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As per Zacks Investment Research, Wall Street brokerages have forecasted Gap Inc’s sales will be worth $3.61 billion for the current quarter. Nine analysts have issued estimates for GAP’s earnings, with lowest sales estimate being $3.45 billion while the highest estimate being $3.75 billion. The company reported sales of $3.44 billion in the same quarter last year, suggesting a positive year over year growth rate of 4.9 per cent.
Zacks, analysts expects GAP to report full-year sales of $16.30 billion for the current fiscal year, with estimates ranging from $15.93 billion to $16.77 billion. For the next fiscal year, analysts expect the firm to report sales of $16.67 billion per share, with estimates ranging from $15.93 billion to $17.37 billion.
India needs to rethink its trade agreements. The FTA with the European Union has not taken the country far and exports are not rising. On the other hand, Indian imports from countries like Bangladesh are rising and eating into the share of domestic manufacturers because of South Asian Free Trade Area (SAFTA). This is a trade agreement that came into force in 2006 between India, Pakistan, Bangladesh, Bhutan, Maldives, Nepal and Sri Lanka.
Other major areas that need to be worked upon include a change in traditional mindsets. New practices for sustained growth have to be adopted, creating economies of scale, inviting foreign investment and focusing on research and development. The workforce has to be skilled. Competitive products have to be created. Processing is another segment where huge capacities need to be generated and quality improved.
There is a need to create an end-to-end value chain in the textile sector. Ahmedabad and Surat are major centers for producing cotton and manmade fibers and fabrics, aimed predominantly at the low-value domestic market. Gujarat is the largest producer of cotton and manmade fibers. Low-value products like cotton and fabrics are being exported from the state while high-value products like apparels are being imported.
As per the Ready Made Garments Export Council, Egypt’s exports of readymade garments increased 17 per cent in the first quarter (Q1) of 2018, thus recording a profit of $385 million (LE 6.77 billion), compared to $330 million during the same period of 2017.
Around 48 per cent of Egypt’s ready-made garments exports in Q1 was to the US, recording $185 million, compared to $160 million in the same period of 2017, a 16 per cent increase. The council aims to increase export by 20 per cent by the end of 2018 to touch $1.8 billion. The sector’s exports to African countries do not exceed 2 per cent but activating trade agreements such as the African Continental Free Trade Area, will increase exports of Egyptian products to specific markets such as South Africa.
Pakistan’s budget for 2018-19 focuses on general industry and trade. The zero-rating regime has been continued. But exporters say their refunds should be disbursed and that export development surcharge should be abolished. They also want the one per cent tax on export to be reduced to 0.5 per cent. They argue, their problems will multiply owing to the liquidity crunch and as a result the trade deficit will further widen. The liquidity crunch is a major stumbling block in the way of improving exports.
Exporters want a reduction in electricity and gas tariffs. Energy is an important element regarding the cost of production particularly for the spinning, weaving and processing industries. Exporters say its availability at a regionally competitive price is important. Another of their proposals is that gas prices should be uniform throughout the country.
In value added textiles, particularly garments and knitwear, Pakistan lacks variety both in products and type of fabrics. The country does not produce blended yarn and blended fabrics that the global market demands. Pakistan’s textile exports rose 7.2 per cent during the first eight months of the current fiscal year. Textile exports make up around 60 per cent of the country’s total exports.
Bangladesh’s textile industry accounts for over 70 per cent of export revenue and 13 per cent of the country’s gross domestic product. The country has more investor-friendly policies than many of its neighbors and cheaper skilled labor. The country has tax-free access to 37 countries, including the European Union, Canada and Australia.
After liberation in 1972, Bangladesh opted for a socialistic economic policy by nationalising all big industries, including large textile mills. However, the country took a more capitalistic view of development by not only opting for a market-oriented economic policy but also handing over these mills to the private sector in phases.
This signaled a breakthrough in the industry, which provides five million jobs for the people of the country. The country today is an export-oriented economy, thriving on cotton and readymade garments.
Last year, Bangladesh came up with a textile policy, targeted at expanding the export market. One of the focal points of the policy is to strengthen the primary textile sector to fulfil the local demand of textiles and promote a medium and high value added export oriented garment industry.
Knitting industries in the country are self-sufficient. The spinning, weaving, power loom, knitting, dyeing and finishing industries are strong.
Fashion group Esprit Holdings plans to shut its loss-making operations in Australia and New Zealand, concentrating resources in developing Asian markets in China, Hong Kong, Taiwan, Singapore and Malaysia. The Europe-focused apparel retailer stated it will close 67 directly managed retail stores in the two countries that contributed HK$297 million (£27.8 million) of revenue in the fiscal year to end-June 2017, less than two per cent of its total revenue. It gave no further details.
Esprit, which has a market capitalisation of $659 million (£485 million), stated the divestment would result in up to HK$200 million in one-off costs from provisions for store closures and the impairment of store assets, and would have a "negative impact" on its results for the year to June 2018. The retailer posted an 11 per cent drop in 9-month revenue.
There is an increase in the number of luxury brands taking style inspiration from street wear and incorporating sportier and casual urban aesthetics into their designs. They are establishing exclusive design and marketing collaborations with street wear labels, hip-hop and rap recording artists and entertainers, and fashion and social media influencers.
Luxury fashion houses have been partnering street wear brands and introducing sneaker- and street wear-inspired products. Louis Vuitton partnered skateboard brand Supreme on a design collaboration. The collection, which was sold in pop-up stores in major cities worldwide in June 2017, included T-shirts, hoodies and bags emblazoned with Supreme’s white logo on bright red Louis Vuitton patterns.
Luxury brands are adapting to changing times and striving to connect with a younger and diverse customer base, grooming the next generation of loyal luxury customers. The historically conservative luxury goods industry is striving to attract a more diverse and younger client base. Luxury goods companies will increasingly need to innovate and keep up with millennial and Gen Z trends in order to capture and grow sales among the younger generations. The introduction of GST is expected to provide India a huge competitive advantage to India's luxury sector.
"In a new report, ‘Too Deadly To Wear: Levi’s Pollution, the Booming Fashion Industry and Its Role in Deaths from Air Pollution and Climate Change,’ Stand.earth calls out the fashion industry in general and Levi Strauss, in particular, as having an outsized role in the deadly impact of climate change and air pollution across the globe. Specifically, Stand.earth claims the fashion industry contributes to 38,000 deaths a year from climate change and Levi’s annual contribution to climate pollution equals that of 1.1 million cars."
In a new report, ‘Too Deadly To Wear: Levi’s Pollution, the Booming Fashion Industry and Its Role in Deaths from Air Pollution and Climate Change,’ Stand.earth calls out the fashion industry in general and Levi Strauss, in particular, as having an outsized role in the deadly impact of climate change and air pollution across the globe. Specifically, Stand.earth claims the fashion industry contributes to 38,000 deaths a year from climate change and Levi’s annual contribution to climate pollution equals that of 1.1 million cars. Todd Paglia, Executive Director, Stand.earth, says the fashion industry is the source of approximately 8 per cent of global climate pollution. If it were a nation, it would be the fourth largest climate polluter on Earth. Yet major brands like Levi’s continue to drag their feet on comprehensive climate action, ignoring the massive amount of pollution hiding in their supply chain.
Brian Kropp, HR practice leader, Gartner, points out Stand.earth is lashing out at Levi’s but their criticism
applies to the whole apparel industry. They are actually framing this campaign as inviting Levi’s to lead the industry in ending its dependence on coal. Anne Bahr Thompson, Founder, Onesixtyfourth, highlighted Levi Strauss is being called out because it does care and focus on environmental issues. Unfortunately, activists don’t take into account practical business realities and expect companies to do everything immediately and at once.
A fact that needs to be noted is that Levi’s joined more than 300 companies, including Gap, Nike, Guess, Eileen Fisher and VF Corporation in the Science Based Initiative to reduce CO2 emissions. Thompson explains, this gives them two years to reduce their greenhouse gas emissions, in their own operations and within their supply chains, based upon strict criteria. They are in the process of doing exactly what the protesters are calling them out for.
Is there a damage to the brand?
Dino Villegas, Marketing Associate Professor-practice, Texas Tech University feels, it’s a brand that has been able to maintain relevance for more than 160 years. But now Levi’s is an easy target on pollution and even if this particular attack does not have an immediate effect on brand equity, other attacks in the future can be damaging. Ultimately, it’s the consumers who will decide the fate of brands as Kropp said, corporate social responsibility is more complicated today than it was a decade ago, as companies are being pressured into joining more causes, by more people, through a greater variety of channels, with activist campaigns able to get more attention through social media. If it steps up its environmental efforts further or faster, it won’t be to pacify these activists.
Making the right statement, Thompson said, that changing the model for business cannot happen overnight. Activists should be commending Levi’s efforts and asking how they can help speed things up. We absolutely should call out companies who are irresponsible and negligent. But we need to support and work alongside companies, like Levi’s, that are trying to do the right thing.
Ethiopia’s textile industry is fast catching up with the likes of Vietnam, Indonesia, Cambodia and other Far East countries. The prospects of advancing to a medium level of industrialization are within sight. Ethiopia with a young labor force of 45 million people has a huge potential in the manufacturing sector. The annual manufacturing growth which is currently 25 per cent is projected to increase gross domestic product fourfold and its share in exports to 50 per cent.
Buoyed by medium term prospects for growth, textile and apparel companies are all set to expand their operations. The flow of foreign direct investment into the country over the six months since last June has risen 22 per cent compared to the same period the previous year. Half a dozen textile parks have either become operational or are under construction.
Eighteen leading apparel and textile companies from the US, China, India, Sri Lanka and six local manufacturers have set up factories at an industrial park in Hawassa. This is a state-of-the-art park. Spread over 1.3 million square meters, it has been designed to employ 60,000 people at full capacity and generate export revenue amounting to a billion dollars. It has 37 factory sheds and its own renewable electricity source. It also employs zero liquid discharge, enabling it to recycle 90 per cent of sewage disposal.
Bangladesh commerce minister Tofail Ahmed has sought duty-free benefit from Thailand for 36 more products, including garments and medicine. Currently, Thailand provides duty-free access to 6,998 Bangladeshi items. However, garments that account for 81 per cent of Bangladesh's total exports are not on the list of these products.
In 2016-17, Bangladesh exported products worth $48.57 million to Thailand and imported products worth $781.6 million from the country, according to the commerce ministry. Meanwhile Thailand has expressed a keen interest to invest in Bangladesh's infrastructure, power, energy and other potential sectors.
