The Cotton Association of India (CAI) has increased its cotton crop estimate for 2019-20 season beginning October 1, 2019, by 5.5 lakh bales to 335.50 lakh bales of 170 kg each, in its June estimate. For crop year 2018-19, CAI finalised total crop at 312 lakh bales. The Crop Committee of the association estimates total cotton supply up to September 30, 2020 to be 382.50 lakh bales, which consists of the opening stock of 32.00 lakh bales at the beginning of the cotton season on October 1, 2019, crop for the season estimated at 335.50 lakh bales, and imports estimated by the CAI at 15.00 lakh bales.

Imports are estimated to decline by 17.00 lakh bales compared to the previous year’s estimate of 32.00 lakh bales. Domestic consumption up to September 30, 2020 has been estimated at 280.00 lakh bales i.e. at the same level as estimated in the last month's estimate. The CAI has also retained its export estimate for the season at the same level as estimated in the previous month i.e. at 47 lakh bales against 42.00 lakh bales estimated earlier. The increase of 5.00 lakh bales in the export estimate than estimated in the previous year was made in view of the favorable conditions existing for exports of cotton from India.

The preliminary sales of Florence-based luxury group Salvatore Ferragamo declined by 46.6 percent to €377 million in the first six months ended June 30 compared to €705 million in the same period last year. Impacted by the pandemic, the lockdown of commercial activities and lack of international traffic, the group’s sales fell by 60.1 percent in the second quarter. As of June 30, the company had 643 points of sales, including 389 directly operated stores and 254 third-party-operated stores in the wholesale and travel retail channels.

In the first half of the year, the retail distribution channel reported a 41 percent drop to €260.6 million, representing 69.2 percent of the total. In the second quarter, retail revenues decreased 51.2 percent. Sales in the wholesale channel tumbled by 56.4 per cent to €110.8 million accounting for 29.4 per cent of the total. In the second quarter, wholesale revenues declined by 75.7 per cent. The company’s revenues from the Asia Pacific region declined 39.9 per cent to €166.7 million during the second quarter. Sales declined 35.3 per cent at constant exchange rates, benefiting from the positive performance of the retail channel in China, which recorded growth of 11.6 per cent at constant exchange rates.

Fresh off its worst quarter on record, Kering believes that a focus on sustainability and diversity will serve it well amid the current retail sector upheaval. The pandemic has accelerated the brand’s efforts to reduce waste. It is working at all levels of the value chain, lowering the number of prototypes, reducing production waste and live streaming fashion shows, etc. Finally, Kering has intensified use of artificial intelligence to power everything from product recommendations to supply chain forecasting.

Kering is betting on millennial and Gen Z customers to help it bounce back from the Coronavirus crisis in the second half, led by a recovery in the key Asia-Pacific region. The brand’s net profit by fell 63.4 per cent in the first six months of the year after COVID-19 forced the French luxury group to close stores and factories worldwide, and brought tourism to a halt. The group’s revenues in the three months upto June 30 fell 43.5 per cent to €2.17 billion, representing a decline of 43.7 per cent in comparable terms. This came on the heels of a 15.4 per cent drop in the first quarter.

However, the group flagged an encouraging recovery from COVID-19 with sales in mainland China rising more than 40 percent in the second quarter, and positive trends emerging in Europe and the US from mid-June. But organic sales at its cash cow brand Gucci fell by 44.7 per cent in the second quarter, compared with a 23.2 per cent drop in the prior three months.

Mehrdad Sa’adat, Chairman, Iran-Turkey Joint Chamber of Commerce says COVID-19 pandemic has led to a 90 per cent decline in Iran’s exports to Turkey though trade between the two countries has been increasing after reopening of the borders. Sa’adat said Iran has continued to export to Turkey via road and railway. In early June, land borders between Iran and Turkey reopened after more than three months.

On the first day of border reopening, 150 Iranian trucks entered Turkey, according to Rouhallah Latifi, Spokesperson, Islamic Republic of Iran Customs Administration (IRICA). The trucks entered Turkey via three land borders of Bazargan, Sero, and Razi. Turkey relies on Iran as a major market for its manufacturing goods, including industrial machinery and garment, while it also sends to Iran some sizable shipments of crops and fruits that are not cultivated in the country.

As announced by Latifi, Iran and Turkey exchanged 6,300 wagons of commodities via railway during a 70-day period from the beginning of the current Iranian calendar year. Iran’s exports to Turkey via railway stood at 3,072 wagons of goods and its imports from the neighboring country reached 3,228 wagons during the mentioned period of time.

American Eagle Outfitters (AEO) has added a new sub-brand Offline to its activewear brand Aerie. The new sub-brand will offer complete collection of activewear and accessories for easy movement and comfort. An evolution and expansion of the brand’s popular ‘Chill, Play, Move’ collection, the new label will offer soft, cozy and comfortable activewear. It will give Aerie another powerful platform to grow its community while complementing its lifestyle collection of bras, undies, lounge and soft apparel. The subbrand will be available online at aerie.com with two retail stores planned to open by the end of the year.

The sub-brand will also carry the Real Good badge to identify products made from sustainable raw materials including recycled fabrics.

Despite Europe being a huge market, Vietnam’s textile and apparel exports to the continent is worth merely $8 billion. The country exported over $2 billion worth garments and textiles to Europe in past six months while exports to the continent in the past year exceeded $8 billion. Currently, European Union is the third-largest importer of garments and textiles from Vietnam after the US and Japan.

High tariffs weakening Vietnam’s competitive edge

One reason for modest exports is the high tariffs on textile and apparel imports from Vietnam which have weakened the country’s competitive edge in the global textile and garment industry. To regain lost share, domestic enterprises are manufacturing branded products and those that require higher skills. However, COVID-19 has changed consumption patterns in the country with the textile market witnessing demand for products of low or average value.

Meeting export standards

To boost its textile exports, Vietnamese National Assembly recently ratified the Vietnam-EU Free Trade Agreement (EVFTA) that will become effective on August 1. The new agreement states, Vietnam’s key exports to the EU, garment and textiles, will no longer be taxed at 77.3 per cent of export turnover for five years while its import tariffs on remaining 22.7 per cent exports will also be eliminated after seven years. The agreement provides Vietnamese textile and apparel enterprises an opportunity to import high-quality machinery and access raw materials under the European standards.

To explore the benefits of this new agreement, Vietnamese textile and garment enterprises are investing in upgrading infrastructure in factories to meet the technical standards of importers. Tran Nhu Tung, Member-Board of Directors, Thanh Cong Textile Garment Investment Trading Joint Stock Company (TCM), expects the reformed agreement to fuel the company’s exports to the EU by 50 per cent.

Similarly, EVFTA has enabled Viet Thang Jean Company to sign long-term procurement agreements with its raw materials partners in South Korea and Turkey.

Focus turns to local materials

However, only a few enterprises have been able to exploit the benefits of this agreement as the Vietnamese garment and textile industry still largely depends on raw materials and supplies imported from China. To overcome this, the non-processing enterprises in the country need to either produce fabric locally or buy domestic raw materials. They can also import raw materials from countries with bilateral trade agreements with the EU such as South Korea and Turkey.

Another hindrance is the size of these companies. Many of these enterprises are small and medium-sized with limited resources and sub-standard production processes. Their investments in research and development of products are also inadequate and do not exploit the intellectual property assets and trademarks effectively. Hence, Vietnamese companies need to focus on meeting the standards and the management process prescribed by the EU, adhere to social responsibility rules and adopt transparency in labor and production management.

According to research conducted by Confimprese, an association representing Italian retailers, in collaboration with consulting firm EY, ready-to-wear sales across the country declined by 33 percent compared to the same period last here. In total, during the first half of the year, they decreased 45 percent compared to the same period in 2019.

In June, the retail performances in Italy’s primary trade areas saw a double-digit decrease compared to the same period last year. For example, sales on Milan s central Corso Buenos Aires were down 40 percent last month, compared to June 2019.

Last month, the most affected segment was travel retail, which decreased by 72 percent compared to the same period last year. The business of malls, outlets and high-street stores located in big and small Italian cities decreased 30 and 20 percent, respectively.

On a positive note, during the lockdown, from April to June, online sales in Italy surged 135 percent compared to the same period last year and in June, even if physical stores reopened, they grew 54 percent compared to the same month in 2019.

The United States Agency for International Development (USAID) organized two webinars in partnership with the Joint Apparel Association Forum (JAAF) and the Sri Lanka Export Development Board (EDB), to help participants break into the US market. The project is being implemented by Deloitte Consulting.

The first webinar explained participants on the ways to comply with the US Food and Drug Administration’s (FDA) regulations. Experts on the classifications applicable to PPE exports and the FDA’s Emergency Use Authorization engaged with participants and walked them through the process.

The second webinar featured in-depth discussions with US experts on market demand for PPE, including federal demand, distribution chains, and how to sell to the US federal government. Participants learned about the government’s acquisition rules and examined criteria to consider feasibility of PPE manufacturing.

The United States Fashion Industry Association (USFIA) has elected Anna Walker, Vice President- Public Affairs, Levi Strauss & Co its new Chairperson. Walker has been a member of the USFIA Board of Directors since 2014 and served as Vice Chair of the Board of Directors since 2017.Since joining Levi Strauss & Co 2004, she has supported the company’s business strategy and strengthened its reputation by anticipating and shaping external public policy and stakeholder initiatives. Walkar also leads LS & Co’s community affairs program, developing strategy for community grants and employee giving and volunteerism programs globally.

A member of the Levi Strauss Foundation Board, Walkar has a masters’ degree from Johns Hopkins University School of Advanced International Studies and Bachelors of Arts degree from the University of California, Davis.

World footwear COVID-19 survey conducted by the Portuguese Footwear, Components, Leather Goods Manufacturers’ Association (APICCAPS) in April found that the virus had already sent global footwear consumption down more than 22 percent. In Europe, consumption tumbled 27 percent year over year by April. In North America, it’s down 21 percent, and in Asia, footwear consumption had fallen 20 percent.

The same survey also found 42 percent of footwear manufacturers ramping up supply-chain diversification efforts while 39 percent are trying to shorten their supply chains. Footwear production and consumption is picking up in China, where recovery started sooner than it did in the West. Total footwear production in the country has returned to about 70 percent of the normal level now, said Li Yuzhong, President, China Leather Industry Association (CLIA).

Though in India exporters are optimistic about recovery in demand, they are aware there’s still a long way to go. The Indian Council for Leather Exports saw 60 per cent production in May and July and expects this to improve to 85 per cent in August and September.

Brazil manufacturers are similarly optimistic as production is starting to pick up after a painful March that saw production plunge around 30 percent, according to Letícia Sperb Masselli, Manager, Abicalçados-a Brazilian footwear program.

Manufacturers in Brazil are banding together to capitalize on their opportunity. The supply chain there has started to work more as a union to collectively appeal to buyers keen on minimizing their risk and reliance on Asia for sourcing.

With shoppers at home instead of in stores during prime buying time for spring and summer shoes, many companies are in the same over-inventoried boat. Valleverde, an Italian shoe brand managed to deliver more than 80 percent of its shoes to the clients and has only 20 percent of the Spring/Summer 2020 shoes in its warehouse.