FW
The value of textile and garment shares in Vietnam has declined due to the investors’ pessimism about the epidemic in the country and the world. Textile and garment companies in the country have suffered from the interruption of input material supply from China, and most recently, they have been informed that partners from the EU and US have stopped importing products.
Vietnamese textile and garment enterprises need input materials from China to maintain production. Vietnam imported $11.5 billion worth of textile and garment materials from China in 2019, according to the general Department of Customs (GDC).
A lot of textile and garment companies in the country have shifted to make face masks, which has allowed them to survive the current difficulties. Vinatex’s face mask output is 28-30 million a month and will be 50 million face masks a month, if necessary.
TNG Investment and Trade also reported revenue of VND288.6 billion in February, an increase of 65 percent over the same period last year. The sharp increase is attributed to the big orders for face masks.
About hundred knitwear garment making units in Tirupur have shifted to making of personal protection equipments (PPEs) such as gowns, masks, gloves and goggles to meet the rising demand. Raja M Shanmugham, President, Tirupur Exporters’ Association, says PPEs could be manufactured in hubs like Tirupur more swiftly than the import time asserting the 100-odd units in the knitwear export cluster had started making PPEs based on order, he said the units are geared up with support from the district administration.
A number of these units are engaged in making of surgical masks, while some are into PPEs as well. These units use SITRA (South India Textile Research Association) approved standard fabric. They are utilising less than 10 per cent capacity for making 1,000s of masks and PPEs. There should be no issue in meeting the country’s requirement of 15 million PPEs,
The TEA President requested the government to extend support by helping the manufacturers’ source approved fabric, prescribe the standard and manufacturing process to be followed and place orders.
Indian minister for road transport and highway and for micro, small and medium enterprises (MSMEs) Nitin Gadkari has said the MSME and textiles ministries are jointly devising a Solar Cluster Scheme for the handloom sector in which two solar charkhas (spinning wheels) each will be given to 10 lakh women, helping generate employment opportunities. The government is committed to supporting MSMEs facing difficulties during the lockdown and discussions are under way for financing 10 per cent of their working capital and introduction of a deferred payment plan for units in distress, he said.
The government is focused on saving the sector and helping those facing problems by increasing production, exports and enhancing job creation. It is emphasizing on job creation in rural, agricultural, tribal, with a focus on development of 115 aspirant districts across the country.
With brick-and-mortar stores closed and communities dealing with shelter-in-place guidelines, brands are opting to extend return windows. Adore Me temporarily changed its policy from 30 days to 90. Direct-to-consumer bridesmaids dress company Birdy Grey updated its two-week exchange and return policy for all orders placed after March 20; shoppers can sent items back through May 31. Cuts, a premium men’s T-shirt brand, expanded its return and exchange window from 20 days to 60.
Returns are already a big challenge for e-commerce companies, known to have higher return rates than brick-and-mortar. Statista predicted returns would cost brands $550 billion by 2020. And, 41 per cent of shoppers buy things online with the intention of returning certain items, according to Shopify.
Christi Campbell, Head of the fashion, retail and consumer branded products team at national law firm Duane Morris, says companies that will win the most respect from customers are ones that aren’t setting hard deadlines for customers to return products. While building customer loyalty is key over the next few months, there are clear challenges for companies that decide to extend their return window — mainly the financial strain that could be put on the company.
Companies that do make the choice to opt for a return window on the longer side, 90 days or more — will have to deal with unsold inventory that will likely be out of season. Fast fashion companies will likely struggle the most here, as they operate under a quick turnaround to keep up with the latest trends, week-to-wee, Campbell said.
Majority of export units can gradually re-start operations after manufacturing in special economic zones, export oriented units, units outside municipal limits/rural areas and industrial estates and townships is allowed to resume on April 20 as per the revised guidelines for Covid-19 containment issued by the Centre.
As per Federation of Indian Export Organisations this will help in opening of about 80-85 per cent of the manufacturing gradually and bring exports and manufacturing back on track. A positive signal will go out to the world that India is confident of containing Covid-19 through its well thought out and early measures.
FIEO noted that the decision would also give a psychological boost to migrant workers who were getting desperate with the extended lockdown. Exporters of apparels, one of India’s largest labor-intensive export sectors, want the government to allow all garment export units, irrespective of where they are located, to resume production.
The government’s decision to allow operations of seaports and inland container depots for cargo transport, including authorized custom clearing and forwarding agents, has also come as a shot in the arm for exporters as units were facing major hindrances in transporting goods, already manufactured before the lockdown, to the ports for shipping.
Industry bodies across the world are urging brands to honor their commitments to suppliers. Prominent among these are nine business associations in the STAR (Sustainable Textile of Asian Region) Network are calling on buyers to honor their contracts with their suppliers.
The joint statement was issued by the Garment Manufacturers Association in Cambodia (GMAC), the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), China National Textile and Apparel Council (CNTAC), Myanmar Garment Manufacturers Association (MGMA), Pakistan Hosiery Manufacturers and Exporters Association (PHMA), Pakistan Textile Exporters Association (PTEA), Towel Manufacturers Association of Pakistan (TMA) and Vietnam Textile and Garment Association (VITAS).
These industry bodies have called for brands and retailers to take delivery and pay under already agreed terms for goods completed or already in production. They also listed a series of requests to buyers including to honor contracts, take responsibility for orders already completed or in production, offer compensation for cancelled or delayed orders, and not to pressure suppliers into mothballing orders.
UK-based fair trade watchdog Traidcraft Exchange has also asked brands and retailers to honour their contracts with suppliers from “poorer countries” over the COVID-19 outbreak. Remake non-profit has launched a petition, entitled #Payup, urging brands and retailers to continue paying factory workers in their supply chains amid the COVID-19 crisis.
Welcoming the government of India's decision to allow partial industrial activities with effect from April 20, Apparel Export Promotion Council (AEPC) has sought similar approval for apparel exporting units. Partial resumption of industrial activity will help mitigate the hardship being faced by many segments of the society, AEPC chairman A Sakthivel says.
He further urged the government to also allow the apparel exporting industry, which is facing immense financial difficulties and imminent closures, to restart their activities. He requested the government to allow apparel exporting units who export a minimum of 50 per cent of their turnover to operate under these guidelines, as already allowed to SEZs and EOUs in Para 15 of the consolidated revised guidelines.
Most swimwear brands are moving ahead with product launches, including Andie Swim and Onia. For Andie’s 2020 spring launch on April 1, which included four new suit colors, the company turned to TikTok for the first time to create a launch video of employees dancing and wearing the latest products. Andie has also been offering at 15 percent off code for customers.
Onia is also moving ahead with product launches into the summer, focusing on the brand’s direct-t0-consumer business to drive sales, with wholesale essentially at a standstill.
While both Andie Swim and Onia noticed sales slip during the first few weeks of quarantine, both said things have started picking back up in the last two weeks. The global swimwear market was valued at $18.9 billion in 2018 and was projected to reach $29.1 billion by 2025, according to data platform Statista. That was before the recent pandemic hit. It’s unclear how the market will be impacted in the long run, but Melanie Travis, CEO and founder of DTC swimwear brand Andie Swim, said she’s optimistic that while the industry may take a hit in these next few months, swimwear sales will bounce back. She is hopeful travel will resume by June or July.
Concerned over mass sacking in garment factories amid the COVID-19 outbreak, labour union leaders in Bangladesh recently demanded immediate reinstatement of all terminated workers with full monthly wages. Three unions, in a joint statement, claimed around 10,000 garment workers from Dhaka, Savar, Gazipur, Ashulia, Narayanganj and Chattogram have lost jobs.
The Bangladesh Garments and Industrial Workers Federation (BGIWF), the Bangladesh Independent Garment Workers Union Federation (BIGUF) and the Bangladesh Centre for Workers Solidarity (BCWS) called on factory owners to comply with the government order and stop firing workers during the crisis.
The three organisations suggested preparing a list of workers who have been terminated from January to March and reinstating all of them with full wage payment and inform workers about this through an official notice.
Their other demands included keeping the garment factories closed until the extended public holidays with paid leave.
The unions also warned of launching global campaign against buyers who cancel, suspend or claim discount on their orders, citing the impact of the pandemic.
K K Lalpuria, MD, Indo Count
“The current situation is very uncertain, complex and unprecedented. Customers who closed their stores or point of sales have no option but to cancel their orders. In fact, we are unable to ship to even those who have not cancelled their orders. Some have deferred it where there is low impact believing it may start by the first week of June. As the situation has impacted both parties in the business they should take each other’s views in resolving issues; should be open for suggestions and see mutually how they can minimize the loss. They should plan together to see how they can sustain their market share and build on opportunities.
Our first objective is to ensure all our staff and workers are safe. Once we are allowed to start operations, we would convert the whip to finished form and keep goods ready for shipment. We are studying the credit terms and customers business in detail to see how we can support the business jointly. We also are studying the market closely and would like to satisfy all our stakeholders by adapting good risk management policies in future. We would introduce new strategies to see how we can safeguard such disruptions in future and grow our business.
The government has taken right steps to restrict the impact of the pandemic. They now need to support us to see how the industry can revive and sustain in future. Our financial loss is high due to loss of sales, at the same time we need to pay for fixed expenses. Textile sector is capital and labour intensive and works on thin margins. To sustain this sudden loss we need government’s financial support to revive and build the sector again. By doing this, the government will be supporting farmers, labour, MSME, exports and overall Make in India.”
