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Global stakeholders in the textile industry convened in Ahmedabad, India for a technology symposium to discuss the sector's future. The World Textile Conference-3, organized by the Textile Association (India), brought together delegates from various countries such as India, the United States, Germany, Switzerland, South Africa, and Uganda to deliberate on the entire textile value chain from cotton to industrial textiles to marketing.
Mahendrabhai Patel, Honorary Secretary of TAI, stated that the conference aimed to be of service to the global textile sector during this critical period.
The conference focused on four key themes, Economy and textile sector, Growth and fiber balance (Natural vs. Synthetics), Sustainability and Innovation and Training Next Generation and Research.
According to Bryan Haynes, Technical Director Global Nonwovens of Kimberly-Clark, growth in manufacturing is happening in the APAC region, and India is a critical player in this equation. Dr. P. R. Roy highlighted the need to re-strategize in the post-COVID-19 era due to the shift in global growth equation, supply chain issues, and skilled labor issues.
Leaders from leading fiber companies discussed the availability of fibers for the industry, which will require about 20 million tons in the next 3-4 years. Effective utilization of resources like fibers is critical for the sector.
An important recurring theme was the need for a skilled next-generation workforce and creating more awareness of emerging technologies. Gandhiraj Krishnasamy, Honorary Secretary of the South India Unit of TAI, stated that the Indian textile sector needs more practical knowledge and project details on technical textiles.
China’s economy has been effected because of year-long Covid restrictions and lockdowns coupled with drop in overseas demand. Consequently, business has slowed down creating widespread employment. Currently, there is huge pressure on Chinese factories as US demand has dropped after an inventory pile up in the first half of 2022, with apparels remaining unsold and consumer prices moving north over summer and autumn months of 2022.
Coping with post-pandemic demand slow down
For China’s economy, the drop in overseas demand has created huge unemployment problems with lack of high-skilled factory workers now much needed and large number of unskilled workers remaining jobless. The cut-throat competition in domestic markets has led to raging price wars between different local brands, all out to get a share in a shrinking market pie. The current transition from simply manufacturing goods in mass factories to actually conceptualising and branding them is a slow and expensive process that has led to unemployment in China’s changing economic landscape.
Although China abruptly ended its zero-Covid policy in December 2022, business activities were curtailed throughout last year, which adversely affected the economy. Retail sales in the US, which has been China’s largest trading partner on a single-country basis, slowed last year and are expected to be slow in 2023.
As per a CNBC report, Chinese GDP grew around 3 per cent in 2022, its second-slowest growth rate since 1976 and well below the government’s target of around 5.5 per cent. However, short-term data indicates quicker-than-expected recovery as Zero Covid policy restrictions eased and the economy struggles to return to normal.
Factories focus on creating their own brands
Although China still maintains its status as the world’s factory and supplies more than a quarter of global products, some other low-cost manufacturing countries such as Cambodia, Vietnam, Bangladesh have steadily lured away clients during the pandemic and lockdowns. The improved product quality of these new manufacturing hubs at practically the same prices as well as the plethora of new e-commerce channels has given greater choices to customers around the globe. Many Chinese factories are now contemplating launching their brands rather than mass-producing for an overseas company.
Reports suggest, garment factories are experiencing tough times especially those involved in traditional garment making catering to export orders. Some are not breaking even. Many of these units that manufactured for international labels are now contemplating designing, branding and distributing clothes under their factory brand, to survive.
Many small family Chinese businesses are now adopting cost-saving strategies such as opening factories in Cambodia and integrating robotics into their facilities, lessening financial pressures from rent among other things. Companies are also focussing on online retail with live-stream hosts to showcase products, similar to many US shopping channels to reach out to American consumers, who keep them afloat.
With these new ways of doing business and government’s fiscal support, analysts feel the Chinese economy will be back with a bang by the second half of 2023. Reopening post lockdowns will be spearheading the economy while emerging markets will have to fight tooth and nail to keep their share of the market pie built when China’s chips were down.
The apparel industry is facing a challenging year in 2023 as apparel exports in January hit a five-year low, raising industry concerns.
The January 2023 performance of apparel exports amounted to $396.6 million, down 18.6% from the previous year, falling below the previous low of $397.61 million in 2021. The industry's best January performance was in 2019, where exports hit a record $5.3 billion before being overtaken by last year's figures.
In January 2023, apparel exports to the US were down 24% to $162 million from the previous year, while exports to the EU decreased by 19% to $113 million. Shipments to the UK were down 8% to $56.3 million, and other markets decreased by 10% to $65 million. The 2023 January performance marked the fourth consecutive year-on-year monthly decline, although month-on-month figures were somewhat erratic.
The negative growth in recent months can be attributed to higher inventories at both the store and consumer level and high inflation in key markets. In the fourth quarter of 2022, the apparel industry experienced a 15-20% decline in orders. Industry analysts predict that Sri Lanka's apparel exports may continue to decline YoY until the first half of 2023 or beyond.
To increase exports in the short- to medium-term, accessing new markets or expanding into emerging or high-potential markets is crucial. Analysts emphasized the need for the early finalization of proposed Free Trade Agreements. Additionally, Sri Lanka manufacturers and exporters need to manage their costs to improve the country's macroeconomic fundamentals and ease of doing business.
Last week, the apparel industry expressed concern over the 66% increase in electricity tariffs by the government, warning that it was a severe blow to the industry's competitiveness.
Pure London's Independent Retailers Sustainability Toolkit was launched at the Pure London event held from 12-14 February, and has already been downloaded by over 250 independent retailers.
The toolkit is now available on the Pure London website and aims to help independent fashion retailers in the UK embrace sustainability in their business operations, with a step-by-step guide that covers everything from reducing carbon footprint to sustainable packaging.
The Sustainability Toolkit was created as an invaluable resource to make a difference and drive sustainability in the fashion industry. The toolkit has four chapters: Mapping Your Impact and Creating a Strategy, The Shop Environment, Sourcing Sustainable Suppliers, and Circularity. The first chapter empowers retailers to create a sustainability plan by exploring the core principles of sustainability strategies, while the second chapter focuses on the shop environment and covers areas such as packaging, water, electricity and gas use, end-of-season stock, shop fittings and fixtures, ecommerce, and staff. The third chapter encourages retailers to challenge their suppliers to provide adequate proof that their products are being made in a responsible way, while the fourth chapter explains circularity and its importance in reducing our unsustainable reliance on raw materials. The toolkit includes practical advice, balanced views, activity worksheets, and links to further resources.
In February 2023, the International Apparel Federation (IAF) participated in the OECD's Forum on Due Diligence in the Garment and Footwear Sector in Paris.
This event brought together brands, suppliers, NGOs, CSOs, international bodies, and government representatives from around the world, and was the first in-person event since the Covid-19 pandemic.
The IAF represented the interests of garment manufacturers and small and medium-sized brands, expressing support for European corporate sustainability due diligence legislation while emphasizing the need for effective enforcement and implementation in line with the OECD's due diligence guidance to create a level playing field.
At the event, the IAF and its partners in the Sustainable Terms of Trade Initiative (STTI) highlighted that purchasing practices are fundamental to effective due diligence. The STTI is a coalition of 13 associations from 10 garment manufacturing countries, supported by the IAF, GIZ Fabric, and the Better Buying Institute, and was represented by various individuals, including Dr. Liang Xiaohui of CNTAC from China, Cem Altan, President of IAF and member of the Board of TCMA from Turkey, and Faruque Hassan, President of BGMEA and IAF Board Member from Turkey.
During a panel discussion, Matthijs Crietee, Secretary General of IAF, commented that the way due diligence is implemented in a supply chain can lead to bad purchasing practices, highlighting that corporate sustainability due diligence is a risk-sharing exercise, not a risk transfer exercise. Another panel focused on how brands and suppliers could collaborate to share the costs and responsibilities of due diligence more fairly, with Dr. Liang Xiaohui discussing STTI's origins and the need for a collaborative solution.
In 2021, the EU sent over 112 million second-hand clothing items to Kenya, with at least 37 million containing synthetic materials, according to research by Clean Up Kenya and Wildlight for the Changing Markets Foundation.
Of the 900 million garments received by Kenya from around the world, over 56 million were either dirty or unusable. The report's findings were based on an analysis of 4,000 used clothing items found in Kenyan markets, compared with data from the country's customs records.
Each year, tons of clothing produced by fast fashion addiction are directly dumped in African landfills, causing severe health and environmental problems. Exporting plastic waste from the EU is already restricted and soon to be banned, but over one-third of second-hand clothing shipped to Kenya contained plastic and was of poor quality, becoming landfill waste. The solution is not to shut down the used clothing trade but to transform it, banning recycling companies from exporting junk clothing, says George Handing-Rolls, head of campaigns at Changing Markets Foundation.
The cost of clothing in EU countries has fallen from 30% of household expenditure in the 1950s to just 5% in 2020, thanks to the use of synthetic materials, which are cheaper than natural ones. Consumers are now buying 60% more clothing than they did 15 years ago, and each EU citizen throws away an average of 15 kilos of textiles a year, despite keeping them for only half the time. According to petrochemical industry experts, the use of synthetic materials such as polyester and nylon has quadrupled since 1980 and accounts for 69% of all textile fibers used in clothing production.
Germany, Belgium, France, the UK, Poland, Hungary, Italy, Lithuania, Estonia, and Ireland accounted for 95% of all second-hand clothing exports from the EU to Kenya, with Germany being the top exporter, sending over 50 million clothing items, of which over 25 million were waste and almost 17 million were plastic-based.
In 2022, China's apparel exports to the US increased to $36.547 billion from the previous year's $34.772 billion, following a sharp recovery from COVID-19 disruptions. However, the growth rate was not sustained in the last quarter, possibly due to the ongoing geopolitical disputes and trade wars between the two largest economies. Despite this, both countries recognize the mutual economic benefits of trade.
China's apparel exports to the US declined to $7.195 billion in the last quarter of 2022, compared to $11.042 billion in Q3 2022. Earlier in the year, the shipment was $10.581 billion in Q2 2022, $7.728 billion in Q1 2022, $9.647 billion in Q4 2021, and $11.649 billion in Q3 2021.
Interestingly, despite the US's ban on importing cotton and cotton products from China's Xinjiang region, cotton exports from the US to China increased in 2022. Cotton exports from the US to China rose to $2.902 billion in 2022, up from $1.330 billion in 2021. The trade was $1.820 billion in 2020, $705.069 million in 2019, and $920.496 million in 2018.
However, the quarterly figures show a decrease in US cotton exports to China in the last two quarters of 2022, with $525.120 million in Q3 and $423.983 million in Q4, down from $959.613 million in Q1 and $993.916 million in Q2.
Kontoor Brands, the global apparel company that owns the iconic brands Wrangler and Lee, has reported its Q4 and full-year results for 2022, and provided its financial outlook for 2023. In Q4 2022, the company recorded revenues of $732m, an increase of 7% YoY, and reported EPS of $0.91, compared to Q4 2021's $0.75.
For the full year, revenue was $2.63bn, up 6% YoY, and reported EPS of $4.31 compared to $3.31 in 2021. The company also announced that it had returned $166m to shareholders through a combination of share repurchases and dividend payouts.
Kontoor's Q4 revenues were driven by strength in domestic wholesale and digital, offset by decreases in international, with China particularly affected by COVID-related lockdowns and restrictions. In contrast, U.S. revenue increased 16% YoY to $605m, with gains in both Wrangler and Lee brands, and strength in digital wholesale, which increased 66% YoY. U.S. own.com revenue also increased by 19% YoY. International revenue fell 20% YoY to $127m due to the continued impact of COVID restrictions in China.
Looking ahead to 2023, the company expects revenue to increase at a low single-digit percentage compared to 2022, with an EPS in the range of $4.55 to $4.75. CEO Scott Baxter praised the company's performance despite "unprecedented macroeconomic challenges", and said he expects the company's "strategic investments in talent, demand creation and innovation" to drive growth across DTC channels, categories, and international markets.
Armani Exchange India is a brand that is leading the way in sustainable fashion by demonstrating perfect dedication and contribution to the environment. The brand's commitment to sustainability is evident in its T-shirts, which are made from organic cotton, recycled polyester, and produced in a way that reduces waste and energy consumption. Armani Exchange T-shirts are a perfect blend of sustainable materials, innovative production, and fair labor practices, making them an excellent choice for those looking to make a positive impact on the environment while remaining stylish and contemporary.
The production process of Armani Exchange T-shirts involves the use of sustainable materials like organic cotton and recycled polyester, which help reduce the brand's impact on the environment. The brand also uses digital printing technology and water-saving dyeing techniques, which are highly efficient and help conserve water. Additionally, Armani Exchange has implemented a biodegradable packaging program that uses eco-friendly materials that decompose quickly and do not harm the environment.
The brand is committed to reducing waste and energy consumption in its production processes and is also dedicated to bringing fair labor practices. The brand helps local communities, provides a safe working environment for cotton farmers, and ensures that the workers involved in its production processes are treated fairly and receive fair wages.
Armani Exchange's commitment to sustainability goes beyond just its materials and production processes. The brand has implemented a sustainable packaging program that uses eco-friendly materials and works towards the reduction of waste. The brand's commitment to transparency and communication provides its customers with information about the materials and processes used in producing the Armani Exchange T-shirts, increasing their awareness of the fashion industry's environmental impact.
Against the backdrop of a massive earthquake, the third and largest edition of Istanbul Fashion Connection trade fair took place in Istanbul from February 8 to 11, 2023, showcasing Türkiye’s power of disaster management and the need to revive economic development.
The fair, while paying respects to the victims of the disaster- was an extremely successful one with around 588 exhibitors and another 22,543 visitors from 134 countries. This comprised 45 per cent international visitors from Asia (33 per cent), the Middle East (33 per cent), Europe (19 per cent) and Africa (13 per cent) and 55 v domestic visitors, showing their faith in the country’s high levels of crisis management.
Core Istanbul, bridal, and other innovative segments attract crowds
Alongside the busy exhibition, the Türkiye Exporters Assembly (TIM) and Exporters’ Associations also initiated immediate aid campaigns in coordination with the official Disaster and Emergency Management Presidency of Türkiye to help the thousands of victims. The trade fair continued with lively economy-boosting activities with international visitors such as Ackermans (South Africa), Al Shaya (Kuwait), Apparel Group (UAE), Truworths (Kenya), Bodesa (Mexico), El Corte Ingles (Spain) and other countries who met exhibitors relevant to them and concluded orders.
The Istanbul Fashion Connection spread over a massive 100,000 sq. mt. was divided into segments of different brands and manufacturers and showed the collections in women’s wear, menswear, kid’s wear, denim, sportswear, evening and wedding wear, lingerie, hosiery, leather and fur collections. With a concept of B2B meetings in speed dating mode: brands and manufacturers networked with special international buyers which insured the fair’s success.
Also, there was a new and sophisticated designer area called ‘The Core Istanbul’ where globally renowned designers from Istanbul Fashion Week presented their innovative product portfolios. They included Arzu Kaprol, Aslı Filinta, Cerenocak, Çiğdem Akın, Ersozata, Essin Barış, Ezgi Karayel, TAGG, Giyi World, Lug Von Siga, Mehmet Emiroğlu, Meltem Özbek, Kuela, Murat Aytulun and By the Oak among others.
Creative spaces in the trade fair showcased trends and themes for the coming season in a visually-elaborate manner. Euphoric Recall encompassed colourful, playful 70's vibes; Metasphere described the return of glitter and metallic with a futuristic touch. The New Gen area featured pieces by up-and-coming designers. A huge aesthetically appealing display of high-quality bridal and evening dresses and suits was shown in the FashionIST area, which caught the attention of many visitors.
In the IFCO Sourcing area that was specially designed for production trade, visitors networked directly with international production companies such as Bozkurt, Bilce Tekstil, Gelişim, Karar, Cemsel, Bozpa, Demezoğlu, Zevigas and more. As a part of IFCO, around 145 manufacturers presented their product portfolios here.
As per Türkiye’s government, the textile and clothing sector exported around $31.2 billion in 2022 which accounted for around 12.4 per cent of the country’s total exports. With a share of 6.7 per cent of the total GDP, the total production of textile and clothing industry was $79 billion last year. Export volume of over $21 billion is what is keeping the country’s economy alive. The apparel industry as the sixth largest exporting country in the world targets exports worth $40 billion in the medium term. The success of the third edition of Istanbul Fashion Connection was a great step to boost a flailing economy currently reeling under the after-effects of a natural disaster.
