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Encouraged by successful fund-raising by women’s wear brand ‘W’, several mid-sized apparel makers have initiated talks with private equity firms to raise funds for their business. One such company is Esjay International Pvt. Ltd and the other is Soch Apparels Pvt. Ltd. The former has hired bankers to raise funds in the range of Rs 50-100 crore, it is heard. Their previous attempts to raise funds were unsuccessful because of differences on valuations.
The said company is in discussions with private equity investors to raise about Rs 50 crore by diluting about 15-20 per cent in the company. The Sunil Jhangiani-led Esjay launched the Chemistry brand way back in 2004. Jhangiani, whose family owns Esjay, failed to raise money in 2013 because of a disagreement with investors over the firm’s valuation.
Bengaluru-based Soch Apparels Pvt. Ltd, the owner of women’s wear brand Soch, is also in plans to raise funds from investors. The Boutique Investment Bank is helping Soch find investors.
The third company is Dixcy Textiles Pvt. Ltd., the owner of the Dixcy Scott underwear brand, is also planning to raise about Rs300 crore from private equity investors. Currently, it is in the process of hiring investment bank Avendus Capital Pvt. Ltd to help it to find investors.
The size of the Indian women’s apparel market will reach $20 billion in 2020, from $13 billion last year growing at an annual average pace of 10 per cent, according to estimates by Avendus Capital. The branded portion of this market that was approximately 17 per cent in 2015 is expected to exceed 38 per cent n the next 10 years.
Readymade garment factories in Bangladesh continue to be under strict punitive measures like business cut by western retailers and brands due to their non-compliance of workplace safety requirements. So far, more than 228 global apparel buyers, retailers and brands have either suspended or terminated their business relations with around 150 garment factories through their two platforms-Accord and Alliance. While Accord is the group of more than 200 EU based buyers, retailers and trade unions, Alliance represents some 28 apparel buyers and companies based in North America.
Both Accord and Alliance inspected the structural, electrical and fire safety in some 2,000 factories from which their members buy. Each factory is then provided with a CAP designed to help it address safety issues and achieve compliance with their respective safety standards. Recently Accord informed the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) that more than 550 factories are not making the required progress in remedial works. Accord has warned of stalling business relations with those units unless they make required remedial works for ensuring workplace safety and also requested BGMEA to take necessary measures to avert the final stage of business termination, it is informed.
BGMEA vice president Mahmud Hasan Khan says there are few factories that want to rejoin the groups. But many of them currently do not work for the Accord or Alliance signatory members. A good number of factories could not do the remedial works as their units are located in a rented or shared building. Another reason is that they did not get the required financial support to carry out the flaw fixing works.
In a latest setback for the supplier, two class action lawsuits have been filed against Welspun India Ltd. The lawsuits allege the company fraudulently labeled its bed sheets and towels as premium Egyptian cotton while the contents were not. It may be recalled that the supplier came into the bad books of recently.
Welspun committed a ‘widespread fraud’ in which ‘consumers who have purchased Welspun bed linens have overpaid for an inferior product,’ a plaintiff alleged in an August 29 lawsuit filed in a New York federal court. The suit was filed by Hagens Berman Sobol Shapiro LLP, a consumer-rights action law firm.
However, a Welspun spokesperson declined to comment on the lawsuits. Welspun's stock fell 2.2 per cent to Rs 56.60 in Mumbai yesterday.
The controversy over Mumbai-based Welspun has been getting large since Target said it's stopping business with the vendor after discovering sheets and pillowcases that were made with cheaper fibers were mislabeled as Egyptian cotton for two years.
Sweden plans to strengthen bilateral trade with India. Trade between the two countries is somewhat skewed at the moment with India largely importing raw material from Sweden and exporting value-added products. India is Sweden’s 19th largest export market and the third largest trade partner after China and Japan in Asia. The main Swedish exports to India are pharmaceuticals, paper and pulp products, chemicals, engineering products and telecom equipment. The main items of Indian exports are chemical products, food products, and semi manufactured and manufactured goods.
India wants to increase food exports to Sweden. And Sweden is ready to provide the technology and know-how for improving quality to international standards. Sweden is keen on exploring the possibility of a joint project in smart textiles using viscose staple fiber, cellulosic fiber and pulp as an alternative to cotton.
Most major Swedish companies entered India decades ago but in recent years their investments have increased and Indian companies have also begun to invest in Sweden. There is significant potential for enhancing bilateral collaboration in key areas like green technologies, renewable energy, smart infrastructure, healthcare and defence. Many Swedish companies such as Ericsson, Swedish Match, SKF and ABB came to India even before it became independent.
In the last several years, the strategic importance of Bangladesh textile sector has emerged strong. The country is a key gateway for global supply chains and production networks with figures proving it to be the world’s second largest manufacturer of denim products. Bangladesh has in all 26 denim making factories with a total investment of over $834 million and a monthly production of 30 million yards per month, seems to be an essential ally for the growing international demand for denim fabric and for skilled yet competitive workforces.
Knowing this well that this productive effort in Bangladesh needs to be supported by a strong drive towards cultural improvement, the Bangladesh Denim Expo organization is pushing standards ahead, year after year. For the upcoming Bangladesh Denim Expo show to be held on November 8 and 9, the Expo will organise a number of workshops and seminars in Dhaka with the aim to develop the skills of local denim designers, denim developers and denim enthusiasts and to promote the Bangladeshi denim industry.
Both workshops and seminars will cover a variety of topics including denim style and trend direction and denim fabric trends. According to Md. Mostafiz Uddin, CEO of Bangladesh Denim Expo, the purpose of organizing these workshops and seminars is to achieve this objective. He also said that one of the long term objectives of Bangladesh Denim Expo has always been to nurture local talents and help educate them. Two months prior to the 5th edition of the Expo, a similar number of seminars are to be held. Participants will be exhibitors and visitors of to the Expo and local denim professionals.
"India and China, the two most populated countries in the world, are going to be the most coveted markets by 2030. As the current global economic trend moves towards the next decade, it is clear that the US will be replaced by China as the world’s biggest apparel market and India will not be far behind."
India and China, the two most populated countries in the world, are going to be the most coveted markets by 2030. As the current global economic trend moves towards the next decade, it is clear that the US will be replaced by China as the world’s biggest apparel market and India will not be far behind.
Though China’s economy has slowed in recent years India China to emerge biggest markets for sustainable fashioncreating a disparity in supply-demand but the overall market sentiment remain positive with high consumer confidence. According to a study by Fung Global Retail & Technology, consumer spending trend remains high for kids’ wear and casual wear categories. Meanwhile, recent reports by Nielsen Global Survey of Consumer Confidence showed India’s confidence is up three points from the previous quarter. “The Union Budget revealed the government’s commitment to fiscal consolidation which will pave the way for sustained and inclusive growth. In following months an improvement in various macroeconomic indicators was evident, and the government seems to be on its way to achieving its objectives of low inflation, low interest rates and high GDP growth—a scenario optimal for improved consumer spending” says Roosevelt D’Souza, MD, Nielsen India.
According to Euromonitor International “The market indicators are showing positive trends as GDP and apparel spending in both China and India are projected to more than double over the next 15 years. By 2030, China will be the world’s largest apparel market, followed by the US and India.
Changing retail landscape to create future opportunity
China’s positive economic outlook might result from its “One Belt, One Road” initiative, an economic and diplomatic program that calls for major investment in the region’s trade routes. In a recent McKinsey podcast, senior partner Kevin Sneader explained “There are two parts to this: the belt and the road,” he said. “The belt is the physical road, which takes one from here all the way through Europe to somewhere up north in Scandinavia. What they call the road is actually the maritime Silk Road, in other words, shipping lanes, essentially from here to Venice. Therefore it’s very ambitious, covering about 65 per cent of the world’s population, about one-third of the world’s GDP, and about a quarter of all the goods and services the world moves.”The $100 billion initiative would help fuel growth for China after its economy has seen a period of slowing down. In another positive trend, China’s apparel market is becoming more organised as the top 10 brands in activewear, jeanswear and casualwear, have been increasing their market share significantly. Thus, making the market more competitive and quality driven.
India on the other hand witnessed significant growth in organised retail driven by increasing consumer preference for specialty, department, and hypermarkets and increasing lifestyle spend. Over the last decade, almost all global brands have made a beeline for India market changing the retail landscape of the country.
sustainable fashion emerges strong
An indepth analysis of both China and India reveals consumer’s changing perception and increasing awareness for sustainable fashion and natural fibres. According to Indian Consumer Survey Fully 73 per cent say they “could spend the rest of their life” in the fiber. Additionally, 7 in 10 Indian shoppers say they would be more likely to shop at a store offering clothes made from more sustainable materials, and nearly 8 in 10 (79 percent) say they put effort into finding sustainable apparel. As more manmade fibers have entered India’s market, businesses that promote natural fibers stand to be noticed. And 76 percent of shoppers are more loyal to brands offering natural fibers like cotton. In China, 68 percent of consumers are willing to pay more to keep clothing cotton-rich, according to the CCI and Cotton Incorporated Chinese Consumer Survey. Cotton Incorporated and CCI has initiated a promotion program “Mian is…” (MI) in China for a decade, reminding consumers about the benefits of cotton and educating them on the fiber via digital and social media campaigns. “In 2015, with the theme of ‘Cotton, more than looking good,’ the campaign promoted cotton’s fashionability and other benefits,” says Cotton Incorporated’s Angela Chen, Manager, and Public Relations China. She emphasizes the depth of MI’s digital dive. “One of the MI musical and dance videos reached 16 million viewers. The program also has more than 60,000 Weibo fans and more than 10,000 fans on Wechat, just joined last June.”
The World Fashion Convention will be held in Mumbai, September 27 to 28, 2016.
It will bring together some of the leading industry stakeholders across the value chain to deliberate and present insights into various opportunity areas – covering the entire spectrum from manufacturing to technology to branding and retailing.
Insights into the fast growing Indian domestic market given by major Indian players will give delegates a very good understanding of how to capitalize on growth opportunities in complex emerging markets.
The convention's speakers cast will again form a strong combination of Indian and international industry leaders from brands, retailers, manufacturers, academia and suppliers to the industry.
World Fashion Convention is being hosted by the International Apparel Federation together with the Clothing Manufacturers Association of India.
India has one of the world's fastest growing economies and is being watched by international brands, retailers and manufacturers. India stands out for the size of its domestic market, for its enviable growth rate, for its deep rooted own design tradition.
The convention has as one of its main goals connecting the local fashion industry of the host country to the global fashion industry network.
World Fashion Conventions are known for their prominent and high quality speakers. Past speakers include top executives from Hugo Boss, H&M, Inditex, G-Star, Tommy Hilfiger, Zegna and Benetton.
The UK has launched a program to support its textile sector.
The program is aimed at businesses within the textiles sector and covers manufacturers from carpets to clothing, as well as industry suppliers, such as textile machinery manufacturers and designers. It supports businesses in accessing finance and grants, and practical help with exporting and websites.
A combination of capital and revenue grants are available for projects related to new or improved premises, plant, machinery, equipment, energy efficiency, workforce training, research and development and products.
The Textiles Growth Program has been launched focused on Greater Manchester, Lancashire and West Yorkshire where the UK’s historic textile and clothing sector and home ware manufacturing is concentrated to support capital projects, skills training and research and development.
One of the companies to benefit from the program so far is Grafea, which makes a range of high-end leather bags, rucksacks and satchels for luxury markets in Italy, China, Russia and America.
As the popularity of its products grew, the company recognised the need for a significant expansion program, including the purchase of new equipment so it could increase production capacity and cater to the growing demand.
The program is helping the company expand into new premises and grow its presence overseas.
The Indian textile industry is facing serious issues.
It is reeling from an increase of a third in the price of raw cotton over the last four months, caused by delayed rains and pest attacks on cotton fields. Spinning mills have reduced production by 15 to 20 per cent.
The industry is highly fragmented, subject to volatile swings in prices because of antiquated trading systems, and ill-equipped to fend off growing competition from more efficient rivals such as Vietnam and Bangladesh.
Inaccurate production data gives room to speculators to spread rumors of a shortage of cotton, causing extreme volatility in cotton prices. India’s cotton yields, already among the world's lowest, have fallen due to delayed rains and white fly problems.
The textile industry came under unwelcome international scrutiny after Welspun India, the country’s largest textiles exporter, was accused by a major US retailer of passing off cheap cotton sheets as containing valuable fine Egyptian cotton.
The textile industry’s future is critical to India’s social and economic prospects. It employs 45 million people, including the informal sector -- second only to agriculture -- and was recently the target of an 895 million dollar package of incentives with the aim of catalyzing investments of 12 billion dollars over the next three years.
The US may restore trade benefits to Myanmar that had been suspended more than two decades ago amid rights abuses. The aim is that Myanmar should be able to benefit from preferential tariffs for poor countries under the Generalized System of Preferences scheme.
Myanmar’s GSP eligibility was suspended in April 1989 due to concerns about labor abuses. The country has been seeking to regain the trade benefits since 2013, the same year it gained GSP status from the European Union.
However not all sanctions will be scrapped.
GSP is the largest and the oldest US trade preference program. The status will grant Myanmar tax privileges on exports to the world’s largest economy and in turn fuel foreign investment into the industrial sector. The GSP status could bolster investor interest in the garment sector.
But it is unclear which sectors the special tariff preferences would be applied to and whether the fledgling garment sector would be included.
Trade between Myanmar and the United States is still minimal. Myanmar’s total bilateral trade for the 2015-16 fiscal year to November came to about 17.1 billion dollars. Bilateral trade between Myanmar and the US for the first six months of 2016 came to 238 million dollars.
