FW
The recent India International Knit Fair held in Tiruppur from February 17 to 19, 2020 showcased end-to-end products pertaining in the knitwear segment. The wide range of displays included summer/winter collections in knitwear for infants, children, men and women. Space dyed yarn garments made from mélange yarn dyed stripes and jacquard were displayed along with cotton, polyester, poly cotton, polyester-viscose blended fabric apparels. Garments made from banana cotton blends attracted visitors. These blends have 80 per cent cotton and 20 per cent banana fiber. Garments with reverse prints, cold pigment dyed 3D prints, acid spray styles, tie and dyed, bio washed, enzyme washed etc also were showcased. Manufacturers displayed special designs, different types of packaging methods and also visual merchandising.
Tiruppur is the knitwear capital of India. The share of Tiruppur knitwear exports in India’s total garment exports is 20 per cent. More than 80 per cent of the industries in this sector are medium and small scale. This is the right time for the knitwear sector to capture the market that’s leaving China, due to an increase in cost of manufacturing. Top brands, stores, wholesalers, importers see Tiruppur as one of the major sources for consumer’s requirements.
The Coronavirus (COVID-19) is expected to severely damage profitability of India’s spinning sector. Even though domestic cotton fiber prices continue to be competitive vis-a-vis international cotton prices, a further correction in international cotton prices amid demand-side uncertainties could render domestic spinners uncompetitive in international markets.
As for the performance of the Indian cotton spinning industry, it has already been severely constrained in the current fiscal amid multiple headwinds, including a demand slowdown in the domestic as well as export markets and unfavorable raw material prices. While the industry was pinning hopes on a gradual recovery in cotton yarn exports from the fourth quarter onwards, aided by softening of domestic cotton prices, the recent developments could prolong tough times for the domestic spinners. The domestic cotton spinning industry is highly dependent on exports, especially to China, where 30 per cent of the cotton yarn produced in the country is exported.
The outbreak in China and the consequent lockout in parts of the country resulted in a shutdown of production units in India, trickling down to lower demand for the yarn. The resultant correction in realisations, even as cotton prices have remained relatively stable on the back of scaled-up market interventions by the Cotton Corporation of India, are expected to contract spinners’ contribution margins.
Mango, the Spanish retailer is the recent addition, has announced its support for the Pakistan Accord, marking the first expansion of the International Accord for Health and Safety in the Textile and Garment Industry beyond Bangladesh.
The decision to support the Pakistan Accord aligns with Mango's Sustainable Vision 2030 sustainability strategy. This initiative aims to minimize the environmental and social impact of Mango's products and operations by focusing on "product, people, and planet." Mango publicly discloses its suppliers down to Tier 3 and collaborates with over 50 facilities.
The International Accord secretariat reported that over 50 brands and retailers have already joined the Pakistan Accord since January, with more expected to follow in the coming weeks.
The International Accord's 187 brand signatories collectively source garments and textiles worth over $2.6 billion from Pakistan. The secretariat anticipates that all 110 signatories with operations in the country will eventually participate, covering 500 to 700 facilities and benefiting tens of thousands of workers.
In addition to Mango, notable companies supporting the Pakistan Accord include Adidas, American Eagle Outfitters, Asos, Boohoo Group, Marks & Spencer, Puma, Uniqlo (owned by Fast Retailing), and more recently, Hugo Boss.
However, Levi’s has not so far signed the agreement.
Apparel exporters in Sri Lanka are impacted by disruptions of imported raw materials from China. Buyers are slashing orders as the novel Coronavirus (COVID-19) spreads into Europe, which is Sri Lanka’s largest export market. Factories in Sri Lanka are to be closed for a period of two to three weeks, while some are planning to prolong it until the raw materials arrive.
Ships are unable to carry cargo from Chinese ports because there is no cargo to be carried and several trading have been cut from shipping lines from Chinese ports.
The outbreak in China has hit India’s manufacturing and exports of medicines, electronics, textiles and chemicals. India sources about 70 per cent of active pharmaceutical ingredients and close to 90 per cent of certain mobile phone parts from China. Indian businesses are calling for cuts in import duties on antibiotic drugs, mobile parts and other items to help cope with the fallout from the coronavirus outbreak which has disrupted supplies from China. Credit with a backstop facility of guarantee may be offered for companies which have the capability to start immediate production of items that can feed into domestic consumption.
Indonesia plans to ease licensing procedures to import raw materials as its manufacturing sector is witnessing the impact of supply chain disruption from China caused by the Coronavirus (COVID-19) outbreak. Simplifying import procedures for raw materials would be one of the strategic measures to cope with the impact. Almost 500 companies will receive special permits to allow them to import raw materials from sources other than China. The raw materials imported by the 500 companies account for two-fifths of the country’s total raw material imports. There has been severe disruption to the supply of raw materials from China, especially for the plastic, textile, footwear, steel and chemical products industries of Indonesia.
Indonesia’s garment exports for the 10 month period until October 2019, decreased 3.6 per cent. The three biggest destinations for Indonesian garment exports are the United States, Japan and Germany. Until October 2019, the Indonesian garment market share in the US market fell from 4.6 in 10 months of 2018 to 4.4 per cent in 10 months of 2019. Growth in the textile industry and textile products in the third quarter of 2019 increased to 15.08 per cent. This achievement is much higher than the achievement in the same period in 2018, which is 10.08 per cent.
• A total of 1,375 brands from 30 countries exhibited
• Approx 135 brands from 25 countries at ‘CPM Body & Beach’
• Around 22,000 buyers from Russia and the Eurasian Economic Union
• Almost 10 per cent growth among France, Greece and Turkey country pavilions
• Increasing significance of fashion ‘Made in Denmark’
The 34th edition of CPM (Collection Premiere Moscow), the largest tradeshow for men’s, women’s and kid’s wear, lingerie, eveningwear and accessories in Eastern Europe, drew to a close on February 27, 2020. In 15 halls of Moscow’s Expocentre, 1,375 brands from 30 countries successfully showcased to around 22,000 professional visitors from Russia and the Eurasian Economic Union.
Nikolay Yarzew, CPM Project Director Russia and CIS said: “CPM has once again confirmed its status as Eastern Europe’s leading tradeshow platform. In particular we would like to emphasise buyers’ growing influence and high level of interest in collections from Russia itself. After the slight increase in VAT in 2019, order volume is picking up once again. Brands from Belarus, the Ukraine, Moldova, Armenia, Kazakhstan, Georgia and other countries are also becoming popular. Thanks to our cooperation with associations, we can always ensure that new brands are presented at every edition of CPM. Start-ups from these markets are also provided market entry opportunities. CPM is a strong event for the retail sector.”
The next CPM will be taking place from September 1 to 4, 2020 at the Expocentre exhibition grounds in Moscow.
The Coronavirus (COVID-19) outbreak in China has affected India’s cotton yarn exports, exerting pressure on yarn realizations. China accounts for nearly one-third of Indian yarn exports. The performance of cotton spinning industry, has already been severely constrained in the current fiscal year amid multiple headwinds, including demand slowdown in the domestic as well as export markets and unfavorable raw material prices. While the industry was pinning hopes on a gradual recovery in yarn exports from the fourth quarter onwards, aided by the softening of domestic cotton prices, recent developments could prolong tough times for Indian spinners.
The movement in domestic prices contrasts with international trend where uncertainties on demand have resulted in a sharper correction to cotton fiber prices in recent weeks. Even though domestic cotton fiber prices continue to be competitive vis-a-vis international cotton prices, a further correction in international prices could leave domestic spinners uncompetitive in international markets.
The impact on contribution margins over the next few months could be lower for companies that have built up adequate cotton reserves at low prices in recent months, have a wider geographical presence in markets other than China, and a focus on non-commodity and value-added products.
The recent international trade fair for the leather goods industry, ILM (Internationale Lederwaren Messe), witnessed a 41 per cent drop in visitors due to Coronavirus (COVID-19). Buyers from big (online) companies such as Zalando or Limango besides smaller retailers from Switzerland, Italy, Austria and the Netherlands, stayed away from the show.
However, none of the exhibitors regretted their participation in the show. Many were also confident about deliveries from the Far East. Supply bottlenecks would not yet be noticeable at this point and the hope that the situation will ease up a bit in the coming weeks is there.
The ILM Offenbach is primarily a specialist fair for all business sectors that have leather goods, bags and accessories in their portfolio. The focus is on international fashion brands, products that embody innovative spirit and contemporary design and meet the most sophisticated standards of elegance, exclusivity and value. A wide range of products from the worlds of sport, travel and work also have their fixed place at the fair - variations on current trends including a selection of fashion collections of small leather items, school supplies, umbrellas, gloves, belts and other accessories.
Bangladesh’s apparel sector is being hit by Coronavirus-related supply chain disorders, with prices for raw materials soaring. As materials from China fail to arrive on time, prices of local stocks of items have gone up by nearly 50 per cent in some cases. Some factory owners have been forced to bring raw materials in by air to meet manufacturing deadlines. And the sector is gearing up for a prolonged crisis as the virus continues to spread worldwide, with fears that destination markets in the US and Europe will be affected. Bangladesh imports some 60 per cent of its woven fabrics from China. Some 15 per cent to 20 per cent of raw materials and 80 per cent to 85 per cent of dyeing chemicals and accessories of the knitwear sector comes from China. And some 40 per cent of raw materials for garment accessories and the packaging manufacturing industry also comes from China every year.
Bangladesh’s apparel sector is the country’s top foreign currency earner. Production in many factories is being hampered by the lack of raw materials. Due to the short supply, prices of different raw materials have increased by between 30 per cent and 40 per cent.
Fast fashion giants could be particularly vulnerable to the spread of the coronavirus.
This depends on a company’s share of sales from China, the total value of products it manufactures in the country, and how quickly inventory turns over. Fashion retailers such as H&M often produce their higher cost items in China, where factories have long developed skill at sewing more complex products such as jackets, while making basic low-cost garments such as T-shirts elsewhere. For H&M, China accounts for about 50 per cent of the total value of products it sells. Inditex, on the other hand, sources just ten per cent of its total value of goods from China, but it has one of the highest rates of inventory turnover, which might normally be an advantage but in this situation could prove a liability. Its largest brand, Zara, can turn a design into a finished product faster than much of the competition and keeps new items streaming into stores. But this also means Zara relies on its supply chain to constantly feed it. Retailers with high stock turnover are likely to be impacted sooner than those with low stock turn.
The virus has forced factory closures all around China, throwing fashion’s supply chain in the country into disarray. Even as factories reopen, many are working at diminished capacity.
