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Pakistan government has released additional Rs 6.2 billion refunds to support its textile sector which has been badly hit by the outbreak of COVID-19 in the country. The money has been released under the drawback of local taxes and levy (DLTL) scheme of the government to facilitate exporters.
With the release of additional money, the cumulative amount released under the scheme reached Rs 51.2 billion during FY20. The government hopes this will resolve the liquidity issues of its exporters and enable them to further their exports through investment.
Pakistan's exports including the textile sector have been badly affected by the outbreak of the pandemic, partially due to closure of manufacturing units during the lockdown period and partially due to the fall in demand of Pakistani products in the international markets. Earlier in April, the government had issued DLTL refunds of Rs 20.5 billion for the textile sector to help industrialists pay dues to their employees during the closure of industries during the pandemic.
Last month, the Pakistan Readymade Garments Manufacturers and Exporters Association demanded several incentives from the government including release of the DLTL for export-oriented sectors including textile sector to sustain the industry amidst the severe liquidity crunch due to COVID-19.
It may become harder to find second-hand clothing in future as COVID-19 has put many clothing and textile bank collection systems at risk. In May ,the UK’s Textile Recycling Association said the average price of clothing left in textile banks fell from £130 a ton in March to £30 in April. The International Bureau of Recycling warned that the textile salvaging industry has entered a critical stage which threatens the existence of many collection, sorting and recycling operations.
Closure of retail outlets around the world has led to a glut of raw materials and finished products. This has pushed the price of raw materials so low that it’s often not economically viable for textile recyclers to collect them. In future, this could reduce the supply of second-hand clothing further down the line.
A May report by UK’s Textile Recycling Association revealed the average price of materials left in textile banks had plunged from £130 a ton in March to £30 in April, with further declines expected. Even in the more positive scenarios, it would take 18 to 24 months until the current stocks have been reduced to normal levels and business is normalized.
According to Forrester Research, hurt by the closures of its department and retail stores due to the COVID-19 lockdowns, Nike Inc has reported its first quarterly loss in more than two years. The brand’s wholesale business, through which Nike sells merchandise to other retailers, came to a halt amid the health crisis. This led to a 50 per cent fall in shipments, increased inventory and higher costs due to order cancellations.
As a result, gross margin of the brand fell by 820 basis points in the fourth quarter. However, Nike’s investments in its digital platform over the years helped it to record a 75 per cent rise in online sales, as many consumers shopped for activewear and sneakers from the comfort of their homes.
The company is now accelerating focus on its online presence, and expects its overall business to reach 50 per cent digital penetration. Online sales accounted for 30 per cent of total revenue in the quarter.
The Italian Chamber of Fashion has decided to reappoint Carlo Capasa as president until 2022. Capasa was first appointed in this role by the Milan-based association in April 2015. He succeeded Mario Boseli, who headed the organization for 15 years and is now its honorary president.
Since his appointment, Capasa has been focusing on several aspects of development including: sustainability, inclusion and diversity, digitization and support to young designers. Last year, the association issued a manifesto to guide companies in implementing inclusive practices. He has also forged tight relationships with international institutions and promoted Italian fashion through compelling storytelling.
In particular, Capasa has hosted roundtables and collaborated aimed at defining practical guidelines to promote sustainability across the whole fashion chain besides launching the Green Carpet Fashion Awards Italia project in collaboration with Livia Firth, founder and creative director of Eco-Age. Last year, the organization additionally joined the Kering-led Fashion Pact initiative with the role of coordinating Italian brands. In his new tenure, Capasa will lead the organization’s relaunch after the Coronavirus pandemic forced brands to reconsider their overall strategies.
Crocs Inc plans to open new global headquarters in Broomfield, Colorado, which will enable the casual footwear company to employ more full-time staff. In addition to the 375 positions already maintained at the company’s corporate headquarters, Crocs plans to hire new full-time employees for the Broomfield facility. Its new global HQ offers its employees a wide range of adaptable collaboration spaces, from video technology-equipped conference rooms to huddle spaces and one-on-one meeting rooms. Other features of the headquarters include living green walls, skylights and roll-up doors for maximizing the presence of natural light in the environment, a full-service café, and wayfinding technology designed to help staff navigate the space.
Crocs also intend to make a positive impact on its new HQ’s local community by supporting small businesses in the region. It has started making donations to the Broomfield Chamber of Commerce and the Denver Metro Chamber of Commerce for their "Prosper Colorado" initiative. It will also be looking for new ways to get involved in the Broomfield community in the future.
The Coronavirus crisis has also taken its toll on the company’s first quarter financial results, contributing to a decline of 5.0 per cent in quarterly revenues, which totaled $281.2 million. Crocs’ net income for Q1 was $11.1 million, or $0.16 per diluted share.
In its latest update to the World Economic Outlook, the International Monetary Fund (IMF) cut its projection for India’s growth. The organization estimated Indian economy to contract by 4.5 per cent this fiscal following a longer period of lockdown and slower recovery than anticipated in April, but will smartly bounce back during the next fiscal.
The outlook projected that India will grow by 1.9 per cent during the current fiscal. It also projected a growth of 6 per cent during the next fiscal. However, it is 1.4 percentage points lower than the April outlook. Taking note of liquidity support under the Atmanirbhar Bharat package, it feels that various sectors will gain from that.
Much like last year, the upcoming edition of Copenhagen Fashion Week will also feature 34 brands from Denmark, Sweden, Norway, Finland, Germany, and the UK at its upcoming edition. The event will be held from August 9-12, 2020. The steady number of participating brands clearly indicates that the industry continues to support the fashion week and believes in the value of standing together - also in an era where nothing is as it was.
The fashion week will present a wide range of the brands that have given Copenhagen Fashion Week its international attention. Danish brands include Ganni, Stine Goya, and Henrik Vibskov, while Sweden will participate with Rodebjer, Hope and Whyred; Norway with Holzweiler; Finland with Marimekko; Germany with Lala Berlin and Malaikaraiss and the UK with Rixo. It will be a combined line-up that especially represents Scandinavian brands and also includes other strong Northern European brands.
The fashion week will follow a new hybrid format that mixes digital experiences with physical events. The physical shows and presentations still remain a large part of the schedule with brands like Soulland and Mark Kenly Domino Tan staging physical events to be streamed digitally to secure exposure and reach. Many brands, like Baum und Pferdgarten and By Malene Birger, will present their universe entirely digitally, fostering new and innovative material to be showcased for the first time at Copenhagen Fashion Week. Ganni, among others, are preparing for a hybrid showcase format bridging physical and digital.
A projection by market research company eMarketer, China is likely to produce $5.072 trillion in retail sales in 2020 compared to $4.894 trillion to be produced by the US as the American market is likely to shrink by a large amount. China’s e-commerce battle between JD.com, Alibaba and Pinduoduo, and the nationwide implementation of digital innovations, is helping the country’s retail market bounce back much quicker than the rest of the world’s including the US, amid COVID-19 recovery.
Also, China’s potential growth rates for consumption and retail sales are higher than those of the US and other major markets as international factors — such as the protests in Hong Kong, territorial disputes with India and South East Asia countries, and the trade war with the US — could impede China’s recovery.
The Garment Manufacturers Association in Cambodia (GMAC) has urged the ministry of labor and vocational training to delay the 2021 minimum wage negotiations, arguing that the 2020 wage levels should remain intact as the sector is vulnerable during the COVID-19 pandemic. GMAC said since many factories have suspended operations and some are closing, support in the form of delaying the negotiations is necessary to help stabilize the sector.
The ministry issued a notification on June 10 on the schedule of minimum wage negotiations in the textile, garment and footwear sector for 2021, scheduled to take place from July to September. A ministry spokesperson, however, said the negotiations will continue as scheduled without any delay.
The Collective Union of Movement of Workers is worried that in future workers will suffer even more if the New Year minimum wage is not raised and other benefits are also reduced.
Indian readymade garment exports are expected to surpass the $30 billion mark by 2027, says rating agency CareEdge. This will translate into a 4.6 to 4.9 per cent share in world exports as against the current share of 3 per cent.
India’s readymade garment exports have been stagnant at around 15 billion dollars in the past five years. Currently, India has a market share of around 5 per cent in the EU and UK as Bangladesh, Vietnam and Pakistan have a tariff advantage of around 10 per cent vis-a-vis India in some of these markets.
Having adequate raw materials and a large workforce, India is poised to grab the opportunity in the global readymade garments market. India has a good presence across the cotton textile value chain from fiber to fabric while it has a limited presence in manmade fiber, which is expected to get a boost by the expected free trade agreement with the UK and the production-linked incentive scheme.
With the free trade agreements, India's share in the UAE and Australian markets are expected to increase and the trade pact with the UK would be a game changer as it will create a level playing field. Further having a presence across the entire value chain reduces transport costs and lead time, thereby providing a cost-effective solution to customers.
