID-19 pandemic for the reductions in new orders, forecasting that export revenue this year would fall significantly amid decreasing global demand. The country had recorded an export turnover of roughly $32.6 billion in 2019, up 6.9 per cent from 2018, according to the statistics office.

A report by Business Turkmenistan states, the country presently exports more than 70 per cent of its textile products to foreign markets. The Ministry of Textile Industry of Turkmenistan operates more than 70 enterprises, including for the production of various types of cotton and mixed yarns, fabrics, jeans, knitted fabrics, and finished products from these fabrics.

The companies have installed equipment from companies of Japan, Italy, Germany, Belgium and Switzerland. The operation of several large textile industries within the framework of the "raw materials - finished products" principle has shown that this method is more effective, the report said.

The Ashgabat Textile Complex (ADT), which is one of largest enterprises in the Central Asian region of its kind, fully supplies the country's domestic markets, producing a variety of export-oriented products. The distinguishing feature of the products manufactured by enterprise is that no chemical additives are used in the dye or softening agent. The complex exports its products with the trademarks ADT, Goza and Vada. At the beginning of the year, the tailors also started decorating their products with the symbol ‘Turkmenistan – Home of Neutrality.’

Against the growing anti-China sentiment, global sportswear makers, who source a large chunk of their raw materials from the country are planning to shift sourcing and manufacturing to India and Southeast Asia. Global retailers and brands are ready to hedge sourcing to different markets other than China for the goods they sell in India. Under Armour whose merchandise suppliers are based around the world does not foresee any significant impact on its India business as a result of any duties or curbs that the government may introduce.

However, manufacturing in India may push up costs for these sportswear companies. Domestic manufacturers have not yet developed scale, as a result of which brands will find it dearer in the beginning to move sourcing and production of finished goods to India. According to the managing director of a home-grown footwear manufacturing company, China has scale and makes for the world, while India only makes for domestic consumption. He hopes India to achieve similar scale over time. It will take brands at least two years to move their production out of China.

A senior executive of a footwear retail chain says, despite the government taking efforts to ramp up duty on goods coming in from China, a large part of the hundreds a of containers that arrive on Indian shores every day are under-invoiced. This is counterproductive for domestic manufacturers.

Japan-based flat knitting solutions provider Shima Seiki, has released a new design software, and two other web services to enhance its user experience. Intended to aid in digital transformation of fashion industry post-COVID-19, these services are best adapted for new work styles and methods including teleworking and telecommuting.

At the same time, they are geared toward streamlining and improving efficiency to achieve sustainability through reduced waste. The latest service added by to Shima Seiki- the SDS-onE Apex Fiz is a subscription-based design software that can be installed on customers’ individual computers. The software enhances the functions of SDS-onE Apex series by enabling it to adapt to different work styles and environments. The software is furthermore available in five different flavors that can be selected according to the customer's needs, from Fiz Design Pro to Fiz Design Jr.

Yarnbank, is the world’s first online web service for searching and viewing latest yarns, developed with cooperation from yarn companies from around the world. Knit manufacturers and apparel companies can be assured that the simulations created using yarnbank are not merely realistic images but accurate representations using yarn that can actually be purchased and used in production. Yarnbank also serves as a new promotional platform for yarn companies with the opportunity to present their yarns directly to their customers.

The SHIMAnAVI e-learning system allows Apex series users to experience online training when and where it is convenient, and at their own pace, supporting new work styles and environments such as teleworking and telecommuting. Several courses are available in different languages to suit the needs of individual customers as well.

Coats, the world’s leading industrial thread company, has launched a unique app known as Coats Synthesizer. The app features a yarn blend calculator which accurately predicts, within seconds, fabric properties for end-use in the personal protection sector.

The tool enables Coats to support its customers' tailored needs while also saving on the resource of multiple sampling processes. It is a bespoke tool that blends yarns virtually using algorithms. The sophisticated blend predictor technology provides information on essential fabric properties such as burn protection, abrasion resistance and ATPV (arc thermal protective value). It also allows yarn costs to be optimized in real time. The app will enable Coats to collaborate with its customers on the development of new and innovative blends together. Following the initial blend prediction and sampling done digitally, it is just fine tuning that is required at the physical development stage. This significantly increases the speed of delivery of products that meet customer needs without extensive trials or sampling.

Coats Synthesizer also provides a series of advanced solutions with added quality and value for protective wear. These include the Coats FlamePro™ product range of flame-resistant, electric arc and cut-resistant yarns which deliver optimum heat, fire and smelting hazard protection for use in the personal protection, military and industrial sectors.

International Apparel Federation (IAF) in collaboration with Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA), Foursocure and Sourcing Journal will hold a one month long 'Digital Global Apparel Sourcing Expo' in the country from July 15. The expo will be visited by all private label and retail brand buyers, large brand buyers and sourcing managers, brand owners and start up labels, designers, product manager and agent buying houses.

Some of the top visiting counties to the expo will include the US, UK, Germany, Australia, France, Denmark, Canada, Netherlands and Pakistan. Around 15,000 buyers will attend the expo which will provide order volume of 20 million pieces. Holding the digital version of the show will enable the International Apparel Federation to minimize the problems confronted by the business community.