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Although Nike Inc’s quarterly revenue and profit blew past Wall Street expectations on strong sales in China, the brand registered a lower-than-expected growth in North America, its biggest market. The world’s largest footwear maker faces intense competition from brands like Adidas , Skechers and VF Corp’s Vans in North America, even as it pushes to sell exclusive merchandise through its tap-and-buy SNKRS app and retail stores.
Nike’s revenue from North America rose by 5.3 per cent to $3.98 billion in the second quarter, compared with the previous year’s 9 per cent rise, but missed Wall Street expectations of $4 billion. The company’s gross margin of 44 per cent was also slightly below estimates of 44.1 per cent, hurt by higher product costs due to incremental tariffs in North America.
In Greater China, the fastest-growing market for Nike, its revenue rose by 20 per cent to $1.85 billion. The company recently introduced its app in the country. According to IBES data from Refinitiv, Nike’s net income jumped 31.6 per cent to $1.12 billion, or 70 cents per share, in the quarter ended Nov. 30, while analysts on average had expected 58 cents per share. Its overall revenue rose by 10.2 per cent to $10.33 billion, beating the average analyst estimate of $10.09 billion.
The Chinese textile industry faced a rough time in 2019. This was true for cotton, polyester and viscose. Rayon yarn mills will not completely switch production but they prefer polyester/rayon blended yarn which has similar prices but cheaper costs and considerable profits compared with pure yarn. Therefore, both vortex-spun and open-end rayon yarn also saw a production shift.
Some pure spinning machines will be occupied, but they dispersed rayon yarn’s competition burden and to a certain extent maintained the stability of the operating rate of rayon yarn mills. Polyester yarn was supported by market feedback orders and the polyester market.
Rayon yarn had sales and profits advantages compared with cotton yarn. It was mainly cotton yarn mills that cut production. Polyester/cotton yarns were preferred, and the proportion of viscose flowing into them was not high. As for market demand, assuming that prices and market fluctuations of the three major feedstock remain similar this year, the situation in 2020 will be similar to that in 2019. As for viscose staple fiber, there was still a certain increase, but it was hard to give much strong support to the market. Stronger market fluctuations also require a combination of supply and demand changes.
Lifestyle brand Shoppers Stop will set up an apparel manufacturing facility in Telangana’s Sircilla apparel park. The project is expected to create employment opportunities for hundreds of women.
A South Korean company is also investing in Telangana. Youngone is setting up a 290 acre facility at Telangana’s Kakatiya Mega Textile Park. This fiber-to-fabric integrated textile cluster is built on 1,200 acres of land. Over a dozen companies have come forward to set up their manufacturing operations in the park with a combined investment of over Rs 3,900 crores. Youngone is a South Korean textile and apparel major. The facility would involve manufacture of knitted and woven garments for outdoor wear and technical textile products, predominantly for exports. It is estimated that more than 12,000 jobs would be created through this project. The Kakatiya mega textile park is the first industrial park project to reach the ground-breaking stage in three years after the formation of the state. The project also assumes significance due to its location in the cotton-rich Warangal region which was once a hotbed of Naxalite activities in Telangana. A state-of-the-art infrastructure featuring common effluent treatment and zero-liquid discharge facilities besides ready-built factory sheds will be developed in this park.
Louis Vuitton will shut one of its shops in Hong Kong. Protests have hit demand as high rental costs bite. The decision to close the shop came after the company failed to reach an agreement with its landlord to cut rent in the mall outlet.
Louis Vuitton, the world's biggest luxury goods brand by sales, has eight shops in Hong Kong, one of the world’s top shopping destinations. High end fashion labels have hunkered down in Hong Kong since demonstrations escalated in June. Hong Kong’s retail sales fell 23.6 per cent from a year earlier in November. Until now, luxury brands had only shut stores in Hong Kong temporarily when protests flared. Some brands are weighing up redirecting some of their investments elsewhere, including to the Chinese mainland and other parts of Asia where many have managed to make up for lost sales in Hong Kong. Some brands are trying to renegotiate notoriously high rents in Hong Kong as one way of mitigating the hit to operating margins.
Hong Kong has long drawn numerous tourists from the Chinese mainland who pick up luxury cosmetics, accessories and clothing at slightly lower prices than at home.
LVMH, based in France, owns Louis Vuitton apart from other fashion brands like Christian Dior and Hennessy.
BGMEA has opposed the 22 per cent hike in different container handling charges raised by private inland container depots (ICDs) as it would increase their costs sharply affecting the export activities at a time when the sector is passing a tough time. The association also stated that the private ICDs/off/-dock operators cannot collect the enhanced charges without the ministry’s approval.
On December 12, Bangladesh Inland Container Depots Association (BICDA) increased empty container handling charges and export goods stuffing package charges by 22 per cent and instructed all the private ICDs to collect the enhanced rates from January 01, 2020. Under the enhanced charges, for a 20 ft. export container the package (stuffing) costs have increased to Tk 4,390 from Tk 3,600 and the ground rent has gone up to TK 125 from Tk 100 per day. Landing charges have risen to Tk 220 from Tk 180 per tonne and CFS storage charges after seven days have increased to Tk 30 from Tk 25 and the per container VGM charge to Tk 1,220 from Tk 1,000. For a 20-ft. empty export container, the charges for per day ground rent, lift on/off, documentation charges and one-way transportation/haulage have increased by Tk 22, Tk 66, Tk 52 and Tk 220 respectively.
In the last decade, Inditex has shifted most of its factories from the European Union to Asia. In 2008, 43.5 per cent of the group's suppliers were within the common market. Ten years later, their share has dropped to 24.6 per cent. In 2008, the European Union housed 43.5 per cent of the Spanish group’s suppliers. Ten years later, their share has been reduced almost by half, to 24.5 per cent.
The throne that Europe has lost is now held by Asia, which already represents 55.7 per cent of the total network of suppliers for Zara’s matrix. Ten years ago, the region accounted for 35.2 per cent, with just 417 suppliers.
A decade ago, Inditex totaled seven productive clusters in the world: Morocco, Turkey, Bangladesh, India, Portugal, Spain and Cambodia. In the last ten years, the company has added five more, Argentina, Brazil, Pakistan, China and Vietnam. In total, the twelve areas contribute 96 per cent of the group's production. The African continent, meanwhile, today houses 145 Inditex suppliers, 44 more than in 2008.
In these ten years, the group has also made progress in transparency and compliance. In 2008, the company conducted 655 social audits. In 2018, the group conducted 12,065 audits.
Bangladesh’s export earnings have fallen 7.59 per cent this quarter. Value addition in readymade garment sector dropped 3.31 percentage points in the quarter. The country’s exporters are losing their competitive edge due to the overvalued currency and the increasing cost of doing business. The US-China trade war resulted in a slump in consumption of readymade garment products. The consumption fall also forced the country’s exporters to lower prices.
Import of raw materials represents 38.99 per cent of the country’s export value. The readymade garment sector imports raw cotton, synthetic or viscose fiber, synthetic or mixed yarn, cotton yarn and textile fabrics and accessories for garments as inputs for the production. The readymade garment sector contributes 83.52 percent to the country’s overall export earnings. Due to Bangladesh’s high dependency on garment exports, any instability in this sector in future could result in huge unemployment and a trade deficit. So the country needs to diversify its export basket.
Bangladesh’s competitors have already succeeded in this. Vietnam for instance emphasises electronics and other value-added export products. Bangladesh has to develop factory to port communication in order to reduce lead times and has to have a one stop service in trade procedure and documentation in product transaction.
Pitti Immagine Uomo will be held in Florence, Fortezza da Basso, Italy from January 7 to 10, 2020. This is the world’s most important platform for men’s clothing and accessory collections and for launching new projects in men’s fashion. New collections for fall /winter 2020-21 will debut. The show will host more than 1,200 brands of which 540 will be foreign ones and 265 will be new ones and expects to welcome about 36,000 visitors.
Unisex brand Telfar will incorporate unisex designs with comfortable sportswear. Contemporary design brand Closed and the British fashion designer Nigel Cabourn will combine their creative visions in a new exclusive capsule collection that draws inspiration from vintage military uniforms. Sergio Tacchini, an Italian sportswear brand founded in 1966, will showcase a retrospective celebrating the brand’s heritage as well as highlighting the newest collection. A group of artists, actors, models, designer and friends will honor designer Karl Lagerfeld who passed away last year. They will present their personal interpretation of the designer’s most iconic piece–the white shirt. A flag show will depict seemingly simple rectangles of fabrics in constant movement. The idea is to show this can express identity, feelings, thoughts and sense of belonging–just like clothes and brands.
Atul Ganatra, President, Cotton Association of India and Mahesh Sharda, President, International Cotton Agency expound on the current market scenario for cotton in India
Much of the cotton currently available in our country has been damaged due to the recent rains. Therefore, we would have to wait for another 15 days to know the correct cotton prices. Currently, cotton prices are quite low as the available cotton is of low quality and has a moisture content of 25 percent to 50 percent.
Extended monsoon is the spoiling the quality of our cotton. We normally require cotton of 75 to 78 RD but have to contend with 72 RD cotton. We cannot ignore the weather conditions this month. The next ten days will be extremely crucial for the crop.
Though cotton is produced on a much larger scale globally, USDA recently reduced its production by 4 per cent. Earlier, the association produced 22 million bales. Now, it produces only 20.8 million bales as most of its buyers are adopting a wait and watch policy.
India will continue to be the world’s top cotton producer as consumption will continue to rise. The current low prices will also boost consumption.
Pakistan’s garment manufacturers and exporters can’t participate at the US trade show Magic. Reason: they can no longer afford to be a part of this comprehensive fashion marketplace as costs are too high. They now hope for subsidies, which will enable them to be present at the show and target the lucrative US textile import industry. In real terms Pakistan’s textile exports have remained stagnant in the last six years. During the same period textile exports from Bangladesh and Vietnam have increased seven per cent to ten per cent. Pakistan share in the global textile trade has declined from 2.2 per cent at the start of the century to less than 1.70 per cent. The country is looking at boosting its foreign exchange reserves through a jump in exports.
Magic showcases women's and men's apparel, footwear and accessories. It fuels the business of fashion by helping facilitate connections between buyers and brands with outstanding services like retail concierge and matchmaking programs, bridging relationships and strengthening connections. Additionally, retailers and buyers have opportunities to learn, network, and conduct business with new and returning exhibiting brands. From the height of advanced contemporary luxury brands, to the latest trends in fast fashion, Magic fuels the business of fashion bi-annually in February and August every year.
