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Luxury brands are investing in China. Increasing spend by cash-rich Chinese millennials is prompting brands to revamp some stores and open new ones in second- and third-tier cities where luxury spending is growing faster. Youngsters account for around 30 per cent of the sector's sales. Millennials from the middle and middle upper are absolutely not hesitant to buy luxury brands.
Armed with family money, 20 to 34 year-olds start buying luxury brands at a young age and purchase more frequently, splurging on everything from jewelry and fashion to cosmetics and handbags. Revenue growth in China's luxury segment was around 15 to 20 per cent for the first half of the year. Chinese luxury shoppers represent almost a third of the global luxury market.
The share of luxury purchases made in China is rapidly increasing, spurred by price cuts from top brands after import duties were cut on some goods and buying products from overseas websites and vendors was made difficult. Price of luxury goods in China, previously significantly higher than in Europe and the United States, have been gradually falling. Taxes have also been lowered by seven to 17 per cent, allowing firms to cut prices.
To capture the rapidly growing millennial market, global names are increasingly moving further afield from China's first-tier cities - the previous engines of growth.
Pakistan’s textile exports dropped 16.1 per cent in July 2018 compared to shipments recorded in June. On a year-on-year basis, textile exports in July fell half a per cent compared to July 2017. Textile exports roughly make up 60 per cent of Pakistan’s total exports.
One reason for the dip is the reduction in tax rebates that made things unviable for textile producers. Right now the industry is operating at five per cent profitability. It is also a fact, though, textile exports tend to fall in July as exporters try to increase exports in the closing month of the earlier fiscal year, which is June.
Pakistan recently adjusted its exchange rate by letting the currency weaken, but it won’t impact national exports. Pakistan’s textile production faces high input costs due to imports, which dilutes the impact of the depreciation on the textile industry. High quality raw material is imported by brands. Chemicals are imported while energy requirement is also generally met by diesel imports.
The textile sector hopes for better exports in winter when consumption increases in the west due to the cold weather and Christmas. Exports are also sought to be hiked by improving localisation and quality of raw material as better brands import better quality cotton to meet their requirement.
As per a deal worth over $10 million between the Australian Alpaca Association (AAA) and MUSIAD Sydney, a Turkish business organisation, a large number of live Australian alpacas will be exported to Turkey for genetics. These alpacas would also be sent to Turkey for scouring and processing into textiles. At present, the fleece is sent to mills in New Zealand for scouring before it can be made into yarns and garments.
The Millpaca stud farm in NSW, Australia produces about 10 tons of fleece each year. According to its owner, and AAA president, Ian Frith, the export deal was a great opportunity for producers as it would help their country, which is the fourth biggest textile manufacturer in the world, boost its breeding herds. The Australian alpaca farmers would be able to explore different markets outside its country and put more value-added products into countries close to Turkey.
Barcelona-based fashion brand Mango reduced loses by 45 per cent to €33 million in fiscal 2017, compared to the previous year's 61 million. The company's turnover, however, declined by 2.9 per cent to €2.19 billion compared to the €2.26 billion reported in 2016. Its EBITDA rose by 50 per cent to €115 million. In 2017, Mango had implemented a restructuring program that resulted in a solid reduction in its net debt. On December 31st, the company's debt decreased 33 per cent, dropping from €617 million to €415 million. Its international operations accounted for 77 per cent of revenue, while Spain made up the remaining 23 per cent.
The brand’s online sales increased by 15.4 per cent to reach €339.2 million, 15.5 per cent of total revenue. These are now predicted to account for 20 per cent of total revenue in 2019. The brand’s investments reached €45 million in 2017, with most of it going towards improving its technological systems. It will further invest €30 million towards digital transformation over the course of this year, along with another 20 million into other projects. The company opened 20 stores last year leading to a total of 211 megastores in India and 2,190 stores across 110 countries.
As per Association of Textile Producers and Exporters of Azerbaijan, Latvia's textile manufacturers plan joint underwear production in Azerbaijan to boost export to CIS markets. The country does not plan to produce in CIS markets as that would be unprofitable for them because of existing customs duties and taxes for the European countries.
Azerbaijani textile products are in great demand abroad and "Made in Azerbaijan" brand is gaining popularity not only in Turkey, but also in the CIS and Baltic countries. Latvianian manufacturers are currently negotiating with the Association of Latvian Lingerie Manufacturers and the Russian Association of Textile Producers for the venture. Presently, Azerbaijan’s textile products are available in Latvia, Russia, Turkey, Ukraine, Belarus. The products produced at the Baku Textile Factory and Gilan Textile Park are available at these trade houses.
The Association of Textile Producers and Exporters was established to support the development of this sector in Azerbaijan. The initiative on the establishment of this association was put forward by entrepreneurs involved in the textile sector. In general, such associations serve to improve relations between the state and the private sector.
Kering has appointed Patrick Pruniaux, current Chief Executive Officer of Ulysse Nardin, as the new CEO of Girard-Perregaux. He will manage the group’s Swiss luxury watchmaking maisons within the watches & jewelry activities. Pruniaux will report to Albert Bensoussan, Chief Executive Officer, Watches & Jewelry Activities, Kering.
Pruniaux’s role will include devising a coherent strategy for accelerating the development of the two Maisons in international markets besides maintaining their unique characteristics, ability to innovate, and the excellence of their know-how. He has over 20 years of experience in the FMCG and luxury industries and in the watchmaking sector in particular. He spent nine years at TAG Heuer and several years at Apple, where he worked on the launch of the Apple watch before becoming MD of Apple in the UK and Ireland.
As clothing sales decline, Japanese apparel companies are diversifying into new fields such as martial arts fitness, boutique hotels and fresh food. Tokyo-based Jun Co, which owns brand Rope, has partnered with American sportswear company Nike Inc in 2015 to create the Nergy brand, which offers sportswear with trendy patterns, as well as martial arts uniforms made from thinner fabric that are easy to wear.
Similarly, TSI Holdings, a Tokyo-based golf clothing brand, in November 2017 opened Groove Zone to offer cycling fitness classes. Okayama-based Stripe International Inc, which owns the casual Koe brand, opened a combination apparel-accessory shop, hotel and restaurant called Hotel Koe Tokyo in Tokyo. Tokyo-based Ryohin Keikaku Co, which owns the Muji brand, has opened a store to sell fresh food in Sakai. The company plans to open a combination hotel-flagship store in Tokyo’s Ginza district next year.
According to a household survey by the Internal Affairs and Communications Ministry, Japan’s average spending on clothing was ¥46,291 in 2017, down 20 per cent from 10 years ago. The apparel market in the country is shrinking, due in part to the declining population and the rise of apps that let people sell their own items.
Intertextile Shanghai Home Textiles will be held from August 27 to 30. This is a trade event covering the entire spectrum of the home furnishing industry like home textile products, furniture fabrics, decorative fabrics and curtain fabrics. Product categories include digital printing, curtains, furniture leather and carpets and rugs.
US brand Lutron, one of the global leaders in the lighting control industry, will offer a wide selection of energy saving dimmers and lighting control solutions. French group Somfy will display automatic control of openings and closures in homes and buildings. Jiangsu Mingcheng from China, an expert in sun-shading and energy-saving technology, will show products allowing users to control curtains by computer, remote, mobile applications.
Carpet Export Promotion Council from India will make its debut at Intertextile Shanghai, organising a pavilion with seven exhibitors who produce hand-knotted wool and silk carpets. Garment and textile machinery expert Global Fortune will introduce its latest advanced textile solutions to the industry.
Kornit Digital, the leading digital textile printer, will showcase its Kornit Allegro system which combines printing and drying in a single step. The system eliminates unnecessary machineries, shortens production time and is widely applicable on multiple fabric types. Leatech will showcase 3D simulation software that allows flexible design and efficient production.
Garment Technology Expo (GTE) was held in Bangalore, August 18 to 20. This is South Asia’s largest and most comprehensive exhibition on apparel, knitting, textile printing technology, fabrics, accessories and allied services. The world's most advanced machines and materials were showcased under one roof. It featured more than 180 exhibitors from all segments of apparel manufacturing and trims.
Along with top exporters, many domestic retail giants, brands and start ups visited the show. Among the visitors were senior executives and decision makers from domestic garment manufacturers, exporters, buying houses, designers, wholesalers, retailers, ordinance factories etc who are looking for machines and materials needed for upgradation and setting up new units for sourcing their requirements.
Bangalore-based buying houses visited the show as they were keen to know about the latest machines and technology. Technology got a great response all through the event. Be it Brother’s IoT technology or Duerkopp Adler’s new launch of the 755S Speed Pocket automated machine, the offerings got an overwhelming response from the industry.
GTE Bangalore, having started in 2006, is held every alternate year and is also growing in stature and reach with each show.
Finished apparel, home furnishings and other made-up textile goods make up 93.5 per cent of US imports from China in the apparel sector. Fiber, yarn and fabric imports from China into the US represent only 6.5 per cent of the apparel sector.
Given that apparel and other sewn products made in China almost always contain Chinese inputs, a significantly greater value of fibers, yarns and fabrics made in China enter the US market in the form of Chinese-made downstream finished products than at the input stage.
Most of China’s 10 million direct textile and apparel jobs are concentrated at the final steps of the supply chain, the highly labor-intensive cutting and sewing operations. China predominantly ships end items versus intermediate inputs. End item imports most directly and negatively impact US textile and apparel production, investment and jobs.
China’s apparel and other textile-based end items compete head to head with western hemisphere products that typically are made from US fibers, yarns and fabrics. By the time a pair of Chinese blue jeans arrives in the US market, they are in a position to displace other products in the market. The US textile industry would be negatively impacted by additional tariffs of 10 per cent or up to 25 per cent on product from China.
