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China “cheats” and “we won’t let it flood our market,” said US president Joe Biden on May 14, to justify quadrupling customs duties on Chinese electric vehicles, imposed alongside tariff rises on other goods. Among them, a wide range of textile and apparel products, a cause of concern for the American Apparel & Footwear Association (AAFA)
However, now the American Apparel & Footwear Association (AAFA) has launched a fresh offensive against the continued imposition of tariffs on apparel and footwear imports, arguing that they are placing an undue burden on both American consumers and businesses. The AAFA's campaign comes amid rising inflation concerns in the US, with apparel prices growing almost 6.8 per cent year-on-year in March 2024, as per the Bureau of Labor Statistics.
“These tariffs are a relic of the past that are hurting American families and businesses,” said Steve Lamar, President and CEO of the AAFA, in a statement. “American consumers are already facing higher prices at the grocery store and the gas pump, and these tariffs are only making things worse."
AAFA not in favour of tariff continuation
In a press release, AAFA titled "Apparel and Footwear Industry Reacts to Report That Will Only Lead to Greater Inflation," Lamar called the move a "real blow" to both American consumers and manufacturers. The AAFA's argument is echoed by industry experts. Retail industry analyst Mark McCrary pointed out tariffs are essentially a tax on American consumers, as the added import costs are often passed down the line to shoppers. “These tariffs are not protecting American jobs,” McCrary said. “In fact, they are likely leading to job losses as consumers cut back on their spending due to higher prices.”
Further frustration stems from the perceived ineffectiveness of the tariffs. As per AAFA, the Biden administration itself has acknowledged that these tariffs have failed to achieve their intended goals. The AAFA release points out similar tariffs were lowered in 2019 with minimal disruption, suggesting alternative approaches might be more successful. In 2022, textile and apparel imports into the US were worth $132.2 billion, exceeding the figure of $127.7 billion recorded in 2019. China was by far the leading supplier country, its export value up slightly to $32.7 billion, with a 24.7 per cent market share.
President Biden himself has acknowledged the negative impact of tariffs on consumers. In a recent address, he stated, "We are working to address the issue of tariffs and bring relief to American families. We understand that these tariffs are contributing to inflation, and we are committed to finding solutions that will lower prices for everyday goods.”
The AAFA is urging the Biden administration to remove the tariffs on apparel and footwear imports. The association argues that doing so would help to lower prices for consumers, boost the US economy, and create jobs in the retail sector.
Statistics to support AAFA's claims
The AAFA estimates that tariffs on apparel and footwear cost American consumers an additional $12 billion annually.
A 2023 study by the Peterson Institute for International Economics found that tariffs on imported goods from China cost American businesses $62 billion in 2020.
The National Retail Federation estimates that removing tariffs could save American consumers an average of $135 per year.
The National Retail Federation estimates that tariffs on apparel and footwear cost American consumers an additional $18 billion per year. Similarly, the American Chamber of Commerce estimates that tariffs have led to the loss of 200,000 jobs in the retail sector. The US apparel and footwear industry supports over one million jobs.
AAFA says, the continued tariffs are not only hurting consumers but also placing a strain on American businesses. Many apparel and footwear companies are struggling to absorb the increased costs of imported goods, which is leading to lower profit margins and reduced investment. Some companies have been forced to lay off workers or raise prices to consumers in order to stay afloat.
The AAFA's campaign to remove tariffs on apparel and footwear is gaining momentum. With rising inflation concerns and the upcoming midterm elections, the issue is likely to receive increased attention from policymakers in the coming months. It remains to be seen whether the Biden administration will heed the AAFA's call and take steps to lower prices for American consumers.
However, removing the tariffs could also have negative consequences. Some domestic manufacturers argue that eliminating tariffs would put them at a competitive disadvantage against foreign producers who benefit from lower labor costs.
The Biden administration faces a delicate balancing act as it weighs the competing interests of consumers, businesses, and domestic manufacturers. The AAFA's latest campaign is sure to add pressure on the administration to take action to address the issue of tariffs.
Walmart, the retail giant, recently announced job cuts in its corporate sector alongside a push for in-office work. This has sparked questions about the true motives behind the moves. While automation is a stated goal, some speculate there's more to the story.
Embracing automation
Walmart claims these changes are part of a long-term strategy to integrate automation across 65 per cent of its stores by 2026. This could involve tasks like inventory management, logistics, and even checkout processes. They plan to consolidate remote workers into three central hubs, fostering closer teamwork. This shift could be a response to challenges faced with a fully remote workforce. The company believes automation will improve efficiency and free up employees for customer service roles.
However, some analysts believe the picture is more complex. Here are factors to consider:
Remote work reduction: Walmart's requirement for most remote workers to relocate suggests a shift in company culture, potentially prioritizing in-person collaboration over remote work benefits.
Cost-cutting concerns: Automation, while an investment upfront, can lead to significant cost savings in the long run. This could be a driving force, especially after recent economic uncertainties. Regardless of the reason, job cuts raise concerns for affected employees. While some may be offered relocation, others may face unemployment. The impact on local economies, particularly near the closed remote offices, needs to be considered.
While automation is likely a factor, it's difficult to say definitively if it's the sole reason. Streamlining operations, potentially reducing costs, and a cultural shift towards in-office work all seem to be at play. The impact on store-level jobs remains to be seen. Effective communication and potential reskilling programs from Walmart will be crucial in the face of automation.
Walmart's job cuts are a sign of changing times in retail. Automation is undoubtedly a factor, but cost-cutting and remote work restructuring might also play a role. As automation continues, the industry must find ways to ensure a smooth transition for its workforce.
The European Union's Corporate Sustainability Due Diligence Directive (EUCSDDD), which came into effect on April 24, 2024, is set to shake up the fashion industry. It’s been touted as a game changer as brands and retailers, of a certain threshold size will now require certain practices and sourcing shifts.
Who needs to comply?
The EUCSDDD focuses on large companies. The exact size threshold is still under negotiation, but estimates suggest it will likely apply to companies exceeding 250 employees and a turnover of €300 million globally, or with over 500 employees and exceeding €175 million turnover within the EU. This captures a significant portion of major fashion brands and retailers.
Statutory sustainable steps
Brands and retailers must implement a comprehensive due diligence strategy. This includes:
Identifying and assessing risks: Companies need to map their supply chains, pinpointing potential human rights violations (like forced labor) and environmental harm (e.g., water pollution from dyeing).
Taking action: Once risks are identified, companies must develop plans to prevent, mitigate, or address them. This could involve working with suppliers to improve practices or ending partnerships with non-compliant ones.
Monitor: Keep track of the effectiveness of their efforts and report publicly on their progress.
Reporting and transparency: Companies are obligated to report on their due diligence efforts, including the measures taken and any challenges encountered.
More ethical and sustainable sourcing landscape
The EUCSDDD is expected to push fashion businesses towards nearshoring. Companies may source more materials and production closer to home to ensure greater control and visibility. It will also lead to strategic partnerships. Collaboration with suppliers who prioritize sustainability will be crucial. Investment in transparency will become mandatory as brands need to invest in technologies like blockchain to track materials and production processes.
However, countries with a heavy reliance on garment exports, like Bangladesh, might face initial difficulties adapting to stricter regulations. The EUCSDDD presents an opportunity for these countries to improve labor conditions and environmental practices, ultimately enhancing their competitiveness in the global market.
Indeed,the EUCSDDD marks a significant step towards a more ethical and sustainable fashion industry. While challenges exist, particularly for developing nations, the directive presents a chance for brands and retailers to embrace responsible practices, ensuring a greener and fairer future for fashion.
The American textile and apparel industry is facing continued uncertainty as the Biden administration maintains tariffs imposed on Chinese imports during the Trump era since 2018. These tariffs, originally intended to pressure China on trade practices, are having a ripple effect across the US industry, raising concerns for both businesses and consumers.
Tariffs here to stay
The tariffs, implemented in stages throughout 2018 and 2019, added an additional 10 per cent duty on billions of dollars worth of Chinese goods, including textiles and apparel. While a ‘Phase One’ trade deal in 2020 saw some tariff reductions on specific categories, many textiles remain subject to the increased duties. “The continued tariffs are a major concern for US apparel companies,” says Rick Helfenbein, President and CEO of the American Apparel & Footwear Association. "These additional taxes make it difficult for American companies to compete with China on price, ultimately hurting US consumers."
Retailers are caught between rising costs due to tariffs and pressure to maintain competitive prices for consumers. “We’re seeing margins shrink as we absorb some of the tariff costs, but we can’t raise prices excessively or risk losing customers,” said Susan Allen, spokesperson for the National Retail Federation.
Industry divided
The impact of the tariffs is a source of division within the industry. Some domestic manufacturers see the tariffs as a positive step, leveling the playing field against cheaper Chinese imports. “The tariffs have created an opportunity for American apparel companies to win back market share,” explains Olivia Jones, spokesperson for the National Textile Producers Association. "We've seen a resurgence in domestic manufacturing in recent years, and the tariffs are helping to accelerate that trend."
While some companies have begun sourcing materials from other countries like Vietnam, the transition is slow and disrupts existing supply chains. “Moving production is a complex process,” explained John Lee, CEO of Evergreen Apparel. “It takes time to find reliable partners and ensure quality. In the meantime, these tariffs are a burden on our business.”
However, many larger retailers and apparel brands rely heavily on Chinese suppliers due to their lower production costs. These companies argue that the tariffs are driving up their costs, which they are forced to pass on to consumers in the form of higher prices. The cost of these tariffs is ultimately passed down to consumers in the form of higher prices for clothing and other textile goods. A recent study by the Peterson Institute for International Economics predicts an average price increase of 4 per cent for American consumers.
Experts predict that the continued tariffs will likely lead to a combination of higher prices for American consumers and a shift in sourcing for apparel companies. Some companies may look to diversify their supply chains, seeking out manufacturers in Vietnam, Bangladesh, or other countries. However, this process can be slow and complex.
“In the short term, consumers should expect to see clothing prices continue to rise,” said David Jones, a retail analyst at Georgetown University. "The long-term impact is less clear, but it's possible that we could see a return to a more diversified apparel manufacturing landscape in the US."
The Biden administration is currently reviewing the tariffs, but no decision on their future has been announced. The issue remains a point of contention, with both the potential benefits of a stronger domestic industry and the drawbacks of higher consumer prices to consider.
Despite the massive growth of e-commerce, a new report by Cushman & Wakefield (C&W), a global real estate services firm, paints a surprising picture of Europe's luxury retail sector – one brimming with resilience and growth. Their first-ever ‘European Luxury Retail Report’ delves into key trends shaping the landscape.
New stores galore
A key takeaway is the significant number of new store openings. In 2023, there were 107 new boutiques across 20 key luxury streets in 16 European cities. This surge reflects a 70 per cent increase compared to pre-pandemic levels, according to the report. This translates to a strong showing, particularly considering the limited vacancies in these prime locations. Seven of these streets boasted zero vacancies, while 16 had vacancy rates below 5 per cent.
Interestingly, the report also indicates a trend towards larger stores. Luxury brands are seeking expansive spaces on prominent avenues. This is likely a strategic move to elevate the customer experience and showcase a wider range of products.
France, Italy, and UK top draws
Geographically, the report finds no surprises. The bastions of European luxury - France, Italy, and the UK - continue to dominate the scene. Over 40 per cent of the new store openings in 2023 were concentrated in these three countries. Cities like Paris, Milan, and London remain magnets for high-end brands and affluent shoppers. Classic destinations like Paris' Avenue Montaigne and London's Bond Street continue to be magnets for high-end retailers and affluent shoppers.
Surprising strength, contradicting e-commerce boom
C&W's findings challenge the notion that physical stores are withering under the pressure of online retail. “The continuing attractiveness of well-established luxury retail locations...” says the report, “highlights the ongoing importance of physical stores.” However, experts point to several reasons for this resilience.
Experience over transaction: Luxury retail is as much about the experience as the product. Flagship stores offer personalized service, exclusive product lines, and brand immersion that e-commerce can't fully replicate.
Tourist return boosts demand: The report credits the return of tourists, particularly from high-spending regions like China and the Middle East, for driving demand in key European luxury destinations.
So, what does the future hold for luxury stores? The report suggests a move towards experiential retail. Physical stores are no longer just about transactions; they're about creating a memorable brand experience that fosters customer loyalty. This might include hosting exclusive events, offering personalized services, or integrating cutting-edge technology to enhance the shopping experience. “Luxury retail is all about human connection,” says Sally Bruer, Head of European Retail Research at Cushman & Wakefield. “While e-commerce offers convenience, physical stores provide a platform for brands to truly engage with their customers and create a lasting impression.”
For example, consider the recent opening of a sprawling Dior flagship on Paris' Avenue Montaigne. The store boasts an art gallery, a cafe, and personalization services, all designed to create a memorable and luxurious shopping experience that can't be replicated online.
Cushman & Wakefield's report upends the narrative of a dying physical luxury retail sector. Instead, it reveals a market that is adapting and thriving. While e-commerce remains a major force, physical stores are not going away. They are evolving into experience-driven destinations, offering a unique value proposition that complements the online shopping experience.
Cotton sowing in the cotton-rich region of North Telangana, may commence up to two weeks earlier if the early rains continue. After focusing on election campaigns, cotton farmers are now preparing their land in anticipation of an early monsoon.
The Cotton Association of India (CAI) has maintained its estimate for cotton pressing during the current trading season, ending on September 30, at 309.7 lakh bales, each weighing 170 kg. The total cotton supply is estimated at 315.86 lakh bales. Including the opening stock of 28.9 lakh bales and export shipments of 21.5 lakh bales, the total supply reaches 359 lakh bales. According Atul S Ganatra, President, CAI, cotton consumption up to the end of April 2024 was 192.8 lakh bales.
Cotton pressing estimates for Telangana have also been upwardly revised by 1 lakh bales to 35 lakh bales.
Following the recent launch of its 'Timelesz' line, Zara continues to enhance its kids' division. The Inditex-led brand has infused a Japanese touch into its children's wear launching a new ‘jinbei’ collection. The collection customises the jinbei, the traditional Japanese summer garment akin to a kimono specifically for children and makes it available on the brand's online platform and in select stores.
This new line features two models: a romper with a V-neck and short sleeves for babies aged one to nine months, priced at €19.95, and a two-piece set for babies aged nine to 18 months, priced at €22.95. Each style is offered in three distinct designs, including geometric prints, floral motifs, and a navy blue color block option. The garments are primarily crafted from organic cotton certified by OCS or viscose, and they are produced in Spain.
With this launch, Zara not only diversifies its product offerings but also strengthens its international expansion strategy, particularly targeting Asian markets. This move further solidifies its position in the children's wear segment.
Zara's children's division gained significant momentum following the closure of Massimo Dutti's children's line in 2020. This strategic decision aimed to streamline and enhance Zara's offerings for young children. By the end of 2022, the initiative was further supported by the complete absorption of Kiddy’s Class, Inditex’s children's fashion subsidiary, simplifying the overall structure.
Founded in 1974, Zara had a retail network of 1,811 stores by the end of last year, encompassing both company-operated and franchised points of sale. As part of the Galician Inditex portfolio, Zara stands alongside brands such as Massimo Dutti, Bershka, Stradivarius, Pull&Bear, Oysho, Zara Home, and Lefties.
Zara, which reports its financial results together with Zara Home, recorded a 10 per cent increase in sales in the fiscal year 2023 compared to the previous year, reaching €26.05 billion.
Hong Kong-listed group, Esprit Holdings has filed for insolvency ‘under self-administration’ for seven subsidiaries in Düsseldorf, Germany. The affected businesses include Esprit Europe GmbH and six other German subsidiaries. The reasons cited for bankruptcy include high rent, labor and energy costs, the after-effects of the coronavirus pandemic, and international conflicts as reasons for financial unviability in Germany.
Esprit operates in over 40 countries with headquarters in Germany and Hong Kong. The insolvency may impact other European businesses, as some affected German entities are shareholders in Esprit companies in France, the UK, and Poland. Esprit has already filed for bankruptcy in Belgium and Switzerland in March.
No shop closures have been announced yet, but 1,500 jobs are at risk. Subsidiary management is working on restructuring plans, and the group is seeking new funding opportunities. Potential investors are interested in strategic partnerships, with Reuters noting an advanced-stage discussion for acquiring Esprit's European brand rights.
Marking a significant cultural shift in a country where, less than a decade ago, women were required to wear body-covering abaya robes, Saudi Arabia recently held its inaugural fashion show featuring models in a swimsuits. The poolside event showcased the designs of Moroccan designer Yasmina Qanzal, who presented a collection of mostly one-piece swimsuits in shades of red, beige, and blue. Many models had exposed shoulders, and some displayed partially visible midriffs.
Through this fashion show, the designer aimed to present elegant swimsuits reflecting the Arab world, notes Qanzal. Hosting the show was a groundbreaking moment for Saudi Arabia as it was the first event of its kind in the country, adds Qanzal.
The fashion show was held on the second day of the inaugural Red Sea Fashion Week at the St Regis Red Sea Resort, located off Saudi Arabia's western coast. This resort is a component of Red Sea Global, one of the ambitious giga-projects central to Saudi Arabia's Vision 2030, a social and economic reform initiative led by Crown Prince Mohammed bin Salman.
Since ascending as first in line to the throne in 2017, Crown Prince Mohammed has spearheaded a series of sweeping social reforms aimed at softening Saudi Arabia's traditionally strict image, which has been heavily influenced by Wahhabism, a purist form of Islam. These reforms have included reducing the influence of the once-dominant religious police, who previously enforced prayer times by chasing men out of malls, as well as reintroducing cinemas and organising mixed-gender music festivals.
While interacting with an APTMA delegation led by Kamran Arshad, Chairman-North Zone; Shafay Hussain, Punjab Minister for Industries, Commerce and Investment assured All Pakistan Textile Mills Association (APTMA) of expediting development of industrial parks in Punjab to boost apparel exports.
The delegation also included Asad Shafi, Senior Vice Chairman; M Ali, Executive and M Raza Baqir, Secretary General. The minister informed that the Punjab chief minister has recently set up a high-powered committee headed by provincial minister for industries to examine and understand the best practices across the world in general and Bangladesh in particular for the establishment and operation of garments cities on the pattern of 'Plug and Play Model'.
He added that such industrial parks will be equipped with the state-of-the-art infrastructure to attract foreign and local investors. The committee would make recommendations on all aspects of the setting up of Garments Parks either in the existing industrial estates or on new sites. Arshad applauded Gohar Ejaz, Patron-in-Chief, APTMA for proposing the vision of apparel cities in the province by constructing modern industrial zones dedicated to garment manufacturing.
These cities will attract local and international investors by leveraging competitive advantages like low-cost labor and favorable trade status, and boost textile exports by $12 billion, he added. These industrial zones are crucial for overall economic growth, as they stimulate industrial activity, attract investment, and foster economic development, he emphasised.
Shafi explained, each of these parks will be spread over 2,000 acre with five districts each. Around 400 stitching units of 2 acre each with a covered area of 100,000 sq ft will be established in each park. The parks will be built with an investment of $2 million each and house fully built up 100 garment factories with 1,000 stitching machines.
A delegation of Pakistan Coating Association (PCA) called on Chaudhry Shafay Hussain, Provincial Minister of Industry and Commerce at Tevta Secretariat to discuss the productivity of paint industry, import of raw materials and problems of the industry. On this occasion, an MoU was signed between Tevta and PCA to facilitate mutual cooperation in the preparation of courses and skilled manpower as per the requirement of the industry.
Hussain termed the MoU of cooperation with the paint industry as a welcome sign and assured that Tevta can provide skilled manpower to the paint industry. Courses related to the coating industry will be introduced in Tevta's institutions. A 3-year paint and ink modern course will be started in Tevta's colleges in Lahore while 6-month courses will also be introduced, Hussain added.
