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Four months after acquiring Jean Machine, the new owner of the denim retailer says it plans on "cleaning up" the look of its stores as a part of an effort to woo back customers. Gerry Bachynski, President and CEO of Comark Services says renovations will begin this Fall at some locations in the hope of reinvigorating a company that has been around for 41 years in Canadian retail.
Customers are going to see something different, he added also over the past few years, customers have cast aside jeans in favour of more comfortable leggings and yoga pants. But he thinks denim is poised for a comeback. In 2016, the company saw a resurgence in denim sales, says Bachynski, declining to provide specific sales figures for Jean Machine.
Founded in 1976, Jean Machine has 30 stores in Ontario. Comark's parent company, Vancouver-based Stern Partners Inc., acquired Jean Machine in March for an undisclosed amount after it ended up in bankruptcy protection following years of dwindling sales.
Bachynski, whose firm also oversees a number of other companies including denim retailer Bootlegger, says shoppers gave up on jeans for casual athletic options popularized by brands like Lululemon and the Gap.
Ethiopia is fast developing into a dynamic apparel sourcing hub. China, South Korea, India and other countries have opened new plants in the nation, while a growing number of European and US brands are sourcing garments. As a part of its drive to lift the country to middle-income status by 2025, the country has been building industrial parks. The newest is Hawassa Industrial Park. Among the 15 companies with factories there is PVH, a US apparel company. PVH’s 280 employees produce garments for a number of international brands, including Calvin Klein.
Ethiopia's low labor costs make it an attractive garment sourcing destination. The country’s young, cheap workers give it the potential to grow into a major garment hub. Another factor in the country’s favor is its fast developing infrastructure. Ethiopia used to depend heavily on trucking, hindering its transition to a more export-oriented economy. But the railway connecting Addis Ababa to Djibouti will help solve this problem.
At present, most companies investing in Ethiopia are apparel makers and other light industry manufacturers. But General Electric plans to make medical equipment in the country, and Samsung is working with a local partner to produce printers. Hyundai will build a commercial vehicle assembly plant.
Scottish technical textiles manufacturer Don & Low is coming out with a brand new synthetic grass line. Working collaboratively with its raw materials and machine partners, as well as multiple years of extrusion and manufacturing experience, has meant the company has some exciting grass developments to bring to the demanding and performance driven artificial grass market.
The investment will allow for 3,500 tons of grass yarn production capacity for 2018 alone, with potential for further investment and expansion in 2019-20. Don & Low aims to utilise this investment by taking synthetic grass yarn technology to the next level and leverage its technical leadership position in other markets to immediately deliver enhanced yarn characteristics for the benefit of the entire synthetic turf industry.
The new investment will enable Don & Low to create a unique and pioneering range of grass yarns, which is expected to exceed even the toughest industry expectations, and be a step ahead of current market offerings. The new addition will also help Don & Low meet increasing demand of synthetic turf industry to provide highly durable, resilient and skin-friendly yarns for a variety of sports and landscape applications.
Don & Low is the only grass yarn manufacturer in the UK and one of the few grass yarn manufacturers globally.
Ethiopia is fast developing into a dynamic apparel sourcing hub. China, South Korea, India and other countries have opened new plants in the nation, while a growing number of European and US brands are sourcing garments. As a part of its drive to lift the country to middle-income status by 2025, the country has been building industrial parks. The newest is Hawassa Industrial Park. Among the 15 companies with factories there is PVH, a US apparel company. PVH’s 280 employees produce garments for a number of international brands, including Calvin Klein.
Ethiopia's low labor costs make it an attractive garment sourcing destination. The country’s young, cheap workers give it the potential to grow into a major garment hub. Another factor in the country’s favor is its fast developing infrastructure. Ethiopia used to depend heavily on trucking, hindering its transition to a more export-oriented economy. But the railway connecting Addis Ababa to Djibouti will help solve this problem.
At present, most companies investing in Ethiopia are apparel makers and other light industry manufacturers. But General Electric plans to make medical equipment in the country, and Samsung is working with a local partner to produce printers. Hyundai will build a commercial vehicle assembly plant.
Apparel Tech Up was held in Sri Lanka on July 20 aimed at discussing latest trends in global apparel retail and manufacturing and how new age technologies like Artificial Intelligence, Big Data and Mobility can aid Sri Lankan apparel manufacturers.
It saw a large turnout from apparel manufacturing fraternity of Sri Lanka with the presence of over 90 high management representatives from 42 manufacturing groups including Sirio, Hirdaramani Group, MAS Bodyline and Brandix. The audience included technology providers – Fast React Systems and GSD. A discussion on changing landscape of retailers and consumers of fashion products, the inevitable rise of e-commerce and plausible impact on manufacturers took place.
The number of styles per season is rising at a CAGR of 17.9 per cent. This means by 2020, manufacturers will have to plan twice the number of styles as they do today, whereas the overall quantity will remain constant. Products using AI, Big Data and Mobility can drastically change the landscape of apparel manufacturing in the world.
This impact of fast fashion is expected to greatly affect global apparel manufacturing. Amazon holds a 6.6 per cent share of fashion retail in the US and this is expected to rise to 16.2 per cent in the next five years.
Vietnam is among the top five textile and garment exporters in the world, but the Vietnamese market is controlled by foreign brands. The nearly 200 foreign fashion brands in Vietnam hold up to 60 per cent of the market share. Only 20 per cent of the 6,000 homegrown textile and garment companies target the domestic market. They are more focused on making products for export.
The presence of high-street fashion brands such as Zara, H&M, Topshop and Mango has created a shopping wave in Vietnam. Zara follows a strategy that attracts customers. Every product is displayed on the shelves for just a couple of weeks and in limited quantities. The manufacturer doesn't make the same products again, and the models will be replaced with new ones. This strategy makes people think they need to buy products as soon as possible or they won’t have the opportunity to own them.
In comparison domestic brands seem to be faltering. Foci opened in 1999 targeting mid-end clients. By 2007, it opened 60 shops in large cities. However, since then all Foci shops have been shut down and Foci’s products are now sold online.
Similarly Ninomaxx, a once-famous brand, had a network of 200 shops throughout the country. However, since 2012, it has been undergoing restructuring and has had to close a series of shops. It now has 64 shops, mostly in the south.
"Bangladesh's garment export to China increased 14.77 per cent year-on-year to $391.59 million in fiscal 2016-17 riding on duty-free trade privileges. Exporters are taking it as a sign of new opportunities waiting to be tapped. China has transformed into a major export destination for Bangladesh because of its huge population with a growing section of middle-income households."
Bangladesh's garment export to China increased 14.77 per cent year-on-year to $391.59 million in fiscal 2016-17 riding on duty-free trade privileges. Exporters are taking it as a sign of new opportunities waiting to be tapped. China has transformed into a major export destination for Bangladesh because of its huge population with a growing section of middle-income households. China also has advantage of a shorter lead-time and better prices from retailers and brands, which makes it a preferred manufacturing paradise.
Exporters’ delight
China itself is strong in jackets and lingerie, and Bangladesh’s export of such products is not too high. Growing Chinese middle class are the main customers of Bangladeshi apparels. For Asif Zahir, Director, Ananta Group, a leading exporter, garment exports has been maintaining 10 per cent growth every year to China. China is a new destination for them. Zahir exported garments, mainly denim and trousers, worth $15 million last year. Retailers like H&M, GAP and Zara are his main buyers from Chinese markets. Additionally, China has its own retailers and brands which buy a lot of garments from Bangladesh. Export of trousers, denim, non-denim and T-shirts, is high from Bangladesh to China.
A recently study by Switzerland-based International Textile Manufacturers Federation (ITMF) said by the end of 2020, China would produce $750 billion worth of garments up from the current $300 billion, half for export and the remaining for domestic use. Currently, about 80 per cent of China's garment products are produced for local consumption. So Bangladesh should focus on this Asian economic giant for its future export growth. The remaining export-focused 20 per cent make up about 40 per cent of global apparel trade, worth nearly $200 billion. China has 1.35 billion people, for which many Chinese manufacturers do not bother with exports, the study said.
Chinese manufacturers produce high-end garment products which middle class consumers can hardly afford. As a result, demand for Bangladeshi garment items is high. Since Chinese manufacturers have already shifted their focus to high-end products, Chinese government started exploring an alternative market for middle class consumers. As a measure, the Chinese government in April 2011 allowed duty-free access to 4,721 products, of which majority are garments. Since then, garment export to China from Bangladesh is on the rise.
Bangladesh advantage
Anwar-ul-Alam Chowdhury Parvez, former president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), points out the Chinese market would grow automatically as they have already shifted from producing basic items. Local garment exporters enjoy a three per cent cash incentive on export to China under a new market stimulus package introduced in 2009 to minimise fallouts of global financial recession.
China's state-owned companies and private sector entrepreneurs have also shown keen interest in Bangladesh for Chinese government's flagship Belt and Road Initiative, which includes Bangladesh. In 2016-17, overall export increased 17.49 per cent to $949.41 million from $808.14 million in the 2015-16, revals Bangladesh Export Promotion Bureau figures. Soon China would become the second Asian market after Japan for Bangladeshi exports to cross the $1 billion mark.
Based on two-way merchandise trade in 2016, India became the United States’ 9th-largest single-country trading partner (rising from 10th place in 2015). US two-way merchandise trade with India increased 2.2 per cent to $67.7 billion in 2016, the United States International Trade Commission (USITC) stated in its ‘The Year in Trade 2016’ report.
As per the report in 2016, India’s share of total US merchandise trade with the world rose to 1.9 per cent, up from 1.8 per cent in 2015, continuing a slow but steady increase in India’s share of US merchandise trade with the world over recent years.
Although US exports to India went up slightly in 2016, the US merchandise trade deficit with India rose 4.2 per cent to $24.3 billion in 2016 as imports grew even more than exports.
US merchandise exports to India increased 1.1 per cent from $21.5 billion in 2015 to $21.7 billion in 2016. Leading US exports to India in 2016 were non-industrial diamonds; non-monetary gold; civilian aircraft, engines, and parts; almonds; and petroleum coke. US merchandise imports from India increased 2.7 per cent in 2016 to $46.0 billion.
Indian and global manufacturers of fashion and lifestyle products have asked department store chains to pass on the benefits obtained from GST. The chains stand to save about 2 per cent due to the switchover to GST. Retailers have paid 15 per cent service tax on premises they rented out commercially since 2010. With GST implemented from July 1, a range of indirect taxes levied by the Centre and state governments, including service tax and value-added tax, have been subsumed into one levy. Rentals account for about 10 per cent to 15 per cent of a retailer’s costs.
With the introduction of GST, the tax on rental can be set off against input tax credits available for other goods and services. A certain margin is given when they buy goods from us, says the chief executive of a global brand. Everybody is pushing it hard. He says Shoppers Stop alone stands to save between Rs 30-50 crored a year.
The European Union (EU) has decided to increase its investment ratio in Bangladesh’s service sectors from 40 to 49 per cent. The intent is to make European investment more attractive and improve business index. Bangladesh and the EU will work together for resolving problems in trade and investment relationships. Some of these areas are: import duties and customs trade facilitation, Bangladesh’s pharmaceutical sector, licenses and investment in the service sector and tax regimes.
Bangladesh wants the EU to offer higher prices for garment products. The country wants to encourage FDI from EU member countries and increase trade volume with Europe by 10 per cent. Bangladesh has invited investment from EU member countries in the special economic zones being set up in 100 locations across the country. A Bangladesh-EU chamber of commerce may be formed soon. The last such meeting between Bangladesh and the EU was held in December, focusing on pharmaceuticals, financial flows and tax regimes.
Efforts will be made to identify problems and devise solutions with all-out efforts of the two sides. Meanwhile Accord and Alliance wants to extend the time for completing inspections of fire safety, electrical safety and structural integrity of garment units.
