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Intertextile Shanghai Apparel Fabrics will be held in China from October 11 to 13, 2017. This time it will debate the future of athleisure and sustainable fast fashion. While fast fashion implies unsustainable, low-cost, low-quality clothing that has been rapidly produced to replicate catwalk trends, can it transform into a sustainable option? This vital issue currently facing the industry will be debated.
On one side, there are those who believe it is not just a passing fad, but a fundamental shift in the way people dress. On the other are those who believe that wearing athletic clothes and shoes in formal contexts will become less common in the coming seasons.
Eight trend forums will illustrate autumn / winter 2018-19 trends in different markets. Beside the trend forums, the Beyond Denim display area will showcase newest range of denim products, trends and technology under three themes: Azure, New Age and Cultural.
There will be panel discussions on sustainable denim, organic textiles, linen for autumn and winter, innovative technology in the fashion industry and trends and new opportunities in Bangladesh’s textile industry.
As the industry’s most influential event, Intertextile Shanghai Apparel Fabrics not only provides the widest product sourcing platform but also a stage for the industry to debate the most pressing issues, as well as find products, technologies and solutions to address these.
Silk Mark Expo was held in Assam from September 15 to 19. This is a platform to popularise Silk Mark labels and provide valuable linkages to stakeholders in the silk industry. The aim was to encourage entrepreneurs to start their own silk businesses.
The platform showcased premium silk products by 36 Silk Mark members cum authorised users of the Silk Mark labels such as weavers, manufacturers, NGOs, prominent silk dealers, exporters and government supported agencies from all over the country.
The expo gave silk loving connoisseurs a chance to pick pure silk products and know more about silk. Muga, eri, tasar and mulberry products were showcased to generate awareness about the new possibilities of silk products to be developed. Silk testing facilities were also extended to facilitate consumers confirm the purity of products and reaffirm their faith in Silk Mark.
Silk Mark is an initiative of the Silk Mark Organisation of India to protect the interest of sericulture farmers and consumers by safeguarding the purity of silk in the products. There are more than 3540 authorised users of Silk Mark and over 2.8 lakh Silk Mark labeled products in the market. The expo was organised by Silk Mark Organization of India and Central Silk Board.
The world’s top cotton buyers, all in Asia, are flocking to India to secure sup¬plies after fierce storms in the US, the biggest exporter of the fiber, affected the size and quality of the crop. In the past week alone, India sealed deals to sell about a million bales to China, Taiwan, Vietnam, Pakistan, Bangladesh and Indonesia. Harvey and Irma caused widespread damage to the crop in Texas and Georgia.
Buyers are switching to Indian cotton. There are other cotton producers like Brazil and Australia but they may find it difficult to match the price offered by India, where a bumper harvest is likely to keep rates lower. In 2016, the United States exported 86 per cent of its cotton, 69 per cent of which went to Asia.
India is the world’s second biggest cotton exporter. Farmers are likely to harvest a record 40 million bales of cotton in the 2017-18 season, bring¬ing domestic prices down and making exports even more competitive. For the 2017-18 season, farmers have planted 12.1 million hectares with cotton, up 19 per cent from a year earlier. India harvested 34.5 million bales of cotton in the 2016-17 season. Favorable crop conditions would help India sell 7.5 million bales of cotton on the world market in 2017-18 against six million bales in the previous year.
Exports account for 70 per cent of Portugal’s textile and clothing business. The industry has been able to carry out an extraordinary reconversion and modernization. It is primarily clustered in the north coast of the country and encompasses spinning, weaving, finishing, knitting, apparel manufacturing, home textiles and technical textiles. Located in the same region are the Technological Centre of the Textile and Clothing Industry and the Centre of Nanotechnology and Smart Materials.
The main markets for fashion from Portugal are the US, Spain, Germany and the Nordic countries. The country’s textile industry has shifted over the past two decades from an emphasis on price to value in response to competition from low-cost countries. The focus now is on fashion, design, technological innovation, logistics and international markets.
The geographical and cultural proximity of the main customers, who rely on fast and flexible response, has induced the Portuguese textile industry to offer the shortest lead time in the world, which varies from two to six weeks, depending on the type of product.
The country is promoting textiles in three areas: brands/fashion/design, private label and home textiles. Home textiles make up nearly 40 per cent of the sector´s exports to the US.
Luxury group LVMH will invest more to improve its environmental credentials. The group is taking steps such as raising the share of leather goods sourced from strictly monitored tanneries to 70 per cent by 2020. LVMH owns the fashion house Louis Vuitton and champagne brand Moët & Chandon among its 70 businesses. Its companies contribute €30 to an in-house carbon fund for every ton of Co2 emissions they generate from 2018. Those funds are then earmarked for insulating buildings and other projects.
Fashion businesses are seeking to reassure shoppers who are increasingly drawn to eco-friendly brands. In an industry that has drawn flak for cruel or wasteful practices, including some companies embroiled in animal abuse scandals, many luxury houses are trying to improve their image.
Beyond tightening standards on the way some materials are sourced, including the leather used for handbags, companies are also running the rule over everything from packaging to the type of energy-saving light bulbs used in their stores. Consumers have become more sensitive to how clothes and accessories are made, with some fast fashion companies coming under fire for exploitative working conditions or the use of fabrics that encourage pollution.
"Fung Global Retail recently analysed fashion titans Inditex and H&M to understand the business strategies and USPs that set them apart. H&M produces just 20 per cent of its clothing range in-season, in contrast to 60 per cent at Inditex. Similarly, only 32 per cent factories that H&M uses are located in or close to Europe, compared to 59 per cent of Inditex’s factories. H&M’s revenue growth is being supported entirely by new store openings, and its sales-per-store growth is negative."
Fung Global Retail recently analysed fashion titans Inditex and H&M to understand the business strategies and USPs that set them apart. H&M produces just 20 per cent of its clothing range in-season, in contrast to 60 per cent at Inditex. Similarly, only 32 per cent factories that H&M uses are located in or close to Europe, compared to 59 per cent of Inditex’s factories. H&M’s revenue growth is being supported entirely by new store openings, and its sales-per-store growth is negative. Inditex continues to report positive comparable sales growth and sales-per-store growth. H&M’s product offering is strongly focussed on basic apparel items.
Inditex growth ahead of H&M
Inditex has been growing much more strongly than H&M, and this is due to Inditex’s more comprehensive fast- fashion offering. For products manufactured in proximity markets, Inditex has lead times of around five weeks and the company claims to replenish stocks of existing designs in two weeks while H&M can get fast-fashion products to market in around two to six weeks, reveal Morgan Stanley research. Talking about Asian market, it takes between three and six months for H&M’s Asian-sourced products to reach store shelves. The lead times at Inditex for Asian-manufactured garments are almost the same. By revenue, Inditex is 14 per cent larger than H&M.
H&M does not own factories, while Inditex is vertically integrated. In Arteixo, Galicia, where its head office is located, Inditex owns 11 factories focused on skilled work such as cutting out garment pieces. Third-party factories then stitch such pieces into finalised garments. Zara alone employs around 350 in-house designers, while the company website reveals that the group has design teams of over 700 individuals. H&M, on the other hand, has a much smaller design team, employing 160 designers.
Performance matrix
Inditex is growing much faster than H&M. In the companies’ most recent respective fiscal years, Inditex grew euro-denominated sales at almost double the pace that H&M did. And the growth gap has widened in the first half of the current fiscal year: In first half of 2017, Inditex total revenues grew by 11.5 per cent year on year and comparable sales grew by 6 per cent while H&M grew total revenues by 5.2 per cent in euros, or by 8.6 per cent in Swedish krona. Even though H&M has seen sluggish sales growth, it has continued to grow its orders with suppliers very strongly. As a result, H&M is growing its inventory at a much faster pace than it is growing its sales.
H&M’s revenue growth is being supported entirely by new store openings, and its sales-per-store growth is negative. Inditex continues to report positive comparable-sales growth and sales-per-store growth. The research concluded that a strong fast-fashion positioning is supporting growth at Inditex. H&M’s product offering is focussed much more strongly on basic apparel items, which provides it with less differentiation in the market. Analysts say, H&M will continue to find it tough to maintain underlying sales growth, in the context of heightened fast-fashion competition, including from ultrafast-fashion players such as Boohoo.com and Missguided while Inditex is better placed to compete with such upstart rivals.
Apparel reporter Vishnu Clothing Company (VCC) has launched a new office in Rainham (UK) to expand its business and attract more buyers. At present, the Tirupur-based 15-year-old company exports 70 per cent of its garments to the UK market and 30 per cent to other European countries.
The exporter expects the newly launched office to help the buyers and agents in the UK and European markets connect better with the company’s representatives in person and discuss possible business collaborations.
A team of seven has already been appointed by VCC at its UK office to look after this new development and make it a successful venture for the company. The exporter is Sedex- and Disney-certified and produces an extensive range of kids, women and men’s apparel. It expects 40 to 50 per cent growth in the current fiscal post the steps taken to amplify its business. Currently, the company has an annual turnover of Rs 45 crores.
The establishment of the office in the UK is a bold initiative taken by the company seeing the current challenging scenario of Indian apparel exporters in the UK market post-Brexit. Rajesh Kumar, Marketing and Merchandising Manager of the company says even though the market is sluggish, the company is positive of achieving the targets.
For the first half of the year, House of Fraser’s comparable sales were down 5.2 per cent. Sales were hurt by web disruption as it moved to a new platform, which sent e-tail sales down 9.8 per cent. But the benefits of its transformation program are already beginning to come through in the first seven weeks of the second half, with better sales and margin performance. The company also expects a full recovery in e-commerce sales, originally expected to be complete by the end of the summer but now set to take a further four to six weeks.
The new own label women’s collections have been launched including the acquired Issa label and customers’ response to date has been very encouraging with initial sales exceeding expectations. The new web platform has greatly improved customers’ experience and online margins. Good progress has been made in recovering sale volumes and the group expects to be trading normally by the beginning of the important final quarter of the year.
House of Fraser is an UK department store giant. Its investment in the distribution center will deliver cost savings through improved operational efficiencies. The group is optimistic that it can deliver growth over the key trading final quarter of the year.
Honduras is Central America’s top textile exporter. The industry is one of Honduras’ main export and employment generators, comprising nearly 260 companies operating in 16 industrial parks. Strategic investments have helped transform the country into one of the world’s major players in the booming synthetic yarn and active wear market. Some 83 per cent of Honduran textile exports are destined for the US. The country is the US’s top supplier of cotton T-shirts and second largest supplier of fleece wear.
Honduras’ goal is to surpass Indonesia and Mexico to become the US’ fifth most important apparel provider. US, Chinese and European investors are investing both in synthetic manufacturing facilities and in distribution centers to service e-commerce. Several plants in the country have already incorporated new technologies for the use of recycled synthetic fibers. One such plant is slated to begin operations in the summer of 2018. The plant will have the capacity to produce more than 25,000 tons per year of drawn texturized yarn in a range of dimensions and textures to be used for the elaboration of synthetic sport, moisture-wicking, stain-resistant and other high-performance fabrics for clothing and footwear.
Synthetic textile manufacturing lead times and costs will become even more competitive once the high-tech yarn is produced locally instead of imported.
The global fiber sector is in a state of volatility with considerable ups and downs, significant overcapacity in a number of fiber segments and the backlash from slowing global demand at retail. The fiber market is in need of greater transparency and improvements along the textile value chain. Though synthetic fiber growth is up, and cellulosic fibers are enjoying strong growth, polyester saw the slowest growth in 80 years, and natural fibers are stagnating.
There is a global shift towards manmade fibers while natural fibers, mainly cotton, have lost market share. Manmade fibers occupy 70 per cent of the global fiber market versus 55 per cent some ten years ago, and this trend may continue for years. Between 2006 and 2016, synthetics occupied 51 per cent of the global market share, and now that number is 64 per cent.
When it comes to cellulosics in particular, like lyocell, the fibers have seen above average production growth of six per cent. China has lifted its volume of stable fibers by two per cent, due only to gains in manmade fibers. In India, output advanced two per cent thanks to increases in all categories. Bangladesh is fully focused on cotton products and as of today is not able to supply manmade products. But in time manmade fibers may have a growing share in Bangladesh.
