FW
During Fashion Snoops’ ‘Making sustainability the new normal’ discussion last week, many fashion experts anticipated an industry-wide shift to conscious consumption in the post-pandemic world.
Panelists agreed that sustainability is no longer optional—it’s a concept that’s now vital to staying in business.
One of the main reasons for this is society’s newfound connection with nature. As the pandemic continues on, consumer spending is slowing. People are now staying indoors more than ever and reflecting inward, taking inventory of what they truly need. Experts believe this shift in perspective will likely translate in their future purchases.
According to Nia Silva, Fashion Snoops’ materials editor, now that society is opening its eyes to the interconnectedness of all things, the industry needs to respond accordingly and start “championing the rights of nature.
But according to the experts, there’s still more that needs to be done—and sizable change requires sizeable adoption. Panelists agreed that legislation would help motivate businesses to act more sustainably, as companies that fail to adopt sustainable practices often do so because of budget concerns.
Ashwin Chandran, Chairman, The Southern India Mills’ Association (SIMA) has stated that the extension of moratorium period of term loan for another three months i.e., upto August 31, 2020 has come as a sigh of relief for the ailing textiles and clothing industry. He stated that the MSME package announced by the Finance Minister on May 13, 2020 under ‘Aatma Nirbhar Bharat Abhiyan’ would benefit MSME segments and today’s RBI announcements would benefit the non-MSME industrial units to mitigate the financial crisis.
The deferment of interest on working capital, reduction of margin money for working capital and the relaxation of prudential financial norms are the welcoming features of the announcement made by RBI Governor. SIMA Chairman stated that the extension of the permissible period of pre & post-shipment export credits by three months and the time for remittances against normal imports from six months to 12 months would also greatly help the exporters and importers to ease their liquidity.
SIMA Chief has stated that the Indian textiles and clothing industry had been facing long drawn recession and demanding two year moratorium period for repayment of all term loans well before the COVID impact needs at least another seven months moratorium period i.e., upto March 31, 2021 to avoid large number of textile units from becoming sick and NPAs. He has stated that the international and domestic demand for textiles and clothing is likely to drop by 30 per cent with the existing lockdown condition during the current financial year. Ashwin pleaded with the government to allow one time debt restructuring for the textiles and clothing industry that would greatly help the mother industry that employ over 105 million people to prevent job losses and sustain the survival and revive from the unprecedented crisis.
SIMA Chairman has pointed out that though RBI has been making announcements, several banks are yet to extend the various benefits relating to interest rate reduction and additional working capital already announced by RBI on 27.3.2020. He has pleaded the Hon’ble Prime Minister to intervene in the matter, direct all the banks to extend the various benefits announced by RBI immediately so that the industry could tide over the COVID crisis.
A new forecast by the Institute for Supply Management published in the ‘Spring 2020 Semiannual Economic Forecast’ indicates that in the US manufacturing, revenue, capital expenditures and utilization are all expected to contract substantially this year due to the coronavirus pandemic.
However, the same survey reveals a surprisingly buoyant outlook for US apparel and leather industry for the rest of 2020. This upbeat outlook mainly stems from the ability of these two industries to divert their production to the manufacturing of PPE when the pandemic forced their stores to close and orders dwindle, and the potential for new core business now that retail is beginning to reopen.
Textile production to decline by 3.6 per cent
The survey states, non-manufacturing industries including agriculture, transportation, warehousing and retailer are likely to record a 10.4 per cent net decrease in their
overall revenues. The capacity of these industries to produce products or provide services is expected to decrease 2.8 per cent during 2020.
In terms of manufacturing industries, the production capacities of 11 industries including textile mills is expected to decrease by 3.6 per cent in 2020. On the contrary, production capacities of five manufacturing industries are expected to increase in 2020. These industries include apparel, leather and allied products. Their capital expenditures is also expected to increase in 2020 compared to 2019.
Apparel prices to decrease by 2.8 per cent
In the December forecast, respondents had predicted a 0.4 per cent increase in prices they paid for products during the first four months of 2020. The industries that they reported an increase in prices included textile mills. These respondents now report a 2.8 decrease in prices in 14 industries that also include apparel, leather and allied products.
The prices of products in seven manufacturing industries including textile mills expect their prices to increase in 2020, while 11 industries including apparel, leather and allied products expect prices to decrease.
In non-manufacturing business, executives expect prices to increase on an average, 3.9 per cent as compared to prices at the end of 2019. The 11 industries predicting price increases for all of 2020 include wholesale trade, and transportation and warehousing, while among the seven industries expecting price decreases for 2020 were agriculture and retail trade.
Apparel revenues to grow, textile to contract
Apparel, leather and allied industries also expect their revenues to grow in 2020. On the other hand, revenues of 15 manufacturing industries including textile mills are expected to contract. The revenues of 18 non-manufacturing industries including agriculture, transportation and warehousing; retail trade and wholesale trade are also expected to fall.
The revenues of purchasing and supply management executives in manufacturing business are expected to contract by 10.3 percent. This is 15.1 percent lower than the 4.8 percent increase forecast in December.
Revenues of L Brands the Columbus, Ohio-based owner of Victoria’s Secret and Bath & Body Works declined 37.1 per cent in the first quarter of 2020 that ended May 2, 2020. The company’s net sales declined to $1.654 billion from $2.629 billion in the prior-year period, largely due to the fact that the retailer’s stores have been closed since March 17, in response to the ongoing Covid-19 pandemic.
The largest decline was seen at the Victoria’s Secret the lingerie brand, whose sales declined from $1.5 billion to $821.5 million. The sales of Bath & Body Works saw a less notable decrease. Its sales declined to $712.7 million from $870.7 million recorded in the same period in the previous year. The brand’s direct business achieved a year-over-year increase of 85 per cent in sales, which totaled $288.9 million, compared to $156.4 million.
Overall, L Brands reported a net loss of $296.9 million plummeting from net income of $40.3 million in Q1 2019.
Recent data from eShopWorld shows, April’s year-over-year apparel orders in the US grew by 98.4 per cent followed by sporting equipment with 96.2 percent growth in order volume, and footwear which saw 60.2 per cent growth in order volume. The categories continued to see growth in the first half of May at 118 percent growth, 58.5 per cent growth and 106.6 per cent growth year-over-year, respectively.
Many brands in these categories experienced exponential sales during this time. Brands that reacted quickly to properly address international markets during the pandemic saw the most growth. Companies that were able to offer easy availability through e-commerce were able to effectively and efficiently acquire a larger share of the market with new audiences.
The top 10 countries that consumed US brands for April year-over-year included Israel, Ireland, New Zealand, Canada, United Arab Emirates, Chile, Australia, Belgium, Switzerland and France, ranging from 92 to 178 percent growth in order volume. Returns from e-commerce consumers also lowered during this period.
John Harmon, Senior Aanalyst at Coresight Research in a recent webinar hosted by Planalytics revealed around 25,000 retail stores may close this year, twice the number as last year, as the coronavirus pandemic continues to have an impact on consumer behavior.
Harmon expected a U-shaped recovery as retailers navigate government-dictated staged reopening across the country but business is not expected to immediately return to post-pandemic levels. Harmon said in the last five weeks, around two-thirds of consumers were buying online than they had previously. But they were mainly buying food and sanitation products, home office supplies and fitness equipment.
Harmon predicted that post-lockdown; consumer demand will change dramatically as only 18.6 per cent of consumers are expected to buy apparel, footwear or accessories. Evan Gold, executive vice president of global partnerships for Planalytics, predicted shoppers to more attuned to weather than ever before and shop for seasonal merchandise in season, rather than before.
The AEPC has said, India’s apparel industry is prepared to play a key role in the global market for PPEs, estimated at over $60 billion over the next five years, The Indian government recently announced plans to procure two crore PPE kits from the country’s apparel industry.
The government has disallowed PPE exports in order to meet domestic demand first. This leaves the large global market for PPEs open to countries like China, Bangladesh and Vietnam, with a key competitor missing. Therefore, India’s vision should now shift from “first local-then global” to local with global, views Rohit Choraria an Adjunct Faculty at Christ College, deemed university, Bengaluru.
The country has production capacities up to 30 per cent across 95 approved PPE producers. Besides, there are 300 certified producers who are ready to take orders, as per the Textile Ministry. The key reason for such massive production capability is due to the lack of orders for fashion apparel from foreign markets in the wake of pandemic restrictions in those countries.
India has a combination of available spare production capacities and addressable global market, but no market access due to government restrictions. Therefore, India should examine the export policy of Vietnam and Bangladesh, which are key competitors in the global market. The country cannot afford to ignore global market opportunities, which will shrink with each passing day due to myopic government restrictions.
Due to the economic situation caused by the global pandemic and travel restrictions, Messe Frankfurt has jointly decided with the German Textile Cleaning Association and the VDMA Textile Care, Fabric and Leather Technologies to postpone Texcare International to November 2021. The event will now be held from November 27 to December 1, 2021 in Frankfurt am Main.
In November 2021 Texcare, a leading international technology fair, will offer manufacturers of plant and machinery an outstanding and eagerly awaited platform to position the textile-care industry, together with its customers from all over the world, to cope as well as possible with the challenges of the future following the Corona crisis.
Texcare International is held every four years in Frankfurt am Main and, in its regular rotation, reflects the innovation cycle of the industry. It is the leading international trade fair for textile care, with a high degree of international participation, both among exhibitors and visitors. As a provider of innovations and incentives for the international textile-care business, it is a venue which cannot be missed.
The crisis caused by the Covid-19 pandemic is compelling long-established and internationally renowned Parisian trade show Tranoï to reinvent itself at very short notice. Boris Provost, who has been in charge of the event and its staff of 17 since September 2019, is currently busy seeking new financial partners. On April 15, Provost applied for and was granted a protection procedure for the company, allowing its debts to be frozen.
He also emphasised that the transformation projects he began to implement at Tranoï are still on the cards. Filing for court protection was simply necessary for the company to turn the corner.
A year ago, Armand Hadida and Patrick Lecêtre (Tranoï’s shareholders, together with the HLD group), asked Provost to lead a change in company governance and to reposition Tranoï on the market. It was this challenge that prompted him to come on board. The company’s transformation led to exit of Hadida and Lecêtre in the next two to four years.
Tranoi is therefor,e seeking new investors. It is currently negotiating with everyone from French and international trade show organizers, to digital companies, which could contribute useful tech expertise, to investment funds in a variety of shapes and sizes. Its vision is to team up with partners for the medium and long term, with men and women keen to get involved and whose know-how is complementary to that of our existing staff, so that we can collectively transform our services in order to ensure a return on our clients’ investments.
Comparable sales of US-based retailer Target Corporation grew by 10.8 per cent in the first-quarter FY 2020 as customers made fewer but bigger shopping trips. On the other hand, there was a huge jump in the retailer’s digital comparable sales, which grew by 141 per cent. Digital comparable sales accelerated every month in the quarter, from 33 per cent in February to 282 per cent in April.
Its total revenue of $ 19.6 billion grew 11.3 per cent compared to last year. The retailer saw healthy market-share gains across all five of its core merchandise categories. Target’s positive results are a good sign for Indian home furnishing manufacturers as there are many companies in India, which are supplying textile products (soft goods) to the retailer.
