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Bangladesh’s garment factory owners have expressed their deep displeasure over a unilateral decision made by EU brands and retailers to extend the presence of Accord on Fire and Building Safety in Bangladesh by three years.
They say Bangladesh is a sovereign country and that the unilateral decision is not a sign of partnership. They add that without consultation with stakeholders, Accord cannot extend its timeframe. If Accord wants to work after 2018, it would have to send a proposal in this regard to the government of Bangladesh.
At the OECD Global Forum on Responsible Business Conduct in Paris on June 29 EU retailers and global trade unions announced the extension of the agreement on Accord for a second term saying that the agreement will enter into effect when the current Accord expires in May 2018.
Accord is a European retailers’ platform. Accord conducted a successful pilot safety committee training program at 56 supplier factories having registered trade unions and the initiative has formed safety committees in 33 of the factories.
If any factory seeks financial assistance for remediation, Accord would facilitate negotiation over the issue between the lead buyers and manufacturers.
A total of 1,388 out of the 1,452 readymade garment factories inspected by Accord on Fire and Building Safety in Bangladesh are lagging behind the schedule in implementing corrective action plan while remediation in 57 factories are progressing as per schedule.
For the first quarter of 2017 Abercrombie & Fitch’s net sales were down four per cent and gross margin was pressured by steep traffic headwinds and more promotional activity than had been planned.
Comparable sales were in line with expectations and have improved sequentially over the past few quarters across all brands, geographies and channels. Comp sales were down ten per cent.
Abercrombie & Fitch expects gross profit rate for the year to be slightly below last year’s adjusted rate of 61 per cent.
The company plans to close 60 stores in the US by the end of this year, and to remodel 47 stores and open seven full-price stores and two outlets. Strategic initiatives include strengthening its omni channel presence, engaging with customers through loyalty programs and social media, renovating stores through an updated prototype model and partnering with wholesalers and franchisers to reach more consumers.
Abercrombie & Fitch expects comp sales to remain challenging for the full year and to see trend improvements in the second half of the year. The company expects the gross profit rate for the year to be slightly lower than last year’s adjusted rate of 61 per cent. The company expects operating expenses to be down three per cent from last year, with 65 per cent of the reduction occurring in the second half of the year.
One of the global luxury fashion brands Hugo Boss, has joined more than 460 partners from across the global textile supply chain to join the ‘Cotton Leads’ program, which aims to raise awareness of responsible best practice in the USA and Australian cotton sectors.
Members of the initiative include US retailers such as Macy’s, Target, Kohls, Aeropostale, Brooks Brothers as well as a host of suppliers to the global cotton textile supply chain.
The Cotton Leads program says it intends to raise awareness of responsible cotton production practices; strict regulations that protect the environment and people, and points to nation-wide cotton research and development programs and sustainability benchmarking that are common to both the US and Australian cotton sectors.
Cotton Australia CEO Adam Kay noted that brands and retailers are demonstrating a genuine desire to deliver products made from responsibly-produced raw materials, but also acknowledged it is not the only sustainable cotton initiative on the market.
Just as Hugo boss is a leading global fashion brand, the Cotton Leads program leads the way in both responsible cotton production, and the sharing of best practices and other educational resources with the global cotton community.
The Green Textile City Initiative is aimed at scaling up sustainability efforts in large textile clusters in China. The initiative has been launched in partnership with leading global apparel retailers and fashion brands. The belief is that a sustainable textile industry will benefit the private sector while supporting a better environment in China and that best practices can drive significant environmental improvement and cost savings for apparel and textile supply chains.
The initiative provides sector-level capacity building and technical training for over 100 textile mills in three textile cities. Half of the trained mills implemented resource efficiency projects on their own. China produces more than half of the world’s textile fabrics, with 267 billion dollars in exports in 2016, but this water-and-energy intensive sector has a large environmental footprint.
In the Greater Suzhou Area alone, 23 textile mills implemented 138 factory projects last year, saving 8.4 million dollars in water, energy, and chemical operating costs. These projects had an average payback of 17 months and collectively saved four million cubic meters of water and 30,000 tons of coal per year. The initiative is an example of how partnerships and expertise of multiple stakeholders can be leveraged to scale up resource efficiency in manufacturing supply chains.
In a partial relief for manmade textile units, GST on texurising, twisting, weaving and yarn dyeing has been reduced from 18 per cent to five per cent. But despite the relief, several looms and fabric makers will still have unutilised credit on their books, raising the cost of fabric by eight to ten per cent.
Partially oriented yarn, polyester filament yarn and staple fiber manufactured by virgin chips/granules are covered under the umbrella of manmade fibers and liable to be taxed at 18 per cent under GST. But other processes of textile yarn units, such as twisting, warping, doubling, dyeing, printing, bleaching, mercerising, texturing, multi-folding, cabeling, air mingiling, air-texturising, sizing etc, are not covered under the umbrella of manmade fibers. The job work rate of such processes at textile yarn units falls under the five per cent GST slab.
Manufacturers and exporters who make garments and buy fabric or do all the processes outside will also suffer as the duty refund will have to bear the burden of unutilised credit. They will be at a disadvantageous position as compared to composite mills that do all processes in-house. The textile industry has a pivotal position in the Indian economy. It is strong and competitive across the value chain. India has an abundant supply of raw material like cotton, wool, silk, jute, and manmade fiber.
Pakistan may impose a cess on imports and exports of textile products. The aim is to generate funds for the development and promotion of textile sector. After the imposition of the new development cess, the textile value chain will be exempt from the export development surcharge, the cotton cess, textile cess and the cotton standardization fee.
The proposed cess is aimed at helping the textile industry in Pakistan achieve sustainable growth, employment generation, increased productivity and value addition through the textile chain.
The cess will be levied and collected on imports and exports of all textile products. The rate of cess on imports and exports of textile products will be 0.2 per cent of the value of imports. In case of partial or short realization of export proceeds, the cess would be collected by authorized dealers at 0.2 per cent of the full FOB value of the goods shipped.
However, bed wear exporters will not support the proposed legislation. They say core issues that the industry is grappling with need to be addressed and that if the cess comes into effect the industry would end up with more bureaucracy, creating more problems for the industry. They say they are already faced with a liquidity crisis and loss of competitiveness due to expensive utilities, high cost of doing business, blocked refunds etc.
As per an official statement, China's securities regulator has approved the launch of cotton yarn futures on the Zhengzhou Commodity Exchange. The cotton yarn futures, together with cotton futures already traded, will help companies in the industry to hedge against and improve the management of risks, the China Securities Regulatory Commission (CSRC) stated.
Futures contracts obligate investors to buy or sell the underlying assets at a predetermined price at a specified time, helping investors mitigate risks of price volatilities.
As per the CSRC large and frequent fluctuations in cotton yarn prices have had negative impacts on related industries in the past few years, and the launch of the cotton yarn futures will be an answer to market demand.
The date for the commencement of trading will be announced later. China has been developing its commodity derivatives market and plans to gradually open it up to foreign investors. Earlier in April, the country launched white sugar options, the second commodity options after soybean meal. China launched soymeal and sugar options earlier this year, and is expected to soon launch a new hog futures contract.
Active wear shirts now change color with thermal heat signature. The shirt is a new way to measure workout using one’s body heat since it keeps a comfortable temperature but has the ability to change colors depending on body temperature.
The material used to make the shirts is MRI stylised technology-approved and has been combined with the body’s blood flow and metabolism with advanced thermal imaging to create the color changes. The harder a workout, and depending on the muscles that are worked, the shirt will change colors accordingly, giving a clear map of the muscles that have been worked on and those that need to be worked on.
Fitness apps are capable of tracking activities, diet, weight, and sleep patterns to help people stay motivated toward fitness goals. The drawback to most of these fitness apps is the need to have a smart phone on 24/7 to get the most accurate response.
Being able to visualise the impact of a workout in real time via a person’s thermal heat signature makes this clothing jump leaps and bounds over any other. It’s unlike other gym clothes. It allows the wearer to push harder and exceed their own expectations.
With these workout clothes, people will get to know more about themselves and how their metabolic response changes with the amount of heat that is produced. What makes this active wear even better is the fact that it's eco-friendly because of the non-toxic dyes.
Bangladesh garment companies have been trying hard to win more orders. However, one problem they face is foreign buyers want quality products at low prices. And for various reasons, including an energy crisis and factory remediation costs, production costs have increased by 18 per cent. So, whoever can offer low prices will win orders. Some companies having volume capacities are taking orders at low prices. This is setting an unhealthy trend in the sector.
Terror attacks have affected visits of buyers. So it’s necessary for mills to go abroad and book orders. Competition from countries like Vietnam is another factor. Bangladesh’s clothing exports to the US declined by around six per cent during the first quarter of the current calendar year.
In the first 10 months of financial year 2016-17, the country’s exports were only 2.26 per cent higher than exports in the same period of the previous year. Most likely the country will miss the target of current fiscal year. In the first 10 months of this financial year, exports were 6.06 per cent short of the target. For the first time the country fears having negative growth by the end of this financial year.
In the first five months of this year, Vietnam’s exports to France increased 15 per cent over the same period last year. Exports of cell phones and accessories were up 21.7 per cent year-on-year and accounted for 37 per cent of the total. Footwear exports were up five per cent and textile and garment exports were up 20.6 per cent. Vietnam’s exports of rubber products to France increased sharply by 127 per cent. Exports of textile, garment, leather and footwear materials together were up by 98.2 per cent. Exports of plastic products were up by 70 per cent and confectionery exports were up by 66 per cent.
However, exports of pepper to France decreased by 38 per cent and those of precious stones, metals and products to France decreased by 28.9 per cent. France is Vietnam's fifth largest trade partner in Europe and is the third largest European investor in the southeast Asian country. Almost two thirds of French investments are made in the services sector, one fifth in industry (water, gas and electricity), seven per cent in agriculture and five per cent in retailing.
Almost 300 French businesses are set up in Vietnam in the form of companies, representative offices and joint ventures.
