A coalition of nearly 70 global fashion organizations, including H&M Group, Primark, and Vinted, has issued a formal joint statement demanding urgent policy reforms to remove systemic economic barriers hindering the growth of resale and repair services. Despite projections that the global circular fashion market could reach $393 billion by 2030, industry leaders argue that current tax frameworks remain fundamentally biased toward virgin production. Research from the Ellen MacArthur Foundation highlights, resale and repair activities, which are inherently labor-intensive, are frequently subjected to double taxation on every transaction. This structure effectively penalizes circular models, making it far more profitable for retailers to rely on linear ‘take-make-waste’ production than to invest in longevity.

Proposed policy levers for circular scaling

To bridge the profitability gap, the coalition is urging governments in the EU, North America, and Canada to implement three targeted interventions: the reduction of VAT in Europe and the elimination of sales tax on resold goods in North America; the introduction of lower labor taxes and dedicated tax credits for jobs created in repair and sorting; and the expansion of Extended Producer Responsibility (EPR) schemes to fund the necessary infrastructure for collection and sorting at scale. Industry estimates suggest that these adjustments could boost gross profit margins for resale and repair businesses by up to 55 per cent and 41 per cent, respectively. Leyla Ertur, Chief Sustainability Officer, H&M Group, emphasized, if governments are truly committed to circularity, they must stop viewing circular businesses as niche segments and start addressing the structural fiscal penalties that currently prevent these models from competing on a level playing field with traditional retail.

The Fashion ReModel initiative

The Fashion ReModel is a multi-stakeholder project led by the Ellen MacArthur Foundation to help brands and retailers scale circular business models. It explores ways to decouple growth from the extraction of new resources, focusing on the infrastructure and policy changes necessary to make resale and repair commercially viable at scale.

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" Germany-based industrial sewing and embroidery thread manufacturer Amann Group has confirmed its intent to expand factory operations and inject fresh capital into Bangladesh. Unveiled during a high-level bilateral meeting between Markus Nicolaus, Group CEO, Amann Group and Mahmud Hasan Khan, President, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) signals a deepening commitment to the region’s evolving textile landscape. Rather than remaining a conventional raw material provider, the company aims to position itself as a strategic partner capable of meeting the rigorous quality standards required by premium international brands currently sourcing from Bangladesh.

Aligning with value-added manufacturing

This strategic investment aligns with Bangladesh’s industry-wide transformation, where the focus has shifted from high-volume, low-margin exports to higher-value apparel production. Khan emphasized, this expansion serves as a catalyst to attract German brands that have historically maintained a limited footprint in the country. Nicolaus expressed particular interest in Bangladesh’s high-tech textile sector, noting, the company is currently evaluating additional investment opportunities that leverage the country's growing manufacturing sophistication. This development occurs alongside critical discussions regarding infrastructure optimization, including energy supply, logistics, and port efficiency, which remain vital for maintaining the competitive edge of Bangladesh’s garment export sector as it navigates ongoing global trade headwinds and evolving international tariff policies.

Amann Bangladesh

Amann Group is a global leader in high-quality sewing and embroidery threads for the apparel, automotive, and technical textile industries. Operating in Bangladesh through its subsidiary, Amann Bangladesh, the company supports the premium segment of the market with advanced thread solutions and technological expertise to enhance garment durability and aesthetic appeal.

The fashion and apparel sector in the UK is navigating its most challenging period in nearly a year, with latest data from the Office for National Statistics (ONS) confirming, clothing sales volumes for April 2026 slumped to their lowest level since June 2025. This 2.4 per cent monthly decline underscores a broader retreat in non-essential retail, as household budgets face mounting pressure from external economic shocks. Retailers report, this contraction is not merely a byproduct of unseasonably cold weather but reflects a structural shift in consumer behavior, where shoppers are increasingly prioritizing essential expenditures over discretionary fashion purchases.

Calibrating for cautious consumption

The retail environment is currently defined by a heightened sense of consumer selectivity. As disposable incomes remain strained by energy-related inflationary pressures stemming from geopolitical instability in the Middle East, the traditional ‘seasonal refresh’ cycle has lost its momentum. Industry experts suggest, the current volatility necessitates a recalibration of inventory management. Rather than pursuing volume-driven growth, successful market participants are focusing on high-intent inventory and value-based transparency to entice a more cautious demographic. While some analysts maintain a tempered optimism for the summer months - citing the potential for uplift during major sporting events like the FIFA World Cup and Wimbledon - the immediate outlook remains subdued. For apparel brands, the mandate for the coming quarter is clear: agility in supply chain operations and precision in product placement are no longer optional, but essential for survival in a fragmented and hyper-sensitive marketplace.

A bellwether for domestic consumer confidence

The UK clothing retail sector serves as a bellwether for domestic consumer confidence, encompassing high-street giants, specialized boutiques, and dominant e-commerce platforms. Key product categories include seasonal apparel and footwear. Faced with rising operational costs and shifting economic conditions, the industry is increasingly focused on inventory optimization and omnichannel engagement strategies.

As global textile manufacturers grapple with rising energy costs and stringent environmental regulations, the industry is increasingly turning to precision-based, non-contact finishing technologies. A prominent player in industrial automation, BW Converting is set to demonstrate this technological evolution at ITM 2026 in Istanbul this June. The firm’s showcase centers on its Baldwin TexCoat G4 precision spray system, which addresses the critical need for resource optimization in high-output finishing lines.

Engineering resource efficiency

The transition from traditional bath-based immersion methods to spray-based application represents a significant leap in operational sustainability. By utilizing Precision Application Technology, the TexCoat G4 delivers chemical formulations directly onto fabric surfaces with exact calibration. This non-contact approach reduces wet pick-up by as much as 50 per cent, directly lowering the energy required for drying processes. Yiannis Vasilonikolos, Global Sales Leader – Textiles, BW Converting, notes, such innovations are critical for firms looking to reconcile high-volume output with reduced utility footprints. Mills are increasingly prioritizing consistency and cost-control; our technology allows for the precise chemical application necessary to maintain high-quality fabric standards while significantly shrinking their environmental impact, Vasilonikolos states.

Tangible production gains

The efficacy of precision finishing is increasingly supported by industrial case studies. At Zaman Textile Mills in Pakistan, the implementation of the TexCoat G4 system resulted in a 50 per cent reduction in chemical consumption alongside a 30 per cent increase in overall production throughput. The system’s capability for rapid, waste-free job changeovers further minimizes downtime, a common bottleneck in traditional finishing. Additionally, the integration of the Corona Pure surface treatment platform helps manufacturers adapt to the industry's shift toward C0 (fluorocarbon-free) chemistries by enhancing substrate absorbency and bonding performance, ensuring that environmental compliance does not come at the cost of product quality.

BW Converting provides advanced process-automation machinery across the printing, packaging, and textile sectors. As a core brand under the Barry-Wehmiller organization, it specializes in precision finishing and surface treatment technologies. The company is currently focused on enabling Industry 4.0-compliant, sustainable, and high-efficiency manufacturing solutions for global textile producers.

The denim industry is undergoing a structural shift toward high-precision manufacturing as a prominent vertically integrated producer, Soorty announces its ‘Fast Fade’ collection. Developed in strategic collaboration with Spanish technology firm Jeanologia, this initiative targets the core inefficiency of modern apparel production: the reliance on resource-heavy, manual wet processing. By engineering fabric constructions specifically calibrated for laser and dry finishing systems, the partnership seeks to standardize the transition from artisanal, manual labor to automated, high-fidelity digital production.

Operational efficiency meets authentic design

Retailers facing pressure to lower production footprints without compromising on aesthetic quality will find the development timely. Traditional denim finishing often requires repetitive manual whiskering and chemical baths to achieve vintage contrast. The Fast Fade line replaces these inconsistent labor methods with laser-ready fiber architectures. According to Alper Cataloglu, Vice President - Product Development, Soorty, the move facilitates a ‘genuine exchange’ of technical expertise, effectively bridging the gap between raw textile innovation and finished garment aesthetics. By integrating recycled cotton platforms and Tencel blends, the collection aligns premium material sourcing with manufacturing agility. The result is a consistent, scalable output that significantly reduces the chemical and water intensity historically associated with premium denim, addressing both environmental regulatory requirements and consumer demand for transparent, lower-impact apparel.

End-to-end solutions

Soorty is a Pakistan-based, vertically integrated denim manufacturer providing end-to-end solutions from fiber processing to finished garment construction. With a heavy focus on the European and North American markets, the company prioritizes circularity through its Second Life recycled cotton platform. Soorty is currently scaling its digital footprint to optimize manufacturing speed and reduce environmental impact across its global supply chain.

As the global fashion industry grapples with the dual imperatives of digitalization and environmental stewardship, the upcoming Intertextile Shenzhen Apparel Fabrics exhibition -scheduled for June 9–11, 2026 - is positioning itself as a central hub for technological convergence. Industry leaders are moving beyond conceptual sustainability, focusing instead on applied artificial intelligence to optimize the textile supply chain. By integrating sophisticated data analytics into fabric manufacturing and sourcing, exhibitors are demonstrating how automated systems can drastically reduce material waste while refining production lead times in an increasingly volatile global market.

Cultivating next-generation production ecosystems

The fair’s new ‘Future Horizons Forum’ and ‘Innovation Studio’ underscore a strategic shift toward knowledge-led manufacturing. These platforms facilitate critical dialogues between academic institutions and commercial stakeholders, exploring how AI can manage complex logistics, stock optimization, and real-time sustainability tracking. In a representative case study, emerging collaborations within the Greater Bay Area are showcasing how AI-driven predictive modeling enables manufacturers to align output precisely with demand, thereby mitigating the overproduction cycles that have historically plagued the sector. As exhibitors from across 11 nations converge in Shenzhen, the emphasis is clearly on actionable technology - ranging from waterless digital printing processes to advanced fiber transformation techniques - that empowers brands to meet stringent regulatory requirements while maintaining commercial viability in a competitive, high-frequency retail landscape.

A vital trade platform

Intertextile Shenzhen serves as a vital trade platform for the global textile value chain, connecting fiber, fabric, and accessory suppliers with international garment manufacturers. It highlights innovative manufacturing solutions, sustainable material sourcing, and digital textile technologies, with a strong emphasis on integrating regional expertise to foster cross-border industry collaboration.

In a major consolidation within the apparel sector, Authentic Brands Group (Authentic) has entered into a definitive agreement to acquire the legendary denim label Lee from Kontoor Brands. Valued at up to $1 billion, this transaction marks a transformative moment for both organizations. The deal structure includes an upfront payment of $750 million, with an additional $250 million earn-out provision contingent upon the brand’s future performance metrics under its new stewardship. This acquisition aligns with Authentic’s aggressive strategy of scaling heritage brands through its signature licensing-heavy operational model.

Strategic divestiture to fuel core growth

For Kontoor Brands, the divestiture is a calculated maneuver to sharpen its operational focus. By offloading the Lee business, Kontoor aims to reallocate capital and management resources toward its higher-growth assets, specifically the Wrangler and Helly Hansen labels. Scott Baxter, President, CEO, and Chairman, Kontoor Brands, emphasized, the move is designed to ‘unlock investment capacity’ and create long-term shareholder value by concentrating on segments with stronger growth profiles. Following the announcement, the market responded favorably, with Kontoor shares rising 1 per cent in premarket trading. As Authentic prepares to integrate Lee into its global platform - which manages over $38 billion in systemwide retail sales - the industry anticipates a shift in Lee’s distribution strategy, potentially moving toward a broader, partner-led retail network to revitalize the brand’s presence in competitive mid-tier markets.

The Kontoor-Lee transition

Kontoor Brands is a prominent global apparel company focusing on denim, outdoor, and workwear. The divestiture of Lee, a heritage brand dating back over a century, enables Kontoor to streamline its portfolio. The company now intends to prioritize the expansion of Wrangler and Helly Hansen across international retail markets.

The intensifying heatwaves sweeping across the Indian subcontinent are no longer mere meteorological anomalies; they have become the primary engineers of the country’s seasonal retail strategy. With over 100 cities recording record-breaking temperatures frequently exceeding 45°C, the apparel industry is witnessing a forced evolution in fiber selection and fabric engineering. This increase in heat-stress consumption is leading to a reorganization of the textile value chain, as brands move away from traditional year-round heavy synthetic blends toward high-performance, breathable alternatives. Studies show the demand for summer-centric textiles has grown its retail window by nearly 20 per cent, as the cooling economy dictates the flow of inventory from spinning mills to storefronts.

GSM’s downward pressure

As thermal comfort becomes the non-negotiable metric for the Indian consumer, textile manufacturers are aggressively reducing the Grams per Square Meter (GSM) of their core fabric offerings. The current market shift favors ultra-lightweight constructions that facilitate maximum airflow without sacrificing opacity. This technical transition is particularly visible in the retail segment, where value fashion giants are swapping out standard 180 GSM cottons for 120-140 GSM variants.

This isn't just a stylistic preference but a commercial necessity to ensure product sell-through during extended heat cycles. Breathability is now the baseline for transaction, say sourcing heads. If a garment doesn't offer immediate thermal relief at the trial room stage, it remains on the rack, regardless of the price point. Recent industry findings suggest that for every 1-degree Celsius rise in average seasonal temperature, there is a corresponding 3 per cent increase in the sell-through of garments categorized under lightweight or ultra-breathable classifications.

Natural fiber renaissance and cellulose disruption

The premium on comfort is leading to a resurgence in natural staples like linen and high-grade cotton, while simultaneously accelerating the adoption of man-made cellulosic fibers (MMCF). Market data shows an increase in the consumption of Tencel, Modal, and Viscose, which offer superior moisture management compared to traditional polyester.

Table: India’s fabric market cooling index

Chemical processing units are reporting a 30 per cent rise in orders for moisture-wicking and cool-touch treatments that were previously reserved for high-end activewear. These technologies are now being democratized, appearing in everyday office wear and school uniforms. By treating traditional yarns with phase-change materials (PCMs), manufacturers are creating fabrics that actively manage skin temperature, providing a critical competitive edge in a market where the sun has become the most influential trendsetter.

Changing supply chain and color choices

While the demand for cooling textiles presents a massive opportunity, it brings several operational hurdles, particularly in raw material price volatility. The reliance on high-quality long-staple cotton and specialized cooling yarns puts pressure on margins, especially as energy costs for textile processing rise alongside the temperature. Also, the shift in color palettes, moving away from heat-absorbing dark tones to thermal-reflective pastels requires dye houses to rework their chemical inventories and wastewater management protocols.

Retailers are now forced to adopt more agile inventory models, as localized heat spikes can trigger sudden surges in demand for specific silhouettes like oversized linens and loose-knit essentials. Analytical reports indicate that inventory turnover for cool-palette apparel whites, soft blues, and mint greens is currently 1.5x faster than traditional dark navies and blacks during the March–June window.

A prominent regional retailer in North India serves as a primary example of this strategic realignment. By analyzing local weather forecasts alongside real-time sales data, the brand shifted 70 per cent of its mid-summer inventory to 100 per cent cotton and linen-blends two weeks ahead of the projected heatwave peak. By eliminating heavy polyester linings and opting for air-mesh pocketing in trousers, the brand saw a 25 per cent year-on-year increase in footfall during May. This tactical shift highlights a broader industry truth: in the new climate reality, the most successful fashion players will be those who treat meteorological data as the ultimate sourcing brief.

As the curtains close on FY2025-26, India’s textile industry is revealing a sharp divide. On one side stand integrated and innovation-led companies that have insulated themselves from raw material shocks through specialization, branding, and technical capabilities. On the other are commodity-driven spinning businesses grappling with shrinking margins, volatile cotton prices, and weakening global yarn demand.

The year was marked by persistent cost pressures, unstable export markets, and elevated financing expenses. Yet beneath the turbulence, the final quarter showed signs of operational recovery as domestic demand improved and global logistics bottlenecks eased gradually. India’s textile exports grew 2.1 per cent to Rs 3.16 lakh crore during the year, with man-made fibers (MMF) outperforming traditional cotton categories through a 3.6 per cent increase.

The difference in corporate performance suggests that the industry is no longer rewarding scale alone. Instead, profits are increasingly being determined by supply-chain control, product specialization, and exposure to higher-value categories such as technical textiles, athleisure, and sustainable home furnishings.

Table: Financial insights (FY2025-26)

Figures marked with an asterisk are projected estimates based on Q4 FY26 trajectories and analyst consensus.

The margin leaders pull away

Among the sector’s strongest performers, KPR Mill emerged as a clear benchmark for operational efficiency. At a time when several standalone mills were squeezed by raw material volatility, KPR sustained operating margins above 20 percent in Q4.

Its vertically integrated business model spanning spinning, knitting, dyeing, and garmenting allowed the company to capture value across the production chain while reducing dependence on external suppliers. The company’s growing exposure to athleisure and performance wear also proved strategically important, as these categories continue to command stronger margins and steadier demand than basic apparel exports.

Welspun Living reinforced a similar trend in the home textiles segment. Benefiting from the global China+1 sourcing shift, the company strengthened its position as a preferred supplier to major US retailers. Strong order inflows and sustained export demand kept revenue momentum intact despite broader industry uncertainty.

More importantly, Welspun’s investments in sustainability and textile recycling are beginning to translate into advantages. As international retailers tighten ESG sourcing standards, suppliers with circular manufacturing capabilities are increasingly securing long-term contracts and premium positioning within global supply chains.

Technical textiles gain weight

One of the clearest themes emerging from FY26 was the growing importance of value-added and technical textile segments.

Vardhman Textiles continued its transition beyond conventional spinning by increasing its focus on MMF and technical fabrics. This diversification helped cushion the impact of fluctuations in cotton pricing and strengthened the company’s resilience in export markets increasingly shifting toward synthetic and blended materials.

Arvind Ltd is undergoing an even more pronounced transformation. Historically associated with denim manufacturing, the company is steadily repositioning itself as an advanced materials player. Its Advanced Material Division (AMD), which manufactures high-performance industrial and technical fabrics, has become one of its strongest margin contributors.

The strategy reflects a larger shift underway in Indian textiles. Rather than competing solely on low-cost manufacturing, leading firms are embedding themselves deeper into specialized global supply chains that offer higher profitability and lower exposure to cyclical fashion demand.

Turnaround stories signal a new discipline

RSWM delivered one of the year’s most notable turnarounds, moving back into profitability despite reporting a decline in revenue. The company posted a Rs 52 crore profit for the year after implementing aggressive cost rationalization measures and reducing long-term debt exposure.

Its sharper focus on specialty yarn categories, including mélange and synthetic blends, also helped improve margins. The performance highlights how selective product migration even within traditional spinning businesses can materially improve profitability when paired with disciplined financial management.

Siyaram Silk Mills adopted a different strategy. Rather than pursuing aggressive expansion, the company leaned on its established retail and fabric brand presence to navigate weaker export conditions. While concerns around US tariff uncertainty weighed on sentiment earlier in 2026, Siyaram maintained relative stability compared to pure-play spinning firms suffering deeper realization pressures.

Commodity mills face pressure

The weakest performances came from companies heavily dependent on commodity yarn manufacturing.

Sutlej Textiles reported a Q4 loss of Rs 18.18 crore as high domestic cotton prices collided with depressed international yarn realizations. The mismatch between rising input costs and weak export pricing created a severe input-output squeeze, leaving little room for margin recovery.

Nahar Spinning faced similar challenges, compounded by higher energy and fuel costs. The company’s continued dependence on commodity yarn markets left it exposed to aggressive pricing competition from Bangladesh and Vietnam, where lower operating costs have intensified pressure on Indian exporters.

The struggles of these companies underline a broader reality now reshaping the industry: scale without differentiation is becoming increasingly unsustainable.

A new textile order emerges

FY2025-26 may ultimately be remembered as the year India’s textile sector decisively split into two distinct models. Commodity-led businesses tied to volatile cotton cycles and low-margin exports are finding survival increasingly difficult. In contrast, companies focused on integration, branding, technical textiles, sustainability, and specialized manufacturing are steadily widening their competitive advantage.

The market’s message has become unmistakable. Investors and global buyers are rewarding businesses that control larger portions of the value chain or operate in differentiated categories with pricing power. Whether through technical fabrics, recycled fibers, athleisure, or branded home textiles, the next phase of growth in India’s textile industry appears likely to belong to companies that can move beyond commodity manufacturing and position themselves as innovation-led supply chain partners.

Siyaram Silk Mills has underscored the resilience of the domestic textile market in its FY ’26 performance report. While many export-oriented players in the Indian textile sector have faced significant contraction due to elevated US tariff barriers and cooling demand from European markets, Siyaram’s focus on the domestic consumer has shielded it from total volatility. The company reported a 16 per cent rise in total income to Rs 2,653 crore, maintaining a steady EBITDA margin of 15.6 per cent. This domestic-centric model has served as a buffer, with the company leveraging the growth in wedding and festive spending to offset the broader headwinds currently compressing the Indian textile and apparel (T&A) sector.

Balancing retail growth and capital efficiency

The company’s strategic shift toward a stronger retail footprint remains a central pillar of its long-term growth. By the close of the fiscal year, Siyaram had scaled its operations to 44 dedicated stores, specifically 27 Zecode outlets and 17 Devo stores. This expansion into branded apparel segments - which now represent 15 per cent of its revenue compared to the 80 per cent contribution from fabric - demonstrates a pivot toward higher-margin consumer-facing channels. Management has outlined an ambitious roadmap for the current year, targeting a total network of 70 stores. This transition is critical as the company seeks to mitigate the impact of rising inventory and debtor levels, which grew by 25 per cent this year, largely tied to these store-opening cycles.

Navigating macro-economic volatility

Despite the operational success, the market remains cautious. The share price has corrected by nearly 33 per cent from its 52-week peak, reflecting investor apprehension regarding sector-wide challenges. Exporters continue to grapple with a dual crisis: the erosion of price competitiveness due to US tariffs and the suspension of preferential tariffs in EU markets for 2026–2028. For Siyaram, the path forward involves balancing its successful domestic textile narrative with capital discipline. As industry analysts note, the ability to maintain profitability despite raw material price volatility and the current inflationary environment will define the sector's performance in the coming quarters.

Siyaram Silk Mills is a prominent Indian manufacturer specializing in high-fashion blended suiting, shirting, and readymade apparel. Primarily focused on the domestic market, the company operates an extensive retail network under brands like Zecode and Devo. It maintains a strong financial outlook through strategic retail expansion and premium product diversification.