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Voice of Industry Specialists in Textile and Apparel (VISTA) organized a webinar on ‘Unlocking Opportunities for Apparel & Textile Sector’ recently. Key speakers included: Gaurav Bhargav, Founder and CEO, LPH Apparel Inc; Vivek Bhatnagar, Founder and CEO, Fusion Group; Anupama Singal, Co-founder, Slicer; Manish Bharati, Business Head, Bhartiya International and Abhaya Gupta, CEO, Nanya Inc
The webinar raised many interested questions as to why India has not created its own index like Higgs Index so far, why is sustainability in Indian apparel industry buyer-driven and why are buyers not bothered with the certificates. The webinar urged Indian apparel manufacturers to focus on UN’s SDG. It was also highlighted that Mexico has a lot of opportunities for Indian companies, but India should ship goods for Mexico through US only. Notably, resort wear is a huge business in Mexico. Besides, it was also emphasized that India should focus on Russia, Romania and Poland.
Quoting a survey, Bharti highlighted that people in Europe are buying luxury products online and are very happy with this experience. Hence, he emphasized that digitalization is a must for all. Gupta was of the view that small buying agents and buying agencies can be the change-makers now, and they now need to bring new clients to India. A lot of small vendors need the help of buying agents and these agents have to lead the way.
As a part of a major shake-up to revitalize the business post-Coronavirus, UK footwear manufacturer and retailer Clarks plans to slash around 900 jobs. The company recently made 160 redundancies globally and over the next 18 months, it will make another 700 or so employees redundant.
However, Clarks’ total reduction of 900 corporate roles in its global workforce will be partially balanced by the creation of around 200 new jobs. The retailer is actively supporting staff to find alternative employment within or outside of Clarks.
The announcement is part of Clarks’ ‘Made To Last’ turnaround strategy, which was first launched at the end of last year and is aimed at ensuring the heritage British retailer has a sustainable future.
The strategy includes a focus on sustainability, product innovation, design and quality, and digital enhancement to help customers properly interact with the Clarks brand, and select and buy shoes in convenient ways.
The UP government is looking to replicate the success of Vietnam and Bangladesh in becoming major textile manufacturing and exporting hubs. With the state starting the process of skills mapping of incoming workers, more than 12,000 workers have so far, in the first phase of enlisting, been found to be trained in garment making and tailoring.
The state government has also decided to involve the district level employment exchanges in the process of providing jobs to these workers by sharing their skills database. It recently set up a Migration Commission for the welfare of migrants. The government has named the panel as Kaamgar/Shramik (Sevayojan evam Rozgar) Kalyan Aayog.
The Commission will also take steps for insurance cover to the migrants. Besides, the government is planning to leverage the central stimulus package to provide housing facilities to the migrants.
Under the comprehensive Rs 20 trillion economic stimulus package to overcome the covid-19 challenges, the Centre has announced a scheme to help the migrant labourers in getting residential accommodations. The central government will provide affordable rental housing to the migrants and urban poor under the flagship Pradhan Mantri Awas Yojana (PMAY) scheme.
The International Apparel Federation, by 2020, apparel sales are expected to decline by 50 per cent, compared to 27-30 per cent of revenue, and more than 80 per cent companies are facing financial problems such as bankruptcy. Apparel retailers are trying to get their feet back on e-commerce or other strategies. Already in many countries, brands are reopening stores. On the other hand, 65 per cent of consumers are reducing their spending on apparel.
Retailers and brands are going forward with their strategies and manufacturers also getting new orders. But apparel manufacturers are the most sufferers because they are facing a significant crunch in liquidity.
To save theirs worker, the Pakistan government issued a concessional loan to partly cover 3-month salaries provided no layoffs moratorium on payment of principal. To prevent bankruptcies Pakistan took the resumption of work under strict SOP’s (standard operating procedure) with partial capacity utilization and extra overheads but without the help of brands’ receivables of payments, it will get tough.
At the end of the pandemic, the Re-Set of the supply chain will occur. Fast fashion will go to slow fashion, change in order rhythm, e-commerce will go rapidly but will take more time to replace shops, re-consideration of sourcing strategy and buyer-supplier relation will be rebalanced. Manufacturers around the globe are taking a new initiative to rise back again.
Similarly, Bangladesh RMG companies reopened their factories and are receiving new orders. Bangladesh garments sector is following SOPs to maintain health security for workers. Regular temperature checking, proper sanitization, and social distancing are being established in factories.
Around 85 per cent of Surat business sectors, which fall in The Federation of Surat Textile Trading Association (FOSTTA) ‘zones, are yet to get help in spite of lockdown relaxations across Gujarat. Just 15 percent of the business sectors that are not in control zones have the organization’s gesture to continue activities.
FOSTTA had presented a notice a couple of days prior to locale gatherer Dhaval Patel mentioning authorization to open shops. On May 19, the authority held a gathering with Surat civil chief Banchhanidhi Pani and FOSTTA individuals in which it was chosen to keep the business sectors in the control zones shut.
The authorities recommended modalities to open 20 percent of business sectors in the control zones to open with limitations. Over a lakh of vagrant laborers who were working with the material, businesses have left Surat to their home states.
On May 19, around 20 force loom production lines at Anjani Industries began activities with restricted specialists. Around 30 force loom processing plants began in the Sachin GIDC region and 10 in the Diamond Nagar modern home at Laskana. All these are in non-regulation zones, as per media reports from the state.
The office of the US Trade Representative (USTR) recently released the specific negotiating objectives of the proposed US-Kenya Free Trade Agreement. The proposed free trade agreement (FTA) intends to build on the objectives of the African Growth and Opportunity Act (AGOA) and serve as an enduring foundation to expand US-Africa trade and investment across the continent.
USTR will secure duty-free access for US textile and apparel products and seek to improve competitive opportunities for exports of US textile and apparel products while taking into account U.S. import sensitivities. The proposed agreement will also establish origin procedures that streamline the certification and verification of rules of origin and that promote strong enforcement, including with respect to textiles. The same/very similar language is used in the proposed US-Japan Free Trade Agreement and US-EU trade negotiation.
Of the total $667million US merchandise imports from Kenya in 2019, nearly 70 per cent were apparel items, making the sector the single largest stakeholder of the proposed FTA. While still being a relatively minor supplier, Kenya’s apparel exports to the US reached a record high of $453million in 2019, which was an increase of 132 per cent from ten years ago. For many US fashion companies, Kenya is also its single largest apparel-sourcing base in Sub-Saharan Africa (SSA), accounting for one-third of the region’s total apparel exports to the US in 2019.
However, how to design the textile and apparel chapter in the proposed US-Kenya FTA is not easy. A preliminary content analysis of the 133 public comments submitted to the US International Trade Commission (USITC) as of May 2020 shows that various stakeholders have proposed competing views on several complicated issues, ranging from the rules of origin to the tariff elimination schedule.
Turkish clothing brand LC Waikiki has placed an order with an Iranian company Ronak Jean to produce €20 million worth garments labeled ‘Made in Iran’, most of which will be exported to the Turkish company’s regional branches. The joint project is estimated to create about 5,000 jobs in Iran. Turkish company LC Waikiki, otherwise known as LCW, has become the first major foreign apparel manufacturer to officially start cooperation with Iranian garment players.
The Turkish company has been in negotiation with Iran’s Ministry of Cooperatives, Labor and Social Welfare and the Ministry of Industries, Mining and Trade for the past eight months and the Turkish side has so far surveyed over 70 apparel factories and manufacturing units in Iran.
The first phase of the collaboration will see LCW place orders with selected Iranian apparel makers worth around €20 million in the next year and a half. All the exports will be done under the parent company’s supervision and management. The apparel, labeled ‘Made in Iran’ under LC Waikiki brand, will be exported to LCW branches in other countries.
South Africa is gazetting regulations giving effect to the government’s commitment to assist ailing industries and workers through the Unemployment Insurance Fund. The country recently gazetted the first agreement between the Minister of Labour and the National Textile Industry Bargaining Council. The agreement states that the regulations apply to all employers in the textile industry, not just council members.
The agreement guarantees an amount equal to full pay for the three-week period of the lockdown for those not working, jointly paid by employers with subsidies from the fund through its Temporary Employer-Employee Relief Scheme (TERS). Labor lawyer Dunstan Farrell revealed that while these regulations do not specify the rand amounts, the standard industry agreements reflected that the scheme would pay out between R3, 500 – the minimum wage – up to a maximum of R17, 712 per worker on a sliding scale.
He explained wages are paid on an hourly rate, per hour actually worked, while salaries are a fixed amount per month. The regulations state that the issue of relief for salaried workers is to be referred to a Rapid Response team, established to consider and resolve any unforeseen matters.
TJX brands, the parent company of TJ Maxx, Marshalls, and HomeGoods reported higher sales than recorded during the same period last year as stores reopened this month. More than 1,600 stores were back open globally, including stores in 25 US states and all locations in Germany, Poland, Austria, the Netherlands, and Australia. The company expects most of its stores to be fully open by the end of June.
Earlier in May, photos of shoppers waiting to be allowed inside TJ Maxx stores in some parts of the US circulated widely on social media. One tweet, showing shoppers at a store in Arkansas, has been re-Tweeted more than 4,300 times and liked more than 13,500 times.
Hudson’s Bay, the owner of Saks Fifth Avenue has denied allegations in a lawsuit that an internal restructuring amounted to a move to strip the company of its assets and impair collateral for a loan to subsidiaries of a real estate joint venture. The lawsuit by the lenders called the reorganization a ‘corporate shell game.’ They also separately sought a prejudgment to freeze the parent company’s assets.
Owned by a Hudson’s Bay joint venture, the company defaulted on $7.4 million in payments of the $846 million loan as retailers stopped paying rent after the Coronavirus pandemic forced them to close. Hudson’s Bay, formerly headquartered in Toronto and known as HBC, was reorganized by its new owners ‘to optimize their Canadian and foreign operations and assets from a tax perspective,’ according to the filing. It was converted into HBC ULC under British Columbia law, with Bermuda-based HBC Bermuda set up as the parent entity.
HBC continues to exist, owns the same assets and is bound by the same agreements that pre-date its restructuring. That includes a guarantee of rent payments to the landlords of the 34 stores, but not a guarantee on the loan, which is backstopped by the real estate.
The amount defaulted relates to debt repayment in April and May, and the borrowers were in the middle of talks with the lenders when the suit was filed.
