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US denim retailer True Religion has filed for bankruptcy protection. It has signed a restructuring agreement with a majority of its lenders. The restructuring agreement will slash the company’s debt by over $350 million. The restructuring plan provides full payment of claims of True Religion's continuing trade creditors, which includes continuing vendors, suppliers and landlords.
True Religion’s financial struggles are due in part to consumer tastes shifting toward online shopping and away from the brick-and-mortar shops and department stores where the company's jeans have been primarily sold.
The company would continue to operate business as usual. It sells its jeans and other clothing in 140 stores with the True Religion and Last Stitch brand names, and through other boutiques and department stores. The company closed 20 of its stores last year to cut costs.
Founded in 2002, True Religion grew popular with its array of pricey designer jeans, and from 2007 through 2012, it nearly tripled in size. True Religion’s problems were further adversely impacted by new product designs launched by the company that failed to resonate with the consumer. The rise of fast fashion stores carrying lower prices has hobbled True Religion and other apparel retailers.
Value retail giant Primark is going from strength to strength. The fashion chain is performing particularly well in the UK and is benefitting from the currency shifts that have seen the pound becoming weaker since the EU referendum vote a year ago. New or expanded stores accounted for 13 per cent more selling space in the period and at actual exchange rates, sales are 21 per cent ahead year-to-date.
Overall, the second half is turning out to be better than the first half and year-to-date sales in Britain are nine per cent ahead, with the firm continuing to increase its share of the total clothing market. The pound’s fall may have boosted turnover but it also increased the cost of goods that Primark had to buy-in from abroad. The first half operating profit margin of ten per cent declined from 11.7 per cent in last year’s first half, reflecting the strength of the US dollar on input costs.
Primark has continued to open stores fast and has added 1.3 million sq ft of selling space since the beginning of the financial year. As of June 24, it had 339 stores trading from 13.6 million sq ft of sales space. It opened 10 locations in the third quarter alone, including two in the UK, Spain, Netherlands and US plus one each in Belgium and Italy.
Imprima S.P.A. a multinational group entirely dedicated to textile finishing, announced the acquisition of Como-based converter B-Blossom. B-Blossom acquisition follows that of German printing leader KBC and Italian company GUARISCO. From a creative and commercial point of view, B-Blossom is led by entrepreneurs Maria Moreira and Massimiliano Conti, who will keep on leading the brand personally and will enter the IMPRIMA group as shareholders.
The reason why the company is focused on B-Blossom is its positioning and distinctive printing collection, which has allowed the company to grow and affirm itself rapidly as an accredited supplier for top-of-the-range products and within the most exclusive fast fashion collections.
B-Blossom’s creative team say they are happy to pursue their evolution alongside IMPRIMA, aware to be entering a professional group endowed with the necessary resources to take up future challengers in terms of new technologies and sustainable processes.
In the following years IMPRIMA will keep growing thanks to a 30-million investment in technologies and further acquisitions in and outside of Italy, making sure to maintain its best practice of quality and service as well as the identity of each individual brand.
Confusion reigns supreme in Bhopal’s garment shops over GST. Shop owners lack the software. Most people are still confused whether prices will increase or decrease. Customers hesitate to enter shops. Shops are charging GST from five to 28 per cent. They charge five per cent tax on the product whose price is less or equal to Rs 1,000 and 12 per cent for products with a price of more than Rs 1000. This applies to both stitched and unstitched clothes. It means if the price of cotton and silk saris was Rs 600 and Rs 4,000 respectively, now it is Rs 630 and Rs 4,200. Tax on leather products is 28 per cent. The price on clothing is the same but GST is being charged while billing.
A Levi’s showroom has 40 per cent discount on jeans. So if the price of jeans is Rs 2,141, then after the discount, the customer pays Rs 2,284 due to GST. The showroom is selling fresh products on a fixed price without charging any tax. A manager of a showroom of designer suits and lehengas says he knows nothing about GST and heard of it only through the media. The tax is creating confusion among shopkeepers as well as people.
Currently 9,818 industrial units are active in Iran’s textile and apparel industry. They constitute 11 per cent of all industrial entities in the country and have created more than 2,90,000 direct jobs, accounting for 13 per cent of all industrial jobs in Iran.
Textile exports alone stood at over $620 million last year, registering a one per cent increase year-on-year. Textile flooring topped the list of exports in this sector, with a 45 per cent share. Iran is also known for handwoven carpets.
Iran is the 36th biggest exporter of textile products and the 90th biggest exporter of apparel in the world. Taking into account both textile and clothing products, Iran’s ranking stands at 59th. Iran imported textile products worth $1.6 billion last year. Taking into account equipment and machinery, the figure reaches $1.9 billion dollars.
Fabrics worth $500 million were imported –70 per cent more compared to the previous year. Other major products imported were fiber ($440 million) and yarn ($300 million). In addition, the import of black fabrics used to make chador (a full body-length fabric worn by many Iranian women) saw a 73 per cent increase compared to the year before.
African Development Bank has developed a flagship initiative named Fashionomics. This initiative aims at increasing Africa’s participation in the global textile industry supply chain. The objective is to enable African women and youth operating in the textile, apparel and accessories sector to develop their micro, small and medium-sized businesses and grow their manufacturing operations to the next level of innovation and job creation.
The bank has a high-5 agenda, which is light up and power Africa, feed Africa, industrialise Africa, integrate Africa, and improve the quality of life for the people of Africa. The overarching objective of the African Development Bank is to spur sustainable economic development and social progress in its regional member countries, thus contributing to poverty reduction.
The bank achieves this objective by mobilizing and allocating resources for investment in member countries and by providing policy advice and technical assistance to support development efforts. With Fashionomics, ADB plans to raise the profile of African fashion and textiles on the international stage.
The textile and clothing sector in Africa is dominated by small, medium and micro enterprises and holds the potential to create jobs for millions of women and youngsters. Whether in New York, London, Milan or Paris, African fabrics are inspiring more and more famous designers.
The Garment Manufacturers Association of Cambodia plans to raise a number of tax issues with the General Department of Taxation at a public-private partnership meeting next week. Garment manufacturers have requested the association raise issues about tax facilitation, clarification on some tax term definitions and other tax-related paperwork at the next General Department of Taxation Private Sector Partnership Mechanism meeting on July 13.
The public-private partnership, created in 2016, has brought together the General Department of Taxation and four main sectors of the country’s economy, including the garment, rice, young entrepreneurs and banking sectors. Albert Tan, head of GMAC’s committee on taxation says his association would be seeking further clarification, and co-ordination, from the government at the meeting next week.
Taxation is the second main priority issue in the garment industry to be solved after labour and they hope the issues will be resolved during the upcoming meeting for the improvement of the industry. Presently, there are about 512 export-oriented garment factories, and 59 footwear factories, creating jobs for more than 700,000 Cambodian workers. The garment industry is one of the main pillars out of four to back the country’s economic growth. The export from the sector accounts for more than 70 percent of country’s total exports. According to Cambodia’s General Department of Customs and Excise, exports of Cambodia’s garment and footwear sector rose by 7.2 per cent to $7.3 billion in 2016, up from $6.8 billion in 2015.
The sector remains the most important component of Cambodia’s exports, with garment and footwear exports accounting for 78 percent of the country’s total merchandise exports in 2016.
Zimbabwe imported clothing and footwear worth $20 million in the first five months of the year, latest data from the Zimbabwe National Statistics Agency (Zimstat) shows, as local industry called for tighter controls on imports. Imports of clothing and footwear rose in comparison to the same period last year, when they accounted for $19, 3 million.
The imports include: handkerchiefs, coats, suits, etc. Paramount Garments managing director Jeremy Youmans who is leading the crusade against cheap imports says most companies are not operating at full capacity but the local industry has capacity to meet the country’s demand.
The flood of used clothes has compounded the woes of the local textile industry and squeezes the margins of established retailers such as Edgars and Truworths. Zimbabwe banned import of used clothes from September 1, 2015 but industry minister Mike Bimha says, in January 2017 the ban was unenforceable because the local industry had no capacity to meet demand. Youmans, however, stated the local industry has the capacity to manufacture all the items on the imports list.
Experts say Zimbabwe has a market for 80 million garments annually but only 20 million of those are locally manufactured. Almost 90 per cent of imported new clothes are exempt from duty because of regional trade agreements. The local footwear industry has not recovered from a collapse at the height of Zimbabwe’s economic crisis that saw hyperinflation reach 500 billion per cent.
Exports of readymade garments from Pakistan during July to May 2016-17 grew by 4.10 per cent as against the same period of last year. Readymade garments worth $2.073 billion were exported during the last 11 months of financial year 2016-17.
Bed wear exports from the country grew by 3.22 per cent. In the last eleven months of financial year 2016-17, about 3,18,070 metric tons of bed wear were exported as compared to exports of 3,03,054 metric tons of the same period last year.
However, textile group exports from the country during the last 11 months of financial year 2016-17 recorded a drop of minus 1.98 per cent growth. Pakistan is helping the entire chain of the textile sector to adopt and upgrade to new technology. Funds have been allotted to carry out research activities and bring about a qualitative improvement in industry-academia linkages.
A textile corner will be set up to provide guidance and awareness to exporters to adopt new technologies in order to improve the quality of their products. It will also help in sensitizing manufacturers to promote value addition and earn more profit from exportable surplus. The textile corner is meant to bridge the gap between industry and academia. Funds have been allotted to carry out research activities and bring about a qualitative improvement in industry-academia linkages.
Pakistan’s free trade agreement with Turkey may not happen any time soon. Despite Pakistan’s willingness to open up the auto sector, Turkey has shown reluctance to reduce duties on textile products, an important demand from Pakistan.
Rules of origin offered by the Turkish side for Pakistani products are more restrictive than those applied by the EU. Turkey is not letting the textile sector enter its market easily and has offered to reduce duty by 25 per cent on textile items in five years with the remaining 75 per cent duty to be revisited after this period.
Turkey wants a generous offer from Pakistan but is not ready to reciprocate or to meet Pakistan’s demand for inclusion of three or four textile products. The diaper industry in Pakistan wants a pragmatic approach to concessions on raw material import against import of finished goods to boost the local industry, generate employment and tap export markets.
Pakistan aims to have a targeted approach to seek tariff reduction from Turkey on high potential export items from Pakistan while also reducing its customs duties for raw material imports and machinery that is used for local manufacturing. In the FTA with China, many of Pakistan’s leading exportable items were given lower concessions than Pakistan’s competitors from Asean, which worsened its competitive position.
