Bangladesh's exports of non-cotton garments, including man-made fibers, could double to $19 billion by 2025 from the current $8.5 billion, predicts a new study by the Economic Relations Division (ERD). 

However, this potential hinges on overcoming several key challenges such as importing man-made fibers incurs duties of up to 59 per cent, compared to duty-free cotton. This discourages investment and increases costs.

Secondly, complex customs procedures and limited access to short-term financing hinder smooth operations and expansion. The industry also lacks skilled workers and modern technology, hindering efficiency and competitiveness. It even does a dedicated fiber security strategy and limited research and development activities further impede growth.

To unlock Bangladesh’s export potential, local entrepreneurs like Md Saleudh Zaman Khan Jitu have emphasised the need for duty-free imports of raw materials. Industry leaders like Mohammad Ali Khokon and Abdullahil Rakib have also called for policy support, including duty-free access and infrastructure development.

The recommendations of these leaders include implementing a fiber security strategy to ensure raw material availability, granting duty-free access to all man-made fiber raw materials, establishing a dedicated low-cost investment fund for the sector, investing in skill development and technology adoption initiatives, streamlining customs procedures and simplify duty drawback processes and increasing research and development activities to enhance competitiveness.

Bangladesh is phasing out export incentives to comply with World Trade Organisation (WTO) rules before its expected graduation from Least Developed Country (LDC) status in 2026.

This move has sparked divided opinions, with exporters fearing loss of competitiveness due to higher costs and foreign exchanges challenges. To support these exporters, experts are recommending reduction in business costs and tackling corruption. 

The new policy reduces incentives for various sectors, including leather, agro products, and new markets. Exporters argue that losing incentives on crucial garment items like suits and shirts would prove detrimental to diversification and global competitiveness. Meanwhile, analysts argue that relying solely on cash incentives is unsustainable and masks underlying issues like high business costs and inefficient processes.

Overall, the phasing out of export incentives presents a complex scenario for Bangladesh. While it aligns with WTO rules and might enhance long-term economic efficiency, it raises concerns for the export sector, particularly the garment industry, in the short term. To manage this transition effectively, careful navigation and alternative support measures will be crucial.

US footwear giant Skechers kicked off 2024 with record-breaking sales of $8 billion in 2023, a 7.5 per cent Y-o-Y increase. The strong performance was fueled by a resurgent Asia-Pacific market and a thriving direct-to-consumer business.

The brand’s sales in the fourth quarter soared by 4.4 per cent, driven by a 6.9 per cent spike in international sales and a 0.3 per cent rise in domestic revenues.

Skechers’ direct-to-consumer sales surged by 20.3 per cent, while wholesale sales dipped by 8.3 per cent.

The brand’s sales in the Asia Pacific region grew by 15 per cent, with China leading the charge with double-digit gains. Its net earnings for the quarter reached $87.2 million, translating to diluted earnings per share of $0.56, up from $0.48 in the previous year.

David Weinberg, COO, says, the strong demand for the brand’s comfort technology products, particularly through its direct-to-consumer channels, is a testament to the brand's strength. 

Many major fashion brands are not adequately addressing forced labor in their supply chains, with luxury giant LVMH among the worst offender, says a new report by KnowTheChain.

The report analyses 65 companies based on their exposure to forced labor risk and their efforts to mitigate it. The average score across all companies was found to be only 21 out of 100, indicating significant shortcomings in their policies and practices.

Lululemon emerged as the leader with a score of 63, praised for its strong human rights due diligence practices. It was followed by Puma and Adidas who demonstrated their commitment to fair labor standards.

Foot Locker and LVMH scored poorly, highlighting the need for significant improvement. Amazon and Walmart both scored 32/100, placing them in the top third-performing of companies overall.

Walmart said it works with suppliers, non-governmental organisations, experts and others to address root causes of these issues, foster innovative solutions and accelerate adoption at scale.

The report concludes, many companies lack transparency about their supply chains, especially when it comes to sourcing high-risk materials like cotton. Few of them provide effective remedies for workers whose rights have been violated with engagement with unions and worker representation remaining low across the industry.

The report calls for stricter laws for companies to disclose and mitigate supply chain risks. It urges companies to provide more detailed information about their sourcing practices and potential risks. They need to establish clear procedures for addressing and remedying human rights violations, the report says

Further, the report calls for an integration of sustainable purchasing practices into price negotiations and sourcing decisions. It also urges companies to engage with workers and unions to ensure their rights are protected.