FW
For the first half of 2018, spandex supply in China significantly outstripped demand. Spandex was purchased on demand, and inventory of several weavers and dealers slightly went up. Spandex prices continuously dropped, but prices of MMDI, one of the main feedstocks for spandex, increased by around 20 per cent year on year. PTMEG prices slightly declined year on year, while overall feedstock cost was higher than the same period of last year. Cash flow of spandex 40D deteriorated slightly year on year, while several brands with low financial costs, efficient units and differentiated products showed meager profits. The concentration ratio of the spandex industry is expected to gradually rise in the next few years.
Compared with the great volatility in the past two years, the inventory fluctuation of spandex industry was slight in 2018. Spandex plants focused on selling, while the operating rate of downstream weaving plants was higher than in the previous two years. Downstream buyers purchased spandex mainly to cover the pressing demand this year, and spandex inventory slowly increased. The monthly sales ratio was largely balanced.
The operating rate of the spandex industry was mainly above 90 per cent entering the third quarter. The operating rate of spandex downstream weaving plants was 30 per cent to 70 per cent.
A few manufacturers are planning to opt for man-made fibres like acrylic and polyester blend to counter increasing rising wool price. Price of raw Merino wool imported from Australia rose between 30 and 200 per cent depending on microns in the past 7-8 months. Raw wool, which was available at Rs 1,200 per kg around 7-8 months ago now costs Rs 1,600 per kg.
Price volatility of raw material is likely to impact manufacturers, resulting in increase of prices of shawls, pullovers, coats and other woollen garments. Exporters will, however, face the heat due to their export commitments at negotiated rate. Exporters fix rates with buyers much in advance. Punjab is the main cluster of India’s woollen units, followed by Haryana and Rajasthan. The increase in prices of raw material will adversely affect the Rs 3,000-crore Punjab shawl industry, mainly concentrated in Ludhiana and Amritsar. The other shawl industry centres are Jammu & Kashmir, Kullu in Himachal Pradesh and in the North-East.
Santoni and Lenzing will pioneer a concept called den/IM Tech.
This consists of innovative den/IM knits with indigo yarns that have now moved beyond apparel to shoes and accessories.
This den/IM Tech capsule project captures the most important features of Santoni’s technology—versatility, sustainability, and technical performance.
The target of the Santoni-Lenzing venture is to further sustainability and efficiency while at the same time up the ante in product performance.
Lenzing fibers, derived from wood, possess some of the most sought-after properties, including high levels of softness and strength, and an exceptional ability for moisture transfer—key features of the den/IM shoe and backpack.
Santoni Spa, known for its seamless knitting and speedy, efficient, reliable construction, used two machines for these projects—the X Machine, developed for footwear, and Mecmor, the only machine on the market with needle-shifting movement.
The electronic X Machine supports 3-D patterns and can knit countless intarsia items for seamless shoe uppers. It maps different areas according to types of yarn, producing a final product ready for application of the sole. Mecmor’s versatile Variatex technology produces a variable fabric panel for weft-knitted garments. Its many feeds allow for high capacity in short times, and fabric scraps are almost non-existent.
Urging India to rethink its trade barriers, tariffs and regulations to become a hub for innovation and production, US Ambassador Kenneth Juster emphasised on the need for India and the US to see trade relations as an important strategic element of their ties. He particularly emphasised on the barriers in the technology industry, including a Reserve Bank of India (RBI) order telling technology companies to base all their servers in India. Juster warned that the issue that had become one of a growing number of economic differences between New Delhi and Washington over the past few months.
India agreed this month to defer its plan to hit the US with retaliatory tariffs worth $ 235 million on 29 American products till late September. This was in response to the U.S. raising tariffs on steel by 25 per cent and aluminum products by 10 per cent, which India has failed to get a waiver on. The US is also pondering over the issue of cancelling India’s Generalised Systems of Preferences (GSP) status over the tariffs issue.
Luxury brands are investing in China. Increasing spend by cash-rich Chinese millennials is prompting brands to revamp some stores and open new ones in second- and third-tier cities where luxury spending is growing faster. Youngsters account for around 30 per cent of the sector's sales. Millennials from the middle and middle upper are absolutely not hesitant to buy luxury brands.
Armed with family money, 20 to 34 year-olds start buying luxury brands at a young age and purchase more frequently, splurging on everything from jewelry and fashion to cosmetics and handbags. Revenue growth in China's luxury segment was around 15 to 20 per cent for the first half of the year. Chinese luxury shoppers represent almost a third of the global luxury market.
The share of luxury purchases made in China is rapidly increasing, spurred by price cuts from top brands after import duties were cut on some goods and buying products from overseas websites and vendors was made difficult. Price of luxury goods in China, previously significantly higher than in Europe and the United States, have been gradually falling. Taxes have also been lowered by seven to 17 per cent, allowing firms to cut prices.
To capture the rapidly growing millennial market, global names are increasingly moving further afield from China's first-tier cities - the previous engines of growth.
Pakistan’s textile exports dropped 16.1 per cent in July 2018 compared to shipments recorded in June. On a year-on-year basis, textile exports in July fell half a per cent compared to July 2017. Textile exports roughly make up 60 per cent of Pakistan’s total exports.
One reason for the dip is the reduction in tax rebates that made things unviable for textile producers. Right now the industry is operating at five per cent profitability. It is also a fact, though, textile exports tend to fall in July as exporters try to increase exports in the closing month of the earlier fiscal year, which is June.
Pakistan recently adjusted its exchange rate by letting the currency weaken, but it won’t impact national exports. Pakistan’s textile production faces high input costs due to imports, which dilutes the impact of the depreciation on the textile industry. High quality raw material is imported by brands. Chemicals are imported while energy requirement is also generally met by diesel imports.
The textile sector hopes for better exports in winter when consumption increases in the west due to the cold weather and Christmas. Exports are also sought to be hiked by improving localisation and quality of raw material as better brands import better quality cotton to meet their requirement.
As per a deal worth over $10 million between the Australian Alpaca Association (AAA) and MUSIAD Sydney, a Turkish business organisation, a large number of live Australian alpacas will be exported to Turkey for genetics. These alpacas would also be sent to Turkey for scouring and processing into textiles. At present, the fleece is sent to mills in New Zealand for scouring before it can be made into yarns and garments.
The Millpaca stud farm in NSW, Australia produces about 10 tons of fleece each year. According to its owner, and AAA president, Ian Frith, the export deal was a great opportunity for producers as it would help their country, which is the fourth biggest textile manufacturer in the world, boost its breeding herds. The Australian alpaca farmers would be able to explore different markets outside its country and put more value-added products into countries close to Turkey.
Barcelona-based fashion brand Mango reduced loses by 45 per cent to €33 million in fiscal 2017, compared to the previous year's 61 million. The company's turnover, however, declined by 2.9 per cent to €2.19 billion compared to the €2.26 billion reported in 2016. Its EBITDA rose by 50 per cent to €115 million. In 2017, Mango had implemented a restructuring program that resulted in a solid reduction in its net debt. On December 31st, the company's debt decreased 33 per cent, dropping from €617 million to €415 million. Its international operations accounted for 77 per cent of revenue, while Spain made up the remaining 23 per cent.
The brand’s online sales increased by 15.4 per cent to reach €339.2 million, 15.5 per cent of total revenue. These are now predicted to account for 20 per cent of total revenue in 2019. The brand’s investments reached €45 million in 2017, with most of it going towards improving its technological systems. It will further invest €30 million towards digital transformation over the course of this year, along with another 20 million into other projects. The company opened 20 stores last year leading to a total of 211 megastores in India and 2,190 stores across 110 countries.
As per Association of Textile Producers and Exporters of Azerbaijan, Latvia's textile manufacturers plan joint underwear production in Azerbaijan to boost export to CIS markets. The country does not plan to produce in CIS markets as that would be unprofitable for them because of existing customs duties and taxes for the European countries.
Azerbaijani textile products are in great demand abroad and "Made in Azerbaijan" brand is gaining popularity not only in Turkey, but also in the CIS and Baltic countries. Latvianian manufacturers are currently negotiating with the Association of Latvian Lingerie Manufacturers and the Russian Association of Textile Producers for the venture. Presently, Azerbaijan’s textile products are available in Latvia, Russia, Turkey, Ukraine, Belarus. The products produced at the Baku Textile Factory and Gilan Textile Park are available at these trade houses.
The Association of Textile Producers and Exporters was established to support the development of this sector in Azerbaijan. The initiative on the establishment of this association was put forward by entrepreneurs involved in the textile sector. In general, such associations serve to improve relations between the state and the private sector.
Kering has appointed Patrick Pruniaux, current Chief Executive Officer of Ulysse Nardin, as the new CEO of Girard-Perregaux. He will manage the group’s Swiss luxury watchmaking maisons within the watches & jewelry activities. Pruniaux will report to Albert Bensoussan, Chief Executive Officer, Watches & Jewelry Activities, Kering.
Pruniaux’s role will include devising a coherent strategy for accelerating the development of the two Maisons in international markets besides maintaining their unique characteristics, ability to innovate, and the excellence of their know-how. He has over 20 years of experience in the FMCG and luxury industries and in the watchmaking sector in particular. He spent nine years at TAG Heuer and several years at Apple, where he worked on the launch of the Apple watch before becoming MD of Apple in the UK and Ireland.
