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In 2018, the revenue of US knit fabric rose 2.6 per cent.US knit fabric production in 2018 rose 2.4 per cent against the previous year. Knit fabrics exports from the US declined 5.9 per cent against the previous year. In general, knit fabric exports continue to indicate a dramatic slump. Nicaragua, Honduras and Guatemala are the main destinations of knit fabric from the US they together account for 50 per cent of total US knit fabric exports. Mexico, France, El Salvador, the Dominican Republic, Colombia, Australia, Chile and China together account for a further 33 per cent. From 2013 to 2018, the most notable rate of growth in terms of exports, among the main countries of destination, was Australia. In value terms, Honduras, Nicaragua and Mexico are the largest markets for knit fabric exports from the US, with a combined 43 per cent share. These countries are followed by Guatemala, El Salvador, Colombia, the Dominican Republic, Australia, France, China and Chile, which together account for a further 35 per cent.
Over the last five years, the average knit fabric export price has increased at an average annual rate of 8.8 per cent. The growth pace was the most rapid in 2014 when the average export price increased by 22 per cent.
In the first seven months of 2019, US fabric imports from China fell 22.36 per cent in value compared to the same period last year.For the 12 months through July, China’s market share of fabric imports was down to 27.34 per cent as shipments were 7.52 per cent below the previous year. China’s textile exports to the US have gone through a major decline in the last 20 years. Chinese yarn imports into the US dropped 33 per cent year to date through July. Yarn imports for the 12 month-period from China were down 6.13 per cent, leaving China with a 16.79 per cent market share.
Chinese mills seem to have fallen on tough times. Domestic demand is weak, overseas demand is declining and there are general concerns about business volumes. Most factories are absorbing some of the additional US import duties to keep production lines moving. Chinese mills are also expected to rapidly move their production capacity investments offshore. Most Chinese fabric mills are holding prices and, in some cases, making the sale to keep capacities running. There are lots of shifts to Southeast Asia and not just because of the trade war but in general due to a price increase in China. Some domestic Chinese brands are also moving production offshore.
When it comes to sustainable fashion, consumers don’t see price or style as an obstacle.This is especially true of France, Italy, Germany and the US. In the minds of consumers today, having sustainable clothes no longer means they can’t have nice clothes. Among the hurdles facing consumers who want to buy sustainable fashion products, lack of information and lack of knowledge on where to find such products. The thorny issue of information is predominant. Only 22.8 per cent of French consumers are able to mention a fashion label that sells sustainable products.
Compared to food and cosmetics, sustainable fashion is lagging behind in France and Italy. This isn’t the case in Germany and especially in the US, where consumption of responsible fashion exceeds that of organic cosmetics. For French and Italian consumers, environmentally friendly production processes are the priority. For Americans, the type of material used is the first concern. For German interviewees, the priority concern is that of working conditions. Product provenance isn’t the prime concern for any of the groupings. In 2018, 45.8 per cent of French interviewees bought at least one sustainable fashion item, from eco-responsible brands, secondhand or from a local producer. The figure is 43.4 per cent for Germany, 46.7 per cent for Italy and 55.3 per cent for the US.
The Panorama and Neonyt trade fairs, usually held during the Berlin Fashion Week, will now be held during Berlin Tempelhof, in January 2020. Though both these events will share an entrance, they will however remain independent. Panorama’s change of location is a result of its strategic plan to reactivate the fair. The organisation recently reinforced its helm by incorporating anew head of its marketing and communication department.
On the other hand, Neonyt is expanding its operations. The trade show, which specialises in sustainable fashion, plans to hold its next edition in a bigger location.
Old Navy plans to open 75 stores a year. The goal is to increase the count from around 1100 stores, most of which are in the US, to 2000. The openings will happen predominantly in underserved small markets. Over the past few years, Old Navy has opened about 35 stores in smaller markets. About three-quarters of Old Navy stores are not in malls.
Old Navy belongs to Gap and serves a core audience of value-seeking families. Children’s clothing is often an entry point for the brand. It gets mothers to come in and shop repeatedly as their children grow. Those mothers can also shop for themselves and everyone else in their families while they’re there. The brand has focused on increasing its size range, too, making it a destination for the many American women who go underserved by the narrow ranges at other labels. And it has built an infrastructure that quickly feeds stores with what customers want rather than serving the same assortment to everyone.
This year has been brutal so far for America’s brick-and-mortar retailers. There were more than 7000 store closures in the first half of the year. The majority of closings are happening in clothing and footwear, mainly due to bankruptcies and companies downsizing their store footprints.
Levi Strauss is implementing a strategy aimed at significantly reducing overall water use. Suppliers are already engaged–and deeply invested–in the effort to reduce water use. In water-stressed regions, suppliers have begun to install water-efficient machinery and recycle water. The company will help its suppliers identify worthwhile investments in water projects and, in doing so, help them be successful over the long term. A tag sewn into jeans instructs consumers to wash their garments in cold water, line dry them when they do and donate them when no longer needed. There will also be more consumer-facing and in-store information provided to consumers in the year ahead. In addition, the company participates in a host of industry coalitions and is vocal about its water use programming and the need to work together across companies–and across industries–to truly achieve the necessary impact.
The brand does not believe that by focusing on more environmentally friendly items the prices of the final product may rise. On the contrary, it believes that suppliers can reduce their costs by reducing their water and energy use and becoming more efficient and sustainable in general. Levi Strauss is known for its brands Levi’s, Dockers, Signature by Levi Strauss and Denizen.
L Brands has been focused to diversify its supply chain over the past five years. The company has been in negotiations with its Chinese suppliers to take costs out of the production chain to offset the increases but that also means leaving a little bit on the table so vendors don’t end up seeing their businesses fail.
By the end of 2019, China is expected to represent less than 20 per cent of the brand’s total production. L Brands’ move to other locales is less about tariffs and more about good business practices. The company had been moving production outside China even before the tariffs, putting it in a diversified supply chain position ahead of the hikes. A few years back, 84 per cent of its bra pads were made in China. Most of that is now in Vietnam and Sri Lanka. The lingerie group still works with Chinese vendors, but now less than five per cent of bras are made in China.
The problem with China is not where the product is being made, but also where the raw materials come from. For L Brands’ beauty offerings, 90 per cent of the beauty products are made in the US but all the chemicals used are made in China.
Chinos Holdings plans to split the Madewell denim brand from J Crew as the company plans to raise funds to pay off some of its $1.7 billion in debt, although the volume of shares and their projected value is yet to be revealed. According to this plan, Chinos Holdings will be renamed as Madewell Group.
The Madewell denim brand is considered to be more successful than its sister J Crew which has been struggling to maintain market share and brand appeal in recent years. In the second quarter of this year, the company’s sales rose by 15 per cent to $139.7 million with same-store sales up 10 per cent. That followed a 28-per-cent rise in sales in the same quarter a year ago. J Crew sales, however, fell by 7 per cent in the second quarter, to about $400 million, with comp-store sales down by 4 per cent.
Imports of polyester yarn from India increased 193 per cent from July 2018 to July 2019.Similarly, viscose yarn imports shot up 342 per cent from July last year to July 2019.
Between July 2018 and June 2019, there has been a substantial rise in the imports of all manmade fiber products. Manmade fiber yarn and apparel imports have gone up 83 per cent and 84 per cent. GST made imports more than 12 per cent cheaper.
Rising imports are impacting domestic yarn and garment manufacturers in a big way and are acting as a big disincentive for the upstream industry from investing. There are certain structural issues like relatively higher fiber, power and interest rates, which have made the upstream industry costlier and hence attracting cheaper imports from other countries. Further, under GST, manmade fiber textile products suffer from an inverted duty structure as manmade fiber, yarns and fabrics attract GST at the rate of 18 per cent, 12 per cent and 5 per cent respectively. This has resulted in heavily blocking working capital. Plus the GST paid on capital goods, services and certain inputs is being added to the cost of the manmade fiber textile buyer. These taxes are not considered for calculation of refund of input tax credits and have made manmade fiber textiles costlier.
India is developing 40 new Harmonized System of Nomenclature (HSN) codes for the technical textile sector.HSN is an international commodity description and coding system developed by the World Customs Organization. The codes will facilitate monitoring of export data and providing financial support to the Indian textile sector. The main purpose of HSN codes is to classify goods from all over the world in a systematic and logical manner. This brings in a uniform classification of goods and facilitates international trade. The HSN system is used by more than 200 countries and economies for uniform classification, as a base for their customs tariffs and for collection of international trade statistics. The code will help make a comprehensive formula for monitoring export data.
In the absence of clear classification of the technical textile sector, many genuine manufacturers are not able to avail of incentives being allowed to the sector. HSN will enable the use of these incentives.
The global market for technical textiles has a very high CAGR but India lags with respect to the annual growth rate of this sector, often called a sunrise industry. The codes can help achieve a sectoral market size of up to two lakh crore rupees by 2020-21.
