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"Denim, world’s most popular everyday wear apparel category is likely to continue its growth story in 2016 amidst rising competition from athleisure and other bottom wear categories. A recent Lifestyle Monitor Survey reveals although active bottoms especially ‘yoga pants’ remains the most popular apparel for hanging out at home with 31 per cent usage share , but jeans are the most preferred for running errands (50 per cent), work (32 per cent) and dinner (31 per cent)."
Denim, world’s most popular everyday wear apparel category is likely to continue its growth story in 2016 amidst rising competition from athleisure and other bottom wear categories. A recent Lifestyle Monitor Survey reveals although active bottoms especially ‘yoga pants’ remains the most popular apparel for hanging out at home with 31 per cent usage share , but jeans are the most preferred for running errands (50 per cent), work (32 per cent) and dinner (31 per cent). In spite of the rising popularity of ‘athleisure’ in the US market, jeans continues to be the most available apparel item in fashion retail. In fact, it remains popular among American millennials and Gen-X compared to baby boomers when going out to dinner (35 per cent versus 21 per cent).
Denim sales rise in US despite active wear
Euromonitor apparel and footwear analyst Bernadette Kissane believes the rise of athleisure and the yoga pants has impacted growth in some markets but the denim category remains strong. Going forward, jeans are expected to return to growth with a global CAGR (compound annual growth rate) of 3 per cent to 2020. As the athleisure trend matures, consumers are likely to begin investing in jeans once more. Global denim jeans market was estimated at $58 billion in 2014, according to Technavio, a leading research and advisory company. However, the impact of athleisure has been evident on denim sales as a NPD Group’s survey reveals more than 518 million pairs of men’s and women’s jeans were sold in the US in 2015 but sales in the US were $13.1 billion last year, down 2 per cent compared to the previous year. But at the same time decline is slowing down in compared to the 4 per cent decrease in 2014.
South America, Asian markets on the rise
During the last decade the denim market has grown globally due to its increasing affinity in the emerging markets. As per Cotton Council International (CCI) and Cotton Incorporated’s 2016 Global Lifestyle Monitor Survey, affinity for denim is highest in Colombia at 79 per cent, in Mexico and Europe its 70 per cent, and lowest in India at 34 per cent). And Kissane points out even though athleisure has had an adverse impact on jeans market in the US, in other markets the full force of the trend is less severe.
Across the globe, jeans continue to be a wardrobe staple. Apart from markets like Columbia, Mexico, China has become the second largest market valued at $12 billion in 2015, Kissane says. However, unique fabrications or embellished designs for a dressy look of denim or deep colour dying can result in increased acceptance of denim in Asian markets. There is also an inclination for cotton rich denims in the global markets and a significant percentage of consumers in Colombia (67 per cent), the US (62 per cent), India (61 per cent), Europe (58 per cent) and China (58 per cent) are willing to pay more for cotton rich denims. While both China and the US continue to account for the majority of growth, emerging markets such as Asia-Pacific nations like India and Indonesia, as well as Saudi Arabia, are also picking up pace in jeans market.
And as Kissane explains denim will continue to grow as it is primarily driven by the middle class consumers with rising aspirations fuelling growth in super premium and premium sub-categories. While latest runway trends show a prominence of denim on the global arena as fashion designers and premium fashion labels like Grier Co, Michael Kors showcased denim in Fall/Winter 2016 New York Fashion Week, brands such as H&M and Zara has been aggressively expanding into Asia Pacific emerging markets.
Ethiopia has begun investing in the textile industry. The country's climate is suitable for production of animal fiber and cotton which are significant ingredients in the textile industry. The country also has a huge and young workforce.
Producing strings, buttons and other textile materials at home could help the nation reduce the import cost. One problem in the Ethiopian textile industry is low capacity of factories and companies. Capacity building is being encouraged. Companies are given help to become competitive. Finance too is a problem. Individuals who have the training and knowledge of the sector have no capital to spend. And those who do not have the understanding and educational background own the capital. The main problem is to coordinate these crucial business partners to work together in a way that’s profitable for the textile industry.
Industrial zones are being encouraged. They can provide an opportunity for technological transformation. Indigenous garment fabrics can imbibe important experience from their foreign business partners. There can be training opportunities. Brand building opportunities can arise. Modern technological equipment and transfer of knowledge can strengthen productivity and help the country set export targets.
The country is working tirelessly to boost various industries that support the journey to industrialization.
Technology and data company Engagement Labs, creator of TotalSocial™, the world's first tool to combine in-depth social listening data with comprehensive offline conversation measurement, has released the total social rankings of the top performing apparel brands in the US. And topping the list are brands like are Adidas, Nike, Reebok and Under Armour. In recent years, the US apparel industry has struggled to meet sales targets. This goes to show that brands within the space must focus on marketing efforts to ensure that they get a cut of consumer spend.
On the other hand, the industry lags behind other industries significantly in its online social performance. This is an opportunity for apparel brands to improve social media marketing to drive growth. Particular areas for the industry to focus on are online volume and especially online brand sharing: creating branded content on social pages that consumers find compelling and wish to share with others in their social network.
Based on TotalSocial rankings, athleisure brands do particularly well in both the online and offline categories. In fact, five of the brands among the top 10 fall into the athleisure category. Looking at Adidas and Nike specifically, both brands enjoy plenty of talk online and offline. It has been seen that the former has a slight edge over the latter due to its particularly high engagement with influencers, both online and offline.
The TotalSocial measurement solution is based on a proprietary scoring system built on the pillars of Engagement Labs' patented social media measurement tool and the world's only offline word of mouth tracking system for brands.
The Vietnam Textile and Garment Association (VITAS) has asked the government and authorities to review and adjust development planning for the sector. Under the current planning, though the industry's export value was targeted to reach $20 billion by 2020 but the figure exceeded $27 billion in 2015 and is expected to hit $31 billion this year. From 2010 to 2015, the industry had stable export growth of 15 per cent per year.
Vietnam's demographics – a population structure with more than double the number of working age than dependents was advantageous for expansion of the sector. Hence, the government should help the industry keep up with the country's integration and make use of the abundant resources. To help textile and garment firms take advantage of opportunities and overcome challenges brought by free trade agreements, VITAS suggested the government should update the sector development strategy that was approved by the then Prime Minister in 2008 and Ministry of Industry and Trade in 2014. The association proposed chalking out of a development strategy to 2025 with a vision towards 2040. It also asked the government, to group textile and garment enterprises in concentrated industrial parks. Currently, there are several textile and garment industrial zones in the northern provinces of Hung Yen, Thai Binh and Nam Dinh and the southern province of Dong Nai and Binh Duong, which cover a few hundred hectares each.
Finally, VITAS asked the government to allow the establishment of textile and garment industrial zones to draw domestic and foreign capital.
Whatever the prevailing economic circumstance indicate, US apparel discounter TJMaxx seems to be doing well. And so it is with the latest set of numbers which denotes both the strength of TJX’s business model and its consistency in delivering growth. While growth rates were slightly lower in the last quarter, the company came out strong to remain well above the growth rate of the overall market at least in the US.
As of today, TJX continues to take share across both the home and apparel sectors. While within the US, TJX posted growth across both its main divisions, the more mature Marmaxx, that incorporates both TJMaxx and Marshalls, saw comparable sales increase by 4 per cent. However, HomeGoods was, once again, the star of the show with a sales growth of 10.3 per cent supported by a 5 per cent uplift in same store numbers. Both divisions have been benefitting from a number of favorable trends which TJX has been turning to its advantage.
These benefits have always been fundamental tenants of TJX’s business model, but they are now arguably more relevant than ever and they are helping the company to maintain growth at a time when so many other retailers are struggling.
A rise of about 40 per cent in cotton prices over the past two months has hit both small and big spinning mills as yarn prices are up only 10 to 15 per cent. Many fabric mills have opted for blends of synthetic yarn, which is much cheaper than cotton yarn. This has aggravated the problem for cotton spinners.
For big entities, blended yarn is not a sustainable option. Only a small segment of garment makers has substituted blended for cotton yarn. And over-production of blended yarn might mean a glut in the market. At the end of the season, there do arise supply shortages but this year it has crossed all barriers, due to aggressive buying by hoarders. Multinational bulk buyers with access to cheap funds hoard cotton during high arrival days. As the yarn market is not aggressive, mills cannot pass on the entire cost increase on to the buyers.
Mills in Tirupur have resorted to import of cotton from Australia and Africa. However, it takes 35 to 60 days for order delivery and only a few spinners who’d anticipated a huge jump this year could order for imported cotton in time to reap the benefits. This option is not available to spinners in the north, as the distance from ports adds freight charges, making imported cotton unviable. Small mills which economise on maintaining inventory are hurt the most.
At a recent round table conference in Dhaka diplomats, economists and officials of the International Labour Organisation (ILO) were of the view that despite setbacks and odds, the country’s garment sector has performed well. And expectations from the burgeoning sector are high. Many felt the sector has the capacity to achieve a $50-billion apparel export target by 2021. The attendees of were optimistic and said adequate foreign direct investment (FDI) flow in the sector, completion of the ongoing remediation program for factories and ensuring workers' rights in the industry, can help achieve the target easily.
However, analysts were of the opinion that the target of $50 billion export set by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is consistent with the overall economic growth of the country but completion of the ongoing remediation program in garment factories appear to be a big challenge. There was, however, a loud appeal to the government to arrange foreign funds worth $200 million so that factory owners could be able to complete the remediation task at their units. They opined there was a need to double investment in the next five years to achieve the $50-billion export target by 2021. The fact remains that the required investment will not be possible without FDI. As far as remediation is considered, it is going on at snail’s pace. The slow process is attributed mainly to the lack of expertise, government vigilance, funding and unwillingness of factory owners.
Many factories are located in rented or shared buildings that accommodate other establishments and the row among the factory and building owners as to who will carry out the necessary flaw-fixing work is also to blame for the slow progress.
Messe Frankfurt, the leading international trade show organizer has teamed up with fashion industry veterans Arnold and Bruce Zimberg to launch boulevard prêt-à-sale, a first-of-its-kind trade show. The first show, scheduled for March 2017, will focus solely on menswear. In October, the show will feature both menswear and women’s wear. The debut edition will take place at the Jacob Javits Convention Center's River Pavilion, the 4th level exhibition hall that boasts over 45,000 sq. ft. abundant natural light and exotic views of the Hudson River. The show will offer global retailers the opportunity to meet company representatives of brand-name apparel, accessory and footwear companies.
Boulevard prêt-à-sale was created with an eye on the present and future state of retail sales. The current flux of the retail industry, along with changes in consumer buying habits, have created what industry-insiders are deeming a full price recession and a total transformation in the apparel retail and wholesale markets. While two-thirds of all Americans now shop for value priced merchandise, no traditional trade show properly serves these retailers or the manufacturers looking to sell to them. Boulevard Prêt-à-sale will redefine the wholesale and retail experience and value sales for both brands and retailers.
The show will serve as an international business platform where the largest US and international better value price buyers can meet and network with prominent apparel companies in a welcoming and stylish environment. Boulevard Prêt-à-sale will be the newest addition to Messe Frankfurt's global portfolio of textile trade shows under the established Texpertise network which currently includes 50 trade shows around the world over 19,000 exhibitors and half of a million international visitors annually.
Dedicated to showcase value and off-price merchandise for the better market, Boulevard prêt-à-sale will be held twice a year in New York City in March and October.
Under a special advance authorisation scheme, the government has introduced duty drawback of 3.2 per cent to 4.7 per cent (depending on the category) for exports of non-fabric inputs made from imported fabrics. This will boost export of expensive apparels made from imported fabrics, it is hoped. Welcoming the decision, the garment sector has said that the move would encourage exporting units to enhance production.
Chandrima Chatterjee, advisor, Apparel Export Promotion Council (AEPC), said that the AEPC had requested the government to consider expansion of duty drawback because apparels made from imported fabrics under advance authorisation attract various other taxes on inputs. Duty free import of fabrics under special advance authorisation will be allowed for export of apparels covered under Chapter 61 and 62, subject to terms and conditions.
The authorization, that will be issued based on standard input output norms (SION) or prior fixation of norms committee, shall be issued for the import of relevant fabrics including inter lining only as input. No other input, packaging material, fuel, oil and catalyst will be allowed for import under the authorisation. As determined by the government, exporters will be eligible for duty drawback on non-fabric inputs. Authorisation and the fabric imported shall be subject to actual user condition. The same shall be non-transferable even after completion of export obligation. The fabric imported shall be subject to pre-import condition and it shall be physically incorporated in the export product (making normal allowance for wastage). Only physical exports shall fulfil export obligation.
The European Union has become a net importer of cotton fabrics over the last 10 years. Imported cotton fabrics, particularly from Pakistan, Turkey, and China, have come to dominate the European market. Italy, Germany, Romania and Spain were the largest importers of cotton fabrics in the EU, accounting for about 50 per cent of total EU imports. Germany’s share increased from 2007 to 2015, while the shares of the other leading importing countries remained relatively stable.
Cotton fabrics weighing less than 200 g/sq.m held the largest share of the EU imports. Imports of that product remained relatively stable from 2007 to 2015. Cotton fabrics with a density over 200 g/sq.m (excluding colored yarns) ranked second, with a 27 per cent share of the imports, followed by cotton fabrics of yarns of different colors (excluding denim), which accounted for a 12 per cent share.
From 2007 to 2008, intra-EU trade accounted for the major share of imports. However, the share of extra-EU imports became almost equal to intra-EU imports in recent years, accounting for about 47 per cent of total import value in 2015. That year extra-EU imports of cotton fabrics were two per cent higher than the year before.
