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Cambodia’s potential loss of preferential trade access to the European Union (EU) could weaken the country’s economic growth and undermine the price competitiveness of the country’s garment exports. Cambodia’s economy depends heavily on its garment and textile industry, and the EU is its largest export market. Loss of trade benefits would be a big blow to the sector. If the EU decides to suspend Cambodia’s EBA eligibility, apparel imports from Cambodia would be subject to the World Trade Organization’s most-favored-nation (MFN) tariff rate, which averages around 12 per cent.
Cambodia’s garment industry has many strengths. Garment production is well-established, and despite rising wages it has relatively competitive labor costs. Yet ongoing tensions and the government’s refusal to address the country’s human rights issues will only add to the sector’s weaknesses. Supporting industries, such as textile manufacturing, are still in their infancy, the sector is dependent on Chinese investment and the infrastructure is poor.
The European Commission has given Cambodia a one-month deadline to respond to its findings over alleged human rights violations in the country. It will then decide in February whether to temporarily withdraw the duty-free Everything But Arms (EBA) trade benefit. Based on Cambodia’s strength as an apparel supplier to the US without any trade benefits, there’s a chance the loss of EU benefits might not make a meaningful difference. In the first ten months of the year, US imports from Cambodia rose 10.84 per cent.
Trade show organiser Tranoi plans to launch its own space during the Shanghai Fashion Week. Tranoï strengthens its presence in the Asian market. The trade show organiser began testing the Chinese market last year with its participation in the OntimeShow fair. It will launch its own trade show next year with its local partner DFO during Shanghai Fashion Week.
The event will be called Nova by DFO & Tranöi, and will be held between March 27 and 30, 2020. The trade show organiser expects more than one hundred international companies to attend and will have fashion shows and spaces for emerging designers to present their work.
Tranoï is one of the leading tradeshows in France and takes place every year during Paris Fashion Week. DFO on the other hand, is a fashion management and market development group for China and operates with more than sixty international clothing brands.
The textile commissioner’s office will soon form of a technical advisory cell for the anti-dumping duty investigation regarding import of nylon filament yarn originating from countries like China, Korea, Taiwan and Thailand. The advisory cell will allow a level-playing field to the industry on deciding on the anti-dumping duty.
Yarn spinners in India have been lobbying hard for imposing anti-dumping duty on all the filament yarns including nylon to Federation of Gujarat Weavers’ Welfare Association (FOGWA). China and other countries are manufacturing new yarns to meet growing demand of the consumers. Imposition of anti-dumping duty on such yarns keeps the powerloom weavers away from getting quality yarn, which ultimately leads to increased import of fabrics and garments in India.
The textile commissioner has assured to release Rs 400 crore pending subsidy amount. Out of more than 9,000 files under TUF approval, the government has given approval to only 180 files.
Mothercare is closing all its UK stores and online platform. For the half year UK sales fell by almost 20 per cent. The brand’s UK retail business has failed to deliver annual operating profit in over 10 years. Besides facing the same headwinds as most retailers did, Mothercare struggled to deliver a stable gross margin as 70 per cent of the UK’s shop floor space was given to partner brands in the baby category. The margin and the contribution from these brands reduced over time, and when Mothercare started introducing more higher margin Mothercare-branded product, it realised its shops were too large to fill with its own product alone. In the face of severe competition, the company tried to provide a higher level of exclusivity, but despite its efforts most of its third party products could be bought elsewhere at cheaper prices. The store estate was reduced to 80 locations last year as part of a series of company voluntary agreement but not enough trade transferred to the remaining stores or move online. Meanwhile, cash constraints throughout 2018 hampered the firm’s ability to launch an effective marketing campaign to restore its tarnished image.
Mothercare is focusing on building its brand by working more closely with its franchise partners and designing its product with the global consumer in mind.
Zalando, a European e-commerce giant based in Berlin (Germany), is winding up its apparel sourcing from India. As of now, the firm’s private label zLabels is just sourcing men’s shirts from a Bengaluru-based vendor and knitted garments from a Tirupur-based exporter. From now onwards, the brand will source shoes from India and basic garments from Bangladesh.
In apparels, the brand used to source mainly high fashion garments (knitted as well as woven) from 8 to 10 exporters of India. Its sourcing amounted to about 20 million euros per year as every month it used to place an order of 300-400 SKUs (stock keeping units) and every SKU had a minimum order of 1,000 pieces. In many cases, it went up even higher.
zLabels started in 2010 with around 11 brands in apparel and footwear category to cater to its niche customers. “These 11 private label brands – Anna Field, Even & Odd, Friboo, Fullstop, Kiomi, Mint & Berry, Pier One, Twintip, Your Turn, Zalando Essentials and Zign – will be kept for the time being and reviewed in line with this new assortment strategy at a later point.
Karl Mayer’s products have a very good price-performance ratio and they minimise the making-up effort.
This includes especially plain Raschel fabrics with seamlessly incorporated, lace-like decoration tapes, which do not require hem on leg cut outs and waistband. For manufacturers of shoe fabrics, the double-bar Raschel machine with piezo-jacquard technology offers wide-ranging patterning possibilities. Contours and functional details such as stabilisation structures are created directly during the warp knitting process. The weft-insertion warp knitting machine produces a fine, transparent product with an irregularly puffed-up fancy yarn. The finished curtain article resembles a woven fabric in its look, but is produced much more efficiently and without the elaborate sizing process. The new terry tricot machine has up to 250 per cent higher output than air-jet weaving machines, consumes 87 per cent less energy and production without a sizing process. The ISO Elastic 42/21 is an efficient DS machine for the midrange segment for elastane warping on sectional beams. This is geared towards the standard business in terms of speed, application width and price, and offers a high-quality fabric appearance.
Karl Mayer’s software start-up KM.On presents digital solutions for customers‘ support. This young company offers developments in eight product categories, and it has already been successful on the market with digital innovations on the topics of service, patterning and management.
US fashion brands are adding active wear. Own-brand labels Zella (Nordstrom) and Ideology (Macy’s) have grown their assortments of the number of products landing each month and in the frequency of drops. These increases indicate a high demand for private label active wear within department stores.
Targeting the value market, Old Navy frequently features discounted active wear in its e-mail communications and promotes the category at attainable price points. May is the favored month for active wear messaging at Old Navy, while 50 per cent off is the most popular discount offered. American Eagle Outfitters focuses on featuring active wear pieces that have lifestyle appeal to the mass market. In its newly launched Tackma Tech performance collection, neons are prominent alongside stretch and moisture-wicking components. Tommy Hilfiger is also getting in on the active wear action. Tommy Hilfiger also infuses its existing brand DNA into the collection by featuring pieces in its signature American colors.
Bright colors are gaining traction when it comes to men’s active wear. Shades like orange and yellow have increased in product counts by 67 per cent and 143 per cent. Patterns are popular this season in women’s wear accounting for 20 per cent of arrivals compared to 15 per cent last year.
Brazil’s cotton output is likely to be relatively flat in the 2019-20 season. Though over the last two years, Brazilian cotton output and exports have risen significantly the yearly growth rate of planting areas is likely to decrease in the 2019-20 season or even be negative. It may be related to the growers’ return. After the large input, and without obvious returns, growers will maintain normal production for next year.
Before the 1996-97 season, the yield of Brazilian cotton hovered at a low level, and then the yield improved gradually. In the 2018-19 season, the yield has grown by 215.8 per cent from 1996-97. In recent years, the influences of planting areas are larger than that of yield on output. Especially in the 2017-18 and the 2018-19 seasons, with the continual decrease of yield, the large rise of planting areas has pushed up cotton output. Viewed from this correlativity, Brazilian cotton planting areas and yield may be flat in the 2019-20 season, and the change on output may be also limited.
Brazilian cotton output is supposed to rise by 35.9 per cent year on year in the 2018-19 season and exports may rise by 43.7 per cent. In the 2019-20 season, output may edge up by 0.2 per cent and exports may rise by 42.9 per cent.
US denim imports were down 1.52 per cent in the first 10 months of the year. As per Commerce Department’s Office of Textiles & Apparel( OTEXA) figures China’s shipments of blue denim apparel declined 21.97 per cent for the year to date. China’s market share of imported jeans for the 12 months through October fell 18.98 per cent to 20.05 per cent, reflecting a similar picture for overall apparel. China’s declines were most dramatic in September and October. While companies such as Guess and G-III Apparel are sticking with Chinese production, and have been able to negotiate with factories there to mitigate price increases from tariffs, PVH is reducing its exposure. PVH sourcing out of China is about ten per cent of its overall sourcing mix but three or four years ago that was close to 35 per cent to 40 per cent.
US denim imports from Mexico increased 2.88 per cent for the year. Denim imports from Bangladesh grew by a slim 1.48 per cent. Vietnam’s denim exports to the US jumped 23.23 per cent. Pakistan’s shipments rose 5.04 per cent Cambodia’s were up 2.37 per cent. Denim imports from Egypt increased 16.47 per cent, shipments from Jordan rose 6.46 per cent and imports from Nicaragua gained 24.29 per cent. Guatemala also posted a solid gain, up 8.29 per cent.
Vietnam’s garment exports in the first 11 months of this year were up nearly eight per cent year-on-year. But Vietnamese textile manufacturers are seeing orders decline, with buyers moving to other, cheaper developing countries. Normally, by the end of a year, manufacturers have enough orders for the whole of the following year. But this year many do not have enough orders for 2020, with some reporting a 20 per cent drop in orders from last year.
Moreover, many have not signed long-term contracts for products, only monthly or quarterly. Many orders have shifted to emerging countries in Africa, while competition with textiles superpowers like China, India and Bangladesh is becoming increasingly fierce. Even China’s orders are being transferred to countries with preferential tariff rates such as Bangladesh and Cambodia. Not only Vietnamese textile and garment producers, but also its fiber industry is facing increasing competition from foreign businesses and rivals in countries such as India, Thailand and Indonesia.
The difficulties being faced by Vietnam’s textile industry include rising costs of raw materials from China and lower prices demanded by foreign buyers. Vietnam is losing its low labor cost edge over other countries even as its use of technology in production remains limited, leading to reduced competitiveness.
