British fashion retailer Superdry has agreed to sell its intellectual property assets in the Asia Pacific (APAC) region to South Korean firm Cowell Fashion Company for $50m as part of its ongoing turnaround strategy.

Cowell will own and use the Superdry brand in key APAC markets, starting with South Korea and expanding to others including China.

Superdry said Cowell, which focuses on licensing and manufacturing apparel products for global brands, is “ideally positioned to appreciate and maximise Superdry’s potential across the region”.

The retailer will provide “certain support and know-how relating to the Superdry brand” to Cowell for two years following completion of the sale and receive a $1m management fee.

PVH Corporation, the owner of popular fashion brands like Calvin Klein and Tommy Hilfiger, has released its factory lists and detailed sourcing strategies for 2022.

The move has enabled analysts to study the company’s sourcing trends and changes over the past year. According to the analysis done by Sheng Lu and Ally Botwinick , PVH continues to work with an increasingly diverse apparel sourcing base, sourcing from 37 countries across the world in 2022, the same number as in 2021. However, the company increased its total number of vendors from 503 to 553, demonstrating its commitment to diversifying its sourcing base.

The analysis also found that PVH’s dominant sourcing base for finished garments and textile raw materials remains Asia. In 2022, around 56.2% of PVH’s apparel suppliers were Asia-based, followed by the EU at 20.3%. PVH added twenty new Asia-based factories to its supplier list in 2022, increasing its total number of vendors in the region. Moreover, as many as 83% of PVH’s raw material suppliers were Asia-based in 2022, far exceeding any other regions.

The study also revealed that PVH’s sourcing strategies in China are evolving and more complex than just “reducing China exposure.” PVH continued to work with more Chinese factories, adding 17 new ones between 2021 and 2022, potentially due to the company's growing sales in China. PVH’s garment factories in China are smaller than those in other Asian countries, which may be because PVH treats China as a sourcing base for flexibility and agility, particularly for orders that may include a greater variety of products in smaller quantities. Interestingly, PVH priced apparel made in China higher than those sourced from other Asian countries.

Finally, PVH is actively sourcing from “emerging” destinations outside Asia. The company sources from several countries in America, the EU, and Africa, including Portugal, Brazil, Tunisia, and Turkey, for various reasons like serving local consumers, sourcing flexibility, accessing raw materials, and lowering costs.

Sheng Lu is an Associate Professor in the Department of Fashion and Apparel Studies at the University of Delaware. Ally Botwinick is a Research Assistant at the University of Delaware, where she works with Professor Sheng Lu on projects related to international trade and global supply chains in the textile and apparel industry.

The India Fashion Tex 2023-Reverse Buyer Seller Meet (RBSM), jointly organized by the Wool & Woolens Export Promotion Council (WWEPC) and Powerloom Development & Export Promotion Council (PDEXCIL), concluded successfully at Hotel Ashok in New Delhi.

The three-day fashion exhibition was attended by over 1000 buyers from 30 countries, including the US, UK, EU, Japan, Vietnam, Middle East, and Sri Lanka. The event saw more than 100 exhibitors and buying houses from India, such as Lux Industries Ltd, Juba Sons, and Neeraj Arts & Crafts, alongside international brands like Puma, Ikea, and Adidas.

Compared to the previous two editions, this year's event saw an increase in footfall, with over 3500 visitors attending the exhibition over three days. Special attention was given to exhibitors from Jammu and Kashmir promoting Pashmina shawls and scarves. The highlight of the event was the fashion show, which featured various woolen Indian and Western apparel, including Pashmina shawls, stoles, scarves, mufflers, kurtis, blazers, and caps crafted by Indian weavers and artisans.

Established by the Central Government in 1964, the Wool & Woollens Export Promotion Council (WWEPC) supports, protects, maintains, increases, and promotes the export of Wool & Woollen Products and Acrylic Knitwear.

The Powerloom Development & Export Promotion Council (PDEXCIL) was set up by the Ministry of Textiles, Government of India in 1995. The Council promotes, supports, develops, advances, and increases power looms and the export of powerloom fabrics and made-ups thereof.

Nike reported a 14 percent increase in revenues to $12.4 billion in the third quarter, compared to the previous year, with a 19 percent increase on a currency-neutral basis.

The Nike brand's revenues reached $11.8 billion, up 14 percent on a reported basis and up 19 percent on a currency-neutral basis, driven by double-digit growth in North America, EMEA, and APLA. Despite a challenging December following the shift in Covid-19 policies in China, revenue for the Nike brand in Greater China grew 1 percent on a currency-neutral basis. However, revenues for Greater China declined 8 percent on a reported basis.

Gross margin decreased 330 basis points to 43.3 percent, while net income was $1.2 billion, down 11 percent compared to the previous year, and diluted earnings per share were 79 cents, decreasing 9 percent.

Converse's revenues reached $612 million, up 8 percent on a reported basis and up 12 percent on a currency-neutral basis, led by double-digit growth across all channels in North America, partially offset by declines in Asia. Meanwhile, net profit for the quarter fell to $1.24 billion from $1.4 billion a year earlier.

Japan's imports of clothing and accessories increased by 4.2% in February 2023, reaching 221,056 million yen, accounting for 2.6% of the country's total imports. On the other hand, the imports of textile yarn and fabric decreased by 2.5% compared to the same period in 2022, reaching a value of 74,645 million yen, representing 0.9% of the total imports.

The imports of textile yarn and fabric from China also experienced a decline in February 2023, reaching 37,664 million yen, which was 9.1% lower than the same period in 2022, representing 2.5% of Japan's total imports from China.

Regarding exports, Japan's textile yarn and fabric exports in February 2023 increased by 3% compared to the previous year, reaching a value of 59,730 million yen. Additionally, the country's textile machinery exports in February 2023 were valued at 27,151 million yen, representing a 9.7% increase from the previous year's exports and contributing 0.4% to the total exports.

In 2022, Japan's clothing imports experienced a 23.2% increase from the previous year, reaching 3,494,110 million yen. Meanwhile, textile yarn and fabric imports increased by 25.7%, reaching a value of 1,261,222 million yen. Japan's textile yarn and fabric exports in 2022 also increased by 15.2%, reaching 772,688 million yen, while textile machinery exports increased by 26%, reaching 301,414 million yen.

Turkey and Europe have been importing Indian cotton yarn at an unexpected rate since February, causing an increase in demand for cotton exports from India.

Experts attribute this rise to the textile spinning sector's devastation after the recent earthquake in Turkey, which resulted in Turkey importing cotton from India. Additionally, Europe has also been unable to import cotton from Turkey, which has led to a spike in demand for Indian cotton.

India's total cotton exports to Turkey and Europe had been 15%, but this figure has increased to 30% in the last two months.

India's cotton prices had been higher than international prices for the past year, but now prices have aligned. Good crop and significant demand from China, Turkey, and Europe have contributed to the recent boost in exports.

Industry experts have noted that India's cotton yarn exports fell by 59% from April 2022 to January 2023. However, exports have picked up in recent months, with January's figures being the highest since April 2022. The steady price of cotton will result in better demand for exports.

More than half of the green claims made by clothing and textile web pages are unsubstantiated or simply untrue, according to a recent sweep by the European Commission.

The findings highlight the prevalence of greenwashing in the fashion industry, which is facilitated by self-governed definitions of sustainability. Consumers are eager to make a difference, but without regulation and harmonized sustainability language, their green purchasing decisions may not be effective.

A recent Forbes study shows that Generation X and Z consumers are willing to pay 10% more for green products. However, the industry must ensure that these claims are based on robust scientific data and represent the best industry standards.

The European Commission is due to publish its proposal on substantiating environmental claims soon. This proposal is crucial in turning the tide of textile pollution and saving valuable resources, but the methodology used to underpin the policy is essential.

The Product Environmental Footprint (PEF) is currently the most substantial method, but it is incomplete and does not account for the positive impacts of natural fibers. The PEF methodology must be updated to include indicators on microplastic release, plastic waste, and circularity.

Clothing is one of the biggest contributors to microplastic pollution, with synthetic fabrics accounting for 35% of the total primary floating microplastics in the world's oceans. A clearly defined plastic waste indicator should also be introduced to the PEF, given the significant contribution of synthetic clothing to fast fashion and plastic waste.

The inclusion of a circularity indicator is also essential to delivering the EU's circular economy goals. It is critical that the PEF is brought in line with the latest science and made fit for purpose to ensure it helps deliver the EU's sustainability and circularity ambitions.

The omission of indicators linked to synthetic clothing will result in misguiding well-meaning consumers and could lead to the duplication of the mess currently dealt with in the industry.

Finally India’s fashion retail can look ahead with more optimism as the sector is expected to see good double digit sales growth in FY23. As per a report by credit rating agency ICRA, rising discretionary spending and normalisation of store operations post pandemic, India’s fashion retail sector is expected to see a 45 per cent year-on-year (YoY) sales growth.

Operating profit margins to grow

With significant rise in advertisement and promotion spends so far this year, fashion retailers operating profit margins (OPMs) are expected to be around 7-7.3 per cent, the report predicts. In fact, India’s retail sector saw significant 55 per cent YoY revenue growth in first nine months of FY2023 led by improved economic activity and an uptick in discretionary spends. As Sakshi Suneja, VP and sector head of corporate ratings at ICRA, says, “While this was admittedly partly led by a low base, it also reflects a sharp 35 per cent growth over the pre-pandemic period of first nine months of FY2020.”

A similar stud more recently by Unicommerce too had said, the growing adoption of e-commerce in India has helped the accessories and footwear segments which reported a phenomenal 41.2 per cent and 41.7 per cent YoY growth this winter over last year. The growth was led by rising consumer interest in products such as perfumes, watches, belts, hats, jewellery, and hair accessories among others.

The Unicommerce analysis had also stated, boots and sneakers were shoppers’ most popular choices in footwear. Innerwear was the other emerging segment with both men and women shopping online as numbers report a 29.3 per cent YoY growth in winter 2022. Bags and wallets, although a small segment of fashion, also reported a strong 24.3 per cent YoY growth during the same period. The report goes on to state, apparel segment accounts for the majority of e-commerce orders and has seen strong growth of 11.5 per cent YoY in this winter.

As per the latest ICRA report, retail sector’s good show was also aided by nearly 5 million sq. ft. of additional store space in FY20-FY22. Segment-wise, revenue growth is led by premium brands in the metros or Tier-I cities. After a lull in FY21 retail expansion plans were taken up with new vigour in FY22, and continues in FY23. This was enabled by the large equity raisings in FY2021, coupled with improved cash flows during FY22 and YTD FY23. As Suneja points out, “Entities in our sample set increased their capital spending to Rs 14 billion in FY2023, implying a YoY expansion of 55 per cent.”

The ICRA report says, retailer’s gross margins in 9M of FY2023 remained largely in line with the FY2022 levels, as they passed on the increase in raw material costs (led by the increase in cotton prices) to consumers. The other major cost heads for a retailer are: rental, employee costs, and selling/promotional expenses, which together account for about 30 per cent of the total cost.

Value segment still to recover

The ICRA report however states, the value-fashion segment, has been facing inflationary headwinds and reported a negative same-store-sales growth compared to pre-covid days of the first nine months (9M) of FY2020.

While value-fashion segment players continue with their capex plans in FY2023, ICRA expects some curtailment/re-calibration in capex spending by them in FY2024, till inflationary pressures ease.

Meanwhile, online retail continues to grow. The ICRA report suggests, online sales will continue to grow, albeit at a slower pace, as the pandemic slows down. The share of online sales is expected to grow to 12-14 per cent of revenues by FY25 as against 8 per cent in FY22. This is, however, unlikely to replace the brick-and-mortar sales model any time soon.

Online retail continues to remain popular

On similar lines as per a Technavio study, online fashion retail market In India is predicted to grow by $22.97 billion from 2021 to 2026. The report says, the market is estimated to grow at a CAGR of 18.83 per cent during the forecast period. One of the key trends influencing the growth in India’s online fashion retail market is the rise of social commerce. With major players like Facebook, Instagram, YouTube, Pinterest, and Snapchat, the social commerce platforms facilitate transaction-based social interaction and user experiences through their platforms.

Wellness is expected to be one of the megatrends shaping consumer behaviour until 2030.And sportswear brands have a significant opportunity to tap into this trend, understanding how wellness impacts consumers' lifestyles and health will be key to recognising opportunities and innovating for the long term.

A significant percentage of consumers who embrace wellness from a holistic point of view engage in physical activity as one component of their lifestyles. Sportswear brands must recognise that wellness is how consumers engage with the world around them, guided by a sense of community and a desire to care for the planet. To tap into the growing trend, sportswear brands must consider adopting proactive strategies, embracing digital tools to help consumers achieve their wellness goals and building an omnichannel presence.

Although physical activity is closely linked to wellness, a significant percentage of consumers do not exercise regularly. Sportswear brands have a crucial role to play in promoting exercise and creating a real impact in the communities they serve. Brands should adapt their messages to appeal to consumers interested in overall wellness beyond performance and competition.

Sri Lanka's garment industry, responsible for over 50% of the country's export earnings, is in crisis as about 50,000 workers have lost their jobs due to the economic downturn.

Sri Lanka has 300 manufacturing companies that employ 350,000 workers, producing garments for international brands such as Victoria's Secret, Marks & Spencer, GAP, Tommy Hilfiger, and Van Heusen.

Trade unions report that several garment factory owners in Sri Lanka have cut jobs and wages and closed entire facilities without paying the government-recommended compensation. Unions are concerned about expected labor reforms, including increasing the number of overtime hours and night shifts for women, which could exploit the existing workforce.

Most of the workers in the garment industry are women who migrated to support their families and have suffered from crises, including the COVID-19 pandemic. During the pandemic, the government deemed the industry too important to shut down, causing mass outbreaks in factories and workers' homes.

The government is not interested in dialogue between social partners, according to a factory operations manager.