FW
German sportswear group Adidas has recorded a jump in its third-quarter profits. This has been lifted by a surge in sales of its own-brand trainers and apparel. The company, which sponsors English Premier League giants Manchester United, also confirmed its improved outlook for the year, bolstered by high-profile sponsorships during the Euro 2016 football tournament and the Rio Olympics as well as collaborations with big names like Kanye West.
According to its new chief executive Karsten Rorsted, 2016 will be a record year for the Adidas group with truly exceptional results. For the July to September period, the group's net profit climbed by 24 per cent to €386 million compared to the same period last year. Its group revenues grew by 14 per cent to €5.4 billion.
The Adidas brand itself saw global sales jump 20 per cent driven by strong demand for its retro-inspired originals trainers and its neo urban fashion line. Sales of its Reebok brand were up seven per cent. Both brands did particularly well in China and the United States, allowing the Adidas group to gain ground on its main rival Nike. For the coming days, the group felt that it would see one-time costs in the second half of 2016 related to restructuring measures at Reebok and investments aimed at strengthening the group's growth foundation.
But it said it was still on track to meet the improved forecast announced in July, expecting revenues to increase at a rate in the high teens this year. According to expectations, net income this year is likely to soar by 35 to 39 per cent to between €975 million and €1 billion. In spite of the good news, shares of Adidas fell by more than five per cent to €139.10 in early morning trading in Frankfurt.
Globally, the online store segment is expected to be the most valuable segment in terms of revenue between 2015 to 2021. A US market study on men's underwear and women's lingerie provides in-depth information about various factors and trends affecting each market segment and provides analysis and insights about the potential of the men's underwear and women's lingerie market in future.
The US men's underwear market was estimated at $3,236.4 million in 2015 and is expected to grow at a CAGR of 5.1 per cent. On the other hand, women's lingerie market revenue is expected to grow at a CAGR of 5.4 per cent throughout the forecast period. Both men's underwear and women's lingerie market is expected to witness significant growth over the forecast period. This growth is attributed to increased proliferation of modern retail formats such as supermarkets, discount stores, and pharmacy stores; rising personal income of US households; rising fashion consciousness, change in lifestyle, and rising awareness regarding health and fitness and personal hygiene among men and women in the country.
On the other hand, high competition due to the presence of a relatively high number of global and local intimate apparel manufacturers is expected to be the major restraining factor for growth of the men's underwear and women's lingerie market. On the basis of category, the men's underwear market is segmented into different types of underwear. The boxer brief segment is expected to remain dominant throughout the forecast period, with high revenue contribution. By the end of 2021, the boxer brief segment is expected to hold a share of 34.9 per cent in volume terms.
Women's lingerie market is bifurcated on the basis of product type, size, price range, age group, and distribution channel. By product type, brassiere segment is expected to register highest CAGRs in both value and volume between 2015 and 2021. By size, the medium segment is projected to contribute highest over the forecast period. On the basis of price range, premium range segment revenue is expected to register a CAGR of 6.8 per cent over the period 2015–2021.
China is still by far the world’s biggest textiles exporter but buyers are turning increasingly to India, Pakistan and even back to Europe, as price gaps narrow. Textile exporters in China are being crushed by rising costs. China’s vast economic transformation has meant rising living standards, but also rising wages, forcing companies to move up the value chain to remain competitive. High-tech industries are springing up to replace labor-intensive sectors such as textiles and apparel.
China’s textile exports fell last year for the first time in six years, slipping five per cent. In January to August of this year, textile and clothing exports are down more than 4.5 per cent. Among the biggest headaches for textiles and other low-end manufacturers are wages.
Average wages in China have grown at an annual compound rate of more than 12 per cent a year in 2013 from 1994. Authorities in China have called for a slowdown in wage rises in order for the country to remain competitive. Chinese manufacturer’s feels in five to 10 years, all low-end production in China will shift to Pakistan.
Python has created a new line of fitness clothing aimed at providing support, compression and recovery properties. Python Performance is a British sportswear company. It has worked with sportswear designers and exercise physiologists to develop garments that combine the benefits of technologies such as compression, joint support and kinesiology tape. The fitness clothing is based on the proprioceptive principles of a kinesiology tape.
Leggings and tops include an innovative fabric weaving technology that delivers pinpoint heat and cooling, pinpoint compression and supportive joint stabilisation so the wearer gets support where they need it most. The garments provides support and stabilisation to joints.
Proprioceptive support is achieved through the Lycra-backed strips, which are based on the principles of kinesiology tape but without the need to apply the tape each time. Stabilisation technology is designed to help target injury prone points to avoid pain and aid performance. In addition, optimised muscle activation is achieved through pinpoint heat and cooling properties, allowing for heat dissipation and retention in the right places.
With kinesiology tape, athletes need a trained expert to put it on, whereas with the Python Performance clothes, they don’t, and they can feel the compression straight away. Warm up happens faster than usual, which helps with injury prevention.
Spanish company Inditex has signed a three-year collaboration agreement by which it will fund grants for students of Tsinghua School of Economics and Management, China to conduct academic and business exchanges in Spain. The chairman and CEO of Inditex Pablo Isla, and the Dean of the Tsinghua University School of Economics and Management (SEM), Professor Yingyi Qian, were the signatories. Inditex is a Spanish multinational clothing company headquartered in Arteixo, Galicia. It is the biggest fashion group in the world that operates over 7,000 stores in 91 markets worldwide.
As per the agreement, the two would donate resources for programs like: Grants for Tsinghua’s SEM students to visit Inditex’s headquarters in Arteixo, Spain to gain practical experience in areas such as fashion retail management, logistics, environmental protection and sustainable development; training programmes to support the professional development of academic staff in scientific research and teacher training; promotion of cultural activities for students on the Tsinghua SEM campus in Beijing.
The five day International Cotton Advisory Committee (ICAC) meeting concluded in Islamabad with member-countries pledging to adopt innovative-cutting edge technologies for improving cotton production at lower costs, and strengthening the value-chain that would make competitive. The meet was held from October 30 to November 4.
A statement issued at the end of the 75th plenary meeting on Emerging Dynamics in Cotton: Enhancing Sustainability in the Cotton Value Chain said government policies should focus on allowing prices to fluctuate with market forces, increasing funding for agricultural research, and implementing science-based regulations that allow technology development and adoption. The concluding session was presided over by ICAC executive director JoseSette while the secretary, Ministry of Textile Industry Pakistan Hassan Iqbal was the chief guest. Sette said one of the greatest challenges for the cotton sector in Pakistan was energy shortage, which needed to be addressed on an urgent basis for industrial growth in the textile sector. Pakistan possesses huge potential in cotton production and textile manufacturing to penetrate in the international market, he added. The event, organised by the Ministry of Textile Industry in collaboration with ICAC, was attended by 378 persons, including 14 representatives from members, four international-member organisations and four non-member countries.
Buyers and retailers in Bangladesh have expressed concern over slow progress on structural remediation in factories where readymade garment (RMG) is assessed by Western retailers' groups. They feel, structural remediation is now being done at a slower pace than that of fire and electrical ones.
Apparel makers, however, blame slow move in detailed engineering assessment (DEA) approval by the retailers' platforms, absence of required engineering firms having experience of conducting DEA and high cost for such a slow progress. In its initial inspection, Accord assessed some 1,600 local garment factories that produce apparel products for its more than 200 signatory members and found more than 80,000 safety hazards.
Accord says, around 966 factories submitted their DEA reports to the group for approval till June 2016 while only 297 got clearance. Only 20 per cent or 3,854 structural issues out of 19,790 have been so far remediated till July last. About 70 per cent and 45 per cent electrical and fire safety hazards respectively have been remediated till July. Another platform of North American-based apparel buyers and companies namely Alliance assessed some 759 garment factories. Some 3,334 structural hazards or nearly 49 per cent out of total identified 6,707 have been fixed in its listed factories till September last.
On the other hand, 11,569 electrical issues out of 16,824 flaws and 8,851 fire hazards out of 14,122 have been remediated, according to Alliance. About 68 per cent and 62 per cent of electrical and fire hazards were remediated respectively, according to Alliance.
"‘Make in India’ has been in the forefront of Prime Minister Modi’s vision of putting India in the global manufacturing map. However, experts now point out that a lot still needs to be done to make it a reality as Sanjay K Jain, MD, TT writes in “Make in India – is it happening” Indeed it has been a major programme the PM and rightfully so as India has truly lagged in manufacturing sector. As he says, “All the ingredients are there but still the dish is far from complete as the receipe is yet to be figured out."
‘Make in India’ has been in the forefront of Prime Minister Modi’s vision of putting India in the global manufacturing map. However, experts now point out that a lot still needs to be done to make it a reality as Sanjay K Jain, MD, TT writes in “Make in India – is it happening” Indeed it has been a major programme the PM and rightfully so as India has truly lagged in manufacturing sector. As he says, “All the ingredients are there but still the dish is far from complete as the receipe is yet to be figured out. The negative to flat industrial growth rates in the recent past when the economy is said to be growing at 7 per cent plus is another disturbing and eye brow rising piece of data,” he writes. Jain says we ourselves are a manufacturer who sells domestically and exports across the globe. “The Make in India programme had excited me also personally and had hoped for a lot to happen.”
What works for India is its ample labour at reasonable cost, a huge domestic market, ample opportunity for import subsitution, rich reserves of raw materials, a proactive government, yet the Make in India vision has really not taken off as expected.
Making Make in India a Reality Jain writes in his article, “As I sit down and ponder objectively, prompted by the growing influence of Chinese products in our country – it makes me wonder how Make In India dream will be fulfilled. I am asked by many youngsters as to what sectors and segments hold great potential. My instant reaction is that avoid the manufacturing sector – it makes me guilty of not being in sync with our PM who I admire a lot. I looked around to see whether my advice is wrong, however sadly the more I analyse and look around, the more convinced I am that my advice is correct,” reiterated Jain.
Jain says, many have countered him to say as businessman he should be promoting ‘Make in India’ strongly. But he is able to convince himself and find sufficient logic/reason to share the excitement. “It is pertinent to understand as to why have the educated class of the country, mostly shunned entreprenuership and more so the manufacturing sector,” he opines.
Jain says everyone feels owning a factory means one is rich and everyone tries to extract their pound of flesh. This leads to a factory being harrassed by: local people on various counts. Inspector raj should be managed as they have omni powers to penalise you; multiple laws regulate factories; labour and trade unions must be managed.
Issues that plague the system
Jain asserts, to get consolidated land for a factory is a nightmare, and thereafter no insurance that it’s going to stay with you. Moreover a manufacturer is open to risk of fire, calamities, accidents and so on. “Despite being one of the fastest growing economies, we are far behind even smaller nations when it comes to Ease of doing business. World Bank recently confirmed India’s ranking at 130 out of 190 nations (means no progress made by us despite intentions).”
Another bugbear is power which is extremely expensive in most parts of the country. The Electricity Act was passed in 2003, however still many States don’t allow purchase of power and many make it inviable by imposing cross subsidies, taxes, charges etc. Power on IEX is available as low as Rs 2/unit, however its landed cost to industry multiplies 2 to 3 times, where allowed to be purchased. The moot point is that why should State Electricity Boards be allowed to act as monopolies?
Interest rates are extremely high. Despite RBI having decreased their rates by 175 basis points over last 18 months, the banks have not even decreased by 100 basis points!!! Why should compliant customers pay for NPAs and inefficiencies of banks?
Jain says labour attrition, absenteeism, education levels make manufacturing consistently a challenge. Some reasons for this same are number of religious festivals we have across the country, MNRGEA which makes labour take long leaves for their home town, culturally not a disciplined country, education levels in rural still very low – makes skilling difficult, propensity to migrate has reduced, married women working is still very low.
Economies of scale are difficult to develop due to poor availability of consolidated land, issues of employing large number of labour in one location – one stray incident or displeasure of local leaders can ruin a company. There are hardly any favourable FTAs, which could provide a big market to Indian companies to dare to set up large capacities.
Jain says manufacturing taxes too add to the problem. “Manufacturing is taxed and taxed, ensuring they never can generate sufficient return on capital employed unless they are in some industry where they enjoy monopoly or subsidies,” he says. Apart from direct taxes, companies pay a host of indirect taxes. Cross-subsidies are the order of the day. Even after paying taxes and taxes for meeting government expenditure, they have to pay cross subsidies on a host of expenses to subsidise other sectors like power, interest, freight etc. Even indirect tax collection like VAT is the duty of the purchaser – its duty of company to ensure his supplier pays taxes instead of VAT department who has registered them.
What needs to be done?
Jain feels unless we in spirit don’t understand the importance of manufacturing sector and its role in development of the country by generating employment, revenue, self reliance, earning foreign exchange by exports and import subsitution, reducing cost of products for the common man – we shall never ever see the dream of India becoming a manufacturing hub and factory of the world like other nations have become over the last few decades.
Today the service sector looks attractive and all are zeroing on it. But Jain questions, without a vibrant primary economy how can the supporting segments thrive and grow. Indeed, the government has understood all this and hence, ‘Make in India’ came up, “however, to realise the dreams on ground, we have miles to go. We also recognise that it needs the combined efforts of both Centre and state to make things work, hence important to build a Federal consensus like being done for GST. Federal competitiveness is already visible and the Statewise ranking on Ease of Doing Business is also a welcome step.
Jain hopes ground level problems are understood and appreciated before it’s too late.
Linen and uniform launderers and suppliers from across the world assembled at Bruges, Belgium to attend the World Textile Services Congress (WTSC) from October 5 to 7. The event was organised by the European Textile Services Association (ETSA), FBT (Belgian national association of textile services) and TRSA (international, based in the United States).
Nearly 90 executives from more than 50 laundry companies came from 12 different countries along with 14 sponsoring suppliers making for a total of nearly 200 participants. They reviewed political, economic and social conditions affecting the industry worldwide.
While delegates were prompted to recognize what makes their businesses and homelands unique, many of them related to each other’s experiences noted issues they face at home that extend across borders. This enabled executives to share strategies for fulfilling common business opportunities.
Trends that WTSC presenters discussed were: The industry has yet to thoroughly document the value of its services, indicating the need to reverse perceptions of the business as a commodity; corporate consolidation of textile services operators continues to decrease their numbers and increase larger chains’ market share, but niches remain for independents; immigration creates costly public burdens but remains a fertile source of employees; better analysis of launderers’ databases can improve customer service and drive additional revenue; more plant processes can be automated to increase operating margins.
These themes emerged from the beginning when former European Commission President Herman Von Rompuy delivered his keynote address. Attendees recognized similarities when geographic and product market trends were discussed in panel discussions. Belgian launderers discussed their operations as they opened their doors for participants’ visits on the final day of the Congress.
The Coimbatore-based VXL Group is a one-stop solution provider for waste collection and baling requirements. The company has set up a state-of-the-art facility to manufacture the new-generation high efficiency fans and autobaling systems. Known for its continual R&D initiatives, the company has carved a niche for itself in the field of ring travelers. In its ring traveler unit, VXL has developed new process techniques to produce the new range of travelers, especially designed for compact spinning.
VXL has more than 4,000 installations across India. Design strength, sophisticated engineering, intelligent technology and dedicated customer support have been the key reasons behind the group’s success over the years. The company has a team of experienced application engineers for helping out customers with traveler selection and to achieve better quality and production.
Despite recessionary trends, the company has been able to maintain top line in the first half. The introduction of the new range of high efficiency centrifugal fans and central baling stations has been an important milestone reached by the group this year. Some of the major customers of the group include Ramco and Premier, both of Tamil Nadu, Vasantha Spinners and Ravali Spinnners, both of Andhra Pradesh, ST Cotex and Sel Textiles, both of Ludhiana.
