Zara-owner Inditex has surged past H&M in its second quarter sales. Inditex’s recovery during the quarter was boosted by remaining best-in-class in speed and from a strong overall recovery in its core market Spain. Better sales in China helped Inditex race ahead of H&M, which suffered owing to criticism of alleged human rights abuses in the Xinjiang region.

As per an analysis by Refinitiv SmartEstimates, Inditex’s sales during the second quarter increased 48 per cent year-on-year to € 7.02 billion. Growth during the quarter was supported by lower store closures and slightly improved backdrop. The group’s net profit during the quarter increased 307 per cent year-on-year to €872 billion. Analysts at Alantra Equities say, lifting of travel restrictions, unwinding of remote working and the return of social are expected to boost demand for fashion apparel across Europe.

Third quarter sales of Swedish H&M's sales during the June-August period increased by 14 per cent year-on-year, adds Refinitiv SmartEstimates. The brand’s sales in China were hit in March as it was wiped off Tmall and domestic phonemakers' app stores after it expressed concerns about alleged human rights abuses in the Xinjiang region in 2019.

Lacklustre rainfall throughout July and August will lead to one per cent year-on-decline in India’s cotton production to 28.3 million 480lb bales in 2021-22, predicts analyst Fitch Solutions. The recent outbreak of pink bollworm in Bhatinda and Mansa will also drag down yields, says a Fitch Solutions report. However, the analyst expects production to bounce back in 2022-23, if weather normalizes and the outbreak of pink bollworm is adequately contained.

At a global level, Fitch revised its 2021 average cotton price forecast to USc90.0/lb (USc87.0/lb previously). The near-term supply outlook has worsened, it said, Meanwhile, Fitch said global demand will rise strongly in 2021, and subsequently revised up its demand forecasts in Bangladesh and Turkey. The recovery in these two countries has been somewhat better than originally anticipated. Fitch sees global demand rebounding 14.1 per cent y-o-y in 2021 compared to 12.7 per cent growth in its last update in June following the 13.3 per cent COVID-19-related drop in 2020.

The analyst estimates the deficit to be 4.4mn 480lb bales this year compared to a previous estimate of 1.8 million bales. This will put downward pressure on global stocks and provide some support to the price. In the long term, Bangladesh and Vietnam will gain significant market share in cotton consumption as their textile sector expand significantly, says Fitch.

Bangladesh’s spinning millers have stepped up investments in synthetic and blended yarns in response to the increasing use of such yarns globally. The country's spinning mills imported 1 lakh ton of polyester staple fiber in 2020, while it was only 10 lakh ton in 2015, according to the Bangladesh Textile Mills Association (BTMA).

Engr Razeeb Haider Munna, Director, Bangladesh Textile Mills Association (BTMA) informs, many spinning millers are converting a part of their capacities to manufacture synthetic yarns and some are investing to set up new units for synthetic and blended yarns. He hoped production capacity of such yarns will be higher within a year.

South Asia’s leading textile giant Noman Group has invested in setting up a 100 per cent synthetic yarn unit, which is under trial production. Its new unit will produce about 100 ton of synthetic yarns per day, which is scheduled for commercial operation by the end of this month, saus Mohammad Enamul Karim, Executive Director-Spinning.

Noman has also started construction of another spinning mill to produce blended and cotton yarns, whose production capacity will be 125 ton a day. The under-construction unit, involving an investment amounting to Tk500 crore, will come into production by October 2022. It will also create about 1,500 new jobs.

As per the BTMA, local spinners can meet about 80 per cent of the demand for export-oriented knit yarn and 40 per cent of that for woven yarn, while synthetic and mixed yarns are mostly imported from China.

Envoy Group is also investing Tk125 crore to set up a synthetic blended yarn production capacity. The new unit will produce 12 tonne of yarn per day. Similarly, Envoy Group, Matin Spinning Mills, a sister concern of DBL Group, has also invested Tk186 crore to set up a special unit to produce synthetic yarn.

Bemberg™ by Asahi Kasei will be showcased at Filo fair, the international exhibition for orthogonal weaving yarns used in clothing and furnishings, circular knitwear and technical textiles, in a new special area, a dedicated open space reserved for sustainable fibers.

An exceptional fiber made from the smart-tech transformation of cotton linters pre-consumer materials, Bemberg™ is converted through a traceable and transparent closed loop process. The fiber will be showcased by three designers representing different and complementary part of contemporary consumer wardrobe. Zerobarracento, a gender-neutral emerging outerwear brand focusing on zero-waste product development, will present kimonos, padded jacket and wrap dresses made from Bemberg™ while Maurizio Miri will use Bemberg™ linings for its sophisticated tailor jackets.

A brand of sartorial clothing and artisan accessories, Waxewul will showcase a new product, the J_Hood Bag: a doubleface jacket with a comfortably removable hood that can be transformed into a finely hidden doubleface bag. An exclusive, innovative and sustainable garment with minimal impact on the environment made of BemBAZIN™ - a new generation of bazin created, patented and produced by Brunello which is composed by the high-tech and responsible fibers of Bemberg™ - on one side and of wax on the other, traceable and certified, guaranteeing a reduction in waste (two jackets in one) and a long-life cycle.

Euratex has released its vision for a new EU strategy for textiles and clothing. The new strategy aims to develop a forward looking business model and lay down the foundations for a competitive and sustainable European textiles industry.

The European Commission plans to publish an ‘EU Sustainable Textiles Strategy’ before 2021-end. It will also develop a ‘transition pathway’ for the textiles sector – being one of the 14 critical ecosystems of the EU’s new Industrial Strategy.

Euratex plans to develop a forward looking business model, lay the foundations for a competitive and sustainable European textiles industry. It strives for a recognition of the Textiles & Clothing (T&C) sector as an essential and strategic part of the European economy. The organization strongly believes in innovation, quality and sustainability as a source of competitiveness. It emphasizes the value of a skilled workforce, embracing new green and digital skills and supports open markets, based on free but fair competition.

Over the next few years, the resale fashion market is expected to grow 11 times faster than the regular fashion market. By 2025, the clothing resale sector is estimated to reach $47 million, says a new report by resale marketplace Threadup in its 2021 Resale Report. Yet, many luxury brands continue to stay away from market as they fear losing their exclusivity and market prices. As per Women’s Wear Dairy, brands also hesitate to adopt the required complex circular model due to the costs involved.

This year, luxury brand Kering supported a €178 million financing round for luxury resale platform Vestiaire Collective, However, LVMH Moët Hennessy Louis Vuitton, the world’s largest luxury group stuck to offering new products. Bruno Pavlovsky, President-Fashion, Chanel SAS says, the company aims to retain control of distribution, and has no plans to partner secondhand marketplaces. .

Complete ownership of consignment

To engage in resale successfully, luxury brands need to fully own their consigning process, says Audrey Depraeter-Montacel, Managing Director-Retail, Fashion and Luxury, Accenture. However, some luxury brands tend to be slow in handling this process. They need to accelerate their involvement in everything from developing closer contact with the growing secondhand fashion audience, to being able to guarantee authentication, and layering first-hand storytelling into the process on the origins and design of a product.

The luxury sector can help brands achieve circular economy as it has higher average operating margin of 39 per cent compared to 22 per cent for the current linear model, says a joint report titled ‘The Future of Circular,’ by Accenture Strategy. Developed in collaboration with The Fashion for Good, the report adds, adoption of new circular business models will grow across the fashion industry in future and brands that fail to join will miss out on long-term benefits such as additional revenue streams, deeper customer relationships, and new customer touch points.

Resale ownership poses quality risks

However, it’s also important for brands to preserve their image, adds Pavlovsky. Dan Brewster, Senior Vice President-Marketing, Scalefast says, at times customers prefer to work directly with the brand. They feel secure while selling or buying products directly from the brand.

It can also be risky for luxury brands to own a resale platform as they may face issues like reverse logistics, certification of quality and authentication. Hence, brands continue to partner platforms like Vestiaire Collective and The RealReal. They can build their own resale platforms to enhance the delivery process. These can provide all required information on products besides making transactions and product authentication easier.

Such platforms can also enable sellers to charge a premium on the resale market, and offer a premium in-store credit instead of cash, adds Brewster. This model is likely to be profitable for top luxury names whose products are appreciated over time.

Partnerships with resale platforms boom

Luxury brands are also getting involved in the secondhand market with third party. Mulberry and Alexander McQueen have launched resale pilots this year in partnership with Vestiaire Collective. Partnerships help Vestiare increase customer engagement with the brands and tap into new audiences. The company currently has a global community of 11 million buyers and sellers and will continue to engage in partnerships in future.

A recent survey conducted in collaboration with BCG shows, customers are increasingly opting to shop with sustainable brands. Around 62 per cent respondents said they plan to buy clothes from brands partnering resale platforms. However, there’s long way to go before brands publicly participate in the resale movement, adds Depraeter-Montacel. First, they need to identify the most suitable resale model for themselves.

The fashion industry, a major polluter fails to achieve carbon neutrality despite repeated calls by environmentalists and experts. A new survey report by environmental nonprofit Stand.earth shows, around 75 per cent of 47 surveyed fashion and apparel companies do not use clean energy sources. They have been ranked under the F grade by the sustainability index. Some of these brands are industry giants like Under Armour, Prada, and Lululemon. Titled ‘Fossil-Free Fashion Scorecard’, the index ranks 35 companies ‘F’ grade for their efforts towards energy efficiency and transition to clean energy across their supply chains.

Growing dominance of fossil fuels

The report also ranks companies for their use of fossil fuel-based synthetic materials, such as polyester, as well as their public record on setting emissions reduction targets. It gives 20 companies an ’F’ score, 17 brands ‘D’ score, 9 labels a ‘C’ score and one company-Mammut a ‘B’ grade. The Stand.earth report highlights the use of fossil fuels by the fashion industry. It shows, the fashion industry continues to rely on coal for its manufacturing operations. This raises pollution levels in countries like Vietnam and Bangladesh, it adds. Of the 47 companies surveyed, only three brands -- Asics, Mammut and REI—have pledged to curb their green house gas emissions by 50 per cent by 2030. All other companies have set their emission targets at 30 per cent or lower.

Further, the report shows, brands continue to the ignore GHG emissions produced by their fossil fuel-reliant supply chain. Around 75 per cent brands in the survey have been graded with an ‘F’ for failing to use renewable energy resources across their supply chain.

Lack of renewable materials

Only six companies are using renewable energy in their supply chains. These include Asics, Levi’s, Mammut, Nike, Puma, and VF. Of these, only Asics has ended on-site coal burning across all Tier II supplier facilities. The remaining brands have committed to abandon coal use by 2030.

The report further highlights increasing use of fossil fuel-based materials by the industry. Many brands in the survey are seen to be using fossil fuel-derived fibers such as polyester. Only two brands, Vaude and Eileen Fisher, are using low-carbon materials. These brands have been ranked under the ‘B+’ and ‘B-’ grades. On the other hand, luxury labels and fast fashion brands like Chanel, Lululemon, Prada, M&S, Primark, LVMH, Gap and Ferragamo—have been ranked ‘F’ for being the worst performers on the sustainability front.

A similar report by Changing Markets Foundation names Boohoo for making most of its collections with synthetic materials. The report rebukes 60 per cent of all ‘green’ material claims by leading fashion brands as greenwashing.

The Stand.earth report also accuses brands of exploiting popular buzzwords like climate positive or carbon neutral, for financial gains. Most of these claims are not supported with any evidences of reduced emissions or altered sourcing or transportation methods. A case in point is Ralph Lauren, which though commits to achieve zero-carbon emissions by 2040, fails to improve its production processes with renewable energy.

Pakistans advisor to the Prime Minster on Commerce Abdul Razak Dawood informs, textile exporters will continue to benefit from Generalized System of Preferences (GSP) scheme for two more years and not believe rumors against it. This will help Pakistan’s footwear sector grow further, says Dawood. The country has launched the PSDH initiative to offer computer aided footwear designing courses with latest technology to develop the industry and individual entrepreneurs to consolidate their position in the global scenario.

Imran Malik, Chairman, Pakistan Footwear Manufacturers Association (PFMA) says, the industry offers adequate concessional regularity policies and tax relief, which helped it grow over the last three years. In the last three years, the association witnessed a 63 per cent increase in its membership, 92 per cent reduction in shoe import, 22 per cent increase in export.

Organized by the Hong Kong Trade Development Council (HKTDC) and sponsored by Create Hong Kong (CreateHK) of the Government of the Hong Kong Special Administrative Region, Asia's premier fashion event Centrestageended on a successful note. The three-day extravaganza from September 10 -12, 2021, brought together more than 200 fashion brands from 24 countries and regions, with 30 fashion events taking place. It attracted over 2,550 trade buyers and more than 17,200 public visitors to participate and source fashion items. Over the three days of the event, close to 700 video business meetings were arranged to match global fashion buyers with exhibitors online.

The sixth edition of the fair was organized with the theme ‘Chapter Infinity’ to encourage fashion industry players to take creative approaches and reignite their design inspiration in the pandemic era, exploring the countless opportunities that lie ahead. ITOCHU Textile Prominent, the Hong Kong subsidiary of Japanese conglomerate ITOCHU, joined Centrestage for the first time. Celia Lo, Manager, said she identified two local designer brands for developing the company's women's casual wear business and will place orders averaging 1,000 pieces for each style.

Value fashion retailer and Primark-owner Associated British Foods has reported higher profit than a year ago and like-for-like sales in Q3 beating the comparable period two years ago, although Q4 reversed some of that gain due to new restrictions.

Total sales of the company in the second half of the 53 week-year to September 18 are expected to reach £3.4 billion and Q3 like-for-like performance is expected to increase by 3 per cent two-year-on-year.

Primark took a bigger hit to sales than many of its peers at the height of the pandemic as the firm doesn’t trade online. However, when stores reopened, it was also one of the most popular destinations for physical shoppers.

The brand’s sales improved as the period progressed and Q4 like-for-like sales are expected to be only’ 17 per cent lower than the same period two years ago.

The company quarter saw a continuation of the trend for 'comfort living' with “strong sales of leisurewear such as leggings and cycle shorts, and continued demand for seam-free matching separates for women during the quarter. It also saw a “good response” to the launch of new licensed product, such as the womenswear Disney paisley range. Sales of AW21 ranges “have started well” and its back-to-school ranges been strong.

Primark said its operating profit margin in H2, prior to the repayment of job retention scheme money, benefited from a "significant reduction” in store labour costs and lower store operating costs and is expected to be over 10%. Its forecast for full-year adjusted operating profit is now ahead of the profit delivered last year.

Looking ahead to its next financial year, the operating profit margin “will continue to benefit from lower store labor and operating costs”.