With brands like Benetton moving away from Asia to countries like Serbia, Croatia, Turkey and Egypt for their sourcing needs, COVID-19 pandemic seems to have altered global fashion supply chain forever. Benetton plans to halve its Asian supply chain by end of 2022, says Massimo Renon, CEO. The group has already shifted over 10 per cent production away from countries like Bangladesh, Vietnam, China and India. This is helping it control production process and transport costs, Renon explains.

Benetton’s decision is also influenced by the recent spike in sea freights. Scarcity of vessels and rebound in consumer demand has led to a tenfold rise in sea freight costs. This is causing brands like Hugo Boss to move production facilities closure to markets. Brands like Lululemon and Gap are planning to switch to air freight to avoid running out of stock during the holiday season.

Costs, longer deliveries shifts supply chain

Countries like Vietnam and Bangladesh offer 20 per cent lower production costs. However, supply constraints due to COVID-19 outbreak have increased their lead times to 7-8 months, adds Renon. On the other hand, deliveries of clothes produced in Egypt to European stores can be achieved within 2 to 2.6 months. Woolen garments produced in Serbia and Croatia can be delivered in 4-5 weeks, he adds. This is encouraging Benetton to increase production in these two countries and Tunisia.

Zara-owner Inditex has also set up 53 per cent factories in its home market Spain, Portugal, Morocco and Turkey, according to its 2020 annual report. Advisory firm AlixPartners believes, nearshoring shift will become a permanent fixture with most brands having regional or even national supply chains in future. Most goods will be produced closer to markets, adds Daniel Greider, CEO, Hugo Boss, which has a manufacturing facility in Turkey, and produced parts of shoes in Italy, and made-to-measure suits at its headquarters in Metzingen, Germany.

Factory closures in countries like Vietnam are also accelerating nearshoring. Lululemon is moving production away from Vietnam to mitigate supply chain woes. Further, to control inventory delays caused by shipping congestions and factory closures, Gap is investing in air freight. However, air freight is over eight times more expensive for large shipments and about five to six times costlier for smaller containers, affirms Judah Levine, Head-Research, Freightos, a global freight booking platform. Retailers therefore, plan to use air freights for only smaller and higher-margin products such as apparels, computers and accessories and smaller household goods, shows data from research firm Cargo Facts.

Rising labor costs and quality focus add to woes

Other factors leading to brands’ shift from Asia to other countries include rising labor costs in Asian countries. As per the International Labor Organization’s Global Wage Report 2020-21, in the four years preceding pandemic, labor costs in these countries outstripped those in the rest of Europe and North America.

Another factor driving the shift is customers’ growing preference for quality over price, affirms Renon. His group’s emphasis on creating high-quality and long lasting garments is helping it return to profitability after suffering losses for eight years. The group hopes to get back in the race from upcoming Christmas season.

Two brands from Texbrasil (Brazilian Textile and Fashion Industry Internationalization Program); Guria and Rio de Sol participated in the Surf Expo tradeshow, held in Orlando, Florida (US) this month

These companies presented their novelties focusing on beachwear, fitness and resortwear at the exhibition. The brands closed deals worth $ 230.000, in addition to 62 contacts at the event.

Guria, which already participates in other events in the segment in the United States, such as the SwimShow, acquired new customers at the event, who have already placed orders during the tradeshow. With a consolidated presence in the country, the company has its own office and sells directly to retailers in the area.

The extra edition of Colombiatex was held in Medellín, parallel to Colombiamoda. In addition to a digital format version in January, the event also held a physical event from July 20-27.

The companies of Texbrasil; Covolan and Vicunhawere at Colombiatex.The brand LeninhaRoupa de Baixxo participated in Colombiamoda digitally. Together, the companies made $874,000 at the events. For the next 12 months, the expectation is to close another $3 million in business.

The exhibition was important for Vicunha as it enabled the brand to resume face-to-face communication with customers. The brand has participated in the event since the Program’s support began, Due to travel restrictions, the 2021 edition was more local and had Colombian buyers as the vast majority. Even so, Vicunhareceived around 80 customers during the three days of the event.

The West Java Regional Economic Recovery Committee (KPED) inaugurated the West Java Material Center to facilitate the textile industry supply chain. As per an Indo Textiles report, the Material Center is expected to connect small and large industries in textile products.

The West Java Material Center was initiated by the West Java Provincial Government through the Regional Economic Recovery CommitteeSub-Division of Manufacturing, Manpower and Overseas and the Indonesian Textile Association (API) and fully supported by BI and West Java OJK.

ArifinSoedjayana, Head, West Java Province Industry and Trade Office, says, the centrewill facilitate business relations between small and large scale industries, especially in meeting the needs of raw materials.

Herawanto, Head, BI West Java adds, the Material Center provides easy access to raw materials and efficiency of distribution channels between large industries and small and medium industries for the textile industry sector.

Steve Lamar, President, AAFA has appreciated Katherine Tai, United States Trade Representative for addressing US concerns in the Vietnam Timber Section 301 investigation.

Lamar said, the association is pleased to see that US apparel, footwear, and accessories imports from Vietnam will not be subjected to additional tariffs. It is also pleased to see Vietnam and the US solidify their work to guard against illegal timber harvesting an important step for Vietnam’s sustainability journey.

The tariff relief and removal of tariff threats is good trade policy, as taxing Americans to get dressed each day is never a good negotiating tactic, Lamar said.

AAFA has continuously urged the Biden administration for additional Section 301 tariff exclusions and retroactive renewal of all expired exclusions. Last week, AAFA penned a Tai on this issue and the simultaneous shipping crisis causing out of control freight rates, historic logjams at U. ports, delays, and costs that are wreaking havoc on supply chains and America’s economic recovery.

Indo Count plans to showcase its expanded Pure Earth range at the New York Home Fashions Market.

As per a Home Textiles Today report, the company will showcase three distinctive bedding innovations.These new offerings will appeal to environmentally conscious customers who value sustainable, renewable products which enhance comfort and provide better sleep while incorporating the newest technologies to reduce environmental impact and resources required for manufacturing, says GautamSareen, SVP– marketing

The product offering features a sustainable blend of cotton and biodegradable polyester – a blend aimed at reducing the persistence of plastic microfiber pollution in oceans and waterways from laundering, and plastic accumulation in landfills. The construction is designed to mimic the comfort and hand of conventional cotton and polyester while providing a lower polluting footprint.

Adds KK Lalpuria, Executive Director and CEO, advancements to the Pure Earth sheets complement the company’s commitment to sustainable processes to create an incredible new line of products that feel good while doing good for the environment and consumer.

To be held from October 9 to 11, 2021, Yarn Expo Autumn will host around 430 leading suppliers at the National Exhibition and Convention Center (Shanghai). The suppliers will showcase a wide range of products from innovative fancy yarns to high-end cashmere yarns, and functional chemical fibres to quality cotton and sustainable regenerated fibres. Covering 27,000 sq. mt, Yarn Expo Autumn will also have an overseas zone featuring yarn and fibre exhibitors from countries and regions including Hong Kong, India, Switzerland, Taiwan, the US and Vietnam.

The exhibition also offers an online business matching platform for buyers who cannot physically attend the show. Buyers can select their suppliers and arrange online meetings through h AI-driven matching recommendations, instant messaging and video call functions. The trade show will feature latest developments and market trends at themed areas and fringe program events, including the China Fibre Fashion Trends Display Zone organized by the China Chemical Fibre Association, the China Knitted Yarn Fashion Trends presented by the China Knitting Industry Association and the New Fibre New World – Textile Materials Innovation Forum. Various other product presentations will be led by industry experts, business leaders and scholars.

Yarn Expo Autumn is organized by Messe Frankfurt (HK) and the Sub-Council of Textile Industry, CCPIT.

Kering has appointed Thierry Marty, President of North & South-East Asia Pacific regions including Japan, Korea, South-East Asia, Australia and New Zealand, effective from October 1, 2021. Marty will be based in Seoul and report to Jean-François Palus. He has over 20 years of luxury experience in Asia, and has lived in Singapore, Tokyo and Seoul. He started his career at Deloitte before joining LVMH in 1995.

A global luxury group, Kering manages the development of a series of renowned fashion including Gucci, Saint Laurent, Bottega Veneta, Balenciaga, Alexander McQueen, Brioni, Boucheron, Pomellato, DoDo, Qeelin, Ulysse Nardin, Girard-Perregaux, as well as Kering Eyewear. The organization enables its houses to set new limits of creative expression while ensuring a sustainable industry growth.

Grasim Industries aims to initiate action against income tax department for demanding Rs 8,334 crore as capital gains tax on sale of shares in a group firm. Grasim Industries has accused the Deputy Commissioner of Income Tax (DCIT) of imposing a capital gain tax on the value of shares, without considering that the shares were issued to the shareholders pursuant to the scheme of arrangement and no consideration was received by the company which could be subjected to tax.

DCIT has raised a demand for the assessment year 2018-19 with regards to the company’s merger with Aditya Birla Nuvo and Aditya Birla Financial Services. The commissioner has valued the shares issued by the resulting company Aditya Birla Capital at Rs 24,037 crore as the sale consideration for transfer of undertaking and has made the addition of capital gains of Rs 22,772 crore to the income of the company as part of scrutiny assessment for the AY 2018-19. Earlier, the DCIT had sought dividend distribution tax for the same deal in 2019, which was stayed by the Bombay High Court.

Gohar Ejaz, Patron-in-Chief, All Pakistan Textile Mills Association (APTMA) announced plans to add 100 new textile plants this year by investing $5 billion in the industry. As per a Daily Times, Ejaz says the new plants will help Pakistan boost textile exports and create 500,000 new jobs. Addressing the annual general meeting of the association at APTMA House, Ejaz said, the association hopes to achieve the current year’s textile export target of $21 billion.

Pakistan’s towel exports grew by 32 percent in FY21-22, garment exports grew by 19 percent, knitwear exports by 37 percent and bedwear exports by 29 per cent. Ejaz assured cotton farmers would get Rs 600 billion instead of Rs 200 billion paid to them last year. He said that cotton yarn is sufficiently available in the country for consumption in the value-added sector for export purposes as is evident from 25 per cent decline in cotton yarn export in quantitative terms from 0.522 million tonne in 2018 to 0.390 million tonne during 2021 and 26 percent in value terms.

Domestic production of cotton yarn was about 3.5 million tonne, of which 90 percent was used for value-added sector while only 10 percent was being exported, added Ejaz