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Hanesbrands has made a huge splash in its relatively short tenure as a publicly traded company. The US major is best known for undergarments, but other products include sports apparel and hosiery. In its most recent quarter, it saw a 11 per cent rise in revenue, with adjusted earnings from continuing operations climbing by 12 per cent.
Hanesbrands enjoyed strong share-price performance between 2012 and 2014, prompting the company to split its share last year. Hanesbrands did extremely well coming out of the gate, seeing its share price climb by more than 50 per cent less than a year after its IPO. But the recession of 2008 and the ensuing financial crisis sent the stock falling sharply, reaching single-digit share-price levels before bottoming out and rebounding.
It didn't take long for Hanesbrands to get back to where it had traded before the crisis, but several years of sluggish performance put a cap on the stock’s appreciation potential. That changed in late 2012. From there, the stock doubled in less than a year and substantial gains continued through 2014 and into early 2015. By the time the company decided to do a stock split, its share price had climbed almost to $130.
The number of chemicals used in the making of fashion-forward jeans is extensive and controversial too. After major players in the denim industry sounded off their concerns for Aniline, a chemical used in indigo dyeing, during the recent Kingpins Transformers, the substance has garnered new attention from quite a few.
Despite growing campaign against chemical and its possible links to cancer, the said chemical is used by major brands in the denim industry. Till now, Scandinavians are the only ones who have completely Aniline-free. It is the main raw material used in the manufacturing indigo. It was first obtained and isolated from indigo in 1826, taking its name from the actual plant where the substance was found Indigofera anil.
The Environmental Protection Agency’s (EPA) reports that Aniline has been under the organizations statutes/regulations since 1978 making the possible dangers of the substance known for over the last 30 years. The Agency spoke on the possible consequences of Aniline exposure beyond the classification of a possible carcinogen, explaining that the chemical vapors can also be absorbed through the skin. This enforces anxiety among denim heads due to the skin contact associated with wearing a garment that crossed paths with the chemical. However, the EPA also said that they are unaware of any recent issues with Aniline and denim assuaging those concerned about the possible ban from the industry.
Donald Trump’s announcement that he intends to pull the United States out of the Trans-Pacific Partnership (TPP) agreement has breathed new life into the largely dormant Regional Comprehensive Economic Partnership (RCEP). It is a rival multilateral free trade proposal that puts China and ASEAN in leading roles.
Signed in February this year, the TPP was expected to liberalise trade among its 12 signatory Pacific Rim nations including the US, Canada, Mexico, Vietnam, Malaysia and Japan. Cambodia’s exclusion from the trade pact was seen as potential blow to the Kingdom’s economy, primarily because the deal would give some of its competitors particularly Vietnam a privileged access to the US market.
Jayant Menon, Lead Economist for Asian Development Bank’s office for Regional Economic Integration, said that the uncertain future of the TPP had galvanised interest in the RCEP, a more inclusive and less-stringent 16-nation Asia-Pacific free trade agreement that includes all 10 ASEAN member states as well as China, India and Australia. With the TPP effectively dead, Menon feels this would provide an opportunity for the RCEP to fill the vacuum and set the scene for trade policy in this region. While it would be tempting to think of the RCEP as a China-centric deal, Menon said that despite China being the dominant economy in the grouping, the trade deal should benefit all signatories if implemented properly.
However, unlike the TPP, the rival multilateral trade proposal does not require its member countries to liberalise trade or enact sweeping economic reforms. RCEP has to become more ambitious in terms of what it needs to achieve, and [its signatories must] avoid concluding an agreement seen as achieving too little in terms of genuine reforms. Analysts say the TPP’s lofty reform goals, and that potential legal entanglements would largely be handled by US Courts, were defining reasons why certain Asian countries including China and Cambodia were unlikely to seek inclusion in the deal.
Retailers have long depended on sale of high-margin winter coats and boots to boost their annual profits but with the season becoming shorter and warmer, US fund managers, convinced that the industry is becoming a victim of climate change, are leaving departmental stores and apparel stocks. The industry's long supply lines are one reason why apparel companies and department stores struggle to adjust to warmer winters. The industry is also still wedded to the idea that buyers want winter coats which tend to have margins of around 40 percent in early October when summer weather often stays on.
On record, the 2015-2016 winter was the warmest that prompted many US fund managers to abandon apparel stocks altogether. Approximately 48 per cent of US actively managed equity funds have zero exposure to apparel companies up from the 38 per cent of funds that rejected apparel stocks at this time last year, according to a data by Morningstar.
There are signs that this season will continue to be hard on apparel makers. The average temperature in October was nearly 58 degrees. That was the third-warmest October on record and the warmest since 1963, according to the National Centers for Environmental Information.
The average October temperature has warmed by 0.6 degree per decade over the last 30 years, with only September having a greater increase in average warmth, it is learnt. Fifteen of the 16 warmest years on record have been in the 21st Century.
The depreciation of Indian currency is a boost for export of garments but for a short term. It is being said that this depreciation will be good for the export industry only if the situation continues for a longer period.
The rupee plunged to a record low of 66.246 against the US dollar on November 8 before recovering to settle at 68.395 on December 1. One of the reasons for the decline in value is outflow of money from prospective foreign investors. As Ajay Sahai, Director General and CEO of Federation of Indian Export Organisations comments the fall in Indian rupee is good news for exports industry and with the rupee depreciation and rise in dollar value, improvement in export of garments is expected at least for short run. But the country will be at loss if there is greater fall in values of currencies from other major emerging markets.
Raja Shanmugham, President, Tirupur Exporters’ Association feels the depreciation of the Rupee has definitely helped garment-oriented exports. However, the gain is only for a short-term as we have been experiencing this kind of situation since the last few years when the rupee falls by the year end and the value begins to increase within a few days. Hence, most
"While opportunities are rife, Ghanaian companies and artisans are not able to explore US markets as expected. Owing to this, US Ambassador to Ghana, Robert P Jackson, has made repeated attempts to leverage the Africa Growth and Opportunity Act (AGOA) to expand their businesses and contribute more to the growth of the Ghanaian economy. For him, the potential under the Act was enormous, he urged local business to ensure that they took advantage of it to their benefit."
While opportunities are rife, Ghanaian companies and artisans are not able to explore US markets as expected. Owing to this, US Ambassador to Ghana, Robert P Jackson, has made repeated attempts to leverage the Africa Growth and Opportunity Act (AGOA) to expand their businesses and contribute more to the growth of the Ghanaian economy. For him, the potential under the Act was enormous, he urged local business to ensure that they took advantage of it to their benefit.
The entire discussion was a part of the Annual General Meeting of the American Chamber of Commerce (AMCHAM) Ghana, in Accra held recently. He also gave the assurance that there was not likely to be any changes to the Act under the administration of billionaire businessman, Donald Trump. The world is presently sitting on tenterhooks awaiting to see what new policies Trump will introduce and what he will review or scrap. During his political campaign for votes, the US President-elect made a number of comments regarding foreign policy and trade treaties, issues which many are not clear his next line of action should be assume the reins of government come next year.
Reaping the benefits of AGOA advantage
Ghana has enjoyed access to the US market under the AGOA since its inception in 2000. AGOA presents a significant opportunity for Ghana to increase its manufacturing capacity and diversify its exports. Majority of the country’s exports to the US are raw materials, with cocoa and wood being top exported products. A lack of supply capacity, lack of financial resources and AGOA’s ad hoc implementation has led to its underutilisation.
AGOA is the US government’s signature trade initiative with sub-Saharan Africa, with 37 beneficiary countries enjoying duty-free status for exports into the US. AGOA waives duties on more than 6,400 products exports from eligible African countries to the US. AGOA has recently been renewed for the next 10 years by the US Congress.
As of June 2015, AGOA-eligible countries had exported nearly $480billion worth of goods to the US. By providing duty-free access to the US market, AGOA has succeeded in helping eligible nations grow, diversify their exports to the US, and create employment and inclusive economic growth although there is still much left to be desired. Under AGOA, eligible countries can export products including value-added manufactured items such as textiles to the US duty-free.
Ghana’s export of apparel and clothing under the AGOA has expanded from less than $250,000 in 2001 to more than $9million last year. Melinda Tabler-Stone - Charge d’ Affaires at the US Embassy at a workshop in May this year highlighted that with investment partnerships with US companies and technical assistance from USAID, we fully expect to see another large increase in exports in 2016 with the potential to provide employment opportunities for thousands of people.
Dhaval Color Chem, based in Mumbai, provides digital textile printing, sublimation digital printing and screen textile printing solutions. The company has opened a facility in Bangladesh, where the garment industry can experience the printing technology and collect samples. Dhaval will also provide the technology, training and everything required for textile printing.
The facility is meant to address the lacunae in the country’s readymade garment industry, especially in value addition for printing, and to add more value to the product range. Bangladesh mainly exports only plain garments but this is seen as insufficient to maintain steady garment exports.
Bangladesh has a target of reaching $50 billion in garment exports by 2021. Another reason for Dhaval to start operations in Bangladesh is the geographical location and cultural similarities between Bangladesh and India.
With recent advances in digital textile printing, many complicated patterns and colors can now be instantly printed on textiles, giving images and original art-work a new canvas. With cutting edge digital print technology, Dhaval offers new generation, high speed technology with unique print solutions that meet all printing requirements. The company answers all digital printing needs through direct to garment printing and direct to fabric printing.
The Woolmark Company’s ‘Grown in Australia, Made in India’ initiative was in the spotlight, when the global authority on wool joined forces with India Fashion Forum to host a full day industry seminar. It attracted dignitaries including Australian Deputy High Commissioner Chris Elstoft, celebrated fashion designer Ritu Kumar, Satya Prakash Thakur, Chairman, Bhuttico as well as India’s leading retailers and manufacturers.
Designers Karishma Jamwal and Jimit Mistry presented a fashion show for Monte Carlo, Ambassador Shawls and OCM brands highlighting Merino wool’s versatility, innate luxury and boundless potential. Popular television celebrities Shravan Reddy, Ekta Kaul and Ruslaan Mumtaz walked the ramp for the designers while elaborate wool installations and panel discussions with industry experts highlighted the eco-credentials of wool and the farm to fashion journey.
Talking in support of the Wool Conclave, textile minister Smriti Irani said the farm to fashion journey truly highlights how Merino wool can beautifully be transformed into fashion pieces in India. She further said India would encourage the use of wool as a natural fibre as it aims to promote the Indian wool industry. This natural and biodegradable fibre is easy to tailor which makes it a popular choice for most manufacturers and retailers in India.
A delegation of Italian businessmen including President of Association of Italian Textile Machinery Manufacturers (ACMIT) is expected to visit Pakistan from December 4 to 7. The delegation is expected to visit Lahore and Islamabad. And as per Ijaz A Khokhar, Central Chairman, Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) they will be signing a MoU with ACMIT for mutual cooperation to enhance trade and investment. The proposed MoU will be help in getting a partner in Italy, help in tech exchange and facilitate in business development and strengthening cooperation between Pakistan and Italy.
The PRGMEA chairman said Free Trade Agreement (FTA) between Pakistan and Turkey will open new business opportunities especially for textile and leather sectors. The Turkish garment sector was producing highly advance products and FTA will provide an opportunity to Pakistani garment sector to gain the experience of Turkish firms in further improving their products.
The PRGMEA has made efforts to develop close contacts with Turkish associations, Khokar said that the Association was taking revolutionary steps for tracking the industry modern production lines enabling it to compete with international market easily. It will be also taking drastic steps for the promotion of entrepreneurship and female and male students of fashion designing institutes would be trained under this programme. Khokar also informed necessary arrangements are being finalized for setting up state of the art Pakistan Readymade Technical Training Institute costing over Rs 125 million and development work on institute will soon be carried out.
The North Face and biotech start-up Spiber have unveiled the world’s first outdoor apparel prototype to feature synthetic spider silk. The prototype has been created with Spiber’s synthetic spider silk material Qmonos using existing industrial manufacturing equipment.
It is a parka and serves as a physical incarnate of Spiber’s bioengineered proteins mimicking spider silk and the first step toward commercial production of the sustainable fiber. The full offering includes men’s and women’s jackets and vests, tops and bottoms, equipment, footwear and accessories for a range of products suited for traveling and times of inclement weather in urban environments.
Spiber has already applied its synthetic spider silk on a seat for a concept car with Lexus that absorbs energy on impact. The long-term goal is widespread adoption of synthetic protein materials for industrial use. Spider silk is a renewable resource that doesn’t rely on fossil fuels and requires fewer chemical dyes when made into a garment. It is the toughest material that is known. The fibers Spiber has created can withstand existing industrial machinery.
A protein material was made through a completely biological process like any other protein material; a synthetic process was used to form that material. Reducing society’s reliance on petroleum-based materials is part of Spiber and The North Face’s vision for a sustainable future.
