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Apparel retailer Gap faced a smaller-than-expected drop in quarterly sales, largely due to higher customer visits to its Old Navy stores in June. Comparable sales at Old Navy, a bright spot in recent years, were flat after two-quarters of declines. Analysts had expected a decline of 1.20 per cent. Gap also estimated adjusted profit of 58 to 59 cents per share for the second quarter ended July 30. Analysts were expecting a profit of 48 cents.
The company saw higher traffic to its stores in June. Sales at established stores fell two per cent in the latest quarter. Analysts had expected a decline of 2.60 per cent. The company plans to focus on North America and shut 75 Old Navy and Banana Republic stores outside the region.
Mall traffic has also steadily decreased as millennials have taken to the internet to shop for apparel and accessories. Comparable sales at Banana Republic stores fell nine per cent, the sixth straight quarter of decline. The company's net sales fell 1.3 per cent.
US apparel retailers are struggling to draw shoppers who are increasingly seeking steep discounts and are choosing cheaper and trendier clothes offered by fast-fashion retailers.
While a decline in imports accelerated a possible sign of weakness in the world's second-largest economy, China's exports fell again in July by an unexpectedly wide margin. Exports fell by 4.4 per cent to $184.7 billion, of course, a slight improvement over June's 4.8 per cent contraction, the country’s customs data showed. On the other hand, imports fell 12.5 per cent to $132.4 billion rising from a decline of 8.4 per cent.
Weak global demand has hampered efforts to shore up Chinese trade and stave off job losses in export industries. The fall in imports reflects possible weakness in the domestic economy but the figures also are depressed by a decline in prices of oil and other commodities.
Chinese economic growth held steady at 6.7 per cent in the quarter ending in June compared to a year earlier though that was the lowest quarterly level since the aftermath of the 2008 global crisis. The declines in both exports and imports were worse than many forecasters expected.
Garment and footwear exports from Cambodia to the US fell by eight per cent during the first half of the year. Garments comprise the largest component of Cambodia’s export basket to the United States, the country’s biggest single country export market. In 2015, garment shipments accounted for $1.7 billion of the country’s total $3 billion exports to the US. It’s expected that the decline in exports would continue through the end of 2016 as garment and footwear manufacturers shift their production to more competitive countries such as Vietnam, China and Bangladesh.
Investors are wary of setting up factories in Cambodia. The country’s reputation as a low-cost production base has been deeply damaged by strikes, labor unrest and wage hikes. The garment sector employs about 7,00,000 workers. However, the US decision to grant Cambodia a tariff exemption on travel goods under its Generalised System of Preferences (GSP) program could boost its local garment industry.
Cambodia has a clear competitive advantage in terms of producing travel goods. The GSP expansion to include travel goods made in Cambodia has the potential to greatly increase exports to the US and create tens of thousands of new jobs for Cambodians.
India’s largest man-made fabric (MMF) hub in Surat would be adversely affected by the finance ministry’s decision to impose definitive anti-dumping duty on purified terephthalic acid (PTA) imports from China, Iran, Taiwan, Indonesia and Malaysia. Industry says the anti-dumping duty on PTA imports from foreign countries will create a monopoly of big spinning houses and small and medium-scale spinners in Surat and Mumbai will have to suffer. This will further escalate yarn prices by Rs 3 to Rs 5 per kg in the domestic market thereby increasing the final cost of the polyester fabric manufactured in Surat.
As per government notification, the PTA imports from China, Iran, Taiwan, Indonesia and Malaysia will attract duty ranging from $85.67 per ton to $168.76 per ton. The high import duty will prevent small spinners in Surat and other places in the country from importing PTA, main raw material for manufacturing of yarn. PTA, a white, free flowing crystalline powder, is the primary raw material for the manufacture of polyester chips, which in turn is used in a number of applications in textiles, packaging, furnishings, consumer goods, resins and coatings.
Surat Art Silk Cloth Manufacturers' Association (SASCMA) secretary Dinesh Zaveri sounded a word of caution when he said that there was an urgent need for anti-dumping duty on fabrics and not PTA imported from China and other foreign countries.
In its 6th edition, Techtextil India Symposium is scheduled next month from September 8 – 9 at the Holiday Inn, Mumbai. Textile Commissioner Kavita Gupta is expected to deliver the keynote address on government policies and schemes. The symposium has emerged as the primary conference for highlighting the prowess of technical textile and non-wovens sector across the globe with several editions of the conference held in far flung places like Frankfurt, India, Middle East and Russia.
In India, the symposium has been the center of discussions, deliberations and dialogues between key stakeholders, be it at a standalone symposium or in association with the premier Techtextil India exhibition where the industry gathers every two years. Over the last couple of years, India has been growing at a steady pace in the technical textiles with perceptible signs of growth being observed in a few specialised fields. The working group on technical textiles for 12th Five Year Plan (FYP) has projected the market at Rs 1.58 lakh crore for year 2016-17 with a growth rate of 20 per cent during the 12th Five Year Plan.
Application areas and developments in technical textiles sector aren’t slowing down, as a matter of fact the market is advancing as new technologies keep on emerging. The two day symposium will cover six specialised tracks ranging from emerging new technologies for advanced technical textiles to future prospects of the technical textile industry; to growing market for active-wear/performance-wear; and from the right time for investment in medtech and hygiene sectors and high performance applications of non-wovens as well as the growing sectors of protech and composites.
With the Indian government actively working towards accelerating the usage of technical textiles for both institutional and industry buying, Techtextil India symposium’s business-oriented approach will prove highly valuable for machinery and end product manufacturers, raw material and fabric suppliers, and textile industry players.
"After hovering around 60 cents to 65 cents for the past two years, cotton prices are up 16 per cent, selling at around 70 to 72 cents a pound. Upland cotton grown in the United States is selling for 80 cents to 85 cents a pound after bouncing around at 60 cents or below for most of the spring."
After hovering around 60 cents to 65 cents for the past two years, cotton prices are up 16 per cent, selling at around 70 to 72 cents a pound. Upland cotton grown in the United States is selling for 80 cents to 85 cents a pound after bouncing around at 60 cents or below for most of the spring.
Jon Devine, senior economist at Cotton Inc, the research and marketing company in North Carolina that represents upland cotton producers and importers of cotton and cotton textile products, cotton prices started to rise since the past month or two.
A number of reasons have triggered the price hike. Pakistan, the world’s fourth- largest cotton producer, saw its crop decline last year by 500,000 million metric tons, or 2 million bales, due to bad weather and bugs. Since Pakistan’s crop was down, they imported a lot more cotton from India. And India’s shipments was too aggressive exporting cotton to Pakistan. Therefore, supplies have gotten tight in India, and Indian mills have looked to import cotton, which is pushing up prices, said Devine.
Reduction in cotton acreage
Lower cotton prices earlier this year and last year prompted farmers in China to plant other crops, which will result in a 3 to 4 per cent reduction in cotton acreage planted there. Moreover, a number of trading firms are starting to buy up cotton, which was not the norm. In recent weeks, commodities are coming back in people’s financial portfolios and cotton is a commodity, said Karin Malmstrom, Director, Cotton Council International, for China and Northeast Asia. The beginning stocks from May to June came down a bit. If stocks are lower and demand is steady or higher, prices go up.
The USDA estimates global stockpiles of cotton will drop by 9 million bales to 91.29 million bales by July 2017, which are 3.4 million bales lower than the agency’s previous estimate because of increasing Chinese demand. China is the largest cotton consumer in the world and still the largest fabric manufacturer. For sourcing, China remains the most competitive and largest textile source. But for the first time in years, China’s cotton crop this year fell below 5 million metric tons while India produced 5.8 million metric tons. In 2012, China’s cotton harvest totaled 7.6 million metric tons.
Malmstrom opined this as a significant change. China is prioritizing food crops over cotton, which is grown primarily in Xinjiang province in the far west. While the United States is the third-largest cotton producer in the world with a recent 2.8 million metric ton harvest, it is the No. 1 cotton exporter in the world with China historically being its main customer, followed by Turkey.
With consumption outpacing production, it is uncertain whether cotton prices will inch up or dip down. Pakistan’s cotton harvest is expected to return to 2 million metric tons this after declining to 1.5 million tons last year. Pakistan is one of the first to harvest in the next month or two, Devine observed.
Uncertain future
Meanwhile, India’s cotton crop is looking uncertain due to seasonal rains. And, in the United States, the concern is about West Texas, which grows about 60 per cent of the country’s cotton. Because the cotton fields there do not have irrigation and rain deficit could cause problems.
Interestingly, no one thinks cotton prices will go sky high like they did in early 2011, when it was selling at $2.27 a pound, the highest since the US Civil War. To cope with high cotton prices, manufacturers added more polyester and rayon to their clothing, and big department stores raised prices by $1 to $2 to maintain profit margins.
In a bid to rejuvenate the handloom sector and boost jobs related to the trade, Prime Minister Narendra Modi took time to urge Indians to use more khadi products, saying that this can stimulate the sector. ‘On National Handloom Day, let us affirm that we will give an impetus to the handloom sector and use more handloom products in our daily lives. Our handloom sector is diverse, eco-friendly and is a source of employment for countless weavers, who will be very encouraged by our support,’ the Prime Minister said in a series of tweets on the occasion of Handloom Day.
Irani had said that the Textile Policy was poised to give a big impetus to the handloom sector including ways of bolstering e-commerce of the desi yet fashionable fabrics. Irani claimed that the new Textiles Policy would encompass all verticals of handloom. She added that the policy would address handlooms, jute, cotton and other makes of handloom. To keep pace with time, Irani said that an announcement on engaging e-commerce to boost marketing of handloom products will also be made in the Textile Policy.
Noting that the textile sector was one of the major drivers of economy in rural areas, the Prime Minister had urged 125 crore Indians to use khadi and handloom for 5 per cent of their clothing needs.
The government had notified August 7 as National Handloom Day with the objective of generating awareness about the importance of the handloom industry and its contribution to the socio-economic development of the country in general and to promote handlooms, increase income of weavers and enhance their pride in particular. The date was chosen due to its special significance in India's freedom struggle. It was on this very day in 1905 that the Swadeshi Movement was formally launched at a massive meeting in the Calcutta Town hall. The movement involved revival of domestic products and production processes.
India has 2.38 million looms engaging 4.33 million people of which 77 per cent are women. In FY15, India produced 7203 million square metres of handloom of which close to a third were exported.
The number of UK companies manufacturing textiles and apparel rose sharply last year, says a new report, confirming the growing momentum of ‘Made in Britain’ movement. The number of firms producing textiles and apparel rose to 7,880, a 7.6 per cent increase from previous year. The biggest increase came from a rise in the number of apparel manufacturers, up 10.7 per cent to 3,830 companies, while the number of textile firms had increased by 4.9 per cent year on year to touch 4,030.
Adam Mansell, chief executive of the UK Fashion and Textiles Association (UKFT), says there has been a lot of noise about UK manufacturing in the past few years but this is probably one of the first pieces of concrete evidence to support what people in the trade have been hearing.
The UKFT compiled the report from various sources including the Office for National Statistics (ONS) and Revenue and Customs import and export data. Now, it plans to produce it annually to give a clear picture of the UK manufacturing landscape.
Experts say a number of factors have been driving this increase such as the rising cost of overseas production and the increasing need for supply control and flexibility on the part of retailers and brands, as well as greater consumer awareness of UK production and the continued export demand for UK-produced textiles and apparel.
The UKFT argues the growth rate could be even higher than the ONS’s statistics suggest, as the data covers only companies and self-employed individuals registered for value-added tax (VAT) and Pay as you earn (PAYE) tax. The ONS estimates that about 50 per cent of businesses in the UK Fall outside this category.
Texvalley, one of the largest wholesale textile markets in the country, is gearing up for its maiden Diwali booking conference ‘Textile & Garment Fair 2016 (TGF 2016)' from August 10 at Texvalley Main Mall. The three-day value-for-money event is expected to see nearly 150 branded readymade garment manufacturers. Wholesale buyers from the country are also likely to visit the fair which will exclusively cater to the needs of the approaching festival season.
DP Kumar, Executive Director of Erode Textile Mall, which owns Texvalley says they have planned the event in such a scale that TGF would eventually be the most popular show for Diwali collections year-after-year. In view of the announcement of a special package for the textiles sector by the Centre, Texvalley has embarked on a slew of measures for the benefit of members. This include: establishing a B2B trade portal for textile and garment product categories; setting up a modern digital design studio; launching an innovation entrepreneurship centre; partnering with SITRA to set up a test & training centre; and setting up a B2C web store covering Amazon, Flipkart, Ebay, Jabong among others.
Syrian exporters are looking at Iran with interest. They will market their products in Iran by hosting a number of exhibitions. To start with there will be an exhibition of textile products in September. Scores of Syrian companies will take part in the exhibition and showcase their products of clothing. The exhibition will be one of the largest and the most important Syrian textile exhibitions to be held abroad.
Iran is an important market for the Syrian textile industry which has witnessed a recovery during the past couple of years. A free trade agreement between the two countries allows goods to be exchanged with competitive tariffs that do not exceed four per cent. A center for Syrian exports has been opened in Tehran where specialized work teams are tasked with advertising and promoting Syrian products.
Syria has entered into a new phase of trade and investment cooperation with countries, particularly Iran. Syria has export potential in a significant number of agricultural and industrial sectors.
Iran’s high levels of security, diverse economy and educated workforce could make it a new conduit in a crisis-hit region. Its location allows access to Arab states in the south and west, central Asia in the north, and Afghanistan and Pakistan in the east.
