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The slowdown in 2017 has sunk capital and shovelled weavers in Bhiwandi into a cycle of debt and created a shortage of labour. And if there are no clear policies to promote export of textiles, the future of the industry appears bleak for business. Bhiwandi’s textile industry has become a casualty of volatile government policies, say owners of units that have not been operational for around a year. Media reports suggest around 20 power looms sit silently, covered in dust and cobwebs. The family-owned textile manufacturing facility, in Bhiwandi, has not been operational for almost a year.
A kilometre away, a handful of power looms weave ‘fancy’ fabric; white fabric with intricate borders of red and blue; at Iqbal Burhanpuri’s textile unit in Khadipar. A large part of the unit is not operational.
Bangladesh's trade privilege in US markets has again been suspended as President Donald Trump's administration goes on to enforce the trade preference programme's eligibility. The Generalised System of Preferences (GSP) facility for Bangladesh was suspended in June 2013 post the Rana Plaza building collapse in April, the reasons cited being poor labour rights and unsafe working conditions in factories. The Obama administration had asked for 16 conditions to be fulfilled in order to regain the trade privilege. Bangladesh fulfilled the conditions and twice submitted reports to United States Trade Representative (USTR).
But the US has not been reinstating the trade privilege, now citing poor labour rights. In this year's review, Bangladesh could not come out from the list of countries suspended from GSP benefits. Argentina, for one, was being reinstated to the GSP programme, from January 1, 2018, following resolution of certain arbitral disputes with US companies. The US also restored trade benefits to The Gambia and Swaziland under the African Growth and Opportunity Act.
Ambassador Robert E Lighthizer, the USTR and chief trade negotiator for the Trump administration, in a statement stated, “President Trump has sent a clear message that the United States will vigorously enforce eligibility criteria for preferential access to the US market. Beneficiary countries choose to either work with USTR to meet trade preference eligibility criteria or face enforcement actions. The administration is committed to ensuring that other countries keep their end of the bargain in our trade relationships,” it added.
A senior official from the Commerce Ministry was reported to have said. “We do not expect reinstatement of GSP to the US market anymore as the American government has been giving newer conditions to be fulfilled by Bangladesh.”
The US is the single largest export destination for Bangladesh. As a least developed country, 97 per cent of goods originating from Bangladesh are eligible for duty-free benefits on export to US markets as per the decision of the Hong Kong Ministerial Meeting of World Trade Organization in 2005. However, the country's main export item, garments, has not been included in this “97 per cent package” although garment items comprise 95 per cent of Bangladeshi exports to the US in a year.
American Apparel Footwear Association (AAFA) noted that the GSP programme saved American companies nearly $730 million in import duties in 2016 and is on track to save even more in 2017.
American Apparel’s new ‘Back to Basics’ ads, which began appearing at the end of last year, were produced by a small in-house team of male and female photographers.
The photos feature minimal retouching and the ads feature ordinary people, in line with an inclusive marketing strategy which seeks to showcase diverse body types and ethnicities.
The brand attempts to distance itself from its past controversial campaigns by eliminating underage-looking models and stop further criticism concerning the age of models featured in the brand’s ads. A recent casting call issued by the brand asked that applicants must be ’25 years or older’. The change did not go unnoticed on social media.
American Apparel’s has not completely cut its ties with the seductive and flirtatious image for which it has become famous, as seen in head of brand marketing strategy Sabina Weber who described the new campaign as “honest, direct, playful, inclusive, sexy and occasionally slightly provocative.”
“Women feel so conflicted about being sexual right now, but we’re taking a position to still be sexy, unapologetically so, but from an empowered female perspective,” she added, while stressing the change of perspective that underlies the company’s rebranding exercise.
In line with the company’s rebranding strategy, efforts have also been made to ensure that male models are also photographed in similar poses and wearing the same amount of clothing as their female counterparts.
Another feature retained from previous American Apparel campaigns is the presence of armpit hair on female models, the inflammatory nature of which, Weber notes, leaves her perplexed. "Even as we feel we are evolving and making strides, women are still so angry and judgmental when another woman dares to show her body," she decries.
Due to the ease with which information can now be shared via social media, brands have to be more open about the steps they are taking to actively combat sexual harassment in their companies. It is a drive for greater transparency that feeds into the current trend for brands to be more authentic and to reflect the values of their consumers.
Campaigns for change in the fashion industry have also been launched by other organisations worldwide. The British Fashion Council, for example, recently joined the British Fashion Model Agency Association as part of the Models First initiative, which aims to develop a charter of best practice that will protect and give a voice to models working in the UK, while in France, companies are now legally obliged to disclose retouching (photographs) in their marketing campaigns.
The Apparel Export Promotion Council (AEPC) in collaboration with 3M, Association of National Institute of Fashion Technology (NIFT) Alumni has set up a new incubation facility. This facility will be a stage for start-ups to connect with investors and mentors and help them achieve production efficiencies.
A release from the council noted that the centre would serve as a launch pad for start ups such as Micro, Small and Medium Enterprises (MSMEs). The facility besides training and mentoring, it will also provide information to the industry with regard to creation of new knowledge, fashion trends, marketing techniques and management.
Ashok Rajani, Chairman of AEPC disclosed that textile and clothing sector contributes over 5 per cent to country’s GDP. It is important to handhold the units to stand and face international market and competition, with the facility in place, AEPC is expected to achieve the same.
Pinakin Chaubal holds Master’s degrees in Management and Textile Engineering. He has been a long time assessor for NATA ISO 17025 laboratory accreditation and has contributed to the review and drafting of several Australian, Joint Australian / New Zealand and International Standards on textiles, clothing and footwear.
Global brands like H&M, Zara and most others are getting settled in India at an unprecedented rate. In fact, it’s more a case of who hasn’t entered the zoo, rather than who has. Global selling platforms like amazon.com have been successfully wooing Indian suppliers. Historically price sensitive apparel products like inner ware are moving to brand sensitive categories in the minds of local consumers. Now where does all this leave your product? At the centre stage!
In this competitive market, if your product does not take the centre-stage, it will lag, struggle for a while and may eventually suffer from severe competitive arrest. Brand managers demand products that are consistent with the image of their brand in the marketplace. So, it is in the interest of every player in the market to ensure that their product strategy is foolproof.
Product Excellence is the name of the game. Creating great products consistent with consumer demand is a well-orchestrated act between your product development, sales and marketing functions.
Take the humble men’s undershirt as an example. In the past, it provided protection from sweat and body odours through its mere presence and fibre content. Now depending on the activity the target user is likely to use it for such as sports, extended uniform-like use and so on, technologies are available to incorporate antimicrobial and sweat wicking properties in the fabric. The garment could be constructed such that it offers ease of movement. And depending on the target consumer market aimed at, the product could be turned from an inexpensive undershirt into an aspirational branded T shirt. Of course, the sales channels and marketing demands would be vastly different.
In case I have scared you into thinking that this is a big ticket item, let me show you over the coming weeks and months that you can play the game successfully.
Put simply, make it your business to offer great products. If you do not excite your customers, employees and investors with your products, financial success is not ensured.
Through this platform, We plan to provide thought leadership that should propel you into truly generating your own product excellence strategy and back it up with actions.
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Feel free to post your comments and what you may like to see here. It would be great to get your feedback!
Walmart will raise orders of Cambodian garments and footwear products this year and will also start buying travel goods manufactured in the Southeast Asian nation. The announcement follows an escalating diplomatic row between Cambodia and Western nations who have criticised its government’s crackdown on opposition and civil society.
In a letter addressed to Cambodia’s minister of labour Ith Samheng in December, Walmart Cambodia is a key element in the corporation’s international supply chain and it will help Cambodian manufacturers increase competitiveness, productivity and efficiency, according to a report in a Cambodian newspaper.
Walmart officials visited the country in early November to meet top government officials and visit local factories and expressed satisfaction over the quality of garments, footwear and luggage products bearing the ‘Made in Cambodia’ label.
The Garment Manufacturers Association in Cambodia (GMAC) has also expressed its satisfaction with the American company’s commitments and policy. Cambodian commerce minister Pan Sorasak recently stated that European and US buyers have already placed a high number of orders for 2018.
Textile industry watchers expect significant growth in FY19. The country’s textile exporters had struggled through 2017. Shares of several companies stagnated for most of the year as structural readjustments in the US retail industry; the largest market; seriously dented revenue and profit, including the rising cost of raw material.
Pawan Jain, Director, Corporate Affairs, Trident, predicts, “Usually clients keep inventories on the lower side at the year end, however, this time the inventory reduction was more than usual. Expect this process to reach normalcy by Q4 and growth to return in Q1 of next fiscal.”
Credit Suisse said in a note on Welspun India , destocking at US retailers may not continue beyond one more quarter as the stock in retail channel cannot fall more than a certain level. So a recovery should reflect in the second half of the fiscal year. But the reduction in the government’s duty drawback and rebate of state levies schemes can optically lower revenue growth in the second half of the current fiscal.
ICRA noted the credit profile of domestic textile companies is stable, indicating financial health. The aggregate debt of the domestic textile industry is declining as the industry reduced debt-funded expansion. Strengthening of the Indian rupee and cotton prices could upset profitability targets, however, industry data show that US imports of cotton textiles continues to rise with India’s export share growing.
Surat-based textile industry is still reeling under the impact of GST. Textile industry watchers note that largely in weaving and trading, capacity use at most of the power looms and trading units is underutilised by around 50 per cent, however, spinning units are finding buyers in the knitting industry due to the winter season. The others in the textile supply chain, such as weaving and trading, are still finding business unsustainable, more so among smaller players.
Against 40 million metres per day of production in the Rs 500-billion synthetic textile hub of Surat, the current production has fallen to 2.5 million metres per day. So also in the weaving sector, as against a Rs 600-million daily turnover in the pre-GST days, this sector is still down by 50 per cent, said Ashish Gujarati, President of Pandesara Weavers’ Association.
Moreover, power looms continue to down shutters with around 250 to 300 looms daily being discarded as scrap. Also there are still several traders and weavers who are yet to register and come under the tax net. Smaller traders are still hit as the issue is not about the 5 per cent GST, it is about the additional costs of hiring accountants and investing in new technology that is hitting the smaller traders’ hard. This has led to a steep 50 per cent drop in business.
In good times there were 6,50,000 power looms, 150-200 wholesale textile markets, 20,000 manufacturers; including 10,000 weavers, 75,000 traders, 450 processing units; and 50,000-60,000 embroidery machines in the Rs 500-billion synthetic textile hub in Surat. Three industry associations, including silk weavers and textile processors, have made representations to the Centre for relief from post the impact of the GST on business.
Against a normal Rs 100 to 120 billion worth of business during Diwali through dispatch of 1,500 trucks daily for a fortnight, this year business had fallen to just 15 to 20 per cent. Tarachand Kasat of the Surat-based GST Sangharsh Samiti decried, “This was the first time we saw such a Diwali. In the last fortnight or so, which sees peak of Diwali dispatches, business was down by 15-20 per cent.
The Ministry of Finance has simplified regulations to rectify error made by any business organisation during the filing returns under GSTR-3B following representations that were received by the government seeking clarifications on various aspects of return filing including return filing dates, amendment of errors in submitting/filing of GSTR-3B. This rectification will permit businesses to rectify the mistakes made during the calculation of GST liability which came into effect from July 1.
The Central Board of Excise and Customs (CBEC) in a recent communication to field officers has noted, "As return in Form GSTR-3B does not contain provisions for reporting of differential figures for past month(s), the said figures may be reported on net basis along with the values for current month itself in appropriate tables…" There can be no negative entries in the form GSTR-3B while making adjustment in the output tax liability or input tax credit. "The amount remaining for adjustment, if any, may be adjusted in the return(s) in form GSTR3B of subsequent month(s) and in cases where such adjustment is not feasible, refund may be claimed," CBEC added.
There is a facility to edit the information in Form GSTR-3B which can be used only before offsetting the liability. The rectification cannot be made after offsetting liability. In an earlier circular by CBEC on September 1, 2017, it was clarified that errors committed while filing form GSTR – 3B may be rectified while filing Form GSTR-1 and Form GSTR-2 of the same month.
H&M, Joules and BoohooMan have produced new activewear range, tapping into the continuing health and fitness trend. The Swedish fashion retail giant H&M has unveiled its latest women’s collection as a part of its ‘conscious initiative’ and has said it’s “blending fashionable design with highly functional details,” for a new activewear collection “made in sustainable materials.”
Inspired by “nature and strong women,” the collection launched internationally in select stores, will be available on the retailer’s webstore.
Revolving around the theme of ‘In it for the Long Run’, the collection includes tights, sports bras, hoodies and tops for training, running and yoga.
The brand said it has emphasised nature and sustainability, through the prints and the colour palette of green tones, black and beige, but also the predominant use of recycled polyester and elastane in all apparel. Details include quick-dry and seamless features, plus built-in support and holes for ventilation. The designs feature contrast panelling, criss-cross backs and decorative webbing.
Petra Smeds, the firm’s Chief Sportswear Designer, disclosed that a new knitting technique was used to create seamless garments while using less yarn and ensuring less fabric waste. Joules has launched into the active category the first time with a small (seven-piece) women’s collection that is already available online and that is expected to be launched in-store later this month.
Here also, functionality is their forte with moisture-wicking and ventilation features, comfort waistbands and pockets that can hold items like a phone. Prices start at £24.95, rising to £64.95. Joules CEO Colin Porter said the launch felt like a natural range extension given the brand’s lifestyle positioning and its nature inspiration.
