FW
"Caught in a cross fire, Vietnam is currently being squeezed between two economic superpowers -- the US and China. While it needs free access to the American market to keep its export-powered growth story going, the country also heavily relies on Chinese imports that span everything from yarn to chemicals and machines for assembly lines."
Caught in a cross fire, Vietnam is currently being squeezed between two economic superpowers -- the US and China. While it needs free access to the American market to keep its export-powered growth story going, the country also heavily relies on Chinese imports that span everything from yarn to chemicals and machines for assembly lines.
Vietnam’s relations with China have always ranged from unpredictable to turbulent. Its overreliance on trade makes it particularly vulnerable to geopolitical risks. This slender, S-shaped nation has long attracted the attention of foreign powers jockeying for regional influence. However, it is likely to fast lose ground if dragged into the trade war or embroiled in hostilities with China. Despite rough patches in their relationship, China, which supported Vietnam during its war with the US five decades ago, ensures that Vietnam remains within Beijing’s orbit of influence and promotes trade and investment in Vietnam. The country regularly promotes trade and investment in Vietnam. On its part, the US sends warships to visit the Southeast Asian country to participate in joint activities with the Vietnam People’s Navy.
Vietnam takes a neutral stance
In this clash between the two giants, Vietnam aims to remain neutral. To stay on an even keel, senior Vietnamese
officials always pay a visit to Beijing whenever they visit Washington. The country knows how to maintain its independence without being gratuitously provocative.
However, territorial tensions between Vietnam and China have been escalating for the last four months. In mid-2014, China positioned an exploration oil rig off Vietnam, triggering violent anti-China protests. Then, Chinese competitors flooded across the border to set up factories, too. Investment from China and Hong Kong surged, from $3.4 billion in 2014 to $11.9 billion in 2019, on hopes of taking advantage of the proposed agreement.
Twin typhoons strike Vietnam
The trade war is attracting more Chinese companies to Vietnam putting the country at risk of new duties on its exports. Currently, twin typhoons are bearing down on the country as the fortunes of its Hong Le Trading Company are being inescapably exposed to two opposing forces. Its new fabric unit imports yarn from China which is further spooled into Chinese-made cotton-spinning machines to produce bolts of cream-colored fabric. These bundles of cloth are then trucked to Hong Le’s dye unit, Hao Hanh Trading Co. Chinese dye chemicals are used to treat this fabric before it’s sent to factories throughout Vietnam to be cut into shirts and dresses destined for clothing racks in the U.S
The coronavirus has impacted businesses across China. Stores are being closed and the stores that do remain open are operating with reduced hours and seeing fewer shoppers. Roughly 150 of Capri’s stores in mainland China are closed. Nike has shut about half of the stores it owns in China. Adidas has shut a significant number of shops.
The companies join a growing list of global brands that have decided to limit operations in China, despite their reliance on the country for growth. All of Apple’s stores in China have been shut for now. Starbucks has closed more than half of its roughly 4,300 Chinese locations. Retailers are starting to worry that their businesses outside China will be affected as well if additional travel restrictions are put in place and there’s a drop in spending by Chinese tourists abroad. Such a dip in Chinese tourists seems inevitable as airlines cancel flights. American Airlines has suspended all flights between the United States and mainland China through March 27, while Delta Air Lines won't fly from the United States to China through April 30. Hong Kong carrier Cathay Pacific has slashed flights to mainland China by 90 per cent and making significant reductions elsewhere in its network over the next two months.
Swedish sport and outdoor brand Haglöfs has appointed Fredrik Ohlsson, the company’s former global sales director, as its new CEO. Ohlsson will replace Carsten Unbehaun, who has in turn been appointed general manager of Asics EMEA.
Haglöfs’s strategic focus is on the relationship with customers, thanks to an increasingly targeted, sustainably developed product range, and on digital tools. Last year, the brand introduced new e-tail sites in eight countries, and also opened three monobrand stores.
Haglöfs was founded in Sweden in 1914 as a small-scale backpack producer. It is currently active in 20 European and Asian markets, via approximately 1,250 multibrand retailers, and has a staff of 200 people. Haglöfs also operates 11 monobrand stores in Europe: two each in Helsinki and Stockholm, one in Åre, Avesta, Haparanda and Göteborg (Sweden), one in Oslo, Chamonix (France) and London.
The French Textile Equipment Manufacturers' Association (UCMTF), a group of about 35 companies, has introduced a new modernised logo made of textile ribbons of blue, white, red colors of the French flag.
The new logo will be seen in the main international textile machinery fairs and in the textile magazines as France is the sixth textile machinery exporter with world leaders in such fields as long fibre spinning (wool, acrylic), yarn twisting and control (including technical yarns), space-dyeing, heat setting for carpet yarns, carpet systems, dyeing and finishing, felts and belts for finishing processes, nonwovens, air conditioning of textile plants and recycling processes of textile materials.
Zero-tariff trade has become the number one priority for the UK after Brexit. Without a tariff-free trade deal, everything can get more expensive and difficult. Imposing tariffs would require bonded warehousing, to minimise the duty paid on moving goods. Though the EU is ready to offer a highly ambitious trade deal that includes zero tariffs and quotas, it would also demand specific and effective guarantees to ensure a level playing field.
The EU is the UK’s largest export market. Three fourths of the UK’s exports go to the EU across the fashion and textile industry, so an additional cost on top of that would be catastrophic. It will also be important for the UK and Turkey to secure a separate trade deal. Turkey is a big fabric supplier, and has a customs union with the EU, so the UK will have to do a deal.
At the same time there would be no need for a free trade agreement to involve accepting EU rules on competition policy, subsidies, social protection, the environment, or anything similar, any more than the EU should be obliged to accept UK rules. The UK exited the bloc on January 31, 2020.
Parisian show Premiere Vision has adopted a new calendar. It will include a fall/winter event taking place in early July, rather than mid-September. In 2021, Première Vision Paris will take place from February 2 to 4, followed by an event from July 6 to 8. Blossom Première Vision, dedicated to premium brands and luxury labels’ pre-collections, was originally held in early July. It will now be transformed into a new event, set for the second week of September.
This new calendar has placed Première Vision’s main event only a week after Pitti Immagine Filati 87, the yarn and knitwear show that takes place in early July in Italy. At the moment, Munich Fabric Start is held in the beginning of September, before Première Vision. This will change with the new calendar. Première Vision will also be distancing itself from Chinese textile and clothing fairs, notably Intertextile and Chic, which advanced their dates from mid-October to late September in 2018.
There are three reasons behind the date change. First, products arrive in stores earlier now, with the common practice of pre-collections. Second, collections, along with their delivery, have increased in pace. Third, faced with these changes, collections now develop over longer periods of time, beginning the process earlier.
North Face is designing garments with their entire life cycle in mind. The focus is on extending the product’s lifespan and finding new purposes for it when it’s finally beyond use. Interacting with worn-out clothes helps designers see parts of garments that tend to break or tear first, so designers will now reinforce these parts. Among the pieces from the line is a kimono sweater made from an old puffer coat. It’s chic, with clean lines, giving new life to a garment that would have ended up in the trash.
Circularity is a movement devoted to keeping clothes out of landfills. When it comes to the fashion industry, this involves wearing garments longer, repairing them when they are damaged, then repurposing or recycling them when they have reached the end of their life. Many brands are shifting toward this model. Since 2000, the average number of times a consumer wears an item before throwing it away has dropped by 36 per cent. Many people use a garment only eight to ten times before throwing it. These habits are contributing to the destruction of the environment. Every year, 85 per cent of all textiles produced end up in landfills or the ocean. Since most clothes are made from plastic-based synthetic fibers, these garments might take hundreds of years to decompose.
The coronavirus outbreak in China is impacting Nike’s business forcing it to shut down half of stores in the country. The brand could fall short of its earnings consensus for its third fiscal quarter by as much as 15 cents per share due to store closures across China in response to the coronavirus outbreaks.
However, despite the difficult situation, Nike’s long-term opportunity to continue to serve consumers in Greater China with inspiration and innovation remains exceedingly strong. China has been one of the biggest growth markets for Nike, and the world's largest sportswear maker has relied heavily on the spending power of Chinese consumers to counter slowing sales growth in North America.
In December 2019 revenues of the retail sector dropped 0.9 per cent in Europe. In 2018, sales of the sector fell 2.2 per cent. This setback breaks the upward trend that the sector experienced in recent months. Last June, fashion trade in Europe grew 2.9 per cent and touched 3.1 per cent in September but by November it was 1.5 per cent. In fact, January, May, April, and December were the only months of 2019 when the fashion sector experienced poor sales, with a decrease of 0.3 per cent, 4.8 per cent, 2.4 per cent and 0.9 per cent respectively. In the whole of European Union, the textile, clothing and footwear trade registered a year-on-year decrease of 0.2 per cent in December.
The largest increases in 2019 were recorded in Romania, Hungary, and Ireland with a year-on-year growth of 8.5 per cent, 6.1 per cent, and 5.2 per cent respectively. In Spain, the rise in trade was 1.1 per cent while Germany, France, and the United Kingdom marked increases of 0.8 per cent, 2.5 per cent and 2.9 per cent in 2019.
American shoppers are helping boost European retail market. Fashion and beauty are among the main beneficiaries of tourist spending in the UK and Europe.
Milan Fashion Week will be held from February 18 to 24, 2020. Typically an event like this attracts a thousand visitors from China, buyers, journalists or designers. But now very few are expected, mainly Chinese visitors who were already in Europe at the time of the outbreak. So the idea is to have the Chinese virtually participate in the Milan Fashion Week. Eight young Chinese stylists will be given the chance to participate in the Fashion Hub Market. This will be achieved through pre-recorded video discussions and figures that will allow them to present their projects. As the Coronavirus epidemic intensifies, the National Chamber of Italian Fashion has declared its solidarity with China. The campaign is twofold, with a special event and multiple video conferences that will take place between both countries all week.
The fashion week has announced 56 runways. The 2020-21 season is dedicated to ready-to-wear for fall/winter. Moncler, Ports 1961 and Philipp Plein will be returning, accompanied by Gilberto Calzolari and Vìen, who will be showing for the first time. In addition, a Chinese brand, with a presence in Europe and the US, is expected to show. Meanwhile, Italian fashion has already been economically penalized by the impact of the Coronavirus. For the first semester of 2020, the sector’s revenue is expected to decline by 1.8 per cent, particularly from January to March.
