German sportswear makers Adidas and Puma warned of a major decline in sales in China due to the corona-virus and said while there were early signs of improvement there the impact had spread to other markets.

Global luxury brands including Gucci and Louis Vuitton are scaling back orders with Italian suppliers, as the spread of the epidemic from key market China to major manufacturing hub Italy hit business across the sector. Italy, home to scores of specialist manufacturers of high-end goods from shoes and leather goods to menswear, has seen the biggest epidemic of the virus outside China, prompting Rome to impose a virtual lockdown over much of its wealthy north.

The €280 billion per year global luxury goods sector, already reeling from months of protests in the shopping hub of Hong Kong, was dealt a hammer blow earlier this year by the coronavirus outbreak in mainland China. As authorities battled to contain the emergency in a country that is home to more than a third of global luxury shoppers, brands were forced to shut shops, shelve new openings and post- pone advertising spending there.

The spread of the virus across the world, and to Italy in particular, has compounded the pain, with countries including Britain and the United States warning against non-essential travel to Italy, slowing tourism to a trickle. That is set to translate into a major sales hit for the country’s 90 billion euros fashion and textile industry. “Prolonged disruption of economic activity may well result in supply chain issues for most brands.

Global economic pause due to Coronavirus has given other smaller economies a chance to step up. For example, Pakistan with complete textile and apparel supply chain existing in the country can profit from the slowdown in trade flow between China and the US and the EU in textile products as it can capture some of the fashion market shares.

From 2013 and 2018, around $1.1 billion was added to the exports of articles of apparel and clothing to the EU. Furthermore, exports of made-up textile articles improved to $650 million between 2013 and 2018 due to the GSP Plus preferences.

Pakistan Bureau of Statistics data shows, exports boomed 13.82 per cent year-on-year in February 2020. Amidst a global slowdown in trade, exports from Pakistan have gained by 3.65 per cen in the current FY. And the country’s exports to the EU increased from $6.3 billion in 2013 to $8 billion in 2018. This shows that the unilateral trade incentives provided by the European Union to Pakistan in the form of GSP Plus status did help boost export sales to the region and limit what otherwise could have been a complete decay of the export sector between 2013 and 2018.

The trade linkages established between Pakistani exporters and their clients can help increase exports and tap newer markets as supply chains are threatened due to the spread of the pandemic. Pakistan should continue with its policies to boost total exports. Although the growth in global trade is likely to slow down this year, Pakistan must contemplate in developing its export sector to take advantage of opportunities as a result of challenges reported by the large manufacturing powerhouses.

Gap Inc has withdrew its full-year forecast issued just two weeks ago, suspended its dividend and said it will draw down on its entire $500 million credit facility as the apparel retailer looks to weather the COVID-19 crisis. Disruptions caused by the health crisis mark the latest headache for newly named Chief Executive Officer Sonia Syngal as she tries to revive demand for apparels in a competitive market plagued by slowing footfall in malls.

Several retailers have warned of a sales hit due to store closures and restrictions imposed to slow the spread of the virus in China and now in the United States and other parts of the world. The company previously expected 2020 adjusted earnings in the range of $1.80 to $1.92 per share after accounting for a $100 million sales hit in Asia and Europe.

The company was taking the steps to further strengthen its financial liquidity and flexibility “in this time of unprecedented disruption to the retail sector.”

The company will also reduce capital expenditure by nearly $300 million during the year, as well as review all operating expenses to curb spending.

Primark withheld its quarterly rent in a bid to force landlords to consider revising terms urgently as the COVID-19 pandemic decimates the fashion retailer’s trading. The move pertains to 110 of the value retailer’s leasehold properties in the UK, and the quarterly rent was due yesterday.

Primark has written to landlords asking them for their support on lease agreements to mitigate the unprecedented financial impact of the pandemic on the business. Primark wants to sit down with landlords and address both scheduling and quantum of payments.

Primark, which doesn’t trade online like many of its high street fashion rivals, temporarily shut all 189 of its UK stores over the weekend ahead of Prime Minister Boris Johnson’s wider retail lockdown announcement on Monday night.

As a result, it now faced a £650 million loss of sales per month now that its stores in the UK and abroad are temporarily shut due to the pandemic.

Primark revealed over the weekend that it had cancelled all new clothing orders from suppliers, such as factories in India and Bangladesh, but said it would continue to honour orders already shipped or delivered to Primark warehouses or stores.

BGMEA has decided that its members can consider shutting factories to avoid the spread of the COVID-19. However, if a factory management decides to run the factory it will have to follow the highest hygiene and safety measures such that the workers are safe, Garment shipments account for more than 80 per cent of the national exports of Bangladesh and the sector employs more than 40 lakh workers.

The prime minister has given specific directives and called for taking some measures to ensure protection and good health.

Over the last 30 years, Bangladesh has grown into a sweater hub as many entrepreneurs invested heavily Bangladesh is a major supplier of sweater products to the world and exports approximately $3.5 billion worth of items annually.

The Union cabinet has approved the continuation of Rebate of State and Central Taxes and Levies (RoSCTL) for export of garments and made-ups from April 1, 2020, till the scheme is merged with Remission of Duties and Taxes on Exported Products (RoDTEP). According to AEPC, this will help exporters in promoting shipments.

AEPC chairman A Sakthivel says, given the acute shortage of working capital, this reimbursement should be given as Direct Cash Transfer, as in the case of erstwhile ROSL and drawback. This will reduce the time and transaction cost of availing the scheme.

Apparel exporters, who were anyway facing trouble with the reversal of policy benefits like MEIS and delays in refunds, are now facing uncertainties related to both export orders and import of raw materials. Hence, the continuation of this benefit will strengthen the entire cotton textiles value chain.

Chinese officials are weighing potential responses to a series of mixed signals emerging from the US, where officials have been touting progress in the phase one trade agreement, while at the same time reinstating tariffs on Chinese products. China remains committed to implementing the phase one deal, despite the Coronavirus epidemic that has seriously affected economic activities both in China and abroad, but the US should also focus on easing tensions with China and not raising them.

Even as China's trade dropped significantly in the first two months of the year, its soybean imports from the US jumped six fold year-on-year to 6.101 million tons, reports o Reuters. Also, Chinese companies have resumed importing US liquefied petroleum gas after Chinese officials exempted it from tariffs, The US will collect a 25 per cent tariff on certain Chinese products after a previous exemption expired and the US Trade Representative's (USTR) office did not extend the exemption on those goods, according to a recent notice from the USTR. The USTR would extend tariff exemptions for 11 categories of products - part of $34 billion worth of Chinese goods targeted by a 25 percent US tariff imposed in July 2018 - for another year, but left out 22 categories of products, including breast pumps and water filters. In addition, the US decided to slap anti-dumping and anti-subsidy duties on up to 262.2 percent and 293.5 percent, respectively, on Chinese wood cabinets and vanities imports.

The All Pakistan Textile Mills Association and the Pakistan Ready Made Garments Manufacture and Exporters Association has appealed to government to fix interest rate at 5 per cent for the industry, especially when it is facing problems due to deferment or cancellation of shipments to Europe and the USA on account of closure of international borders due to COVID-19.

Earlier, the State Bank of Pakistan cut its benchmark interest rate for the second time in a week, lowering it by 150 basis points to 11 percent. Similarly, chief coordinator PRGMEA Ijaz Khokhar too has said the government should lock down the interest rate at 5 per cent for industry, especially for the small and medium enterprises for at least one year. He also said that the SME is the sector which is mostly affected by the coronavirus. He said most export orders given to small and medium enterprises were either halted or cancelled so the government should announce relief package for this industry as thousands of people were directly or indirectly associated with this sector.

Khokar also appealed to government to grant permission for entry of export goods worth millions of dollars dispatched from Sialkot to Karachi. The cargo was stuck on the border of Sindh as the Sindh government was not allowing the cargo to enter its province. Similarly, shipments of worth millions of dollars were ready for dispatching and were laying in factories of Sialkot waiting for government's policy regarding movement of export goods.

CANCEL the shipments, is not the right word at the moment, perhaps to HOLD could be more reasonable.

Brands should stand by their commitments as their orders are already in process. This is the only way partnerships work

The least could be expected from brands and retailers is to come at discussion table , the moment world comes out of lock down. Brands should talk to their suppliers and workout a workable solution, to be executed over a period of time.

One of the worst international emergencies experienced by humanity in modern history, the Coronavirus pandemic is likely to have a catastrophic effect on the entire world “The economic impact will be too mind boggling” says Rajesh Bheda, Managing Director, Rajesh Bheda Consulting. “The garment industry is likely to be one of the worst sufferers as most global fashion giants have downed shutters in major consumption markets of the US and Europe. Many have suspended deliveries of the ready goods waiting at ports and in factories across the globe, majority of them situated in Asia,” he adds.

Millions of workers in supply countries to be affected

This will have a devastating effect on millions of garment workers and businesses that work on thin margins. As BGMEA estimates, till March 25, shipments worth 2.58 billion have already been cancelled or suspended, involving 936 factories and 1.92 million workers. In India, the factories in Tirupur have been shut from March 22 onwards. Across the country, factories have shut with the national lock down from March 25.

“This behaviour on part of brands is totally unconscionable,” opines Sarah Krasley CEO, Shimmy Technologies. “millions of factory workers are in serious jeopardy as brands have not paid their suppliers for work already done. It is deeply saddening how quickly they have turned their backs on the very partners who are critical to their success,” she adds.

Appeal to retain orders

Meanwhile, India’s textile minister Smriti Irani has appealed to factory owners not to cancel shipments. On behalf of the seven million craft persons spread across craft clusters in India and 20,000 exporters who are part of the Export Promotion Council for Handicrafts (EPCH) and Carpet Export Promotion Council (CEPC), Irani assured brands that both EPCH and CEPC will be working with them to ensure that possible measures are taken to stimulate growth in future.

BGMEA president Dr Rubana Huq has also appealed to buyers not to abandon. With the fate of our industry and workers being uncertain, it’s time to act in compassionate manner,” she said adding, “ However, with brands cancelling orders and deferring shipments, we have no idea what tomorrow holds.”

Brands should act like big brother

“In terms like these brands should act like a Big Brother,” feels Mayank Jain, Mayank, Founder, Moon Technovision. “They should stand by their commitments as their orders are already in process. This is the only way partnerships work,” he emphasises. It’s time for big brands/retailers of the world to protect the industry for a greater interest of the industry. Brands can hold their orders instead of cancelling them or accept procurement liability in case cancellation is unavoidable due to fashion/season change.

Amid the global gloom of COVID-19 pandemic, the Shanghai Fashion Week (SHFW) is engaging hundreds of thousands of viewers through live streaming. One of the world's top runways, SHFW opened on Tuesday as planned after its counterparts in Europe were hit by the COVID-19 outbreak. The organisers took the bold step of moving the fashion calendar online in cooperation with China's e-tailing juggernaut Alibaba Group's Taobao and Tmall – the biggest marketplace for live streaming business – making it world's first entirely live streamed digital fashion week.

Features autumn/winter collections

The mega show on from March 24 to 30, 2020 features over 100 fashion houses and designers, from home and abroad, displaying and selling their new autumn/winter collections on Tmall's various virtual shopping rooms. The event also features more than 150 brands, including Diane von Furstenberg and rising Chinese independent designers such as Shushu/Tong and Angel Chen. In the following week, a string of catwalk shows will be held through hundreds of live streams. These shows will employ cutting-edge technologies such as VR (virtual reality) and AR (augmented reality) to create professional and realistic catwalk atmosphere, ensuring that the viewers enjoy an intermediate experience.

Cloud to connect catwalks with e-commerce

Through its combination of avant-garde designs and advanced technologies, the cloud fashion week will brings together multiple facets of fashion business. It will be the world's first cloud fashion show to connect catwalks and e-commerce, offering unprecedented one-stop, all-around experience to designers and viewers, as well as buyers and sellers.

Initiatives to boost Chinese market

China e-commerce platform JD.com has announced a raft of initiatives and budgets to help boost marketing and promotion activities of brands in China. Similarly, JD.com announced ‘Spring Raindrop Plan’, which will allocate RMB 1.5 billion worth resources to brands that were heavily impacted by Covid-19. It would be offering flash sales, live streaming, coupons, PLUS membership and content marketing to support its merchants. Much like Alibaba, JD.com has also opened up an omnichannel service to help brick-and-mortar stores get online. Additionally, JD.com has collaborated with brands to release RMB1.5 billion worth of promotional coupons to consumers in China. This will help them increase demand and resume sales volumes at a quicker pace.