FW
French luxury group Kering plans to establish a hand embroidery workshop in India. The aim is to improve traceability and working conditions in its supply chain. The goal is not to cover all of Kering’s hand embroidery works but to get a direct and concrete knowledge of hand embroidery and thus also be able to better collaborate with external suppliers as regards working conditions, wages, prices and contractual commitments.
Kering is the owner of brands like Gucci, Saint Laurent and Balenciaga. Kering has reached 88 per cent of traceability for key raw materials and aims to increase the share to 100 per cent by 2025. The group has also lowered its environmental impact by 14 per cent between 2015 and 2018. Kering has linked up with the Institut Français de la Mode (IFM) to launch the first higher education research and teaching center dedicated to sustainability and corporate social responsibility in the fashion industry. The center will focus on a wide range of topics related to sustainability, from traceability to measurement, as well as eco-responsible business models. Aspects of creative ecology will also be studied in order to identify ways in which creative teams can develop ecological fashion and propose new sustainable creative offerings while developing tools for measuring and appropriating environmental and social issues.
Italy’s luxury sector has been dealt a hammer blow by the Coronavirus outbreak in China. In a country that is home to more than a third of global luxury shoppers, brands have been forced to shut shops, shelve new openings and postpone advertising spending. That is set to translate into major sales hit for the country’s fashion and textile industry. It also has implications for the luxury industry worldwide due to Italy’s importance as a supplier. The sector’s sales are expected to decline three per cent at current exchange rates. The industry which expected a slowdown in the first quarter now feels the whole year will go up in smoke.
Prolonged disruption of economic activity may result in supply chain issues for most brands. Italy is a major manufacturing hub and home to scores of specialist manufacturers of high-end goods from shoes and leather goods to men’s wear. Foreign buyers of Italian textiles have started cancelling orders. Global luxury brands including Gucci and Louis Vuitton are scaling back orders with Italian suppliers. Even before the unprecedented restrictions were put in place in March, brands had been cutting orders from late January. A company that was producing handbags for Gucci has no orders for April or May and has been brought to a standstill.
As per OTEXA, the imports of jeans by the US declined by 13.29 percent in value to $265.99 million in January compared to $306.78 million in the same month in 2019. For the 12 months through January, its imports of denim apparels declined by 4.43 per cent to $3.69 billion.
The country’s imports from Mexico dropped by 32.28 percent in January to $41.47 million in value while that from China plummeted by 60.17 per cent to $33.94 million. For the year through January, imports from Mexico decreased by 5 per cent to $782.78 million, while China’s shipments declined by 31.05 per cent to $644.66 million.
However, imports from Bangladesh increased by 5.18 per cent to $51.87 million in January. For the 12-month period, these imports increased by 6.96 per cent to $601.86 million and shipments from Vietnam rose by 27.61 per cent to $384.51 million.
Other major suppliers of jeans to the country during the month included Egypt, whose exports increased by 25.33 percent to $15.16 million; Cambodia whose exports increased by 91.37 per cent to $16.1 million, and Sri Lanka who exported 18.22 per cent more jeans to the US.
The European Apparel and Textile Organization (Euratex) has recommended three essential elements for the success of the new EU industrial plan. The first element includes assessment of the proposed measure in a global context. European companies cannot be subject to new rules, standards or regulations unless all players do play with the same rules.
Secondly, Euratex claims innovation into a more sustainable industry has an important cost the end consumer is not always willing to pick up. This may jeopardise the financial sustainability of the industry, especially for smaller companies. Therefore, adequate measures should be taken to alleviate the burden of green investments, especially for SMEs.
Finally, Euratex quotes labour force shortage as an important barrier to the development of the industry. In 2018, 34 per cent of the textile and clothing workforce was over 50 years old. It is therefore urgent to make an effort to both upskill and reskill the current workforce and to attract young talent.
With Southeast Asia and Turkey on the brink of saturation, Ethiopia is now positioned as one of the most promising hubs for apparel sourcing. Low salaries, foreign investment led by China and commitment to infrastructure are the country’s biggest incentives for operators in the sector. The first textile factories in Ethiopia were launched in 1939. The sector is growing at an annual average of more than 50 per cent and hosting around 65 international investment projects. The factories produce wool, cotton and nylon fabrics, acrylic and cotton threads, sewing thread and readymade garments, among others. The country plans to be the main textile supply hub in Africa, following in the footsteps of other countries such as Vietnam and Bangladesh. In 2016, foreign sales of the sector were 56 per cent more than the previous year’s. In 2019, the country’s exports of fashion goods to Europe were 49 per cent higher than the previous year’s.
H&M opted for Ethiopia as a textile hub in 2014. The Swedish fashion distribution group chose to set up joint ventures with local manufacturers to train workers and prepare factory executives. Currently, the Swedish retailer has 31 suppliers in Ethiopia. Inditex, Decathlon and Primark are some of the other major operators in the sector that have opted for the African country.
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has refuted a report by US Senator Robert Menendez on alleging Bangladesh apparel factories of labor rights and safety violations. Submitted recently, the report titled ‘Seven Years after Rana Plaza, Significant Challenges Remain,’ expressed concerns about the welfare of workers in the garment industry.
The report says, over 1,100 Bangladeshis were killed and thousands injured when Rana Plaza caved in on April 23, 2013 in the nation's deadliest industrial incident. BGMEA has demanded further clarification on this as the sample size of the interview-based report seems over-generalised The association has called for more substantiated details about physical abuse and mistreatment of a worker named Shopna interviewed in the report.
The association also refuted allegation of harassment and low wage payment. It stated that the workers of Youngone are paid above the nationally set minimum wage of Tk 8,000.The Accord on Fire and Building Safety in Bangladesh receives regular phone calls from workers about occupational health and safety. It received 36 calls in 2019 and 2020.
On the complaint of termination of workers by 104 garment factories in December 2018, the association revealed that a committee was formed in May last year to assess the appropriateness of the number of terminated labourers and filed cases and to find justified solutions. Bangladesh amended the labour laws and increased the minimum wage for garment workers in 2018.
Hun Sen Cambodian Prime Minister Samdech Techo Hun Sen says China has arranged vessels to freight raw materials for garment and footwear production to Cambodia from now until May. Due to a shortage of raw materials from China caused by Covid-19, some factories in Cambodia had partially suspended operations, affecting almost 20,000 workers. The fast delivery of raw materials to Cambodia came after a delegation of the Chinese Ministry of Commerce visited Cambodia recently and met with Cambodian Minister of Industry and Handicraft Cham Prasidh.
He said during the meeting, Prasidh presented a list of necessary raw materials that Cambodia is facing a shortage for the garment and footwear industry. He added that the minister also initiated a "Green Lane" to facilitate and speed up shipments, logistics, and customs processing clearance, so the raw materials could be reached Cambodia faster.
American apparel imports in January 2020 fell 11.19 per cent in value and 10.72 per cent in volume. China’s apparel exports to the US fell 36 per cent. As China was the epicenter of the coronavirus, the country declared a lockdown in many provinces. This lockdown forced manufacturers to keep their factories closed. The New Year holidays also fell in January. Apparel shipments from Vietnam to the US increased 4.12 per cent. This decent growth coupled with China’s slump made Vietnam’s apparel exports to the US almost equivalent to that of China. Bangladesh’s apparel exports to the US jumped by 17 per cent. The growth is noteworthy for the country as it concluded 2019 with a stagnation in its exports to the US. India’s exports nosedived by 2.81 per cent. The biggest beneficiaries from Asia were Cambodia and Myanmar. Myanmar almost doubled its apparel exports to the US.
The impact of Coronavirus outbreak has been reflected in the US’ apparel imports in January 2020. The outbreak has severely impacted supply chains not just in China but in other major manufacturing hubs across the world as well. This is going to impact all manufactured goods as well as services.
Yarn prices have risen in Bangladesh as Coronavirus fear has triggered panic buying. Yarn prices had been showing an upward trend since last October due to higher demand from garment manufacturers. Prices of the widely-consumed 30-carded yarn have risen 11 per cent from a month ago. The industry fears losing competitiveness in international markets if yarn prices go up further since buyers will hesitate giving higher prices for garment products.
The supply chain of fabrics and other raw materials has been affected badly due to the outbreak. Bangladesh apparel makers source 46 per cent of their raw materials from China. Overall imports from China plummeted 21 per cent in January compared to last year, and plunged further to 37 per cent in the first week of February. The disaster assistance fund may be extended to factories/exporters to support unforeseen costs such as air freight, sourcing of raw materials and accessories from alternate and more expensive options to complete the orders and cost of financing for the extended period. Since goods from Chinese suppliers would be delayed, policy directives may be issued to the scheduled banks to amend the respective clauses in the back-to-back letters of credit to make the payments to suppliers conditional and justified.
Graham Clark, Director of Marketing, British Wool explains why global expansion will benefit UK wool producers
British Wool is a farming co-operative. What value does this add for a producer?
Farming co-operatives provide strength in numbers, they’re about supporting the whole industry, at British Wool this means we take all types of wool from any producer no matter the size. We want to see our industry succeed in the long term, so it’s not just about pocketing a quick payment. We are relentlessly finding markets and new opportunities for every type of wool, no matter which part of the UK it comes from, or how much there is. Everything we do is designed to increase the payments for all wool producers, not just a few. We’re doing more to market British wool than any other organisation in the UK – our expansion into China is a good example of this.
How big is the wool market in China?
In a word, huge! China processes 70-80 per cent of all wool in the world. Around 55 per cent stays in China, used
in products there, which also makes the Chinese consumer the largest consumer of wool products in the world. Historically most wool products manufactured in China were exported to the northern hemisphere so this is a real reflection of the huge increase in wealthy Chinese consumers. It’s also the major reason the Chinese market is so attractive to Western companies and brands like British Wool – consumers there love British heritage and provenance and we have the contacts, knowledge and expertise to exploit new opportunities, working with downstream partners to increase business.
What is British Wool’s approach in China?
Our approach is to identify strategically attractive partners, building long-term relationships and supporting the development of unique British wool collections in their respective product categories. From there, we will work together and add value through our sales and marketing activities, including the creation of brand and marketing collateral, product expertise, social media exposure, promotions and many other activities as the business and product ranges evolve.
We launched our licensee scheme a year ago in China, this traces the origin of the wool through the various manufacturing processes right back to the wool merchants. This ensures we’re working with companies using high levels of British wool in their products.
Have there been any early successes?
We launched a British Wool bedding collection last September with a leading Chinese manufacturer and this range will be developed further moving into 2020 and beyond. We’re also working with one of the largest cloth manufacturers in the world on a unique British wool collection with a planned launch of Autumn/Winter 2020. There are several other opportunities in the pipeline, covering a range of different products.
What is the ultimate goal?
All our efforts are focused on maximising the returns we deliver to our producers for their wool. Finding new demand for British wool in China can only improve prices and therefore the returns for our registered producers.
