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American casual fashion brand Gap has two smaller size store formats for the Indian market, namely adult fashion and children’s fashion. The average size of the Gap store ranges between 5,000 to 6,000 sq. ft. In case of adult stores, the size is 3,000 to 3,500 sq ft while the size of kids’ only stores will be from 1,500 to 2,000 sq ft.
So far, two adult only stores have been set up one in Bangalore and the other in Kolkata. A children’s exclusive store is expected to come up within this year. While Gap has democratic products throughout the world, some minor tweaks have been made for the India range on an experimental basis. The choice of products are customized for Indian buyers and fit their tastes of color, shape and design.
Gap was introduced to India through Arvind Lifestyle Brands and the first store opened in 2015.. The brand targets millennials and in India, Gap retails men’s and women’s apparel and accessories. Gap’s collections are designed to build the foundation of modern wardrobes – all things denim, classic white shirts, khakis and must-have trends. Gap was the first brand to introduce the pocket tee shirt.
China is the world’s second-largest exporter of textile machinery. Much of the production is destined for the domestic market. The country’s industry believes it will be able to cope with punitive duties that have been proposed by the US.
Chinese exports that could be hit with 25 per cent duties include textile machinery-related items such as knitting, weaving and spinning machines and finishing equipment, plus parts. However, even if these duties are imposed, China feels short-term effect will be limited as most textile machinery produced by Chinese companies is being used domestically or in Southeast Asia or Africa. And since the US doesn’t have many other cost-effective alternatives for sourcing machinery, Chinese manufacturers feel they will be able to pass a lot of the cost along to the end buyer.
Chinese textile machinery is modern and inexpensive compared to many others in the industry. An increasing number of Chinese machinery manufacturers are participating in various exhibitions being held across India. Compared to Europe, the quality of China’s textile machinery may not be quite high, but the price being only one-third of European textile machinery, Chinese machinery is attractive for Indian textile enterprises.
"Burma’s garment and footwear exports clocked in $3 billion in 2017, a growth of 25 per cent over last year. Factories have expanded from Yangon’s Hlaing Tharyar industrial zone to rural regions, in the wake of a tax holiday of seven or five years meant to encourage operations in less developed parts of the country. The size of garment manufacturing operations is also increasing from a mean size of 750 employees to factories up to 5,000 to 7,000 workers. Amid this growth, there arises the challenge of sustenance."
Burma’s garment and footwear exports clocked in $3 billion in 2017, a growth of 25 per cent over last year. Factories have expanded from Yangon’s Hlaing Tharyar industrial zone to rural regions, in the wake of a tax holiday of seven or five years meant to encourage operations in less developed parts of the country. The size of garment manufacturing operations is also increasing from a mean size of 750 employees to factories up to 5,000 to 7,000 workers. Amid this growth, there arises the challenge of sustenance. Last year, a review committee comprising labour groups, independent experts, unions and government officials reviewed the 3,600 kyats ($2.70) minimum wage that was introduced in 2015 and this year the committee agreed to raise it to 4,800 kyats per day. But some workers fear this baseline salary increase may come at the cost of other existing benefits.
Workers’ advocacy group Action Labour Rights says this potential levelling out of bonuses upon the introduction of the new minimum wage is a real risk. It is calling on unions to help workers ask for new contracts that stipulate other benefits are not taken away. Jacob Clere, Burma country director for European Union-funded project SMART, says increasing minimum wage does two things: it catches up what has been eaten away by inflation in the past couple of years, also sets it (take-home pay) a bit higher in real terms. In 2015, many factories tried to offset the added labour cost burden by reducing workers’ wages to the new minimum wage — for some more experienced workers meaning a pay cut — or simply refused to comply with the new mandated rate. It didn’t work well for factories that tried to cut benefits; factory workers felt cheated. He added that when wages are increased, the responsibility to adjust to the new labour market conditions shouldn’t just fall on factory owners but on the shoulders of buyers as well.
Challenges as factories expand
Chinese-owned factories accounted for 45 per cent of total foreign investment in the garment sector last year, followed by Korean and Japanese firms. AQM reports one issue with foreign-owned factories is the lack of integration of locals at the top levels of management. Thandar Ko, Director, BusinessKind, highlighted there is a lack of education around what is harassment in the workplace. A lot of sexual harassment happens in factories but nobody voices it as they are afraid to lose their jobs. For many garment workers who send their families at least half of their salaries, if they experience harassment, she says they may not wish to speak up as the responsibility to remit some of their income is too great.
Also, workers feel unsafe traveling home late at night. Helen Gunthorpe, Co-founder, BusinessKind, ads many women travelling late after shifts, often in the early hours of the morning, have reported harassment from drivers of motorbike taxis or their four-wheeled equivalent. Although some factories offer organised transport from the factory to dormitories, when workers are putting in overtime, they miss these organised trips and are forced to make their own way home. Without an anti-harassment component as part of any existing labour laws, and with factories not required to include a gender policy, women remain at risk of harassment and discrimination.
If such situations aren’t controlled, Burma will lose all opportunities to its low-cost neighbouring countries and it might not be able to get back to gain the preferred spot once again. It’s up to the government to take corrected measures and work towards employees’ safety concerns.
Materials Chemicals Performance Intermediaries (MCPI) is looking to setting up a polyester continuous polymerisation and allied yarn project at a textile park in Bhadrak, Orissa. The company has submitted an investment proposal of Rs 1000 crores seeking early approval for the project.
Once the project comes up, it will attract other downstream industries to the park. The industries to come up in the textile park are expected to generate employment for around one lakh people and help in the realisation of the state’s dream of transforming the region into a textile hub.
With an employment potential of around 200 people, the project will act as an anchor project and help supply feed stock or raw material to the downstream textile industries. The project will not only provide a big boost to the textile park, but also help in overall development of the region.
The textile park in Bhadrak offers unique advantages to investors for its proximity to industrial hubs and abundant availability of land, labor and other utilities like power and water. Developed in an area of around 115 acres, the textile park is expected to house more than 20 industries. Material Chemicals Performance Intermediaries is a chemical process plant with state-of-the-art technology.
Gap is closing down its bridal wear brand Weddington Way. Weddington Way started in 2011 but the business did not gain enough traction to be worth the trouble. Shedding Weddington Way may help Gap focus on the healthier parts of its business, including Old Navy. That chain’s comparable-store handily beat analysts’ expectations in the latest quarter and outpaced the company’s other brands.
Similarly J. Crew shut down David’s Bridal, a chain that sold gowns and accessories, in 2016. J Crew has been an institution since 1983. It is renowned for its fresh, luxurious take on everyday staples. J Crew is known for its lace jogging pants, skirts, tank tops, tees, dresses, fine Italian cashmere sweaters, sequin and lace-detailed skirts and playful jewelry.
Sales at J Crew, whose ballet flats and cashmere cardigans were once a staple of middle-class US wardrobes, have been declining, as it struggles to keep abreast of changing tastes and faces fierce competition from cheaper online retailers. Though the amount Americans typically spend on weddings has grown over the years, competition and shifting fashion tastes have brought uncertainty to the industry. Worse, marriage rates have fallen since the 1980s. That means everyone is chasing a shrinking pie.
Global cotton production in 2017-18 is expected to be 14 per cent above last season and the largest production in five years. World harvested area in 2017-18 is estimated at 12 per cent above 2016-17 as returns from cotton are more favorable and have encouraged cotton plantings over alternative crops.
Major cotton producers are projected to harvest a larger crop in 2017-18, with increases for China and the US leading the gain. In 2017-18, the top three producing countries – India, China, and the US – are projected to account for 63 per cent of the global cotton crop, similar to the previous season. India’s production is forecast at six per cent above last season.
World cotton consumption in 2017-18 is projected at five per cent above 2016-17. Although cotton mill use has been rising relatively steadily for the past six seasons, an expanding global economy and the slowdown in polyester production contributed to this year’s above-average growth. Despite the highest cotton consumption in a decade, 2017-18 world production is expected to exceed consumption for the first time in three years.
World cotton trade is projected at four per cent above the previous season and the largest in four years. Higher trade is primarily driven by increased import demand from countries that process raw cotton into textile and apparel products. In 2017-18, Bangladesh, Vietnam, and China are forecast as the leading cotton importers.
In terms of acreage, India is ranked fourth after the US, Brazil and Argentina in adopting of GM crops. While the top three grow more than one GM crop, India grows only cotton. Bt cotton was introduced in India in 2002 amid a raging controversy. This is a genetically modified seed. Many activists were alarmed at the decision to permit GM crops in India, and there were widespread agitations. Bt cotton continues to be the only genetically modified crop permitted in India and has captured about 95 per cent of the crop area under cotton. However, the increase in productivity has not been commensurate. The average yield was 472 kg per hectare in 2005-06 (when only about 15 per cent of the cotton crop was covered by Bt cotton.) The yield rose marginally to 484 kg per hectare in 2015-16. A dispute arose between several seed companies and Monsanto regarding Bt cotton trait fee payments.
Initially, the dispute between Monsanto and seed companies was the quantum of royalties or trait value to be paid by the latter. In 2010, some state governments fixed the maximum retail prices of cotton seeds, which included the trait values as a component. The governments did this so as to ensure that seeds were available to the farmers at reasonable prices. However, Monsanto put pressure on the seed companies to pay the trait values as determined by them on the ground that they had a patent on Bt cotton seeds. The seed companies had no alternative but to pay under protest.
The Chinese are contemplating investing in sick textile units of Pakistan. More than 115 textile mills have closed for good and many have disposed off their machines at junk rates. Their deserted sites are ideal for establishing modern textile units. They closed because they were operating on obsolete technology and lacked resources to bring in the new one.
But apart from that the basic infrastructure to operate a modern unit exists. There are sheds and storage space and gas, power, and water connections. So the Chinese may enter into joint ventures with sponsors of the closed mills. The mills could be started within six months of investment and would be viable from day one. This is because modern spindles consume 40 per cent less power and require only one-third of the workforce that works in most existing spinning mills in Pakistan.
It makes business sense for the Chinese to start spinning yarn in Pakistan. The basic textile sector of Pakistan is the fourth largest cotton producer and home to low-cost skilled labor. And many Pakistani basic textile entrepreneurs including the closed mills have shown keenness to enter into joint ventures with the scores of Chinese entrepreneurs that have been visiting Pakistan for this purpose.
Bangladesh’s apparel exports to India increased 111 per cent point-to-point in the last nine months. Knitwear exports to India increased 104 per cent, and woven exports increased by 113 per cent. Bangladesh’s total exports to India increased by 15 per cent during the period.
The main reason for the increase in apparel exports is the appreciation of the rupee against the dollar. Also, there is an advantage of lead time to export to India which is a neighboring country. Bangladesh is keen to collaborate with India on various fronts such as supply chain, technology and textile education. Bangladesh is the world’s second largest readymade garment exporter and India is the second largest producer of manmade fiber and textile fabrics. Bangladesh feels it can work with India for creating a supply chain, where it can source the raw material like cotton and manmade fiber, yarn and textiles and convert them into fashion apparels.
Equal emphasis on physical and institutional connectivity between India and Bangladesh will facilitate the exploration of more opportunities through trade and investment. Connectivity offers a game-changing opportunity for India and Bangladesh. This is pivotal to India’s connectivity with its north-eastern region and with countries of Asean.
As textile firm Alok Industries heads into liquidation, about 12,000 permanent employees of the company are set to lose their jobs.The Ahmedabad bench of the NCLT admitted insolvency proceedings against the textile firm last July. A consortium of lenders, led by the State Bank of India (SBI), is claiming dues of over INR 23,000 crore from Alok Industries.
The 270-day deadline before which lenders had to finalize a resolution plan ended April 14 this month. Plans to recover the distressed firm failed as lenders were unwilling to accept an offer that involved a substantial cut. Earlier last week, lenders to Alok Industries did not approve an offer by Reliance Industries and JM Financial ARC to acquire the bankrupt company.
Only 70 per cent of the lenders endorsed the revised all-cash offer of Rs 5,050 crore, which was just about Rs 100 crore higher than the previous one. For a resolution plan to be passed, at least 75 per cent of the lenders must vote in its favor. Tthe firm is headed for liquidation and could be one of the biggest labor casualties since the implementation of the bankruptcy code.
There were 11,759 full-time employees as on March 31, 2017, with the total staff strength around 18,000. Meanwhile, staff costs amounted to Rs 283.31 crore during that financial year. The insolvency proceedings are also expected to impact hundreds of small vendors and service providers to the company. Almost 2.05 lakh equity shareholders, including public financial institutions and retail investors, are also looking in the face of losses as the company heads into liquidation.
