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South Africa is gazetting regulations giving effect to the government’s commitment to assist ailing industries and workers through the Unemployment Insurance Fund. The country recently gazetted the first agreement between the Minister of Labour and the National Textile Industry Bargaining Council. The agreement states that the regulations apply to all employers in the textile industry, not just council members.
The agreement guarantees an amount equal to full pay for the three-week period of the lockdown for those not working, jointly paid by employers with subsidies from the fund through its Temporary Employer-Employee Relief Scheme (TERS). Labor lawyer Dunstan Farrell revealed that while these regulations do not specify the rand amounts, the standard industry agreements reflected that the scheme would pay out between R3, 500 – the minimum wage – up to a maximum of R17, 712 per worker on a sliding scale.
He explained wages are paid on an hourly rate, per hour actually worked, while salaries are a fixed amount per month. The regulations state that the issue of relief for salaried workers is to be referred to a Rapid Response team, established to consider and resolve any unforeseen matters.
TJX brands, the parent company of TJ Maxx, Marshalls, and HomeGoods reported higher sales than recorded during the same period last year as stores reopened this month. More than 1,600 stores were back open globally, including stores in 25 US states and all locations in Germany, Poland, Austria, the Netherlands, and Australia. The company expects most of its stores to be fully open by the end of June.
Earlier in May, photos of shoppers waiting to be allowed inside TJ Maxx stores in some parts of the US circulated widely on social media. One tweet, showing shoppers at a store in Arkansas, has been re-Tweeted more than 4,300 times and liked more than 13,500 times.
Hudson’s Bay, the owner of Saks Fifth Avenue has denied allegations in a lawsuit that an internal restructuring amounted to a move to strip the company of its assets and impair collateral for a loan to subsidiaries of a real estate joint venture. The lawsuit by the lenders called the reorganization a ‘corporate shell game.’ They also separately sought a prejudgment to freeze the parent company’s assets.
Owned by a Hudson’s Bay joint venture, the company defaulted on $7.4 million in payments of the $846 million loan as retailers stopped paying rent after the Coronavirus pandemic forced them to close. Hudson’s Bay, formerly headquartered in Toronto and known as HBC, was reorganized by its new owners ‘to optimize their Canadian and foreign operations and assets from a tax perspective,’ according to the filing. It was converted into HBC ULC under British Columbia law, with Bermuda-based HBC Bermuda set up as the parent entity.
HBC continues to exist, owns the same assets and is bound by the same agreements that pre-date its restructuring. That includes a guarantee of rent payments to the landlords of the 34 stores, but not a guarantee on the loan, which is backstopped by the real estate.
The amount defaulted relates to debt repayment in April and May, and the borrowers were in the middle of talks with the lenders when the suit was filed.
As per latest stats, while Japanese textile and apparel imports in March declined by 2 per cent to reach 216,500 tonne, imports from China declined 4 per cent to reach were 105,300 tonne. In the first quarter, Japanese textile and apparel imports totaled 605,000 tonne, declining by 7.5 per cent year-on-year; of this the volume from China totaled 286,000 tonne, down by 13.1 per cent year-on-year.
From the perspective of share, the proportion of China in Japanese textile and apparel import market has gradually declined to 47.2 per cent from the same period last year. The market share of Vietnam, Indonesia, Thailand and Bangladesh have gradually increased, especially in Southeast Asia. In the first quarter, the main sources of Japanese textile and apparel are as follows.
Although COVID-19 pandemic in China has been gradually controlled, foreign trade was greatly affected. The outbreak of the epidemic outside China was really a great shock to global consumption, and it is expected that Japanese textile and apparel import in April is still not optimistic.
Recent monthly export data by Textilebeacon suggests, the share of fabric exports in total exports of basic textiles increased to 39 per cent in 2019-20 from 31 per cent in 2017-18. The country’s exports of basic textile products, including all types of fabrics, dropped by 39 per cent in March 2020 ending the year 2019-20 with total exports of Rs 74,400 crore.
Among fabrics, the major material to be shipped was plain cloth, while denim, shirting, suiting and saree followed at a distant. Women suits and furnishing fabrics were also among the top ten types of fabrics exported in 2019-20.
Bangladesh has been the major market for Indian fabrics over the years. In 2019-20, India exported $720 million worth of fabrics to Bangladesh. Nearly 760 million sq m of fabric was exported during the year. Its absorption of such a large volume along with those also coming from China and other suppliers explains its robust manufacturing activity which is largely driven by garment making and export. Bangladesh is also a major market for Indian spun yarns. The other major markets for Indian fabrics are the US, Sri Lanka and UAE, with fifth position held either by Senegal or Afghanistan.
LVMH, run by French billionaire Bernard Arnault tops the list of fashion companies on the 18th annual Forbes Global 2000. The company has been ranked as the 73rd largest public company on the list. Sportswear giant Nike finished in a distant second among apparel companies, climbing 35 spots to become the 244th largest public company in the world. Fellow footwear maker Adidas also made strides, cracking the top 400 with more than $25 billion in sales.
Canada-based Lululemon, which came in 1,209th overall, maintained last year’s momentum, clocking nearly $4 billion in sales, up from $3.2 billion last year. Thanks to the athleisure brand’s e-commerce surge and strong balance sheet, some analysts predict that the company may actually end up in better shape than it was prior to the pandemic.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) has engaged different international rights groups to ensure international retailers and brands pay local suppliers. It is also working closely with the Bangladesh government and the country's missions abroad to initiate parallel track of discussions with foreign buyers and governments.
So far, work orders worth nearly $3.50 billion have been cancelled by different international retailers and brands due to the COVID-19 pandemic. Of the amount, most have been assured of payment by the buyers, though delayed. There is still uncertainty in payment as some buyers are not responding to the calls of BGMEA, for instance the British retailer Edinburgh Woollen Mill (EWM), which along with its affiliates, have been sent a letter by BGMEA threatening to have them blacklisted.
Some others, such as the American retailer JC Penney, have filed for bankruptcy, putting the local suppliers in uncertainty. The British retailer Debenhams has also already appointed administrators, making a payment of $66 million uncertain to the Bangladeshi suppliers.
BGMEA has taken all-out steps to reengage the buyers in discussions. It is also working closely with social and international partners like International Labour organisation, Human Rights Watch, Workers Rights Consortium and academia to build a global opinion to support our manufacturers and workers in this difficult time.
The Clothing Manufacturers Association of India (CMAI) has written to the Minister of Textiles Smriti Zubin Irani, and the Minister of Commerce and Industry Piyush Goyal to consider levying a temporary additional COVID duty on all imports of apparel and readymade garments, including on those garments imported from countries with whom India has a Free Trade Agreement, especially Bangladesh.
CMAI has for long been drawing the Government’s attention to the dangers posed by the duty-free imports of garments from Bangladesh, and with it the back-door entry of Chinese fabrics into India - and its consequent impact on the MSME dominated domestic garment industry.
The Government has in several of our discussions and interactions pointed out to the various treaties signed with Bangladesh and other SAFTA countries, and that it would be difficult, if not impossible, to dilute the agreements.
However, CMAI has urged the Government to consider the dramatically changed circumstances prevailing today, in the aftermath of the COVID 19 disaster.
The Indian textile industry has been hit hard by COVID 19 that has impacted exports as well as sales of apparel products in the domestic market. Based on a recent study done by CMAI, it is estimated that there will be more than 40 per cent drop in domestic demand of apparel due to the lockdown and the reduced demand as a result of COVID-19. It is also estimated that more than 20 per cent of the 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 & apparel industry to the tune of 1 crore across the entire Textile Value chain.
In this situation, it is important to think of innovative ideas and policies to support the industry to survive in the immediate term.
With this in view, CMAI has urged the textiles ministry to levy such a duty on imports of garments and fabrics from all countries. Such a duty will result in a level playing field for the domestic manufacturers, and help them compete with the Bangladesh Garment Industry, which has currently at least 15 per cent cheaper production cost.
This will have great positive impact on the domestic industry and will result in the quick recovery of hundreds of MSMEs who are today on the verge of collapse, and the possible savings of hundreds of $100 – 150 million for its fight against COVID 19 (depending on the quantum of Duty imposed). Being fully cognisant of the Government’s constraints, CMAI has suggested that such a measure may be undertaken only for a limited period of time of 12 months, after which we can go back to our current agreements in force.
Latest WTO Goods Trade Barometer reveals the volume of world merchandise trade is likely to fall precipitously in the first half of 2020 as the COVID-19 pandemic disrupts the global economy. The index currently stands at 87.6, far below the baseline value of 100.
The current reading on the barometer captures the initial phases of the COVID-19 outbreak, and shows no sign of the trade decline bottoming out yet. All of the barometer's components indices are currently well below trend. The automotive products index is weakest of all, due to collapsing car production and sales in major economies. The sharp decline in the forward-looking export orders index suggests that trade weakness will persist in the short-run. Similarly, declines in the container shipping and air freight indices reflect weak demand for traded goods as well as supply-side constraints arising from efforts to suppress COVID-show signs of stability, although they too remain below trend.
Trade had already been slowing in 2019 before the pandemic, weighed down by persistent trade tensions and weakening economic growth. WTO trade statistics show that the volume of world merchandise trade shrank by 0.1 per cent in 2019, marking the first annual decline since 2009, during the global financial crisis.
BKMEA has advised the apparel industry to keep its export activities normal to keep the wheel of the economy turning during the COVID-19 crisis. The association has paid its workers 65 per cent of their salary and has also given bonus. According to BKMEA, journalists and law enforcers have been most affected by Covid-19 while carrying duties. It stated that building Nasim Osman Bridge on Shitalakshya River, turning Khanpur Hospital into a medical college, setting up a Knit Palli (knit village) at Shantirchar have remained stalled even after getting permission asthere is no discussion about these.
Bangladesh Knitwear Manufacturers and Exporters Association or BKMEA is a national trade organization of knitwear manufacturers in Bangladesh and is located in Dhaka, Bangladesh.
