During Kingpins24, representatives from the denim supply chain said the sector can shift to a more circular model through collaborations, investment in new technologies and refining its priorities. To achieve this, Malin Ekengren, Denim Designer and Consultant, advised denim companies to reduce their emphasis on revenue. She also urged the industry to seek more consumer and government support to achieve this.

Other representatives at the exhibition added, using recycled fibers to make new fabrics could be a starting point for mills that want to introduce circularity into their product design. Denim manufacturer Kaitex has been using recycled fibers in its production for the past 15 years. The company’s Vice President, advises manufacturers to find a way to manage the stewardship of the input variables to the point that we can return a large percentage of them in a circular fashion.

Sebla Onder, Sustainability Head,Orta Anadolu, views circularity as a group effort and referenced several of Orta’s latest collaborations, including the Alliance for Responsible Denim and Turkey Materials Marketplace, a cloud-based platform designed to facilitate cross-industry materials reuse among Turkish companies. According to her it is crucial to choose partners wisely. This year, the denim mill plans to shift its focus to its handprint.

The #PayUp Campaign, launched on March 30 by Remake, aims to force fashion brands to pay their dues, for the products that are either manufactured completely or in the process of manufacturing. According to Remake, this will impact almost 50 million garment workers. These factories are their sole source of living and in these challenging times, it is inhumane to not pay for their services.

Already, they are heavily underpaid, leaving no room for savings. The government has provided aid, but it isn’t sufficient for all the garment workers. Moreover, the current circumstances aren’t safe to work. Since launching the petition, 13 brands have agreed to pay for backorders, totaling upward of $600 million in Bangladesh. The campaign has helped unlock $7 billion in unpaid orders globally.

A new study by Coresight Research indicates, with the negative sentiment prevailing amongst American consumers against Chinese products it could accelerate the end of ‘Made in China’ label. The survey conducted in early June indicated around 47.8 per cent of Americans are urging retailers to source fewer products from China. Around 39.7 per cent also expressed less willingness to buy Made in China products.

Negative sentiments, government initiatives to hasten China exodus

There is a growing mistrust among US consumers about China-made products. In May this year President Trump allowed United States International Development Finance Corporation to finance companies producing emergency goods and services in the country. Legal experts are also incentivizing US companies with tax breaks and subsidies to uproot their China-based supply chains.

Along with growing negative sentiments amongst consumers, these initiatives could hasten the exit of many brands and retailers from China. Kearney’s most recent US Reshoring Index notes a sharp decline in US manufacturing imports from China. The index states, between 2018 and 2019, US imports from China dropped 17 per cent, and the shift has only accelerated as the trade war rages on. Latest data from the Office of Textiles and Apparel (OTEXA) also reveals a 41 per cent decline in US imports of textiles and apparel from China upto April this year, leaving China with only 30.53 per cent share of the global market. Of the $31 billion US imports that shifted from China to other Asian low-cost countries in the 2018-2019 period, around 46 per cent of went to Vietnam.

Global restructuring remaps supply chains

A new Asian trade balance is taking hold with companies restructuring their global supply chains with an eye toward increased resilience, as well as lower risks and costs. This restructuring is also prompting companies to ramp up their supply chain remapping efforts.

The most recent example of this is German footwear brand Von Wellx which plans to move all of its production from China to India. Apple is also planning to move 20 percent of its production from China to India while. Japanese consumer goods company Iris Ohyama has received a government subsidy to move its manufacturing from China and to Japan.

In future, more companies could move their production out of China, says Coresight Research. Hence, instead of paying attention to political issues, retailers and brands should focus on consumer demands and the importance they give to the sourcing of products.

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.