FW
A venture called Viva China will buy 1.09 billion shares in Bossini, paying just HK$46.6 million ($6 million) for 66.6 per cent of Bossini’s issued capital. After the deal concludd, the buyer will be required under Hong Kong stock exchange rules to offer to buy out the remaining shareholders, which would lead to the company’s privatization. However, in a stock-exchange filing, Viva China said it intends to maintain the company’s listing.
The offer for Bossini’s shares represents a discount of 71 per cent to the 14.8 cents Bossini shares last traded at and an 87.39-per-cent discount to its December net asset value of $560.2 million. The offer reflects the deteriorating financial performance of Bossini Group and its widening loss in the latest financial years,” says the filing. A further loss is expected in the current trading year, with the company recording a $93 million deficit in the first half.
Viva China Group is principally engaged in sports competition, event production and facilities management, sports, sports-talent management and last year expanded into the development, design and sale of sports, health and leisure consumables. The group currently owns about 13.42 per cent of Li Ning Company, the sports apparel retail brand established by its namesake, a former Chinese Olympiad. Li Ning facilitated an introduction between Bossini and Viva China and is effectively underwriting the purchase through companies he controls.
Karachi Cotton Brokers Forum (KCBF), in their budget proposals for the year 2020-21 sent to Prime Minister Imran Khan, have demanded a separate cotton ministry to look after the affairs of the cotton trade exclusively. According to the proposals, KCBF demands the government should impose ban on cultivation of paddy and sugarcane and setting up of sugar mills in the areas already earmarked for cultivation of cotton. A system should be evolved for monitoring of the cotton at district level. The government should fix the support price of cotton in order to encourage the farmers.
The government should mobilize all resources at federal and provincial level to increase per acre yield and to bring more area under cotton cultivation particularly in Balochistan and Khyber Pakhtunkhwa. It should also encourage farmers who are taking interest in cultivation of organic cotton in Balochistan.
Also, the government should ensure the supply of certified cotton seed/BT seed to the growers. Awareness should be created among growers for using modern integrated pest management system. All the cotton research institutes of the country should work hard to make virus resistance cotton seed varieties.
KCBF also demands that government should made necessary arrangements to import pure and certified seeds in small packing instead of importing in bulk. It is pertinent to mention here that large quantity of cotton crop was destroyed every year due to the supply of adulterated pesticides to the growers.
India has initiated an anti-subsidy investigation for imposition of countervailing duty (CVD) on imports of jute products, including jute sacking bags, jute sacking cloth and jute yarn, from Bangladesh. Director General of Trade Remedies (DGTR) of India has already invited Bangladesh for consultation, a condition prior to starting such an investigation. A country can impose countervailing duty on import of subsidized products from any other country to offset injury caused to local products due to the import of subsidized imports. The consultation is supposed to be held through video conferencing by May 15. Bangladesh commerce ministry has already requested India to defer the consultation until June 15 considering the prevailing situation of COVID-19 pandemic.
According to trade officials, this move would come as a huge threat to export of jute products to India, which is a large market for jute products, where Bangladesh’s export of the products has been dwindling since 2017 following imposition of anti-dumping duty by the country.
India in April, 2017 imposed anti-dumping duty ranging from $19 to $351.72 a tonne on import of jute products including jute yarn, twine, hessian fabric and jute sacking bags from Bangladesh for five years. Bangladesh annually exports jute and jute products worth around $200 million to India. Trade officials and industry insiders said that India has been creating barriers one after another to import of the products to hamper Bangladesh’s export. Imposition of this duty will severely impact export of the products.
A new study from Bain & Company states in the next three months, though the luxury industry’s total earnings are likely to spiral down by 60 per cent, increased spending by Chinese consumers will lead to the recovery of the market. Around 50 per cent of luxury purchases are likely to come from mainland China. The country accounted for almost 35 per cent of global luxury spending last year, but Bain suggested it will increase exponentially despite the recent lockdowns and the threatening presence of COVID-19.
Popular brands are reportedly seeing a surge in demand as well as China finally eased stay-at-home measures. The number of store visits, on the one hand, fell half compared to last year.
Bain expects by 2025, the market would reach new high levels between €320 billion and €330 billion. China would account for half of the global luxury spending worldwide, while the rest of Asia will follow closely. On the other hand, the United States, Europe, and Japan will experience a dip and stabilisation phase before recovery.
Founders of the Italian fashion group Dolce & Gabbana, said that the group is likely to lose a lot this year, after the coronavirus emergency.
The unlisted group is one of Italy's 10 largest fashion groups by revenue, with sales of €1.38 billion in the year that ended in March 2019.
The COVID-19 crisis, which hit China late last year before spreading to Europe and the United States, has kept customers at home and forced retailers to shut stores, putting a crushing halt to a decade of spectacular growth for high-end brands.
Global sales of luxury goods are expected to decline by 50 per cent to 60 per cent in the second quarter of the year, consultancy Bain said recently.
Dolce & Gabbana said that after the pandemic the fashion industry would have to adapt to the new lifestyles of customers, with fewer fashion shows and more on-line shopping.
CMAI has urged the government to consider extending measures, which were given to the MSMEs in manufacturing sector, to garment retailers and traders as well. They have said that enhancing of the upper limits of the sector, the merging of the manufacturing and service sectors, and the addition of a turnover based criteria, will all go a long way in enabling many more enterprises, especially here, to take advantage of the various schemes under the MSME umbrella.
The additional loans backed by the government guarantee and requiring no collateral or guarantee of the MSMEs will enable many of its members to get the much-needed working capital assistance that the industry needs to kick start operations after the lock-down ends. However, it is important that the banks respond to these measures and implement the loan scheme within 4-5 weeks to allow quick start to operations to help the economic growth in the country.
CMAI also sought government support for small manufacturers by providing direct grants for payment of wages till September. Small manufacturers will not be able to sustain the losses from lockdown and subsequent slowdown in demand. Absence of such grant could lead to up to 30 per cent of the units closing down permanently leading to 10 million job losses in the textile and apparel value chain.
Getting adequate manpower to ramp up production to meet the demand is one of the major challenges the textile industry is facing, said Sivaramakrishnan Ganapathi, Managing Director of India’s largest apparel exporter Gokaldas. To address the labor issue, the Apparel Export Promotion Council chairman A Sakthivel said the government should consider allowing 12 hours shift instead of 8 with normal wages.
Though luxury rebound in China is fueling hopes of a rapid recovery for high-end brands, analysts expect this spending to be different from the pre-pandemic world. According to Claudia D’Arpizio, Partner, Bain & Co, after a steep and sudden drop in the first quarter, many top luxury brands will end up positive for 2020 in China given the strong sales.
Yet, spending of the rich will shift dramatically in the next year or two, Bain says. Instead of splurging on experiences, which dominated luxury spending over the past decade and fueled much of its growth, the rich will focus their spending on physical products. Analysts say it will take at least a year or two before the affluent want return to crowded planes, restaurants and resorts.
Another big trend: accessories. Handbags and shoes will rule luxury spending in the near term, since they are accessible indulgences that cross all price points. Watches and menswear will suffer, along with women’s formal wear and dress clothes, Bain said. Jewelry will be a mixed bag as the price of gold has soared. Also, most of the spending will shift online and companies may need to shrink their store counts and adapt to fewer retail consumers.
Consumers will spend closer to home rather than traveling. In Europe, where luxury stores were often packed with Chinese tourists, brands now cater to a more local clientele. Generation Y is also expected to drive much of the spending in China as they shop online, Bain said.
Although global supply chains have been a key entry point for women to enter the formal workforce, especially in the garment segment however, they face numerous problems every day. Among these, gender discrimination, violence and harassment especially for women from poorer sections of society is common. The International Labour Organization's (ILO) recent report in March 2023 focuses on achieving gender equality in global garment supply chains with a more equitable set of policies and actions that could lift millions of workers out of poverty and drive inclusive economic growth.
Addressing workers’ issues crucial The garment industry is a significant source of employment, providing jobs for around 94 million workers globally, and although trends vary, nearly 60 per cent garment workers globally are women, reaching nearly 80 per cent in some regions. Asia is the largest employer of garment sector workers, accounting for 75 per cent of all workers which translates to an estimated 42 million women garment workers.
There are four main challenges that women face in gender inequality at work. The first, is to make their opinions and problems heard with weak social dialogue at both enterprise and industry levels in most countries and there are few that work for the protection of women’s rights. Challenges relate to misperceptions of women’s goals and capabilities, as well as the often unequal share of unpaid care work they undertake in the home. Secondly, women workers are usually disproportionately represented in low-wage jobs in the lower tiers of the sector’s supply chain, and more often than not, they lag behind men in terms of equal pay for work of equal value.
Thirdly, they have to manage their families and work and those with small children and lower education levels, face additional challenges and barriers at the workplace compared to men. Fourthly, they face sexual harassment and violence in the garment industry, both in the workplace and while commuting. And this problem increased during the pandemic due to heightened tensions arising from economic insecurity.
Just Transition phase is required for gender equality.
The ILO report highlights focussing on a ‘Just Transition’ phase where all societies intelligently and specifically address women workers’ needs and create new job opportunities for displaced female workers throughout the garment sector is becoming increasingly important to achieving gender equality.
The garment segment’s heavy environmental footprint requires urgent action, which includes equal pay for work of equal value and transparently across all aspects of garment sector supply chains. Gender equality in leadership, management and decision-making at all levels within supply chains as well as a safe and healthy workplace free of discrimination, violence, and harassment is very important. In Asian countries, there has to be a strong focus on reducing the unpaid care work burden for women through affordable, accessible, and publicly funded childcare services and flexible working hours.
Kering shows the way
Gender discrimination in the workforce is currently a serious global concern and companies across the globe understand this realty. Bloomberg Gender-Equality Index (GEI) 2023 that tracks the performance of public companies committed to disclosing their efforts to support gender equality through policy development, representation, and transparency recognised premium French luxury group Kering, which manages several renowned houses in fashion, leather goods and jewellery. Kering has been included in the index for the sixth consecutive year for its commitment to promote diversity, equity and inclusion.
The GEI represented 484 global companies spanning 54 industries, headquartered across 45 countries and has helped companies to track their progress in gender inclusion and support gender equality through policy development, representation, and transparency.
Kering’s inclusion shows the importance the company gives to supporting women at all levels to ensure that they can achieve their full potential in a supportive and inclusive working environment. With programs that focus on women’s talent and leadership potential while supporting them in an office environment, Kering is leading the way for working women in premium segments also and not just factory workers, creating a more equal future for all regardless of economic barriers, and many other companies are expected to follow soon in their footsteps.
As the dust over COVID-19 begins to settle down, fashion retailers, who buckled out of business or downsized considerably some like Warehouse, UK, Oasis, Cath Kidston, Laura Ashley, John Lewis, and others declared themselves bankrupt and many others like Debenhams, Arcadia Group, JCPenney, Nordstrom, J Crew, are itching to get back to business.
Reopening malls, stores a sign of positivity
US mall owner and operator, Simon Property Group, announced
its decision to open malls across nearly a dozen states with safety measures in place. Non-essential stores including those selling garments in Italy and Germany too have been allowed to reopen with strict social distancing norms. Indeed, the news of reopening stores is bringing positivity to the market
Wall Street predicts that by mid-May, a large number of stores would open for business. Besides, fashion apparels and textiles, a new category to be added to the portfolio of these retailers includes medical textiles. Many retailers like Impulse India are exploring in export opportunities in mask and other PPE items.
COVID-19 outbreak gave consumers ample time to scroll through social media channels which further increased their engagement with apparel and fashion brands. A recent report, titled ‘Effects of the COVID-19 Outbreak on Fashion, Apparel, and Accessory Ecommerce’ reveals a noticeable reduction in the number of orders and total sales across all countries from around March 7.
Enquiries and orders roll in
However, there has been some improvement in the figures since then as online fashion retailers are adapting to the crisis. The report also highlights that consumers continue to browse for fashion products, offering opportunities for retailers. This indicates a positive sign for factory owners who have confirmed that some orders are trickling in. As Sameer Thapar, Managing Director, Montrose says orders are coming in mostly from the departmental stores like Walmart, Costco and similar establishments, as they are the ones that are still open with customers walking into them for groceries, and then in turn, are also buying some apparels too.
Buyers are asking for deliveries of basic apparels, reveals Gurminder Matharu, Country Head, Colveta India which is getting actual orders for Bangladesh while also getting enquires for India. Most stores are stocking merchandise for Fall season. As Rakesh Saigal, CEO, Orange Sourcing, informs, the product that is still selling well is loungewear tracks, which is mostly because people are indoors.
As many stores across the Northern Europe have now opened, people are gaining confidence that A/W orders and production can be proceeded but with more conviction, hence many factories that opened are working on A/W collections, says Sanjay Thakur, Division Manager – Global Sourcing, Superdry.
Meanwhile, buying offices have been getting good orders for products in the home segment. This could be attributed to the stay indoors’ phenomena, where people are investing in home products. The categories for which retailers are getting orders are mostly handicrafts, furniture and home textiles, says Sanjeev Jain, Managing Director, TQM Global Buying.
The in-home segment in all major centers – Moradabad, Saharanpur, Jodhpur and Panipat – has confirmed receiving good orders, and once the lockdown is lifted, the quantities of its shipments are expected to rise. However, a big challenge that awaits these retailers is bringing back those laborers who have gone back to their villages during the lockdown.
The Better Cotton Initiative (BCI), UK-based Committee for International Cooperation Between Cotton Associations (CICCA) and International Cotton Association (ICA), US-based International Cotton Advisory Committee (ICAC) and Switzerland-based International Textile Manufacturers Federation (ITMF) have called for collaborative action from the cotton and textile sectors during the COVID-19 crisis.
The organizations urged all those engaged in the cotton and textile value chains to commit to take action that contribute to the recovery of the sectors starting 2021; communicate, collaborate and be responsive to the needs of their counterparties; continue to respect the trade rules that govern the sectors; recognize and publicize positive behaviors; and identify and call out negative, counter-productive commercial behaviors.
They also urged for mutual agreements that keep in mind their shared commitment to the long-term health of the international cotton and textile trade, and to the principles of fair and equitable trading practices on which it is built.
