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Twin fairs, the Hong Kong Houseware Fair and Hong Kong International Home Textiles and Furnishings Fair were held from April 20 to 23, 2018. The two fairs welcomed close to 49,000 buyers from 112 countries and regions, up 1.5 per cent on last year. Almost 30,000 buyers visited the Houseware Fair while more than 19,000 buyers attended the Home Textiles and Furnishings Fair. Attendance from mature markets such as Singapore, Canada, the UK and the US, as well as emerging markets including the Chinese mainland, Vietnam, Brazil, Argentina and Mexico, all saw growth.
This year's Houseware Fair had a startup zone, featuring more than 20 start-ups from Hong Kong, the Chinese mainland, Taiwan and Bangladesh. The zone allowed start-ups to exhibit at a lower cost, making the show a springboard for them to connect with overseas buyers and manufacturers and a testing ground to gauge market responses to their products.
Hong Kong International Home Textiles and Furnishings Fair adopted the interior theme and showcased a variety of home textiles, upholstery and furnishings products, providing a one-stop sourcing platform for buyers. The highlight zone, the Hall of Glamour, spotlighted quality brands and designer collections. India and the Chinese mainland set up a number of dedicated pavilions to showcase their products.
Fossil Group and Puma has signed a global license partnership agreement for the design, development and distribution of Puma watches and smart watches through 2028. Kosta Kartsotis, CEO, Fossil Group says Puma is one of the world’s leading sports brands. The brand is excited to partner with them and bring a world class design and distribution capabilities to the Puma watch collection.
Puma and Fossil Group will collaborate on the design and manufacturing of PUMA-branded watches and smartwatches, with products planned to hit the market in 2019. The new products will be available through select department stores, specialty retailers and e-commerce channels in Fossil Group’s extensive global network.
According to Bjorn Gulden, CEO of Puma the company focuses on innovation that helps to make products that fit the needs of the consumers and the world’s fastest athletes.
Post releasing its Q4 results for 2017 in January, H&M which had its biggest profit decline in six years — 14 per cent for the full year —shut down 170 stores in 2018. Speaking on their results, Karl-Johan Persson, CEO, H&M said the fashion industry is changing fast. At the heart of the transformation is digitisation, and it is driving the need to transform and rethink faster and faster. Experts said it’s the company’s lagging production cycle vis-à-vis its competitors such as Zara, Asos and Boohoo (H&M’s cycle can take up to six months with much of its production in Asia, while others are able to manufacture and deliver product in a matter of weeks), that has caused trouble for the company. While some argued it’s merchandising for being less than savvy, with too many basic tees and jeans, and not enough trends to compel shoppers.
Changing strategy
Now, to drive growth, fast fashion companies are taking various initiatives. For instance, this year, H&M is launching two initiatives that could help it diversify. First is Afound, a brand that will sell various clothing labels — including H&M — at a discount. Second, it has dropped a prelaunch collection for /Nyden, an affordable luxury brand aimed at millennials. The new collection will focus on what the company calls ‘cocreation’, culling designs from various personalities to create capsule collections, even inviting fans to submit photos of themselves via an Instagram hashtag ‘iamnyden’ for a chance to win a trip to Los Angeles to design their own collaboration for the brand. /Nyden will also use the ‘drop’ system that even department stores like Barneys New York have enacted outside the traditional four-season system.
It remains to be seen this strategy proves to be successful for the company. Indeed, the moves the brand has planned for itself could help reignite interest for H&M and transform deliveries into ‘drops’ may help retain the attention of distracted consumers. The co-creator initiative is a new way for the company to continue its collaborative reputation.
Other brands adopt new strategies
Zara is steadily increasing higher-price-point items within its Studio collection, while lowering its entry-level price points by as much as 50 per cent in markets like India. It is also launching an augmented-reality presentation to debut in stores. It will allow shoppers to view specific looks from the spring collection when a mobile phone is held up to a sensor within the store on in shop windows. On the other hand, Asos witnessed a jump of 145 per cent last year. This reflects that fast fashion is here to stay. With the right balance of luxury markets, midlevel brands and department stores, these companies must diversify their marketing and merchandising and digital/brick-and-mortar mix to retain the attention of a younger, dramatically different customer.
Fast fashion leads to problems such as child labor and human trafficking. Mass consumption has removed this generation almost entirely from the manufacturing process – unlike previous generations, who would either know the tailor or fabric producer responsible for making their clothes, or make clothing themselves.
An unprecedented demand for clothing on a worldwide scale is resulting in global clothing brands’ making use of factory plants that are unethical in creation of their products. The first area that is being affected is the lives and health of the workers in factory plants supplying these retailers. In countries that engage in mass production, little is done to protect workers and underage persons employed by this sector. Women and young workers spend 14 hours a day in sweatshops.
Fast fashion is the process whereby products and designs move quickly from catwalks to stores and retailers. Brands buy material from Asian factories that are guilty of contaminating local rivers with carcinogenic run-off. The dyes used to color the clothing in businesses that specialize in fast fashion usually contain toxic chemicals such as nonylphenol.
Bangladesh’s apparel sector export earnings moved north despite numerous obstacles. And among the reasons for growth are: compliance with buyers’ conditions, reforms in the readymade garment sector and higher investment and production.
The apparel sector earned $23 billion through exporting products in the first nine months of the current financial year. Although export growth was nearly $4 billion after the disaster, the number of garment factories had not increased. There were some 5,867 garment factories in the country in 2012-13 fiscal, dropped to 4,600 in January this fiscal. Though the number of factories has fallen productivity increased gradually. However, the number of readymade garment workers has remained unchanged at 40 lakhs.
Accord-Alliance and the National Action Plan were formed after the Rana Plaza disaster to establish a fire and building safety program in Bangladesh. Many factories were shut down after failing to meet the conditions of the Alliance and NEP. Buyers did not encourage these factories to continue production as most of them were housed in shared buildings. But despite the obstacles, entrepreneurs keep their business on track through more investment.
Though total export earnings have increased their growth rate has fallen. Entrepreneurs have taken various steps to regain buyers’ trust.
Major retailers are backing on the Cotton Egypt Association’s (CEA) drive to rid the supply chain of falsely labeled Egyptian cotton goods. They support the measures being taken by the CEA to root out dishonest manufacturers and counterfeit goods from the supply chain. John Lewis and Dunelm are among those backing the drive.
Manufacturers who do not meet the new criteria will no longer be licensed to produce Egyptian cotton products or use the trademarked logo. John Lewis says all Egyptian cotton products they sell are 100 per cent genuine. Similarly the UK-based Dunelm Group supports the new accreditation process put in place by the CEA to protect the Egyptian cotton brand and will be continuing to insist suppliers meet those standards as a condition of trade with Dunelm.
CEA has also partnered leading testing and verification body Bureau Veritas. The process, which has been endorsed by several academic and professional bodies, works by extracting DNA from cotton fibers, yarns, woven, knitted, fabric or finished apparel. This can then be used to identify the origin and source of the fibers and the percentage of genuine Egyptian cotton in a product. Only manufacturers found to be producing 100 per cent Egyptian cotton goods will receive the accreditation.
Big brands and retail giants are waking up to sustainability and need for green value chains supporting it with huge amount investments by introducing sustainable clothing lines within their collections and ethical manufacturing processes. Following this, the UK’s most-anticipated fashion trade show that claims to be the largest gathering of fashion buyers, Pure London has announced the launch of a new section within its show format to display sustainable collections. Called Pure Conscious, the new section will focus on sustainable brands by giving them a dedicated space at the event to be seen and heard.
Pure Conscious aims to impart education around the much debated topics and connect designers with prospective retailers and brands. This would entail creating a one-on-one business platform for new and emerging talent(s) as well, that otherwise go unnoticed at similar events.
The fashion event will also showcase a slew of content-based programs and seminars highlighting the circular loop economy, sustainable fashion and ethical processes. Fashion technology as a subject would also be explored as a key to empowering the entire supply chain to be more sustainable in its outlook.
Notably, Common Objective is the team’s latest online platform which was launched at the Ethical Fashion Forum. The platform is focused on carrying forward the 12-year legacy associated with the Ethical Fashion Forum which is described as the “LinkedIn for ethical and sustainable fashion.
Puma may shift some production from China to other Asian markets if US tariffs are imposed on footwear. The German sportswear maker currently makes about a third of its products in China. It is looking to move sourcing of footwear to countries like Vietnam and Indonesia and apparel to Cambodia and Bangladesh.
Apparel and footwear could be included in tariffs to be imposed by the US on Chinese imports. The tariffs could mean Puma has to accept a lower US margin or raise prices. However, Puma might have an advantage over larger rivals Adidas and market leader Nike in being able to move sourcing faster because its volumes are smaller.
For Puma first quarter sales in the Asia-Pacific region jumped 35 per cent. Puma has about 1,400 points of sale in China, compared to about 10,000 for its rivals. The brand has already been shifting production away from China over the last couple of years due to rising labor costs. However, it’s unlikely tariffs could shift footwear production back to the United States, although medium to long-term it makes sense to move sourcing closer to its major markets.
Moving production for the US market could take about 12 months. The capacity freed up could also be used to make products for the booming Chinese market, where Puma’s sales growth was exceptional in the first quarter. <p
For Q1 Kering’s consolidated revenue is up 27.1 per cent on a reported and 36.5 per cent on a comparable basis. Buoyed by favorable market conditions, this increase is well balanced across all distribution channels. Directly operated stores continued to see strong growth momentum (up 39.9 per cent on a comparable basis), with double-digit growth in all geographic regions, particularly North America (up 54.3 per cent on a comparable basis) and Asia Pacific (up 42.2 per cent on a comparable basis). At the same time, online sales more than doubled during the quarter.
Revenue from the wholesale network rose 30.5 per cent on a comparable basis. Kering Eyewear continued developing its organization, and the collections under the Cartier license, whose sales were consolidated for the first time, were very well received. With a solid framework and bolstered infrastructure, Kering Eyewear has successfully made a name for itself.
Gucci’s revenue was up 37.9 per cent and 48.7 per cent on a comparable basis. Sales in its directly operated stores, where all product categories and nationalities recorded double-digit growth, rose 50.4 per cent on a comparable basis. Revenue posted sharp increases in all geographic regions, particularly North America (up 64.4 per cent) and Asia Pacific (up 49.4 per cent). The house’s online sales, driven by the US, reported triple-digit growth.
Yves Saint Laurent’s revenue was up 12 per cent as reported and 19.6 per cent on a comparable basis.
Textile manufacturers in Pakistan want the zero-rated tax facility to continue. They also want pending tax refund claims to be cleared. Pakistan’s exports have fallen despite the GSP Plus status the European Union awarded the country in 2013 that allows exports at sharply reduced or zero duty. Textile exports have a 57 per cent share in Pakistan’s total exports.
In Budget 2017-18, export refinance facility was maintained at three per cent, export-oriented sectors continued to remain zero-rated and the duty-free regime for machinery imports stood unchanged. A five per cent regulatory duty was, however, imposed on the import of polyester filament yarn.
Now, textile exporters expect more incentives in the upcoming budget for 2018-19 that could help boost their earnings. Industry has also called for reintroducing the duty drawback scheme and removing or at least curtailing duty on the import of synthetic yarn and polyester staple fiber. They are seeking the removal of Gas Infrastructure Development Cess as well which will reduce the cost of production and improve competitiveness.
Meanwhile, the textile industry wants tax on cotton imports scrapped. Textile manufacturers are attracted by the long fiber of imported cotton compared to the cotton produced in Pakistan.
