Industry leaders set maximum price for 30 count yarn
Following continued rise in yarn price in Bangladesh local market for last one month, industry leaders BGMEA, BKMEA and BTMA have set the maximum price of mostly consumed 30 count yarn price at $4.20 a kg and 30s cotton combed yarn at $4.50 a kg. As per a New Age report, the decision was taken on the insistence of country’s readymade garment exporters who had been requesting the government for last few weeks to make the yarn import open through all land ports, alleging price of the item increased 50-60 per cent in the local market compared to international market.
Mohammad Ali Khokon, President, BTMA alleged the unusual price hike of yarn in the local market eroded their competitive edge on the global export market. He said the current global cotton index ranged between 93 points and 95 points and if the index exceeds 100 points, an upward revision of yarn price will take place in the local market and if the index goes down below 85 points, the price will be reduced, he said.
If yarn price in the local market becomes costlier than the international market, the RMG exporters would have to go for import to remain competitive, he added. Setting the price ceiling of yarn has eased the situation and apparel exporters are relieved from an uncertainty in calculating product prices for export, said Faruque Hassan, President, BGMEA
Luxury fashion reaches historic heights in Q2FY21 as winners take bigger leap
Beating all sales estimates, the luxury sector rebounded to historic heights during the second quarter of current financial year (Q2 FY21-22). Even as stores remain closed, and travel banned across the globe, sales of biggest luxury groups including LVMH, Kering, Richemont and Hermès surged well above the pre-pandemic levels during the quarter. As per a Business of Fashion report, sales surge can be attributed to the economic stimulus announced by various governments and the limited shopping options for consumers. The gradual reopening of restaurants and travel also helped drive luxury sales, despite them being competitors to the industry.
Luxury gap to widen
Sales by the largest luxury maker LVMH increased 120 per cent year-on-year during the quarter. Most of the
group’s sales were dominated by brands Louis Vuitton and Dior. Sales of Louis Vuitton grew 40 per cent above 2019 levels. The brand’s first-half operating profit rose 44 per cent over 2019 levels to €7.63 billion ($9.1 billion). LVMH expects growth levels to continue as the brand and its struggling divisions start to recover.
Brands that were leading growth pre-pandemic took a bigger leap during the crisis, says Thomas Chauvet, Luxury Analyst, Citigroup. Though this gap between the winners and loser is expected to narrow in the next few years, it may cause a permanent shift in the industry’s landscape. French brand Hermes’ sales grew 33 per cent above the pre-pandemic level while profitability surged to new heights. In the first half of the year, the brand reported a 40 per cent rise in recurring operating margins compared to 35 per cent in 2019.
Exposure to travel retail boosts Kering sales
Growing exposure to travel retail and wholesale along with consumers’ declining interest in Gucci, helped Kering’s sales rebound in Q2. Sales of Saint Laurent and Bottega Veneta brands accelerated, during the quarter while first-half profits bounced back sharply to €2.2 billion.
Better operations control help Prada’s sales
Efforts to build a better controlled, full-price brand helped Prada’s sales surge 13 per cent in Q2. The brand’s operating profit in first-half of the year grew 11 per cent over 2019 levels to €166 million. Overall revenue declined 1 per cent from 2019 levels as the company continued to slash wholesale brands.
Moncler to focus on A/W season
Sales of Milan-based puffy-coat maker Moncler increased 5 per cent above 2019 levels. The company recently acquired rival brand Stone Island to accelerate sales recovery during Winter Olympics. It does not expect major revenue growth during Q2 and aims to focus on upcoming A/W season, says Piral Dadhani, Analyst, RBC.
Burberry sales rise over 2019
Burberry’s Q2 sales rose 1 percent though revenues fell 4 per cent. The company is working on a turnaround strategy to allay market fears over CEO Marco Gobbetti’s exit from the Florence-based Salvatore Ferragamo later this year. Travel retail leads to 10 per cent decline in Salvatore Ferragamo’s sales. The brand’s recovery remains impacted from high exposure to travel retail, a more formal aesthetic and general lack of brand awareness. Sales declined 10 per cent in Q2. Sales from other channels also declined though from directly-operated stores reached pre-pandemic levels in July.
India’s cotton exports remain resilient with 75.71% increase in May 2021
India is the one of the largest cotton exporters in the world. Exports of cotton yarn and fabrics export account for about 23 per cent of India’s total textiles and apparel export. As per a CCF Group report, in May 2021, India exported cotton yarn worth 101.1 kt a 75.71 per cent rise year-on-year and 12.95 per cent month-on-month increase.
Bangladesh tops monthly yarn exports
Of India’s total yarn exports, shipments to Bangladesh increased to 37,642 mt in May 2021 from 30, 539,28 mt in April 2021. These accounted for 37 per cent of India’s total yarn exports. India’s yarn shipments to its second largest export destination China increased 12.95 per cent month-on-month to 21,750.91mt in May 2021 from 19294.2 mt in April 2021. These accounted for 22 per cent of India’s total global cotton yarn exports during the month.
Three largest destinations for yearly exports
Peru remained the largest export destination for India during the year with an increase of 587.9 per cent over
previous year. Exports to Peru increased to 1,713.92 mt in May 2021 from 249.15 mt in May 2029. The second largest export destination was Bangladesh with an increase of 240.72 per cent over the previous year. India’s exports to Bangladesh increased to 37,642.25 mt in May 2021 from 11,047.82 mt in May 2020.
The third largest exports destination for Indian cotton yarn was Portugal with an increase of 123.34 per cent in May 2021. Exports to the country increased from 2,476.91 mt in May 2020 to 5,532.03 mt in May 2021.
Exports to China post 16.95 per cent yearly growth
On a year-on-year basis, shipments to China increased 16.95 per cent. Among products, exports of uncombed 8-25S/1 and combed 30-47S/1 yarn to China increased by 13.3 per cent and 23.1 per cent year-on-year respectively. In terms of month-on-month change, exports of combed 8-25S/1 declined by 36.38 per cent to 10,071 mt and those of 25-30S dropped by 34.09 per cent. Exports of combed 8-25S/1 and combed 25-30S/1 increased by 11.3 per cent and 10.5 per cent month-on-month respectively and declined by 9.1 per cent and 55.4 per cent year-on-year. Exports of combed 30-47S/1 declined the most by 57.1 per cent year-on-year with export volume of 2042mt.
Despite the pandemic, India’s cotton yarn exports grew both on a year-on-year and month-on-month basis. Bangladesh, China and Portugal remained the largest export destinations for India with exports to China also registering a marked increase despite the political standoff between the two countries.
Amazon to expand brick-and-mortar presence in the US
Amazon.com Inc is plans to expand its brick-and-mortar presence in the US by opening large physical shops that will operate like department stores.
To span over 30,000 sq ft, some of Amazon's first department stores will open in Ohio and California. They will offer products from well-known consumer brands.
Amazon, which dominates the online shopping space, made its biggest bet in the brick-and-mortar format with its acquisition of upscale grocer Whole Foods in 2017.
Amazon also experimented with small physical stores for books and groceries in at least 13 U.S. states including California, Colorado, and Washington.
The e-commerce giant has benefited from a surge in online purchases from homebound shoppers as COVID-19 forced millions to stay indoors over the past year. Traditional retailers also saw online sales surge, though total sales fell as they were forced to shut stores, which make up the bulk of their revenue.
Steady vaccine rollouts are now encouraging more Americans to return to brick-and-mortar stores to buy clothes, footwear, and electronics.
Department store chains Macy's Inc and Kohl's Corp beat Wall Street estimates for second-quarter sales, and also raised their forecasts on full-year revenue and profit as buyers came back to stores and spent on perfumes, shoes, and apparel.
H&M launches resale platform
Swedish fashion retailer H&M has launched a new resale platform specifically for the Canadian market. H&M Rewear is a one-stop digital customer to customer (C2C) resale destination where Canadians can buy and sell any piece of clothing from any brand.
The H&M Rewear platform will allow sellers to search H&M products directly by putting in the product number found on the care label which then will give them access to pictures, descriptions, color from previous seasons through the H&M search bar. Additionally, H&M Rewear, which is being launched together with resale-as-a-service (RaaS) technology company Reflaunt, will advise sellers on prices through its price recommendation algorithm, helping the sellers determine the best competitive price and optimize their chances of selling.
H&M Canada will offer its sellers two ways of receiving payment. Sellers will have the choice between direct deposit or receiving an H&M gift card with an added 20 per cent value that can be redeemed at H&M online and in store. H&M Canada will also offer its members the option to resell their past purchases in one click through its "smart button.
Small manufacturers in Bangladesh suffer as brands shift to bigger apparel makers
The ongoing global pandemic has been particularly tough on small and less-competitive apparel makers in Bangladesh due to the unhealthy price-cut competition. Large and well-established suppliers have been able to survive and receive larger work orders from big garment buyers. However, these suppliers are being compelled to take on product designing and development, inventory management, stock holding, logistics, factory selection and multi-factory production planning, says a new research by the International Labor Organization. A study by the United States Fashion Industry Association (USFIA) highlights, competition amongst local suppliers in Bangladesh will increase in the next two years as US fashion companies’ will increase sourcing from the country.
In 2020, brands including Inditex, Fast Retailing, H&M, Nike, Adidas, Gap Inc, PVH, Hanesbrands, Levi's and
LVMH – improved their market share in the region from 8.8 per cent in 2011 to 11.4 per cent in 2020.
Bigger players in focus to reduce lead times
Small entrepreneurs may find it difficult to survive this adverse business environment as the world’s largest apparel retailers' -- Amazon and Walmart have intensified their concentration on bigger sourcing and sales markets, adds the ILO study. Nike has also concentrated its supplier base from 631 factories in 2019 to 334 in 2021, shows the ILO study. Gap reduced the number of sourcing factories from 1,020 in 2010-11 to 800 only in 2020.
Such consolidation has been a long-term strategy adopted by brands to extend their supplier base by investing in newer markets. Post-pandemic, brands are likely to concentrate more on small and medium enterprises. Brands also plan to reduce their lead times and inventories by adopting 'made-in-cloud' technologies like the Mapped in Bangladesh (MiB), digital mapping technology that tracks the export-oriented RMG factories in Bangladesh.
Data from 400 MiB factories shows, Nike has reduced its supplier base from 35 in 2019 to 25 in 2021. However, the brand started sourcing from five new local factories in 2021. Adidas also reduced the number of factories it sourced from Bangladesh by 16 this year from 41 in 2019 while adding five new factories in 2021.
Factories with better COVID-19 responses gain
Buyers are shifting to factories and countries dealing more effectively with COVID-19 challenges and making timely shipments, adds Khondaker Golam Moazzem, Research Director, Center for Policy Dialogue (CPD). This is leading to big suppliers having better cash flow bagging more work orders. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) stats, show 351 big factories earned export revenues worth $12.29 billion in fiscal year 2019-20. Around 1,334 BGMEA-registered RMG factories earned revenues worth $19.32 billion during the year out of total $27.94 billion export revenues earned during the year.
Lotto Sport Italia signs up WHP Global to market the brand globally
Lotto Sport Italia (LS") has signed an agreement with WHP Global to market the global trademarks for iconic Italian sports brand Lotto; and LSI. Andrea Tomat, CEO will continue to operate the Lotto brand in the core markets of Italy, Europe, the Middle East, and Africa. Together, LSI and WHP will provide design, product development, marketing, and brand management services to Lotto's extensive existing network of over 50 global partners across the world who generate more than USD$400 million in annual retail sales.
The premier Italian sports brand established in 1973, Lotto is world-renowned for its innovative performance-driven footwear, apparel and accessories, which feature the signature double diamond logo. With an eye towards accelerating its dominance in the performance sportswear category, WHP and LSI will together invest in expanding into new markets and product categories while activating the brand through untapped digital channels and partnerships with world class athletes.
WHP Global is a leading New York based global brand acquisition and management firm backed by equity capital from funds managed by Oaktree Capital Management, L.P. and leverage financing provided by BlackRock. WHP owns and manages over USD$3.5 billion in retail sales across its portfolio of brands that includes Anne Klein, Joseph Abboud, Toys "R" Us, Babies "R" US and Lotto.
US’ T-shirt imports rise by 37.97% during H1’21
T-shirt imports by the US grew 37.97 per cent Y-o-Y to $ 9.78 billion during the January-June ’21 period, reports OTEXA. As per Apparel Resources, the volume of these imports surged by 46.37 per cent on a Y-o-Y basis to 287.62 million dozen during the period. Vietnam emerged the top exporter with exports surging by 21.82 per cent to $1.72 billion while exports from China grew by 43.59 per cent Y-o-Y to $1.56 billion.
Exports from India grew by 35 per cent Y-o-Y to $494.44 million in value while the volume of India’ shipment stood jumped by 55.2` per cent to 14.62 million from the same period of 2020. The volume of Bangladesh’s exports increased to 19.18 million dozen while value increased to $471.19 million, noting 62.85 per cent surge in values on yearly note. India’s unit prices of shipped T-shirt in H1 ’21 valued $33.82 per dozen, while the unit prices in case of Bangladesh hovered around $24.56 per dozen.
Government sets up committee to double handloom production
The government has constituted an eight-member committee to double production and quadruple the exports of handlooms in three years. The committee was set up by the Textiles Ministry under the leadership of Sunil Sethi, Chairman, Fashion Design Council of India. The committee will help the government achieve its target of increasing handloom production to Rs 1.25 lakh crore from Rs 60,000 crore and increasing handloom exports to Rs 10,000 crore from Rs 2,500 crore in three years’ time.
Members of the committee include Sudha Dhingra, Professor, National Institute of Fashion Technology; Shefali Vaidya, Freelance Writer, Influencer and Textile Expert; Anagha Gaisas, Owner, Saudamini Handlooms and Paithani revivalist; Suket Dir, Fashion Designer and Managing Director, SKA Advisors and Sunil Alagh, Former Managing Director and CEO, Britannia Industries; KN Prabhu, Paradigm International and Member, HEPC Executive Committee, and Hetal R Mehta, Chairman, Science Engineering and Technological Upliftment Foundation (SETU), Surat.
As per the statement, the panel would also put forth ways for collaboration of handloom weaver agencies with the designers, buying houses and institutions, organizations and exporters, and improving the marketing of products, improving input supplies such as raw materials, credit, technology upgradation, skilling and designs.
Lululemon collaborates with Genomatica for a plant-based nylon
Leading fashion brand Lululemon has collaborated with leading sustainability material manufacturer Genomatica to create a lower-impact, plant-based nylon. As per an Apparel Resources report, the initiative will help Lululemon replace conventional nylon which forms the largest volume of synthetic material used by the brand in its products as of now.
Genomatica uses biotechnology and fermentation to convert plant-based ingredients into widely used chemical building blocks, like those used to make nylon. These building blocks are converted into pellets and yarns, and the two companies will be working closely with Lululemon’s fabric supply chain to incorporate this material into future products.
Through this collaboration, both the companies seek to create positive change within the $22 billion global nylon market by building more sustainable supply chains. Calvin McDonald, CEO, Lululemon, opines, Genomatica’s bio-based innovations, along with its distinctive track record of successful commercial applications, will help the brand achieve its goal of making 100 per cent of its products with sustainable materials and end-of-use solutions by 2030
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DGTR recommends anti-dumping duty on polyester yarn imports
After concluding an investigation under the commerce ministry, India’s Directorate General of Trade Remedies (DGTR) has recommended an anti-dumping duty (ADD) on polyester yarn from China, Indonesia and Vietnam for five years. Experts believe, the move will protect domestic players against cheap imports from these countries.
The investigation was conducted after a complaint by domestic players. DGTR concluded the yarn dumped by these countries at cheap rates is affecting India’s domestic yarn industry. The authority recommended a duty in the range of $4 per ton and $281 per ton. The finance ministry will take the final call to impose these duties.
DGTR has also recommended imposition of duty on imports of aceto acetyl derivatives of aromatic or heterocyclic compounds, also known as arylides, from China. Formed in May 2018 as an integrated single window agency, the authority provides comprehensive and swift trade defense mechanism in India.
Earlier, the Directorate General of Anti-dumping and Allied Duties (DGAD) dealt with anti-dumping and CVD cases, Directorate General of Safeguards (DGS) dealt with safeguard measures and DGFT dealt with quantitative restriction (QR) safeguards. The DGTR brings DGAD, DGS and Safeguards (QR) functions of DGFT into its fold by merging them into one single national entity. DGTR now deals with Anti-dumping, CVD and Safeguard measures. It also provides trade defense support to the domestic industry and exporters in dealing with increasing instances of trade remedy investigations instituted against them by other countries.
Nein Hsing Textile Co to lay off 2,500 workers
Denim manufacturer Nien Hsing Textile Co is in the process of terminating 2,500 workers from its C&Y Garments, Formosa Textiles, Global International and Nien Hsing International factories in South Africa. A fifth, Glory International, sent home 1,500 workers when it shuttered last year. As per a Sourcing Journal report, Nein Hsing Textile has laid off 4,000 workers over the past year, the result of a dearth of orders from American brands, the rising cost of salaries, unrest in South Africa and an ongoing pandemic.
The company manufactures jeans for reputed brands like Levi Strauss, Wrangler and The Children’s Place. It blames the negative impact of COVID-19 and other market forces for the job eliminations. Recent wage protests also precipitated a loss in revenue by crippling the company’s production, while fluctuating COVID-19 infections and riots in neighboring South Africa following the arrest of former president Jacob Zuma contributed to an uncertain business environment that made it difficult for the company to continue operating.
Most of Nien Hsing’s output is destined for the United States, where it benefits from the African Growth and Opportunity Act’s duty-free access for thousands of products, including apparel and textiles.
Fartech Q2 luxury goods sales grows 40 per cent in
In Q2 FY2021-22, online luxury fashion firm Fartech sold 40 per cent more goods than a year earlier. As per an Evening Standard report, the total value of the goods by the firm totaled $1 billion (£730 million) during the quarter. The company also increased revenues in the three months to June to $523.3 million, from $364.7 million year on year. Floated in New York in 2018, Fartech lists thousands of products on its website on behalf of brands such as Balenciaga, Burberry and Vivienne Westwood. The retailer also provides tech services to a number of companies in the industry.
The firm was founded in London by entrepreneur José Neves in 2007. It has an office in Old Street, London while a large number of the over 5,000 employees are based in the capital. The company is amongst the few luxury firms that reported higher sales recently.
Awareness, tech adoption can boost India’s wool industry
As a part of its structured breeding program launched through the National Livestock Mission, the Indian government imported 199 female and 41 male Australian Merino in 2019. After successful shearing for about five months, these sheep are expected to produce a batch of lambs that will offer the softest and the finest wool for apparels. A Down to Earth report says, these lambs are expected to reduce India’s dependence on raw wool imports, and boost pastoral economy. The government plans to replicate the program in Rajasthan, a state known for its superior carpet grade Chokla and Magra wool, informs Ashok Liladhar Bist, Additional CEO, Uttarakhand Sheep and Wool Development Board
Wool consumption drops to 10 per cent
The report says, one reason for the government’s growing sheep imports is the decline in domestic wool
production. Data from the Ministry of Textiles indicates, as of 2018-19, India’s average annual yield in India declined to 0.9 kg as against the world average of 2.4 kg. During that year, India produced 40.42 million kg of wool against its consumption of 260.8 million kg. This increased its dependence on raw wool imports, particularly on Australia and New Zealand.
Despite an overall rise in population, sheep numbers in major wool-producing states like Himachal Pradesh, Rajasthan, Gujarat, Andhra Pradesh and Jammu and Kashmir are declining. In Rajasthan, sheep population declined by 13 per cent from 9.1 million in 2012 to 7.9 million in 2019. Historically a wool hub, the state now also sells grains. In the last 10 years, India’s consumption of indigenous wool dropped to 10 per cent as the quantity produced is not sufficient reveals a study the Centre for Pastoralism, an initiative of Gujarat-based non-profit Sahjeevan.
Incentives can boost wool sector
Imports and crossbreeding are unlikely to resolve this issue and India needs to improve the quality of wool, say experts. The Down to Earth report says, Indian farmers also need to increase focus on sheep breeding for wool rather than for meat. The government needs to incentivize wool shearing and make it a lucrative option for farmers, says Sushma Iyengar, Founder, Kutch Mahila Vikas Sangathan, Thirdly, India needs to increase land pastures across the country. Grazing land in Rajasthan fell from 1.7 million hectares in 2007-08 to 1.6 million ha in 2017-18, shows data from the State Agricultrual Department shows, Land under grazing in other states like Gujarat is also shrinking, while in Uttarakhand and Telangana, it is out of farmers’ reach.
Decline in wool shearing can also be attributed to shepherds’ reluctance to adopt modern practices like machine shearing. These practices require uninterrupted electricity supply, which is difficult in rural areas, adds HK Narula, Head, Arid Regional Centre, Central Sheep and Wool Research Institute.
Awareness and access can boost prospects
Wool shearing in India also suffers from high machine costs. Most shearing machines are imported and cost Rs 1-1.5 lakh, adds Narula. The Ministry of Textiles and IIT-Delhi have launched cheaper versions of machines but they are still in the testing stage. Around 25 per cent farmers in Uttarakhand engage in machine shearing, as against five per cent three years ago. However, sheep care has not received adequate attention in the state.
The state offers abundant scope for better processing and marketing of wool, and even a minimum support price (MSP), like in crops, affirms Narula. Yet, wool shearing in the state fails to receive adequate attention, explains Mohammad Sharif, Former Managing Director, Jammu and Kashmir Sheep Development Board. The Textiles Ministry attributes the constraints faced by the wool sector to outdated and inadequate pre- and post-loom processing facilities, the ineffective role of state wool marketing organizations, the lack of an MSP system and no educational institute for wool technology. The Ministry urges the government to raise awareness about this sector amongst shepherds and improve their access to land pastures. The government also needs to facilitate wool marketing and ensure better prices for farmers.
