Savigny Luxury Index shows spike in global luxury fashion
"With the Savigny Luxury Index (SLI) gaining 6.8 per cent in October, almost double the MSCI’s gain of 3.5 per cent, global luxury brands are heaving a sigh of relief. Kering outperformed the SLI, rallying 17 per cent on the back of yet another strong set of results. Gucci’s 49 per cent sales growth in the last quarter helped Kering to report a 28 per cent growth. LVMH also performed well month, climbing 10 per cent on the back of excellent third quarter results."
With the Savigny Luxury Index (SLI) gaining 6.8 per cent in October, almost double the MSCI’s gain of 3.5 per cent, global luxury brands are heaving a sigh of relief. Kering outperformed the SLI, rallying 17 per cent on the back of yet another strong set of results. Gucci’s 49 per cent sales growth in the last quarter helped Kering to report a 28 per cent growth. LVMH also performed well month, climbing 10 per cent on the back of excellent third quarter results. Burberry gained 8 per cent this month as brokers upgraded the stock in light of its recovery potential; nevertheless, the stock slipped back at the end of the month when Christopher Bailey announced his intention to leave the group in March 2018.
Watch sector also bounced back this time. Richemont expected a net profit jump of 80 per cent in its forth coming first half results, driven by demand for its watches. Cartier sales increased 12 per cent. Swatch sales in August and September had grown by 10 per cent. Another boost to the sector was offered by consortium of Hong Kong-based investment funds when it acquired just over 30 per cent of O Luxe Holdings (formerly Ming Fung Jewellery), a listed Hong Kong-based watch distributor and retailer, valuing the company at around $1 billion. Similarly, France-based Efficio Group, a company specialising in digital communications, acquired France’s largest second-hand luxury watch retailer Cresus.
M&A activity across other segments of the luxury sector also witnessed pace. Belstaff was sold to British petrochemicals company Ineos as part of the Reimann family’s progressive exit from the luxury sector. China-based Hony Capital acquired a 30 per cent stake in Mr & Mrs Italy, an Italian brand founded in 2007 and best known for its fur-lined parkas. The beauty segment recorded a number of transactions this month: US-based consumer fund Castanea acquired 30 per cent of skincare brand Tatcha; Henkel acquired US haircare brand Zotos from Shiseido and UK-based online beauty retailer The Hut acquired make-up brand Illamasqua. Last, but by far not least, US-based private equity firm Carlyle acquired a 50 per cent stake in the Millennial cult brand Supreme for a reported $500 million.
Streetwear in the lap of luxury
Streetwear is trending as demonstrated by Carlyle’s investment in Supreme, on the tail of the cult New York brand’s collaboration with Louis Vuitton earlier this year. There has been a big push amongst luxury brands in the casual segment, notably in footwear. All of this has been done to grab millennials’ attention as they have accounted for 85 per cent of the luxury sector’s growth this year, according to Bain.
Textile Ministry contemplates higher insurance cover for handloom weavers
The Textiles Ministry is looking at increasing the level of insurance cover for handloom weavers, a sector that’s on the government radar for job creation. The Mahatma Gandhi Bunkar Bima Yojana provides insurance to handloom weavers in the case of natural and accidental death and total and partial disability. The ministry has proposed an increase in cover for accidental death to Rs 4 lakh from Rs 1.5 lakh. In case of natural death, benefit may be raised to Rs 2 lakh from the Rs 60,000 now. The textile sector is the country’s second-largest employer.
The government released Rs 16.67 crores under the scheme in 2015-16 compared to Rs 16.39 crore in 2014-15 when as many as 5.74 lakh weavers were enrolled. The benefit is restricted to two children of the member. The government’s effort to enhance insurance for handloom weavers is a good plan. For the betterment of the class, the reform measures should include assistance for improved products, quality control, better marketing and access to markets to enable the weavers maximise the gain from the renewed interest leading to a growing market for handloom. It will improve weavers’ incomes and quality of life.
Textile Exchange discloses commitment towards RWS by 15 brands
The Textile Exchange has come up with broad commitments that for the textile industry under the Responsible Wool Standard (RWS). The RWS is a voluntary global standard that addresses the welfare of sheep and of the land they graze on. As many as 15 brands have committed to the RWS. Madelene Ericsson of H&M said that her company commits to using RWS wool and the company has a long term goal to only use RWS certified wool in its products. Eddie Bauer is committed to the RWS and will begin shifting its material base to RWS-certified fiber in 2017, with a goal of being 100 per cent certified as soon as the company’s supply chain can provide RWS fiber across all categories, observed Damien Huang of Eddie Bauer.
Jesse Montano of Coyuchi observed that his company takes expert care to ensure that everything that bears the Coyuchi label is produced and processed as per strictest environmental standards in safe and humane conditions, from farm to factory to home. Thus, the company is looking forward to adopting RWS wool in its supply chain for Fall 2017. Others who have committed to RWS are Patagonia, Eileen Fisher, Tchibo, Varner, Vaude, Mountain Equipment Co-op, Deckers, Kathmandu and Knowledge Cotton Apparel.
World trade to grow at 1.7 per cent only
World trade in 2016 is expected to expand by just 1.7 per cent. The 1.7 per cent growth in world merchandise trade volume will be accompanied by real GDP growth of 2.2 per cent at market exchange rates. This would be the slowest pace of trade and output growth since the 2009 financial crisis.
Trade growth was weaker than expected in the first half of 2016 due to falling import demand and slowing GDP growth in several major developing economies as well as in North America. Certain trade-related indicators have improved, including export orders and container port throughput, but overall momentum in trade remains weak.
The dramatic slowing down of trade growth is particularly serious in the context of the growing anti-globalisation sentiment. Its possible this may translate into misguided policies that could make the situation much worse, not only from the perspective of trade, but also for job creation and economic growth and development which are closely linked to an open trading system.
The way out is to build a more inclusive trading system that goes further to support poorer countries to take part and benefit, as well as entrepreneurs, small companies, and marginalised groups in all economies.
Milano Unica revises program, now autumn show in September
Italian textile industry show Milano Unica has changed the date of the winter show. Now it will be held in July instead of September. One reason for the change is the show had lost some ground in the last few years. So this decision means it will be held in advance of other textile events. Last year Milano Unica launched Prima MU, a small show dedicated to pre-collections. But with the September edition hot on its heels Italian fabric manufacturers were not able to handle two events so close to each other.
Though it will not be easy for companies to present their collections two months ahead of the traditional autumn event, the decision to bring the date forward is a swift response to the changes the fashion world is going through. It remains to be seen whether buyers will place any orders in July, or whether they will be simply happy to view the collections, preferring to wait before committing themselves.
Milano Unica has been created through the tradition of five Italian exhibitions, Ideabiella, Ideacomo, Moda In, Prato Expo, Shirt Avenue. The project is held twice a year and presents the finest quality products from both Italian and European textile manufacturers. The name Milano Unica represents the three essential characteristics of the textile fair, singular, exclusive, united.
Elastane makes way in men’s pants
Men have now grown more comfortable with the idea of incorporating spandex into their pants. Elastane (the generic term for Spandex and Lycra) has always appeared in men's activewear (including Lululemon's ABC pants) as well as in niche items, like ultra-skinny jeans . But now clothing brands from J.Crew to Uniqlo have all jumped on the flexible bandwagon and there's a really good reason. Stretch improves comfort in a way you can actually feel and it makes doing anything in your pants easier from biking to flat pack furniture shopping. The material is used in these cases because it can stretch four to seven times its initial size and return to its original form later.
Even Levi's announced their most popular and cult-favored jeans are now being produced with stretch, with 1 per cent elastane, the first change to the 501 fabric in 140 years. Levi's acknowledges this may anger denim purists, but finish technicians ensured this new fabric maintained the DNA and integrity of the original.
Men are now used to having elastane in their pants for their athleisure garments. Traditional pant sellers now need to incorporate it to maintain the same level of comfort. Retailers of rigid clothing are feeling the pressure to adapt their clothing and make them more comfortable, as that is driving sales and eating away at the profits of non-stretch clothing.
The pant's cuts do not change, and depending on how much stretch there is, they look very similar as non-stretch pants. Levi's claims that the pants look entirely similar to non-stretch 501 jeans and one only feels the difference when he puts them on.
GTex machinery show on in Pakistan
GTex is being held in Pakistan from September 28 to 30. This is a textile machinery show. This is the largest and the most successful event of its kind in the region with regard to textiles, garments, embroidery, digital printing, chemicals, yarns and brands. For visitors of the textile industry from all over the world, such as manufacturers, buyers, retailers, importers, investors and decision makers, this event offers every year optimum possibilities to come into contact with real experts with the aim of exchanging experiences.
It has become one of the world’s best sourcing platforms in Pakistan. As many as 97 companies with 399 brands are participating in the expo. About 67 foreign delegates from European countries and China have also displayed their products in the exhibition. More than 15,000 visitors are expected during the three day expo. With live demonstrations and B2B meetings a deeper idea of materials, production methods, new technologies and machines can be obtained, which can open up new business contacts and networks to joint ventures.
Product groups are brands, chemicals, clothing, designers, digital printing, dyes, embroidery, energy, fabrics, garments, graphic systems, home textiles, leather, packaging, plastic, series, textile machinery, textiles, yarns.
Orissa’s handloom gets a new lease of life with linen, mercerized cotton
The handlooms sector in Orissa that was facing a crisis due to poor demand for cotton lungis and towels for the last several years has received a new lease of life with the production of linen and mercerized cotton fabrics. The textiles and handlooms department is now creating awareness among local weavers to produce linen and mercerized cotton fabrics to meet the high demand and get better remuneration.
Weavers of Khurda, district had carved a niche for themselves in the cotton garments sector of the state in the post-independence era. Among the most sought garments across the state were cotton lungis, saris and towels produced by local weavers. The said garments even had a good market in states like Tamil Nadu, West Bengal and Madhya Pradesh.
However, mass production of cotton garments in textile mills at Coimbatore, Surat and Mumbai had dealt a death blow to Khurda’s handlooms sector in the 90s. Better quality and low price of machine-made clothes had virtually wiped out handloom products of local weavers. To revive Khurda’s handlooms sector, the textiles department has recently introduced production of linen and mercerized cotton fabrics in Bolgarh and Jatni areas. The regional textile department office is now offering linen and mercerized cotton threads at low prices, new looms, training facility and bank loans to entice weavers to produce new varieties of fabrics.
The textile department is also getting linen threads from Kolkata and mercerized cotton threads from Coimbatore in Tamil Nadu to meet the demand. The textile department has proposed to offer raw materials to weavers and collect finished products from them for marking through its nodal agency Bayanika.
GST rules drafted
The indirect tax regime GST will come into effect from April 2017. As per rules for refund, every registered taxable person will be required to furnish a monthly return in a specified form. There is also a provision for electronic furnishing of annual return by every registered taxable person and composition supplier. Every taxable person whose aggregate turnover during a financial year exceeds a crore will be required to submit annually a certified audited statement.
The draft rules have prescribed the form and manner of submission of quarterly returns by a composition supplier, returns by a non-resident taxable person, input service distributor, persons required to deduct tax at source and the form and manner of submitting statement of supplies effected through e-commerce. The rules also provide for matching of input tax credit claim on inward supplies and procedure for output tax liability reduction claim.
No refund of input tax credit would be allowed if the supplier of goods or services avails of a drawback or claims rebate of tax paid. The rules also provide for grant of provisional 80 per cent refund to notified exporters and refund to certain persons. Refund in case of export of taxable goods or services without payment of tax under bond or letter of undertaking shall be granted on the basis of a prescribed formula.
Fashion Access, Cashmere World's Spring Summer 2017 edition ends on a positive note
After three days of doing good business, the Fashion Access and Cashmere World's Spring / Summer 2017 edition came to an end on September 24. In all, exhibitors and buyers were satisfied with the fair itself and optimistic about the future of the economy in China and throughout Asia.
Buyers from top brands attended both fairs. Participants included: MetroCity from Korea, Li & Fung, French Connection, I.T Apparels from Hong Kong, Abahouse from Japan, Marmalato, Names.RU and PJSC Melon Fashion Group from Russia, Zalora from Singapore, Le Cashmere and Hircus from UK and The Sak Brand Group from USA among others. Around 150 exhibitors from 18 countries and regions were represented with 30 exhibitors participating in Cashmere World, the only trade fair in the world dedicated to luxury fine fibres. Among the highlights were exhibitors from Brazil and Korea with Korean pavilion attracting a lot of attention. South America and Brazil in particular were represented at the Fashion Access.
At the symposia, modern consumer trends were discussed through seminars. Selected exhibitors are awarded for their product design excellence at the Best of APLF Awards (BOAA) twice a year. Shanghai Legend International won the Best Bag Collection Award for their high-end-looking and extremely cohesive collection of bags made of felt. Other winners included young Russian designer and entrepreneur Bags Business Limited for its fresh take on classic silhouette ladies handbags; the Italian footwear manufacturer LSR International for its classic yet very young and urban collection of ladies footwear; and Ningbo Consinee Woolen Textile, for its elegant presentation of ladies garments made with the company's yarns.
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US, China locked in dispute
The US refuses to recognize China as a market economy. China's exports to the United States in the first three quarters increased 18.7 per cent over the same period of 2016, and China’s trade surplus with the United States in the first 10 months expanded 7.3 per cent to reach $225 billion. The robust growth in China’s exports to the United States and the appreciable trade surplus could be a catalyst for the US to maintain a tough stance on China.
Such behavior is reminiscent of the domestic laws of certain WTO members in the Cold War era, and the refusal would put trade ties with China at risk. On the other hand, China has established and continuously improved its market economy system, which has earned worldwide recognition. So far, more than 80 economies have recognized China as a market economy.
So the US opposition to recognizing China as a market economy within the framework of the World Trade Organization is in disregard of the relevant WTO rules. The United States has tried to mix the concepts of the surrogate country approach and market economy status. But the case is about surrogate country approach, not market economy status, which means the former is within multilateral trade rules, while the latter is regarded as a domestic law issue.
Cheap imports hit Indonesian textiles
Textile exports contributed 1.21 per cent to Indonesia’s gross domestic product in 2015. Indonesia is one of the world’s largest textile producers. There are currently around three million Indonesians working in the textile industry. The country is part of the Asean. So, goods - including textile and textile products – are flowing freely within member countries in the region. This means there is a continuously rising flow of imported textile products into Indonesia.
However, Indonesian textile players say that many textiles that are supposed to be coming from other Asean countries are actually originating from non-Asean countries. These imports of relatively cheap textile products are putting pressure on Indonesia’s domestic textile manufacturing industry, an industry that is already under pressure. Since the launch of the Asean China free trade agreement in 2010, the Indonesian market has seen a great surge in cheap textile imports from China.
Meanwhile, Indonesian textile manufacturers have difficulty competing on a global scale as local gas prices are high, while the industry is highly dependent on imports of raw materials from abroad, which cause high production costs. In 2015 Indonesia imported textiles worth millions of dollars from Thailand, Vietnam and Singapore. Especially Singapore is a source of transshipments of textile products that are manufactured outside the Asean region.
India’s denim industry to keep growth pace at 15 per cent next five years
"The Rs 30,000 crores India’s denim fabric segment is expected to grow at 15 per cent per annum in the next five years. In fact, the segment is already keeping this growth pace and will continue at the same speed in the next five years to touch Rs 54,600 crores by 2023, said experts at the 32nd IAF World Fashion Convention. The 32nd IAF convention that ended in Mumbai yesterday held a session on the denim sector ‘New Opportunities in Denim’."
The Rs 30,000 crores India’s denim fabric segment is expected to grow at 15 per cent per annum in the next five years. In fact, the segment is already keeping this growth pace and will continue at the same speed in the next five years to touch Rs 54,600 crores by 2023, said experts at the 32nd IAF World Fashion Convention. The 32nd IAF convention that ended in Mumbai yesterday held a session on the denim sector ‘New Opportunities in Denim’.
Indian denim market in focus
Moderated by Harminder Sahni, MD Wazir Advisors the session focused on the denim industry in India and the segments and layers now divided over price and demographics. Deval Shah, Business Head-Diesel & GAS, Reliance Brands said “Denim revolution started in India in 80s and 90s from simplicity which gradually shifted to lifestyle and more so fashion of late. India continues to be one of the largest producers of denim in the world. India has 0.3 jeans as per capita consumption against 2-3 pairs of jeans in advanced world and 7 pairs in US with 96 per cent of Americans wearing jeans in the US.”
“With growing demand for denim fabric from Bangladesh, to which India exports a huge quantity, the Indian denim industry saw a huge jump in manufacturing capacity which doubled to 1.3 billion meters per annum over the last five years. The number of denim manufacturers too has gone up to around 40 now. However, around 30 per cent of this capacity generally remains idle currently due to excess production capacity. The Rs 30,000 crores denim industry is likely to face a shortage of fresh investment in the next five years” points out Subir Mukherjee, Business Head (Denim), Bhaskar Industries “India is selling cheapest pair of jeans not available anywhere in the world. If we bring down the price of jeans to $10 apiece as is currently prevailing in the US, India’s denim demand would increase resulting in this sector’s growth at 20 per cent per annum.”
In fact, Myntra has most of their sales coming out of value segment jeans between Rs 999 and Rs 1,299 a piece. And as Asthana points out online retailers do not require to incur cost on retail but a massive cost they incur on technology and last mile delivery. At Myntra for example, 60 per cent manpower is involved in the technology while the rest on other aspects of business. Asthana said the online labels created by Myntra will soon be seen in brick and mortar stores as well. “I agree that e-commerce players are in position to play big and increase the per capita consumption by promoting jeans at lower costs,” he explained.
Arguing on similar lines Claudio Grotto, Chairman GAS jeans, who looks at jeans not as the market segmentation but as a subject driven by passion said, he doesn’t look at jeans from a price perspective, while creating it, “for me the objective is that it should be a good fashionable jeans. I had been making and working on jeans for many years, even before launching GAS. Even now, I visit my shops and to know what they like, for me connect with people is very important. Be it USA, Europe or anywhere in the world, jeans only change in size and nothing else,” he opined.
Domestic brand Spykar’s director and COO Sanjay Vakharia believes lower segment of denim is growing rapidly. But, there is a need to bring cheaper segment of denim for consumers in the bottom of the pyramid. However, for Spykar as a brand selling cheap jeans in not an option as they are into retail and retail costs are high in India. “I feel it is not question of international brand or an Indian brand, over the years even international brands have also become as Indian as we are. The incoming of super premium brands like Diesel and GAS will only help our market bar to raise specially in terms prices as when GAS sells a jeans at Rs 8,000 onward, suddenly a jeans of Spykar at Rs 4,000 doesn’t look as expensive”.
Organised jointly by the International Apparel Fashion (IAF) and the Clothing Manufacturers’ Association of India (CMAI), the two-day convention was supported by the Union Ministry of Textiles and Union Ministry of Commerce. It saw the participation of all leading brands in apparel and denim sectors with over 300 delegates from India and across the world.
Bedspread exports up fourfold
India’s exports of bedspreads, in value terms, have seen a phenomenal rise in the last decade. Shipments of bedspreads from India in 2015 were 70 per cent of world exports during the same period. However, major exports from India are still coming from the unorganised sector. Bedspreads are a significant foreign exchange earner for the country. It is one of the few export products where China lags behind India. While China specialises only in machine-made items, India does both machine and handmade items.
With regards to availability of raw material, India is self-reliant. However, a lot of technology upgradation in textile mills is needed – for example in the quality of fabrics used, quality of velvet or cotton. In the case of silk, it’s imported from China, hand worked on domestically, and then made export-ready. Hence there is a need to improve the quality of fabrics used. The recently-announced Rs 6,000 crore special package for the textile and apparel sector may be of help.
Manufacturers feel FTAs, such as an agreement with the EU, will boost exports. They believe the Amended Technology Upgradation Fund Scheme is a good scheme but has to be properly implemented. GST is also seen as helping to minimise costs on many fronts.
