American fashion companies are actively diversifying their apparel-sourcing base to India amid growing risks and market uncertainties in Bangladesh, as per a study by the United States Fashion Industry Association (USFIA).

Conducted in joint venture with the University of Delware, the study, titled, ‘2024 Fashion Industry Benchmarking Study,’ highlights issues such as shipping delays, supply-chain disruptions, and geopolitical instability as top concerns for US brands and retailers in 2024.

According to this study, nearly 60 per cent of respondents plan to expand apparel sourcing from India over the next two years, surpassing plans for any other Asian country. India's advanced local textile-manufacturing capability allows for less reliance on imported components, a significant advantage over countries like Bangladesh, Cambodia, and Vietnam. Additionally, India's strategic partnership with the United States is seen as involving relatively lower geopolitical risks.

Conversely, interest in expanding apparel sourcing from Bangladesh has decreased, with only 48 per cent of respondents expressing such plans, down from 52 per cent in 2023. High social-compliance risks, including labor protests over minimum wage increases, remain a major concern. One respondent noted that while Bangladesh is known for its price competitiveness, its export potential is limited by a lack of product diversification beyond basic cotton items and knitwear.

Conducted from April to June 2024, the study surveyed executives from 30 leading fashion brands, retailers, importers, and wholesalers. It also shows increased sourcing from other Asian countries like Cambodia, Indonesia, and Pakistan, with narrowing gaps in utilization rates compared to top-tier countries.

Expressing concerns over Bangladesh losing business to competitors, FazlulHoque, Former President, Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), says, factors like high production costs, energy shortages, increased wages, and rising interest rates are eroding Bangladesh's competitive edge. Additionally, lack of duty benefits in the US market and political instability are further complicating the situation.

As per official figures from the Office of Textiles and Apparel (OTEXA), Bangladesh's RMG exports to the US fell by 12.31 per cent to $2.90 billion during the first five months of FY24. In contrast, India’s apparel exports to the US declined by just 2.06 per cent to $2.08 billion during the period.

Despite its FY 23 revenues increasing by 4 per centto €2.45 billion in 2023, the Armani Group is experiencing a slowdown its Asia market, which is affecting the group’s sales this eyar.

Having experienced a single-digit slowdown in the second half of 2023 and 2024, the Armani Group attributed it to adjustments within the luxury market, particularly in the Asia ex-Japan region and the more accessible segment of their offerings. This decline was evident in H2, FY23 and continued into the H1, FY24, contrasting with an exceptionally strong H1, FY23.

The slowing of growth in China, the world's second-largest economy and a crucial market for luxury goods, has impacted sales for major fashion brands. For instance, the world's largest luxury group, LVMH recorded 14 per centdecline in net profit during H1, FY24 amidst an uncertain economic environment.

Despite these challenges, the Armani Group's pre-tax net profit rose by 4.4 per cent to €224.5 million in FY23, with adjusted profit amounting to €523 million, compared to €519 million in 2022. The company deliberately sacrificed some margin points to avoid significantly raising retail prices, despite inflationary pressures, states Giuseppe Marsocci, Deputy General Manager

Giorgio Armani, Founder, CEO, and Chairman, emphasisedon the company's preparedness to navigate a market slowdown without prioritising maximum year-on-year profit at all costs. This cautious approach aims to sustain the brand's long-term stability and reputation in the luxury market.

One of India’s leading knitwear manufacturers and exporters, Tiruppur-based Eastman Exports, has appointed Ritesh Kumar as its new CEO.

Armed with over 25 years of experience in the garment industry, Kumar is expected to drive the growth of Eastman Exports and strengthen its position in the global market. He has previously served as Senior Vice President at Shahi Exports.

Known for supplying garments to luxury brands worldwide, Eastman Exports began its operations in the 1970s as a small dye house. The company eventually expanded into exports in 1983 and rebranded itself as Eastman Exports. Over the years, it has evolved into one of the largest vertically integrated textile manufacturers in India, offering end-to-end production capabilities.

The company boasts 35 garment manufacturing units, which collectively produce over 100 million knitted garments annually. This extensive production capacity enables Eastman Exports to cater to a wide range of high-quality apparel demands, from casual wear to luxury fashion.

The appointment of Kumar as CEO marks a significant step in the company's continued expansion and commitment to excellence in the textile industry.

With its share rising to 39 per cent of overall leasing activities, the fashion and apparel segmentdominated retail leasing in Indiaduring H1, FY24.

As per a report by CBRE South Asia, retail leasing activities in India soared to a five-year high in the first half of the current year.

From Jan-June’24, retail leasing increased to 3.1 million sq ft. across eight cities compared to the H1 period in the last five years. Retail leasing activities in the country grew at the rate of 7 per cent during the period.

The absorption was led by Bengaluru, followed by Chennai and Delhi-NCR, which accounted for nearly 59 per cent of the total leasing.

In the coming quarters, the influx of investment-grade mall supply will influence primary leasing trends with leading malls across key cities continuing to witness strong demand for secondary spaces.

Indian cities are also attracting global retailer from Switzerland, America and Japan looking to expand their presence in India, the report highlights. In H1, FY23, about 0.5 million sq ft. of retail space was added across Tier-Ii cities, as per the report. Tier-II cities witnessed an overall space take-up of 0.4 million sqft in H1, with the absorption dominated by Indore and Kochi, accounting for a joint share of 56 per cent, followed by Lucknow and Chandigarh, each with a 17 per cent share.

Ram Chandnani, Managing Director, Advisory and Transactions Services, CBRE India affirms, with a growing number of direct-to-consumer (D2C) brands recognising the importance of establishing a physical presence, the ongoing introduction of quality supply is expected to continue stimulating an uptick in overall space absorption in the coming quarters.