FW
For the third quarter Indo Rama Synthetics’ net revenue was Rs 623.92 crores compared to Rs 663.25 crores in the third quarter of the previous year. EBIDTA for the period decreased to Rs 16.22 crores versus Rs 22.04 crores for the same period in 2015. Net loss was Rs 37.95 crores compared to Rs 7.76 crores in the corresponding quarter last year.
For the nine month period, net revenue was Rs 2,099.80 crores compared to Rs 2,065.37 crores in the previous year. EBIDTA for the period was Rs 8.80 crores versus Rs 56.56 crores in the previous year. Net loss for the period was Rs 69.20 crores compared to a net loss of Rs 51.60 crores during the corresponding period of the previous year.
The company saw a sizable drop in volumes immediately after November 8, leading to a negative financial impact, which is now slowly getting back to normal. Indo Rama Synthetics is India’s largest dedicated polyester manufacturer with a production capacity of 6,10,050 tons per annum of polyester staple fiber, filament yarn, draw texturized yarn, fully drawn yarn and textile grade chips. The group has a strong presence in Indonesia, Thailand, US, Nepal and Sri Lanka besides India. It has focused business activities in the field of textiles, polyesters, and industrial chemicals.
India’s apparel exports to the US fell by 4.8 per cent y-o-y in December 2016.Despite a decline in export value, India’s market share expanded by 10 basis points to 4.2 per cent. The country maintained its position as the sixth largest apparel exporter to the US.
The decrease in India’s export value was solely attributed to a fall in export realisations. During the month, export realisation dropped by 7.4 per cent. However export quantity grew by 2.8 per cent. Among the top five apparel exporting countries to the US, only Vietnam and Mexico registered a growth in apparel exports. China saw its exports fall by 11.2 per cent. The country’s market share deteriorated by 150 basis points to 32.9 per cent. Exports from Indonesia and Bangladesh fell 10.8 per cent and 8.5 per cent respectively. Indonesia’s market share dipped by 30 basis points to 5.4 per cent and Bangladesh’s by 10 basis points to 6.4 per cent.
Vietnam’s apparel exports to the US rose 4.2 per cent. The country’s market share expanded by 150 basis points to 13.9 per cent. Mexico’s exports grew by 9.4 per cent while its market share expanded by 70 basis points to 4.7 per cent.
Invista’s brand Cordura which makes cutting edge fabrics across key textile categories has got more than 50 awards in its 50th anniversary year at ISPO Textrends, making it its first best in category product win with Cordura 4ever knit by Yoonia (Korea). In all 51 Cordura fabrics across six key textile categories emerged winners. These cutting-edge fabrics are on display at ISPO Textrends, as part of the ISPO Munich exhibition, taking place this week. Many of the winning fabrics selected were in the soft equipment category, a reflection of the Cordura brand's durable heritage, which has its roots in technical backpacks. The brand produces fabrics for tents, backpacks, sleeping bags, shoes and more. They are lightweight, durable, abrasion resistant, offer UV protection and are waterproof.
Fabrics in the street sports category range from denim with new performance levels to lighter functional fabrics and finishes with a fashionable edge. The base layer category features next-to-skin fabrics for technical underwear, with pre-shaping, support, thermal or moisture management performance. Softness, comfort, anti-bacterial or eco-friendly properties are added values.
In the second layer category are fleeces, lightweight protective fabrics and performance linings usable for maximum thermal characteristics. Technical membranes are featured in the membranes and coatings category often including two-to-three layer fabrics with stretch that are waterproof, windproof and UV-resistant for ultimate protection against the elements.
In addition Cordura has three outdoor product innovations for 2017 –Authentic Heritage, Simplicity in Style and Going the Distance. Authentic Heritage fabrics aim to help achieve real performance, real results, versatility and reliability. Simplicity in Style has bags, packs and apparel with clean simple minimalistic lines and all around durable style. Going the Distance trend is about multi-functional fabrics that bring a range of hidden benefits. These combine the best of both worlds – strong with soft, fashion and function, durability with definition.
Held February from 5 to 8, 2017, ISPO Munich the trade show for sports industry attracted more than 85,000 visitors and 2,732 exhibitors. Strategies were developed and partnerships formed in personal exchanges. This year's ISPO Munich was more international than ever with a large number of visitors from Italy, Russia, Great Britain, China and the US.
Women in sports, both as industry executives and as a target group, were an important central theme this year. The focus was not just on selecting the right colors but on breaking away from conventional ways of thinking and doing a better job of taking women’s needs into account than in the past.
For instance, the women’s lounge was a meeting place that allowed a large number of female industry representatives to make new contacts. Special tours to the stands of manufacturers and a lecture program geared toward women attracted female visitors in large numbers.
Electronics continues to make its way into the sporting goods sector more noticeably than ever. Products on display included ski poles equipped with sensor technology, virtual reality headsets for a more emotional shopping experience and a digital ski trainer in an inlay sole.
Primark’s Sustainable Cotton Program aims to help women smallholders in India embrace environmentally friendly production techniques that can help boost yields. The program was launched three years back. It has worked with 1,251 farmers, delivering a 247 per cent increase in average profits over the period. Promoting environmental best practices has led to a 40 per cent reduction in chemical fertiliser use, a 44 per cent cut in chemical pesticide use, and a 10 per cent reduction in water use.
These techniques have cut input costs for farmers by 19.2 per cent, contributing to a increase in profits that female farmers have been able to invest in home improvements, healthcare and education for their children. Primark is now seeking to expand the program to cover 10,000 farmers over a six year period as it looks to curb the environmental impact of its supply chain and support women in rural India who currently face average incomes that are just 78 per cent of those experienced by men.
The program provides training to farmers, demonstrating how organic pesticides, lower levels of fertilisers, soil testing and using targeted irrigation rather than flooding can reduce environmental impact, lower costs, and boost yields. Primark's long term ambition is to ensure all the cotton in its supply chain is sourced sustainably.
American retailer BCBG is closing 120 stores.
California-based BCBG sells women’s dresses, apparel and accessories. The group is reducing its physical retail footprint after being negatively impacted by growth in online sales at its rivals.
The stores to be closed either are unprofitable or have untenable lease agreements.
BCBG is repositioning its brands and operations for the future with a focus on digital, e-commerce, selected retail locations, in-store boutiques and wholesale and licensing arrangements.
Glitzy fashion house BCBG was founded in 1989. The first boutique opened in 1992. The fashion brand has operated more than 570 boutiques worldwide, including more than 175 in the US. It has long been a favorite of red-carpet celebrities. Kate Winslet, Victoria Beckham and Alicia Keys have worn its fashions, which include cocktail dresses, handbags and other accessories. The name BCBG is short for the French expression bon chic, bon genre.
BCBG is just the latest retailer to announce plans to pare store counts in the face of increased competition from online sites. Kenneth Cole Productions, a fashion house and shoe company, announced plans in November to close almost all its shops. Macy’s recently announced plans to close 68 stores. Sears and J.C. Penney are also planning store closures.
"With speculation about the US President Trump imposing 20 per cent or other duty on Mexican imports, Mexico could slap ‘mirror’ tariffs against US fabric and apparel imports. This move is slated to negatively impact cross-border manufacturers and retailers. Analysts say for the US to come out with any other compensation treaty to avoid any trade deal damages."
With speculation about the US President Trump imposing 20 per cent or other duty on Mexican imports, Mexico could slap ‘mirror’ tariffs against US fabric and apparel imports. This move is slated to negatively impact cross-border manufacturers and retailers. Analysts say for the US to come out with any other compensation treaty to avoid any trade deal damages.
This statement came at a time when Mexico is set to begin negotiating the North American Free Trade Agreement (NAFTA) by May to meet Trump’s calls for a rewrite. That said, Mexico’s economy minister Ildefonso Guajardo said in mid-January that if Trump imposes a tariff or a border adjustment tax, Mexico would pursue ‘mirror actions’. This indicates the growing tensions between the two neighboring countries, longtime allies, as Trump pursues his plan to build a wall along the border and claims Mexico will pay for it. The 20 per cent tariff or other duty proposal forms part of the plan to fund the wall. Owing to such brewing tension, a possible trade war has strained diplomatic relations and unleashed a nationalist uproar in Mexico with populist groups calling for consumers to boycott American companies including Wal-Mart, Starbucks and McDonalds.
Textile trade dynamics
The US ships roughly $6.5 billion worth of apparel and textiles to Mexico — $4 billion is fabric and $1.2 billion apparel parts. Conversely, Mexico sends back $4.5 billion worth of clothing and textiles — $3.5 billion of apparel and $1 billion of textiles.
In 2016, the textiles and apparel sector grew 5 per cent as strong local apparel sales offset a 4.3 per cent drop in US sales. Going by such a scenario, local sales could grow 7 per cent compared to 10 per cent in 2016. Amid strong anti-American sentiment, local-brand turnover could eclipse US brands for the first time in recent memory.
Many consumers could shun Walmart in lieu of Mexican archrival Coppel or choose to buy at department-store chain Liverpool’s lower-end unit Fabricas de Francia. Mexican fashion designers, long in the shadows, could win consumer hearts. This is bad news for the likes of the Axo or El Palacio de Hierro network, which have grown by bringing aspirational US brands such as Calvin Klein, Tommy Hilfiger and Abercrombie & Fitch south of the border.
Finding newer avenues
To meet the challenges, Mexican apparel producers are seeking new markets in Central America and Europe with which Mexico has a largely vague free-trade agreement. Costa Rica, Panama and Central America could be good markets to compete on price and quality but not Argentina and Brazil, because they have very strong industries and brands. In Europe, Mexican fashion jean labels Oggi and Siete Leguas could make successful forays because they have high-quality products using innovative fabrics and new washing technologies. These companies sell premium jeans to Levi’s, Wrangler and True Religion so they could also start selling in Europe. That will require even more innovation, training and other investment the industry has been slow to pursue.
Exporters in the Tirupur cluster are disappointed with the RBI’s decision to keep the repo rate unchanged at 6.25 per cent. They were expecting a reduction in interest rate, post demonetisation. A reduction is as important at this juncture to increase competitiveness at a time when export growth rate was a meager 3.54 per cent for the nine month period of this fiscal year 2016 -17.
Exporters also feel this is the right time for knitwear sector to capture the market that’s leaving China, due to an increase in cost of manufacturing. If the opportunity is missed, the market would be captured by competing countries like Bangladesh, Vietnam, Indonesia and Cambodia.
They add that growth of the apparel, leather and footwear sectors, which are labor intensive, is possible only when they get borrowings at a lower rate. Similarly, they are concerned over the lack of thrust given to adequately fund the Pradhan Mantri Rojgar Protsahan Yojana, a scheme that was envisaged during 2016-17 financial year to incentivise employers for generating employment. The sixth bi-monthly monetary policy statement for 2016-17 has maintained the repo rate at 6.25 per cent.
The recent Milano Unica held from February 1 to 3, 2017 had 427 textile companies showcasing their products, of which 300 were from Italy, 65 from elsewhere in Europe, 40 from Japan and 22 from Korea. The benchmark trade show for Italian textiles and accessories showcased collections for Spring/Summer 2018. The event marked a major comeback of companies from the Russian Federation, whose numbers went up by 34 per cent. Equally remarkable were the increase in number of buyers from Canada and a rise in companies from China as and the UK and US.
But there was a decrease in visitors from France, Japan and Turkey besides a diminished German presence. Milano Unica has been created through the tradition of five Italian exhibitions, Ideabiella, Ideacomo, Moda In, Prato Expo, Shirt Avenue. The project is held twice a year and presents the finest quality products from both Italian and European textile manufacturers. The name Milano Unica represents the three essential characteristics of the textile fair, singular, exclusive, united.
Milano Unica has changed the date of the winter show. It will be held in July instead of September. One reason for the change is the show had lost some ground in the last few years. So this decision means it will be held earlier than other textile events.
Vietnam’s exports in 2016 rose 8.6 per cent over the year before. However, 70 per cent of the export turnover belonged to foreign owned enterprises. Which meant Vietnamese enterprises contribution was modest to the export turnover. The biggest problem for Vietnam’s garment producers is that they have to import input materials. Since Vietnam’s fashion design industry is still weak, Vietnam’s products cannot attract customers. And since Vietnamese companies are involved only in outsourced work, they cannot earn big money.
The country’s enterprises face the danger of falling into the outsourcing trap of low added value if the situation does not improve. As Vietnam tries to integrate more deeply into global economy, avoiding the outsourcing trap when joining value chains will be a great challenge. The country is the world’s fifth largest garment exporter. It has maintained double-digit growth, ranging on average from 10 per cent to 36 per cent, since 2001.
However, a strong Vietnamese dong and sluggish demand from key markets damped textile exports in 2016. Garment exporters are also faced with increasingly intense competition from outsourcing hubs Cambodia and Bangladesh, which get tariff preferences in the US market. Market access for Vietnam’s clothing in the US is limited by an average tariff of about 11.1 per cent, with tariffs on some textile and apparel products nearing 30 per cent.
