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The Clothing Manufacturers Association of India (CMAI) is advocating for a uniform 5 per cent Goods and Services Tax (GST) rate across the entire Indian textile value chain. This proposal aims to simplify the current multi-tiered tax structure, which has created complications and a problem known as the inverted duty structure.
The current GST framework for textiles is complex and varies based on the type of product and its price. Garments priced below Rs 1,000 are taxed at 5 per cent while garments priced above Rs 1,000 are taxed at 12 per cent.
Raw materials like Purified Terephthalic Acid (PTA) and Monoethylene Glycol (MEG) are taxed at 18 per cent, MMF filament and spun yarn are taxed at 12 per cent. Fabrics and garments are taxed at 5 per cent or 12 per cent, depending on the price.
This differential taxation creates an inverted duty structure, where the tax on raw materials (eg: MMF) is higher than the tax on the finished product (garments). This makes it difficult for manufacturers to claim a full Input Tax Credit (ITC), leading to a build-up of tax liability and an increase in working capital costs.
Supporting a uniform 5 per cent GST, CMAI and other industry bodies like the Confederation of Indian Textile Industry (CITI), argue, a lower tax rate would make textiles and garments more affordable for consumers. They believe, a single tax rate would eliminate the confusion and compliance complexities caused by multiple slabs and price thresholds. This would also reduce the risk of under-invoicing and the informal ‘grey; market. A uniform 5 per cent GST would also support higher-priced traditional wear, handloom, and embroidered garments that are currently penalized by the 12 per cent GST rate. Besides, a lower, uniform GST would stimulate demand and help the industry grow. Additionally, it would help attract investments and create more jobs.
The GST Council is currently considering a major restructuring of the tax slabs, and CMAI is hopeful that the textile industry will be placed in the lowest 5 per cent slab to address these long-standing issues.
Formerly known as the Boohoo Group, Debenhams Group registered 3 per cent growth in adjusted EBITDA to £41.6 million for the fiscal year that ended on February 28, 2025. This was a result of the major transformation undergone by the company under new leadership.
Having his position as the CEO in November 2024, Dan Finley implemented aggressive cost-cutting measures, including £50 million in annualized headcount savings. This resulted in the achieving the strong performance for its Debenhams brand, which saw GMV (Gross Merchandise Value) grow by 34 per cent to £654 million and delivered £25 million in adjusted EBITDA.
The group also significantly reduced expenses by cutting inventory holdings by over 50 per cent and decreasing capital expenditure by more than 50 per cent. As a result, net debt reduced to £78.2 million at the end of the year, down from £143.1 million at the half-year mark and £95 million in fiscal year 2024.
In August 2025, the company secured a new three-year finance facility of up to £175 million, replacing its previous facility more than a year before it was due to expire.
While group revenue declined by 12 per cent to £790.3 million, this reflects the growing importance of the marketplace model, where only commission income is recognized instead of the full transaction value. The gross margin also saw a slight decrease of 50 basis points to 52.6 per cent.
The company is exploring the potential sale of PrettyLittleThing (PLT) and is evaluating options for its US and Burnley distribution sites to align with its new ‘stock-lite’ strategy.
The company anticipates that its adjusted EBITDA for continuing operations in H1, FY26 will surpass the same period in FY25. The transformation strategy is centered on creating the right operating model, expanding the Debenhams brand, and shifting toward fashion-led marketplaces.
In Q3, FY25, American clothing and accessories retailer Gap Inc projects a 1.5 per cent -2.5 per cent rise in net sales while gross margins are expected to increase by 150-170 bps including a 200 bps tariff impact.
In Q2, FY25, Gap reported net sales of $3.7 billion, which was flat compared to the previous fiscal year. However, the brand’s comparable sales increased by 1 per cent, marking the sixth consecutive quarter of positive comps. The company’s diluted earnings per share (EPS) increased by 6 per cent Y-o-Y, which was supported by disciplined cost management despite margin pressures.
Online sales grew by 3 per cent and accounted for 34 per cent of total sales, while store sales declined by 1 per cent. The company closed the quarter with about 3,500 stores, with 2,486 being company-operated.
The company’s gross margin shrank by 140 basis points to 41.2 per cent, largely due to a credit card revenue-sharing benefit from the previous year. Operating income was $292 million, reflecting a margin of 7.8 per cent. Net income totaled $216 million with an effective tax rate of 27 per cent.
At the brand level, Old Navy recorded a 1 per cent rise in sales to $2.2 billion with comparable sales increasing by 2 per cent. Sales of the Gap brand also increased by 1 per cent to $772 million with comparable sales rising 4 per cent, marking the seventh consecutive quarter of positive comps.
Banana Republic recorded a 1 per cent decline in sales to $475 million, but its comparable sales increased 4 per cent, reflecting progress in its repositioning strategy. However, Athleta continued to struggle, with sales declining by 11 per cent to $300 million.
Parent company of iconic brands like Calvin Klein and Tommy Hilfiger, PVH Corp reported a 4 per cent rise in revenue in Q2, FY25. The company’s growth was driven by robust performance in the Americas, which registered a 11 per cent rise in revenue. This growth was supported by strong results in both its direct-to-consumer and wholesale channels.
The company's non-GAAP earnings per share (EPS) reached $2.52, significantly surpassing the expected range of $1.85 to $2.00. While PVH faced challenges such as rising tariffs and a promotional retail environment that squeezed gross margins, the company maintained profitability through disciplined cost management and strategic investments.
Looking ahead, PVH Corp has reaffirmed its full-year non-GAAP earnings outlook and even slightly raised its revenue guidance, a sign of confidence in its strategic initiatives and the strength of its core brands.
The global trade stage has seen a reset this August with escalating US tariffs, creating a high-stakes, three-way competition for South Asia's textile and apparel powerhouses. The US, citing a ‘reciprocal’ trade policy, has imposed varying and punitive tariffs that have upended long-standing export dynamics. This new reality pits Pakistan against Bangladesh in a battle for market share, while India, facing the steepest tariffs, scrambles to maintain its foothold in its most critical export market.
The new tariff regime and its immediate impact
As of August 2025, the US has imposed a multi-tiered tariff structure on major textile and apparel exporters. The core of this new policy includes a 19 per cent tariff on Pakistani goods, a 20 per cent tariff on Bangladeshi goods, and a devastating 25 per cent (with the potential to rise to 50 per cent) on Indian products. This is a major departure from previous trade arrangements and has created a direct, measurable impact on the export viability of each nation.
The tariffs immediately eroded Pakistan's comfortable lead over Bangladesh. The initial 5 per cent tariff advantage Pakistan held has now been whittled down to a razor-thin 1 per cent. While this 1 per cent margin still provides a competitive edge, it is a precarious one, especially against Bangladesh's massive, cost-efficient manufacturing base.
For India, the situation is far more dire. With a tariff rate of 25 per cent (and a potential increase to 50 per cent), Indian textiles and apparel are now at a severe disadvantage. Indian exports to the US fell for the fourth consecutive month in July 2025. This has placed India's annual $10 billion textile exports to the US at significant risk, creating a void that its South Asian rivals are eager to fill.
Table: US tariff rates and export competitiveness (August 2025)
|
Country |
US tariff rate (apparel & textiles) |
Competitive dynamics |
|
Pakistan |
19% |
Cautious advantage over Bangladesh; prime position to capture Indian market share. |
|
Bangladesh |
20% |
Narrow disadvantage to Pakistan, but with significant scale and cost advantages. |
|
India |
25% (potentially 50%) |
Severely disadvantaged; facing a significant erosion of market share. |
Bangladesh's cost and scale advantage vs. Pakistan's tariff edge
While Pakistan enjoys a slight tariff advantage, Bangladesh's textile industry is a formidable opponent. The Bangladeshi garment sector employs 4.1 million workers, nearly triple Pakistan's textile workforce. This massive scale allows for economies of scale in production and logistics. Furthermore, Bangladesh's manufacturing facilities benefit from at least 60 per cent lower power and gas tariffs compared to Pakistan, significantly reducing operational costs.
Bangladesh's established buyer relationships with major US fashion brands and its robust, high-volume manufacturing capabilities could easily overwhelm Pakistan's narrow price edge. Bangladeshi textile lobbies are also actively pressuring the government to negotiate even lower US tariff rates, a sign of their proactive and aggressive approach to market access.
Table: Pakistan vs. Bangladesh a comparison
|
Metric |
Pakistan |
Bangladesh |
|
Total Exports (All Sectors) |
$16 billion |
$47 billion (garments alone) |
|
Textile Workforce |
Approx. 1.4 million |
4.1 million |
|
Power & Gas Tariffs |
High |
At least 60% lower than Pakistan |
India's vulnerability and the hunt for new suppliers
India's punitive tariff rate has made it a less attractive sourcing destination for major US retailers. Major US buyers like Target and Walmart are reportedly re-evaluating their supplier relationships. This is a critical development, as these retailers are known for their ‘value-seeking consumer’ base, where price and efficiency are paramount. With India's tariffs slashing margins, the incentive to source from the country diminishes.
Pakistani manufacturers are already reporting an unprecedented increase in inquiries from US buyers, indicating that a shift in the supply chain is underway. This is a direct consequence of the six-point tariff advantage Pakistan holds over India. Indian suppliers, desperate to retain their US market share, are resorting to slashing prices and operating on razor-thin margins a strategy that is unsustainable in the long term.
The inter-regional supply chain dynamics
The tariff changes are also expected to reshape the textile supply chain within the South Asian region itself. The textile industry is a complex web of raw materials, fibers, yarn, and fabrics. Historically, intra-regional trade has been limited, with South Asia's intra-regional trade accounting for only about 5 per cent of its total merchandise trade. However, this may change.
With India's final products now subject to such high tariffs, Indian textile manufacturers might explore new strategies. This could include a shift towards exporting raw materials, fibers, or yarns to countries with more favorable tariff arrangements, such as Bangladesh and Pakistan. This is a ‘China Plus One’ strategy applied to the subcontinent.
Raw materials and yarns: Indian yarn and fabric producers, faced with a crippled finished-goods export market to the US, may find a new customer base in Bangladesh. The logic is that Bangladeshi garment factories, with their 20 per cent tariff rate and low operational costs, can import Indian raw materials and still produce a final product that is more competitive in the US market than an entirely Indian-made product. This would create a new, symbiotic relationship, where India supplies the inputs and Bangladesh provides the final, tariff-advantaged output.
Home textiles: The home textiles sector, which includes towels, bed linens, and upholstery, is also heavily impacted. India has a significant market share in this category, and the 25 per cent tariff will make Indian home textiles less competitive against those from Pakistan and even Vietnam. This will lead US buyers of home goods to actively seek out new suppliers. Pakistan, with its integrated textile industry from cotton to finished goods, is well-positioned to capitalize on this shift.
The Walmart and Target conundrum
The mention of US retailers like Target and Walmart reassessing their supplier relationships is a crucial element of this story. These companies operate on a model of providing ‘everyday low prices’, where any increase in sourcing costs due to tariffs is a direct hit to their profitability and their core value proposition to the consumer. A tariff hike of even a few percentage points can lead to a shift in a multi-billion dollar sourcing portfolio.
For these retailers, the new tariff structure provides a clear incentive to diversify away from India and increase their sourcing from Pakistan and Bangladesh.
Walmart had previously committed to sourcing $10 billion worth of goods from India by 2027. This ambitious goal now faces a headwind due to the new tariffs. While Walmart is known to work with a diverse network of suppliers, the 25 per cent tariff on Indian goods will undoubtedly force a re-evaluation of this commitment. It is highly likely that they will shift a portion of their textile and apparel orders to Pakistan and Bangladesh to mitigate the financial impact of the tariffs.
Target, a major player in home textiles, will be looking to its suppliers to absorb the cost of the tariffs or find alternative sourcing. Given the intense competition and thin margins in the home textiles sector, it is unlikely that Indian suppliers can bear the full weight of a 25 per cent tariff. This creates an immediate opportunity for Pakistani home textile manufacturers, who can offer a more competitive price point due to their lower tariff rate.
Thus the US's post-tariff trade scenario is not a static one. It is a, evolving situation where a slight tariff advantage, combined with a nation's existing manufacturing strengths, can lead to significant shifts in market share. While India faces an existential challenge to its US textile exports, Pakistan and Bangladesh are locked in a fierce, multi-faceted competition. The ripple effects will extend far beyond national borders, reshaping the very fabric of the South Asian textile supply chain.
Karl Lagerfield has launched its Fall/Winter 2025 campaign, ‘From Paris with Love,’ starring global icon Paris Hilton.
Blending Hilton’s one-of-a-kind charisma with the brand’s unmistakable aesthetic, the campaign playfully unites two cultural forces who have shaped pop culture on their own terms.
Embracing both an elegant and witty visual dialogue between Hilton and the Maison’s Parisian roots, the campaign explores themes of glamour, individuality, and attitude - channeling the irreverent spirit and sharp sophistication that defined Karl Lagerfeld himself.
The result is a celebration of authenticity and self-expression, presenting Paris in a fresh, unexpected light and reframing her renowned image through the lens of the brand’s distinctive point of view.
The FW25 360 campaign will roll out globally across out-of-home, print, social, digital platforms and key pop-ups globally, culminating in a Paris Fashion Week event on October 1, 2025.
Prominent fashion photographer Chris Colls returns for his third consecutive campaign with the brand, capturing Karl Lagerfield’s signature style and house codes in a series of striking black-and-white visuals.
The campaign’s digital dimension comes to life, with a fresh reinterpretation of Karl Interviews Karl infused with humor and surprise that nods to Karl Lagerfeld’s beloved wit, along with a series of surprising and irreverent social moments.
Internationally known Spanish model and actor Jon Kortajarena stars alongside Paris Hilton as the face of Karl Lagerfield Menswear, embodying the collection’s confident edge and serving as the perfect counterpart to his longtime friend.
Fast-fashion brand, Forever 21 is attempting to make a fourth comeback in China after three previous failed attempts. Owned by Authentic Brands Group, the brand is also hunting for a new partner to help it re-launch in the North American market.
The company plans to focus on China and the US on immediate basis. This latest effort follows a period of significant struggle for the brand. In March, Forever 21 filed for bankruptcy in the US for the second time in six years, a consequence of increasing online competition and dwindling foot traffic at malls. The brand subsequently decided to close its domestic operations. Its previous attempt to re-enter China in 2022, which included opening some physical stores, quietly fizzled out by late 2024.
Now, the brand is back with a fresh strategy. It has launched marketing campaigns at music festivals and advertisements on Shanghai's subway system. For this initiative, Authentic Brands is partnering with brand operator Chengdi, a company partially owned by the e-commerce platform Vipshop Holdings, Chengdi will focus on localizing operations, targeting a new generation of young Chinese consumers, and also open physical stores in 2026.
Last year, Jamie Salter, CEO, Authentic Brands Group, reportedly called the 2020 acquisition of Forever 21 probably the biggest mistake he made. When asked about those comments, a spokesperson for Authentic Brands maintained, Salter has always believed that having Forever 21 as part of Authentic Brands Group is a good idea and he still believes that.
In one of the year's biggest corporate transactions in the fashion industry, Skechers and 3G Capital have received all necessary regulatory approvals to complete their acquisition. The deal is set to finalize on September 12.
One of the world’s largest footwear company, Skechers announced its sale to the investment group 3G Capital back in May. The transaction is valued at approximately $9.4 billion, or $63 per share, and will result in the company being delisted from the stock market. Following the change in ownership, Skechers will continue to be led by its current executives, Robert Greenberg as CEO and Michael Greenberg as President.
In H1, FY25, Skechers reported a 10 per cent growth in sales to $4.851 billion, compared to the same period in 2024. The company’s gross profit also increased by 8 per cent to $2.555 billion, though the company’s profitability declined slightly. Its gross margin for the period contracted by 52.7 per cent as against 53.7 per cent in the previous year.
Regionally, the Americas remain Skechers’ largest market, with sales rising by 4.6 per cent to $2.217 billion. However, the company’s sales in Europe, the Middle East, and Africa increased by 29.4 per cent to $1.449 billion. In Asia, Skechers had its slowest growth, with sales increasing by 1.4 per cent to $1.184 billion.
Italian luxury brand, Brunello Cucinelli reported a 8.8 per cent growth its operating profit (EBIT) to $133 million in H1, FY25. This performance is largely in line with analysts’ expectations.
The company's revenue also increased by 10.7 per cent at constant exchange rates during the January-June period, according to preliminary figures released in July.
Even with a general slowdown in the luxury sector, Brunello Cucinelli has shown remarkable resilience. The company remains optimistic about its future, confirming its positive outlook and forecasting a robust annual sales growth of approximately 10 per cent for both 2025 and 2026. This confidence is supported by a consistent sales trend in July and August, which mirrored the solid growth seen in the first half of the year.
Authentic Brands Group (ABG) plans to acquire a 51 per cent stake in Guess's intellectual property, with the founding Marciano family members and Carlos Alberni, CEO, retaining a 49 per cent stake. This new structure is similar to the one used in the 2024 acquisition of Rag & Bone, where intellectual property was separated from a company's operating assets. As part of the deal, Guess will be taken private, with minority shareholders receiving $16.75 per share in cash. The transaction is expected to close in the fourth quarter of fiscal 2026.
Despite this strategic move, Guess’s recent financial results were mixed. The company reported a 6 per cent increase in Q2, FY26 sales to $772.9 million, but its operating income declined sharply to $18.1 million from $47.8 million the previous year. This resulted in a lower operating margin of 2.3 per cent compared to 6.5 per cent last year. Alberini notes, revenues exceeded expectations due to strong momentum in Europe and US retail.
In H1, FY26, Guess’ sales increased by 7 per cent to $1.42 billion. However, the company reported a net loss of $26.7 million, a stark contrast to a profit of $2.4 million in the same period last year. It’s operating income in H1, FY25 declined to $15.2 million as against $27.9 million reported in the corresponding period last year.
Europe remained a strong performer, with sales rising 11 per cent to $742.9 million. The company’s retail sales in North America grew by 3 per cent to $336.0 million, and wholesale sales increased by 21 per cent to $176.6 million. However, sales in Asia declined by 10 per cent to $113.9 million.
Europe was the main driver of the company’s operating profit in the first half of the year, followed by US wholesale. The US retail division posted a loss, which was attributed to rising rents and operational costs. Globally, Guess currently operates 1,589 stores.
