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Thousands of garment workers across Pakistan are battling against forced layoffs and months of unpaid salaries, as the deepening economic crisis caused by COVID-19 hits workers’ ability to support their families in the world’s fifth most populous country. The textile and apparel industry is
Nearly 9 per cent of Pakistan’s GDP – and almost 70 per cent of the country’s exports – comes from the industry. The pandemic has wreaked havoc on textile exports, which are mostly sent to the US, China, the UK and Germany.
Factory production has slowed dramatically across the country, with global fashion brands reducing or eliminating orders. This has precipitated a devastating crisis for Pakistani suppliers, who are passing the impact along to those least able to weather it: labourers living on meagre wages, campaigners say. In Lahore, hundreds of garment workers were reported to have organised a strike last week against the non-payment of salaries at multiple factories and activists claim factory owners are treating workers as expendable commodities.
Last year, Human Rights Watch censured Pakistan’s garment factories for rampant labour violations, including failing to pay the minimum wage, forcing hours of unpaid overtime, and neglecting to provide medical leave or adequate breaks to workers.
The ITM (International Textile Machinery) Exhibition, which is organized every two years, took a step forward by opening the Denim Technologies Special Section this year.
Denim, with its comfort and practicality, is one of the indispensable products of wardrobes and receives demands from all segments including youngsters and older people with the uprising trend of sportswear in recent years. Denim that is considered as one of the timeless products of the fashion world, effectuates a considerable economy from manufacturing to retail on this day. The success of the textile companies in Turkey in production and marketing and their proximity to European countries is considered as a geographical advantage. The fact that the ITM exhibitions are organized in Istanbul connecting the east and the west backs up this advantage.
Because of reaching the occupancy limit in all halls of the ITM 2020 Exhibition, the “Denim Technologies Special Section”, which was established for the first time as an additional hall, is making itself ready to welcome denim, fabric and ready-made garment manufacturers. It offers a great occasion for the visitors that the manufacturers will be exhibiting the latest technological innovations in denim production in this specialized hall from the machinery related to the sector to the dyes used in the production.
The Fashion Design Council of India has accepted all applications from its fashion designer members for its COVID-19 Support Fund and has now opened round two of the funding initiative to non-member designers.
The FDCI also announced that it would acknowledge the contributors to the fund at a later date as funds are still coming in.
The FDCI has been running ‘FDCInsights’ as a multi-media initiative to share stories, information, and tips from designers, stylists, and other fashion industry names during lockdown. The ‘digital discourse’ series has garnered 10 lakh views, the FDCI said.
The organisation’s next initiative is ‘FDCI Wall of Frame’ as an Instagram-based contest for fashion photographers. The contest, which closes on June 1, aims to recognise up-and-coming fashion photography talent in India and give new names a platform.
Six European apparel giants have stepped in to rally support and obtain financial aid for tens of thousands of Myanmar workers who lost their jobs in the economic fallout caused by the global Coronavirus pandemic. These include Swedish H&M (Hennes & Mauritz) Group, Spanish Inditex known for their brand Zara, Britain’s Next, Belgian-German-Dutch C&A, Denmark's Bestseller and Germany's Tachibo.
These brands have urged the stakeholders of Myanmar’s garment and footwear industry to make rapid and coordinated joint approach and action to help their workers. They have signed an agreement with suppliers and trade unions to protect the garment industry and workers in Myanmar from the impact of the COVID-19 pandemic.
This agreement with the Industrial Workers Federation of Myanmar (IWFM) and the IndustriALL Global Union aims to keep the doors of the industry open to the world and its workers protected during and after the pandemic.
Among other things, the apparel brands expressed their commitment to secure financial aid for workers and ensure that their working environment complies with health and safety rules to protect workers from novel Coronavirus transmission. The clothing companies also expressed support for workers' rights in participation in union activities and tripartite dialogue to settle issues.
Walmart has signed a deal with ThredUp, an e-commerce company that buys and sells secondhand clothes, shoes and accessories. As per this deal, customers can now browse thousands of pre-owned items for women and children on the big-box retailer’s website. They can get free shipping from Walmart, so long as they spend $35 or more. And if purchases don’t work out, they can return the items at a nearby store.
Walmart is also expanding its online fashion assortment at a time when it could grab market share in apparel and accessories. Its deal with ThredUp is a way to expand its online fashion offerings and get in on the sustainability trend. ThredUp bills itself as the largest online thrift store. Customers can send in clothes, shoes, handbags and more, so long as they’re in good condition. If they pass a quality inspection and sell, he or she gets a portion of the profits. The San Francisco-based resale company has over 45,000 brands, ranging from designer names like Marc Jacobs to fast fashion like Forever 21.
Walmart dominates the grocery business, but despite its efforts, it is still lags in fashion. It has acquired plus-sized women’s apparel company Eloquii and menswear company Bonobos, developed exclusive apparel lines with Ellen DeGeneres and Sofía Vergara and revived Scoop, a trendy brand that used to have stores in New York City.
ThredUp has struck deals with a growing number of retailers, including Gap, Macy’s and J.Crew-owned Madewell. Many of its partnerships with retailers have had a brick-and-mortar rather than e-commerce focus.
Shattered with COVID-19 lockdown and then devastating cyclone Amphan, the CII Chapter for northern half of West Bengal has urged the government to reintroduce old support schemes. It has urged the government to reintroduce the scheme where silk egg grower used to receive one time 60 per cent support from center and 20 per cent from the state to develop own set up. But it has been withdrawn during 2014-15. In place of 165 egg growers in Malda alone, now there are only 65 of them. Each grower produces around 4 lakh eggs a year. One hundred matured eggs, weighting 18 grams only, costs around Rs 200-400.
In addition, the chapter has also sought the reintroduction of the 10 per cent incentive on yarn sale volume.
A new report from the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) has urged the UK government to invest in sustainable fashion. The report finds the lockdown has dramatically altered consumer habits and attitudes as it has forced changes in that way they buy fashion – 35 per cent women respondents stated they intend to purchase fewer items of clothing in future, and 28 per cent reuse or recycle clothing more than usual. 68 per cent women sought more opportunities for repair and reuse and less pressure from advertising and social media o buy clothing. Fifty-eight per cent of the public reported having bought less clothing during the lockdown.
For the future, the report calls for more government investment in sustainable fashion. It calls for the creation of a dedicated green ‘Beyond GDP’ resilience fund to support burgeoning circular economy innovation within clothing and textiles (and other sectors) in order to enable greater regional resilience, to stimulate local demand and create high skilled local employment. This should also ensure that any job and training support program announced later this year supports growing circular economy jobs within fashion.
In addition, government should introduce stronger environmental standards on the industry including an Extended Producer Responsibility Scheme to incentivise waste reduction and improved design for durability and repair, and a reduction in VAT on repair services.
Consumers also need to be encouraged to keep up changes in their behavior. The RSA is launching the poll as part of its Regenerative Futures program, one of the five Bridges to a better future post-lockdown. Part of this program involves working with communities to develop interventions which change our relationship with fashion, from new ways of manufacturing to repair services and reuse networks.
Amid cities and states reopening for business across the United States with plans for interaction on a small scale such as curbside pickup at retailers, crowd-size control and socially distanced, many trade-show in the country are being cancelled. A recent example is Swimwear Association of Florida, which has cancelled its SwimShow, originally scheduled for July 11–14 at the Miami Beach Convention Center during Miami Swim Week. The decision was made with the safety of the show's exhibitors and visitors in mind.
The event would have been celebrating its 38th annual edition had it not been canceled. In her email, Executive Director of the show Judy Stein mentioned that the opportunity could arise for a SwimShow to be organized during the second half of 2020.
CMAI has urged the government to consider levying a temporary additional COVID-19 import duty on garments for 12 months. According to the submission made to the Textile Ministry and Ministry of Commerce and Industry, the apex body has suggested a short-term duty on imports of both readymade garments and fabrics from all countries, including those with who India has zero-duty agreements. This move comes as the domestic garment manufacturing industry anticipates a slowdown in demand for a year severely impacting business.
The additional duty will result in a level-playing field for domestic manufacturers, and help them compete with the Bangladesh garment industry, which has currently at least 15 per cent cheaper production cost. Additionally, the levy will enable the government to collect approximately $100 – 150 million for its fight against COVID-19 (depending on the quantum of duty imposed).
A recent study by CMAI estimates that there will be about 40 per cent drop in domestic demand of apparel due to lockdown and reduced demand as a result of the pandemic. Over 20 per cent domestic units may face closure, being unable to survive the current crisis. The reduction in demand and revenue levels will lead to downsizing of operations, closure of units and job losses in Indian textile and apparel industry to the tune of one crore across the entire textile value chain.
CMAI had been engaging in dialogues with the government over the challenges and impact of duty-free imports of garments from Bangladesh, and back-door entry of Chinese fabrics on the MSME-dominated domestic garment industry for some time now.
According to a new report by global strategy consulting firm AT Kearny, though global merger and acquisition activity in the consumer and retail sector collapsed by over a third last year, the M&A market is expected to remain active in 2020.
The report pinpoints a previously overheated deal market as one of the major slowing factors for the market last year. A decade of peak activity fueled by economic expansion led to a consolidation wave and a narrowing deal pipeline, seeing deal activity plateau due to the saturated M&A market, exacerbated by record-high valuation multiples.
Meanwhile, CxO’s – in particular of large players in the industry – became more critical of their merger and acquisition investments, in light of growing integration complexity following a decade of bolt-on and digital transformation. This led to higher than expected integration costs and less value creation than anticipated.
More than half of the deals closed in 2019 were aimed at diversification in geographies, capabilities, or industries, as opposed to scale deals that mainly focus on expanding market share.
In order to mitigate risks, buyers have been turning to smaller and less risky deals, a trend that is expected to continue into 2020. According to the report, this year, 69 per cent of consumer executives and 47 per cent of retail executives will look for assets less than $500 million in valuation.
