FW
Small and medium-sized garment factories in Bangladesh are shutting down. The main reasons are: the high cost of production, lower prices offered by foreign buyers, the recent wage hike and the recent free trade agreement between Vietnam and the European Union. Many work orders are shifting to Vietnam, one of the competitors of Bangladesh, because of this free trade agreement. Another important reason is that larger firms’ sub-contracting work to small units has been restricted after the Rana Plaza building collapse in 2013. The restriction on sub-contracting is a major threat for the units as most of them are dependent on the bigger units overloaded with work orders. Now they can’t do the same job because of poor compliance. It is this that prevents retailers from placing work orders with them. Also, small garment units face capital shortages and have low negotiation skills.
There are more than 1000 small and medium units in the garment sector, each employing between 500 and 2,000 workers. About 50 small and medium-sized garment factories have shut operations since April. Closures will take the number of small and medium apparel factories that went out of business in the last one year to more than 200 units.
Primark is delivering strong sales growth in the United States. The UK-based brand has a disciplined store-by-store approach. It offers trendy clothes at rock-bottom prices. It is confident it can succeed in a country that has been a graveyard for some of Britain’s biggest retailers, including Marks & Spencer, Tesco and most recently Topshop. That confidence is underlined by a move to create a supply chain closer to the US market. Primark currently sources all its clothes for the United States from its traditional suppliers, China, India, Bangladesh, Cambodia, Vietnam and Turkey - a costly exercise as stock is freighted across the Pacific through the Panama Canal and up the US eastern seaboard. The plan now is to tap suppliers from countries in Central America, such as Guatemala, Costa Rica and Mexico. Primark’s combination of value, fashionability and breadth of range can mean it can build a US business over the next decade as big as its one in Europe.
Founded in 1969, Primark trades from 373 stores in 12 countries. Profit increased nearly fourfold in 10 years - achieved without venturing into online shopping. Primark contributes more than half of the total profit of its parent, Associated British Foods, which also owns major sugar and grocery arms.
The Philippines is eager for a free trade agreement with the US. The hope is that this will provide preferential treatment and better market access for the country’s export items.
In the meantime Philippines is maximizing its trade privilege with the US under the Generalized System of Preferences. The GSP allows the Philippines to export a total of 5,057 products, or nearly half of the 10,600 US tariff lines, to the US at zero or reduced tariffs. However, the Philippines could lose this preferential treatment once it has been classified as an upper middle-income economy by the World Bank. The government is targeting to develop the Philippines into an upper middle-income economy by 2022. Therefore, the country could lose its GSP status that year.
Trade in goods between the Philippines and the US last year improved 7.16 percent. This makes the US the country’s third-largest trading partner next to China and Japan. Further, exports to the US grew 10.04 per cent, making it the country’s top export destination. Electronic products account for bulk of shipments. Aside from this, top exports to the United States include manufactured items, apparel and clothing, ignition wiring sets, machinery and transport equipment and coconut oil.
Nigeria is aiming to produce up to 4,50,000 metric tons of cotton in three years. This is part of an effort to revive the textile and garment industry. Up to 3,00,000 farmers will be engaged to achieve this aim in 26 out of the 36 states of the country. Six thousand metric tons of cotton seed have been imported and an additional 2000 metric tons have been sourced locally.
The total expected yield at the end of the current season is 3,02,440 metric tons. Nigeria is aiming at accelerating a sustainable increase in the production and processing of cotton. The cotton sector aims at increasing production by 20 per cent as farmers are encouraged by better returns due to increasing cotton prices and improved yields. At one time Nigeria’s textile industry created over 8,00,000 jobs, representing 25 per cent of the total number of jobs in the manufacturing sector. There were 175 textile mills in the country during its golden era (i.e. 1985 - 1991) out of which all but 27 of them have gone under. Key challenges affecting the sector are lack of cotton lint, smuggling and counterfeiting, inadequate infrastructure, limited access to power and funding. Funds needed by manufacturers to recapitalise have been hampered by the high interest rates charged on loans by financial institutions.
Intex South Asia will be held in Sri Lanka, November 13 to 15, 2019. This is the only international textile sourcing show in South Asia, where buyers from around the world meet with quality suppliers. Suppliers from 12 countries and regions will showcase yarns, apparel fabrics, denim fabrics, chemicals, clothing accessories and allied services. A textile dyes and chemicals zone from India will host leading textile chemical, dyes intermediates, pigments and auxiliaries companies. With the inclusion of this pavilion, Intex South Asia has successfully integrated the textile value chain at a single global trading platform.
The Interactive Business Forum will deliver high quality market intelligence to support industry efforts to upgrade, move up the value chain and better understand intra-regional trade and help manufacturers gain a competitive edge. The forum will feature workshops covering a range of topics, including the latest trends, market developments and technological advances in the industry and enable all to access current global market intelligence.
There is a clear shift from the west to the east. While western economies are slowing down, the economies of South Asia are among the fastest growing in the world. Industry and businesses are coming to this region and Intex South Asia aims at speeding up this process.
Garment workers in Eastern Europe are coping with difficult conditions. Romania is one of Europe’s biggest garment producers and the sector is among its top exports. European fashion brands have long found a foothold in the Eastern European country, with at least 4,00,000 people employed in the industry. But a large number of Romanian garment workers are living on the poverty line, earning below the minimum wage as they are regularly abused by the factory owners. Overtime, up to 15 hours a week - often goes unpaid in Romania. Factories are poorly ventilated. Managers deny basic human rights and barely allow toilet breaks. Changes to the country’s tax code have also added to the workers’ challenges. In January 2018, the burden of social contributions payable by the employer was shifted to the employee. The new provisions, while decreasing income tax from 16 per cent to ten per cent, now provide 35 per cent in mandatory social contributions to be paid by the worker. The new fiscal move hits people who are at a higher risk of poverty. Romania’s poverty rate is already ten per cent higher than the EU’s average.
Bulgaria’s garment and textile sector accounts for around 10 per cent of the country's total exports. But unpaid salaries over the years have seen protests erupt. When Bulgaria joined the EU in 2007, there were 1,65,000 textile workers. Today only 90,000 remain.
Cotton stocks are building up in India due to sluggish exports and fresh crop arrivals in Punjab, Haryana and Rajasthan. A cotton output of 7.5 million bales is expected in Punjab, Haryana and Rajasthan, compared with 6.5 million bales last year. Cotton spot rates are hovering around the minimum support price for the commodity, down eight per cent to ten per cent from a year ago. The domestic cotton market is also suppressed due to headwinds in exports of cotton yarn, but demand for cotton seeds and better quality of fiber this season are managing to keep prices from slipping further.
Indian prices have to come down to buttress sagging exports of cotton yarn. Either domestic cotton prices needs to be at par with international prices to arrest the fall in exports or the currency valuation of the rupee and the dollar needs to be favorable for the trade. A good crop is anticipated in the current year as the condition of the standing crop is good. If the favorable weather keeps up, a record output and a high quality of cotton is expected this year. The condition of cotton plantations across the country is good and a record harvest is on the cards.
Ethiopia’s exports of textiles and apparel grew 32 per cent from 2012 to 2016. The share of textile and garment exports in the country’s total exports grew from 2.46 per cent to 5.46 per cent during the same period.
Ethiopia is transitioning from an agriculture-based economy. The textile-apparel industry is a significant element of the economy, in both financial and social terms, as it is a major source of employment and foreign exchange. Cotton consumption in Ethiopia is expected to increase in the coming years as a result of expansion in the textile industry due to foreign investment from countries such as China, India, and Turkey, among others. The Ethiopian cotton sector currently meets 70 per cent of the domestic industry’s raw material requirements. Several foreign companies have committed to investing in industrial parks to accelerate textile production and garment manufacturing. There are at least a dozen spinning mills in the pipeline to address some of the expected demand for yarn. These planned facilities, plus the 15 existing spinning mills currently operating, will bring the country’s installed annual processing capacity of lint cotton to 2,00,000 metric tons.
In sub-Saharan Africa, cotton-producing countries export about 90 per cent of their fiber.
Cotton USA showcased it latest innovations at Première Vision in Paris, France, held from September 17 to 19, 2019. The innovations on offer included new performance materials and origin tracing technology. The aim is to inspire the textile industry with new ideas, technologies and opportunities that propel businesses forward and help its partners rise to meet growing customer expectations and build business opportunities. Becoming a Cotton USA licensee can benefit businesses. The Cotton USA mark is of high value to consumers and can drive both preference and higher prices. Cotton USA is dedicated to providing the entire supply chain with networking opportunities, ongoing education, and the latest research and technological innovations. This is a platform that not only promotes close collaboration between upstream manufacturers with fashion designers, but also showcases denim fashion that combines art, technology and innovation through the creativity of designers.
Cotton USA is a part of Cotton Council International (CCI), a non-profit trade association that promotes US cotton fiber and manufactured cotton products around the globe. CCI’S reach extends to more than 50 countries through 20 offices around the world. With more than 60 years of experience, CCI’s mission is to make US cotton the preferred fiber for mills/manufacturers, brands/retailers and consumers, commanding a value-added premium that delivers profitability across the US cotton industry and drives export growth of fiber, yarn and other cotton products.
"Women power is gaining prominence in 2019 as many female sportspersons are setting records in some of the world’s historically male sports. This was particularly evident when Cori ‘Coco’ Gauff become the youngest player to qualify for Wimbledon and the USA’s women’s soccer team won their second consecutive FIFA World Cup title. Also, more women now occupy high level positions like head coaches and even as owners of male dominated sports teams."
Women power is gaining prominence in 2019 as many female sportspersons are setting records in some of the world’s historically male sports. This was particularly evident when Cori ‘Coco’ Gauff become the youngest player to qualify for Wimbledon and the USA’s women’s soccer team won their second consecutive FIFA World Cup title. Also, more women now occupy high level positions like head coaches and even as owners of male dominated sports teams.
This growth in female sportspersons is being tapped not just by activewear but also other fashion brands. Edited’s retail data platform analysed the new offerings launched by brands for two of the most prominent US female team sports.
The data tracked over 500 new soccer related products. It noted that the vast majority of products stocked by
these brands included T-shirts and jerseys. The top two stockists included Fanatics and Dick’s Sporting Goods, which stocked 255 and 129 products respectively. Retailers like Walmart and Macy’s are also breaking into the top five list with their product offerings too. This trend suggests that there’s demand for this product and retailers are capitalising on it. This is encouraging retailers to stock more sports-related assortments, and align their drops around particular sporting events.
WNBA increases stock of women sports apparels
Founded in 1996, the WNBA recently increased its stock of women sports apparels by 261 per cent YoY. The league procured its apparels from not just existing goods retailers but also first time investors. Its pricing structure for buying these apparels has also changed with the price of its cheapest garment decreasing from $22.00 last year to $7.99 this year. However, price of its most expensive garment has increased from $75.00 to $139.99. The average full price commanded by the brand has risen dramatically, while its number of products discounted has declined.
Growing market influences brands to launch new styles
The sportsworld has not just influenced the runway but has successfully translated well into the mass market. For example, many brands launched new sports jerseys as a part of their Spring ’20 collection. They also introduced new athleisure styles. For instance, Nike, which earlier stocked only $35.00 Dri-Fit t-shirts, now offers premium $100.00 WNBA jerseys.
The growing popularity of sports apparels makes it necessary for brands to launch innovation trends in this sector. Edited helps these brands to achieve this goal besides helping them to monitor new upcoming market trends.
