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Abercrombie & Fitch Co., Kohl's and Gap, Inc. are the latest companies to announce their plans to reopen temporarily shuttered stores. Abercrombie & Fitch Co. has begun the process of reopening its North American and EMEA region stores. The temporary North American and EMEA store closings for the company's brands, including Abercrombie, Abercrombie Kids and Hollister, were first announced in mid-March. These closings were later extended, and the company further announced that it borrowed $210 million under its senior secured asset-based revolving credit facility and withdrew the majority of excess funds from its Rabbi Trust--amounting to approximately $50 million in additional cash--in order to boost liquidity.
In order to follow WHO and CDC safety recommendations, the company said its employees will wear masks, practice physical distancing and wash and sanitize their hands frequently, while stores will increase their sanitation efforts, enforce physical distancing among customers, and have health guards at checkout. The company also would quarantine returns for 24 hours before putting the clothes back on shelves. After extending the temporary closure of its stores nationwide in late March, Kohl's said earlier this week that it is reopening stores in alignment with the Covid-19 timelines and precautions for each state and locale, with many stores operating with reduced hours. The first round of reopened stores are located in Arkansas, Oklahoma, South Carolina and Utah.
In addition to limiting store hours, the company said it is implementing further safety precautions by upholding physical distancing practices in stores, ramping up its cleaning and sanitation practices, and reserving certain shopping hours for consumers who are most at-risk, including those above the age of 60, pregnant customers and those who have underlying health conditions. Kohl's will also require all employees to wear masks and gloves. The company first announced the temporary closure of its store on March 19. After extending these closures, the company further announced that it would draw down on its $1 billion revolving credit facility and cut spending by about $500 million to make it through the pandemic
Textile value-added sector of Pakistan has proposed to the government to restore zero-rating of sales tax, reduce withholding tax and impose regulatory duty on cotton yarn export to create job opportunities, and boost country's exports. In its budget proposals for 2020-21 submitted to Razak Dawood, Advisor to the Prime minister on Commerce and Textile, Pakistan Hosiery Manufacturers and Exporters Association (PHMA) stated that the current global slowdown due to the coronavirus pandemic and fast changing worldwide geo-strategic dynamics and unprecedented economic challenges are being faced by Pakistan in all segments of the economy.
It is dire need of the time that the budgetary and policy measures for fiscal year 2020-21 must hold the key to economic prosperity to confront challenges and create conducive and enabling environment for investment and growth for industry and trade, through major structural changes in tax regime, policy revision focusing to incentivise commerce and industry to generate more employment and overcome the fiscal, current accounts and trade deficit. The PHMA proposed that it is imperative to revive SRO 1125 in its true spirit and reintroduce system of no payment and no refund of sales tax for the five export-oriented sectors. In the budget 2019-20, the government rescinded SRO 1125 and imposed 17 percent sales tax on erstwhile five zero-rated export sectors and exporters are required to apply for refund after export of consignment.
Exporters, who have filed their refund claims up to date, have received 35 percent of claims payment only, while 65 percent of the refund claims are stuck up with the government, which cumulate 12 percent amount of exporters' running capital. However, the profit margin of exporters is around five percent to eight percent. Due to availability of liquidity and smooth cash flow, the confidence of exporters will be boosted to enhance their exports and cement their business ties with the foreign counterparts to capture true business potential. Currently, the WHT is charged at various levels and items such as import of raw material, registration of new vehicles etc, which is adjusted or refunded later. Exporters fall under final tax regime u/s 143(b) and should be exempted from payment of the WHT and be given exemption certificates. This will greatly benefit them and also lower workload on the Federal Board of Revenue (FBR) who is busy in a futile exercise.
For exporters fall under final tax regime withholding tax should be reduced from one percent to 0.50 percent. This would help exporters in using the cash liquidity for enhancement of the exports. Currently there is 11 percent customs duty, five percent regulatory duty, and two percent additional duty on import of the cotton yarn. This has created artificial shortage of availability of yarn, rendering the value-added textile exporters uncompetitive in the global market against regional competing countries. This will lead to decline in exports as local industries are hurting and closing down. Further, garment stitching units are not allowed to import yarn under Duty and Tax Remission for Exporters (DTRE). The PHMA proposed that whenever government desires to impose regulatory duty on import of cotton yarn, the government should also impose regulatory duty on export of cotton yarn, and there should be time limit/duration of imposition of duty.
The government should look into the ways of reducing cost of doing business/energy cost for the spinners and bring them at par with cotton producing countries. Yarn is essential raw material to manufacture value-added textile products for export, and the same is required to be made available at reasonable prices. Further, the Export Oriented Units (EOU) under SRO 327 was introduced on the pattern of Export Processing Zone, where there is no taxes on buying of locally-procured input goods and no taxes on utilities.
Industries registered in the EOU are liable to export 80 percent of their annual production. The PHMA proposed that the FBR should withdraw its SRO 747(I)/2019, so that exporters operating under the EOU can procure input goods without taxes. Further, it is also proposed that industries, registered in the EOU, and export 80 percent of their annual production, should be supplied utilities – gas and electricity without sales tax at zero rates.
Mango will donate 1 per cent of its sales from physical stores to the World Health Organization’s Covid-19 fund, in order to support the more vulnerable health care systems and groups during the pandemic
The fund) enables individuals, corporations, foundations and other organizations around the world to directly support the WHO’s global effort to assist countries in preventing, detecting and responding to the pandemic,
The initiative will last for the next two months, and will involve Mango’s monobrand stores in Europe, Russia, Turkey and New York, as they will gradually reopen.
Since the beginning of the pandemic, Mango has been active in a series of efforts to tackle the health emergency. At the end of March, it donated two million face masks to various hospitals in Spain. In addition, Mango put its logistics, production and distribution organisation at the Spanish authorities’ disposal, manufacturing 13,000 protective gowns for health care professionals.
Mango, founded in 1984 and based in Barcelona, is one of the world's leading fashion groups, with approximately 15,000 employees in 110 countries. In 2019, it generated a revenue of €2.374 billion.
According to a new Forrester report. with the COVID-19 pandemic ravaging several industries amid poor consumer spending, global retail sales in 2020 will decline by an average of 9.6 per cent, resulting in a loss of $2.1 trillion
The impact on India and Japan is to be severe due to the strict lockdowns, the declaration of a state of emergency in Japan, and the postponement of the 2020 Summer Olympics.
The likelihood is that the epidemic will last seven months, and from 2021 retail categories, that have declined by more than 10 per cent, will only bounce back to 90 per cent of pre-pandemic spend.
In the worst-case scenario, lost online sales could reach $510 billion, and even in the best case, retailers will lose $244 billion in online sales, the report mentioned.
In 2020, there will be a significant decline in global retail sales, particularly with non-essential items sold offline, which will be a big challenge for brick–and–mortar retailers.
While offline non-grocery retail will contract by 20 per cent, eCommerce sales will remain flat this year.
In Asia Pacific, the loss of sales is predicted to reach $767 billion in 2020, a decline of 10 per cent from 2019.
China is the most negatively affected country in the region, with $192 billion of retail sales lost in January and February.
Online sales will remain flat, and an average of $360 billion in online retail sales will be lost globally in 2020 compared to pre-COVID-19 forecasts.
In 2020, global online retail sales will grow by only 0.6 per cent compared to 2019.
In the US, retail sales will fall by $321 billion in 2020, a decline of 9.1 per cent from 2019.
Around 611 RMG units in Noida have been granted permission to start work, but with certain conditions set by the State Government. The administrative staff of these factories was struggling to get permission since last few days.
As per orders, Exporters like Shahi Exports, Radnik Exports, Global Mode and Accessories, CTA Apparels and others who also have many factories in Noida, got permission for all the units requested by them.
Lalit Thukral, President, Noida Apparel Export Cluster, who played a key role in getting this permission, thanked the State Government and administration. However, there are around 3,000 apparel manufacturing units in Noida who haven’t been granted permission so far.
The World Textile Information Network (WTiN) based in UK will organise a virtual trade show providing a platform for companies to showcase their development and innovations in various fields including technology and material.
The event will be held from 1 to 31 October 2020. The highlights of the event will be technology and material, textile technology like production of manmade fibres, garment assembly, materials for manufacturing of sportswear, PPE to every kind of fabric.
There will be a virtual booth where exhibitors would be able to showcase videos of their innovations, technologies and any kind of offerings.
Moreover, visitors will be allowed to visit booth, fix appointments to meet company representatives and will be able to chat with exhibitors for any queries and communication.
The event will be giving an opportunity to the visitors and suppliers for collaboration and entering into new partnerships.
Similar to a physical event, the Innovate Textile & Apparel virtual trade show will include online presentations on various topics by the industry leaders, in addition to having seminars and round table discussions on latest topics pertaining to the industry.
Furthermore, to make the show accessible for audience from different parts of the country, the content will be available in different languages including Chinese, Japanese, Spanish and Turkish. The presentations and seminars will have subtitles in the preferred language of the viewers.
It is important to note that the WTiN’s Innovate Textile & Apparel conferences are also currently being held online from 5 May to 30 June 2020, with focus on Industry 4.0 in textile and apparel manufacturing, the impact of smart and novel textiles and digital transformation business strategies. The interested participants can visit ITA website for more information and registration which is now open.
The World Textile Information Network (WTiN) based in UK will organise a virtual trade show providing a platform for companies to showcase their development and innovations in various fields including technology and material.
The event will be held from 1 to 31 October 2020. The highlights of the event will be technology and material, textile technology like production of manmade fibres, garment assembly, materials for manufacturing of sportswear, PPE to every kind of fabric.
There will be a virtual booth where exhibitors would be able to showcase videos of their innovations, technologies and any kind of offerings.
Moreover, visitors will be allowed to visit booth, fix appointments to meet company representatives and will be able to chat with exhibitors for any queries and communication.
The event will be giving an opportunity to the visitors and suppliers for collaboration and entering into new partnerships.
Similar to a physical event, the Innovate Textile & Apparel virtual trade show will include online presentations on various topics by the industry leaders, in addition to having seminars and round table discussions on latest topics pertaining to the industry.
Furthermore, to make the show accessible for audience from different parts of the country, the content will be available in different languages including Chinese, Japanese, Spanish and Turkish. The presentations and seminars will have subtitles in the preferred language of the viewers.
It is important to note that the WTiN’s Innovate Textile & Apparel conferences are also currently being held online from 5 May to 30 June 2020, with focus on Industry 4.0 in textile and apparel manufacturing, the impact of smart and novel textiles and digital transformation business strategies. The interested participants can visit ITA website for more information and registration which is now open.
McKinsey published an analytical report on Chinese apparel, fashion and luxury market, to help international brands restructure their sales strategy and become more competitive in Chinese market. The report suggests although Chinese consumer confidence went into a tailspin the zero-spread lockdown that affected incomes critically, 2023 sees confidence returning after stringent lockdowns were lifted. Prediction is, the sector will experience double digit growth, moving forward, as the Chinese middle-class will once again indulge in their penchant for all things luxury.
However, this does not mean international brands will find the market easy sailing. As the report says in 2021, Chinese brands outperformed international brands in a ratio of 60:40. This trend has been gaining ground since 2013 with local brands steadily capturing more market share year on year. This begets the question what Chinese winning brands are doing to outsmart international ones.
Local brands playing to their advantage
Being based locally provides greater agility in adapting operating models quickly in response to immediate market dynamics which international brands find difficult to match as they are bound by decisions from their headquarters, mostly in the US and Europe. Having this agility also helps managing supply chains quicker as local brands have a better network simply because all supply is also local. As Chinese e-commerce channels and social media are intrinsically insular and tailored to only Chinese consumers, leveraging them accurately is another huge advantage. Local brands have excelled in engaging Chinese consumers with local key opinion leaders and social influencers and at a scale no international brand has been able to.
What global brands need to do
As per McKinsey the first thing international brands need to implement is move away from their global positioning which in most cases don’t resonate with main Chinese consumer segment, the middle class, who often cannot comprehend or relate to Western positioning concepts. Therefore, the value proposition which in most international brands seem to be individualistic experience based needs to be reworked, often exclusivity and impeccable quality being the baseline that are relatable.
Local product relevance is the big winning ticket for international brands. Those who have written their Chinese success stories are ones that usher in their global assets and intellectual property and then gradually incorporate local designs and styles more suited to local cultural and social preferences and trends. Successful brands have found that nothing beats being locally relevant. Having the right social media content generated by local content creators who have a finger on the local trends prevalent further strengthens the local appeal process.
Especially in a market like China that is extremely technology and digital savvy, the right mix of technology and digital infrastructure is going to play a crucial role in consumer outreach, call to action and thereafter sales. International brands will find it an absolutely must to deploy a local in-house team that can work in tandem with the global team to create the most effective communication and engagement. Thus, international brands have to mimic the agility of operations and hiring talent who can become local assets in ensuring the best of a wide supply chain that can be started off as and when the need arises and it does, most times.
McKinsey’s recommendation on being successful in China is based on close analysis of brands that have got it right. For Shanghai Tang and Bosiden, there are Gucci and Raplh Lauren, the later having successfully acquired double-digit growth in 2022 according to President & CEO Patrice Louvet.
Dallas-based online men’s custom clothing brand J. Hilburn has filed for Chapter 11 bankruptcy. The company, which was founded in 2007 in Dallas and made it through the Great Recession as a startup, is trying to reorganise under the protection of the U.S. Bankruptcy Court in Dallas. The tailored men’s clothing line tried to pivot some in recent years by adding more casual apparel, including jeans, but its main lines were formal wear, custom suits and shirts. The company laid off an undisclosed number of employees at its Dallas headquarters last month.
Hilburn sells through a network of personal stylists and directly to customers online. The company said it anticipates no interruptions in business, and all current and future orders will be filled. Stylists work on commission and meet with customers at their homes, offices or in showrooms in Dallas, New York, Boston and Bellevue, outside of Seattle. J. Hilburn owes $15,621 in rent to Inwood Village, where it opened its first showroom in 2016. J. Hilburn said in the initial filing that it has assets of under $10 million, but it owes more than that to vendors. Debts include $6.55 million to Hong Kong-based TAL Group, $806,052 to Portugal-based Criaimie Rua do Facho and $665,957 to the supply chain solutions division of UPS. It owes $2.73 million on a term loan with Austin-based Escalate Capital Partners. Several shareholders were listed from Dallas and Menlo Park, Calif. The company raised $13.8 million in 2013, and it’s listed as an active investment of Boston-based Battery Ventures.
Dallas-based online men’s custom clothing brand J. Hilburn has filed for Chapter 11 bankruptcy. The company, which was founded in 2007 in Dallas and made it through the Great Recession as a startup, is trying to reorganise under the protection of the U.S. Bankruptcy Court in Dallas. The tailored men’s clothing line tried to pivot some in recent years by adding more casual apparel, including jeans, but its main lines were formal wear, custom suits and shirts. The company laid off an undisclosed number of employees at its Dallas headquarters last month.
Hilburn sells through a network of personal stylists and directly to customers online. The company said it anticipates no interruptions in business, and all current and future orders will be filled. Stylists work on commission and meet with customers at their homes, offices or in showrooms in Dallas, New York, Boston and Bellevue, outside of Seattle. J. Hilburn owes $15,621 in rent to Inwood Village, where it opened its first showroom in 2016. J. Hilburn said in the initial filing that it has assets of under $10 million, but it owes more than that to vendors. Debts include $6.55 million to Hong Kong-based TAL Group, $806,052 to Portugal-based Criaimie Rua do Facho and $665,957 to the supply chain solutions division of UPS. It owes $2.73 million on a term loan with Austin-based Escalate Capital Partners. Several shareholders were listed from Dallas and Menlo Park, Calif. The company raised $13.8 million in 2013, and it’s listed as an active investment of Boston-based Battery Ventures.
