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The COVID-19 pandemic will magnify systemic inequality that results in forced labor and modern slavery, the World Economic Forum (WEF) warned. More than 40 million people are estimated to be trapped in conditions of modern slavery, including 24.9 million in forced labor and 15.4 million in forced marriage, according to the International Labour Organization (ILO), a United Nations agency. One in four of them are children. Women and girls, who account for 99 percent of victims in the commercial sex industry and 58 percent in other sectors, are also “disproportionately affected” by forced labor.
With the Coronavirus crisis worsening living situations for months to come, those same people are now at even greater risk, the WEF said. Not only do they lack access to adequate healthcare, but their already restricted movements are further hamstrung by border closures and travel disruptions. Worse, they’re susceptible to stigmatization and discrimination by nativist rhetoric and politics.
Even migrant workers who wish to return home are unlikely to be able to do so safely for a long time. While countries such as Australia have proposed extensions for seasonal worker visas, such overtures are few and far between. Demand for labor—forced or otherwise—is also expected to ebb as the infection tightens its grip on markets, placing those already at high risk of exploitation even deeper in harm’s way
At the same time, risk of enslavement will surge, the WEF said. As the economic fallout from the pandemic continues to batter livelihoods, there will be an increased supply of workers vulnerable to exploitation due to poverty. The ILO estimates that COVID-19 could gut 25 million jobs and send global economies into a freefall if governments do not take adequate action.
A recent report by KPMG asks the Indian government should consider announcing a comprehensive financial support package along the lines announced in Germany and the US, international consultant
For medium to long term, KPMG suggests that government to provide an adhoc reimbursement/ concession of 5-10 per cent against the recently approved Remission of Duties or Taxes on Export Product (RoDTEP) scheme to compensate for the hitherto unreimbursed levies and taxes to the exporters.
From a manufacturing perspective, employment would be impacted owing to limited demand in both domestic and international market, and the textile and apparel sector production is expected to decline by 10-12 per cent in the April-June quarter, the report titled 'Potential impact of Covid-19 on the Indian economy' said.
Cotton fibre prices are expected to take a hit, states the report. While prices of imported man-made fibre (MMF) used for high value products is expected to rise by 25-30 per cent over the next two quarters (April to September 2020). Fabric production is expected to decrease owing to decline in exports and stagnation in apparel/home textiles production. Apparel production is expected to contract by 18-20 per cent, as per industry sources, owing to decline in global demand. Home textiles industry has had limited impact of the Covid-19 induced global downfall
Spurring the biggest economic contraction since World War II, COVID-19 has hit every sector from finance to hospitality. Its discretionary nature makes the sector particularly vulnerable, say McKinsey & Company and Business of Fashion in a Coronavirus update to the ‘State of Fashion 2020’ report. The average market capitalization across apparel, fashion and luxury players witnessed a bigger drop from January through March 24th than the one experienced by overall stock market. The report reveals, revenues for the apparel and footwear sector are expected to contract between 27 and 30 per cent year on year in 2020.
Loss of jobs and financial hardships
Future outlook for the luxury sector is worse with contractions in the sector pegged between 35 and 39 per cent. If brick-and-mortar stores remain closed for two more months, almost 80 per cent of publicly listed Western brands are likely go bankrupt in the next 12 to 18 months
Humanitarian repercussions will also reverberate across fashion as millions across the value chain will either lose jobs or face financial hardships. Already, factories across Bangladesh, India, Pakistan and Myanmar are in crisis with workers taking to strikes and protests for pay as owners dealing with cancelled orders. It’s a conundrum even that governments in these sourcing countries are ill equipped to face.
Brands to reinvent value chains 
The report says, quarantine of consumption could heighten expectations for purpose-driven, sustainable action. To meet these expectations, fashion players will have to adapt their operating models. They should adopt a recovery position based on impact severity to help prepare for the deployment of a recovery action plan. This will involve reassessing their geographical footprint, store network and growth opportunities.
Brands will also have to reinvent their value chain besides reviewing production regularly, considering a recalibration of fashion’s cadence, and strengthening regional integrated supply chains. They should also double-down on recovery and resiliency measures for this. Only then can they begin to decipher what their “new normal” actually looks like.”
The survey reveals over 65 per cent consumers in the US and Europe plan to decrease their spending on apparel. This will compel retailers to offer steep discounts to clear inventory overflowing in warehouses, as well as leftover spring goods, and make up for lost time with closed stores.
Creative and innovative thinking to boost sales
Fashion companies will be forced to consider innovative ways to shrink stock and accelerate nascent sustainability trends. Some other ways they can increase sales is by personalization, customer experience and a re-evaluation of the company’s fashion calendar, such as moving monthly drops into later seasons. They will also have to scale up and strengthen their digital capabilities.
Mckinsey says, the only way forward for fashion companies will be innovation with creative, critical thinking extended across all points along the supply chain. Brands will have to rethink their fashion cycles leading them to skip a season and forcing store merchandise to fall in line with the current season. As more brands and retailers embrace 3D sampling and virtual production, go-to-market processes will revamp their operations with more companies embracing nearshoring and leveraging new manufacturing processes for capsule collections.
Sustainability to be the way forward
Sustainability will become the new way to value businesses as consumers will retreat from over-consumption and irresponsible business practices. Companies will have to introduce new tools and strategies across the value chain to future-proof their business models. They will have to harness innovations in order to make radical and enduring changes to their organisations.
The disruption in trade with China has made British retailers reconsider the wisdom of having long supply chains, and turn back to British manufacturers. Suddenly, security of supply — and not cost — is paramount. Textile companies in Leicester are getting a boost from COVID-19, the disease caused by the new coronavirus. Alkesh Kapadia of Barcode Design, a local fashion manufacturer, said that he’d received a flood of orders from worried customers.
Manufacturers having their own supply chain have been hard hit by the Coronavirus. Italy, for example, is a major supplier of yarn. Kate Hills of Make It British, a manufacturing advocacy group, said that British clothing retailers and brands are now focused on sourcing their fabrics domestically. One of the biggest economic casualties of the crisis could be the international supply chain which will help Britain’s textile manufacturers.
Though manufacturing in China, the original epicentre of Covid-19 pandemic, has largely recovered but now shutdown in the rest of the world are threatening the supply of key parts and demand, EU Chamber of Commerce warned. Some overseas orders have been scrapped as the pandemic ravages the economies of China's trading partners, with many privately-owned exporters firing workers and warning about factory closures in the near future.
Even European companies manufacturing in China for Chinese customers are not insulated, as these customers may depend on exports to Japan, the United States or Europe. While manufacturing has been coming back, companies are vulnerable to supply chain issues potentially stopping the arrival of key parts
China's travel restrictions — which currently stop all foreigners, including those holding residence visas, from entering the country — also creates major problems for chamber members.
Alchemie Technology is set to announce accelerated launch of Novara, a breakthrough new high-throughput digital precision coating technology for technical textiles. Alchemie is actively partnering with manufacturers worldwide to build production lines to address acute personal protective equipment needs and medical textile shortages.
Alchemie’s Novara technology delivers high-precision, 2D-patterned one or two-sided functional coatings to technical textiles, enabling truly unique, multi-functional textiles to be manufactured. Novara combines the throughput of conventional coating technologies with the precision of digital to unlock new product design opportunities and radically reduce the cost of technical textiles. The technology enables functional coatings to be applied with unparalleled precision, all controlled with real-time digital data.
The Novara digital precision coating technology can be delivered as a stand-alone machine or as a module for current production lines, enabling convenient implementation and rapid delivery of manufacturing capacity.
TEXPROCIL has urged the Government to provide interest free working capital term loans to the exporters to cover the cost of salaries and wages.
Exporters are facing huge problems as their buyers are delaying payments against export bills for shipments already made. On the other hand, most of the exporters have entered into forward contracts with the banks and now they are unable to surrender the committed amounts on foreign exchange under these contracts due to delay in receiving the payments.
As a result, exporters have to face huge losses as they are forced to either cancel or roll over the forward contracts which involves
penalty and other charges. Texprocil suggested that banks should not charge penalty for the cancellation or roll over of forward contracts entered with them by the exporters.
For the spinning sector, Texprocil requested to include Cotton Yarn under the MEIS and the RoSCTL scheme since these schemes now stands valid as the validity of the Foreign Trade Policy has been extended till March 31, 2021. It also urged to include fabrics under the ROSCTL scheme.
To address the liquidity problems being faced by the exporters, the council urged the Government to release all pending claims under the TUF scheme and the erstwhile ROSL scheme for Made ups and Garments , automatic enhancement of bank limits for the exporters by 25% and the extension of the Interest Equalization Scheme beyond March 31, 2020 and to cover Cotton Yarn under this scheme
Organisers of the Asia Pacific Leather Fair (APLF) rescheduled the next edition of APLF - Leather, Materials+ and Fashion Access to March 30- April 1, 2021.
The events always take place in March annually but has been rescheduled in light of the initial COVID-19 virus outbreak then largely affecting mainly Asia. The decision to hold the next edition as usual in March 2021 is in direct response to the recent and escalating pandemic now felt globally and in direct response to our industry partners, associations, and most importantly our customers.
“This was a difficult decision for the entire team including our staff, partners, and for the industry to make; however we believe it is the correct course of action that will help sustain the leather and fashion industries in the long run,” said Perrine Ardouin, Event Director of APLF. “The recent unprecedented developments of COVID-19 affecting our community and friends has moved from what was considered just an Asia epidemic at the beginning of this year to what is now a global pandemic. We want to ensure that when APLF returns it is under the best conditions for all participants. In the meanwhile, we will create digital solutions to keep the connection and conversation between buyers and sellers strong, “ he added.
ACLE is the definite leather exhibition in China. It is also the gathering place of the Chinese tanning, footwear, leathergoods, furniture sectors as well as key players in the automotive industry. The exhibition will provide the whole industry with a platform to resume the business and inject confidence through the various conferences and meetings.
To support the industry on maintaining their businesses and staying connected with the community during this difficult period, APLF has various digital products in place, such as the APLF.com marketplace, webinars and InTouch, a new virtual business matching event.
As of now, APLF has planned a series of webinars focusing on educational, industrial and trend topics. The new InTouch initiative is a series of virtual sourcing events during which suppliers will present their products live to buyers around the world. Starting from 16th April, each InTouch event is specially curated to suit different sourcing requirements of the buyers. Exhibitors will present their collections and answer buyers’ questions, and afterwards they will meet each other in a one-on-one business matching meeting.
Regular promotions schedule may soon come to an end as the impact of the COVID-19 pandemic may result in a decline of off-season merchandise and an overabundance of product. Fashion brands and retailers that typically deliver their collections in April or May, are deferring them to June, July and August. This will further defer their fall sales to September and October, in step with the start of the fall season.
Downsizing collections to cut losses
To eliminate liability that comes with retailers canceling and returning orders, many fashion companies are downsizing their collections. Major department stores have stopped accepting product since March, purchase orders be damned.
Owner of fashion brands such Equipment, Joie and Current/Elliott, the Collected Group has reduced its planned summer collections by one-third. The
size of one of those assortments will be divided among the three scheduled deliveries to retain regular. The company, is also skipping the resort season altogether, which typically enters stores in October, November and December. Though its fall collections, will not change in size, but will drop in six monthly shipments throughout the back half of the year.
Shifting to profit-making products
One of the solutions, Jess Brondo Davidoff, Managing Partner at crisis management firm Sprezzatura is focusing on is shifting its attention to products that drive the biggest bottom line. This also includes identifying the brand’s customers, their buying patterns and the products that bring in most profits. This is determined by factoring in the discounts and performance marketing driving their sales, their rate of returns, and their cost of shipping and warehousing.
Many brands’ are also moving to streamlined assortments, with high sell-through at full price. They are not building additional dollars into their prices, because they know it will be marked down. For instance, Collected Group doesn’t plan to deliver products that are not seasonally appropriate as it just goes to perpetuate the already existing vicious cycle of markdowns, which has been most frequent over the last 12 months.
COVID-19 pandemic has infected millions of people and taken thousands of lives across the world. Indeed, the outbreak has affected the textile and apparel industry globally as well as in India. A report by Wazir Advisors ‘Impact of COVID-19 on the Indian Textiles Industry’ states, the outbreak and following three week nationwide shutdown has brought textile and apparel industry to a standstill.
India’s textile and apparel industry employs migrant workers from different states and a large workforce comes from nearby rural, semi-rural areas. Due to the current situation, majority of migrant workers have returned to their native places. It would therefore, be a challenge for the government to bring these workers back to factories once the lockdown is lifted. The study then suggests certain initiatives the government could take to kick start the textiles industry.
Government initiatives to move ahead
The pandemic has hit the Indian economy at a time when growth has slowed to the lowest in a decade,
investments are shrinking and a consumption recovery is sputtering. To deal with this situation, the government can take several measures with some modifications in existing schemes.
Some of these relief measures could be:
• Clearing pending subsidies, release of dues under TUFS,
• Export subsidies (RoSCTL/MEIS), and GST refunds, on immediate basis
• Extension of soft loan equivalent to these government dues Deferment of interest charge for a period of six months on all loans
• Moratorium for repayment of principal and interest for one year Reduction in bank interest rate by 3 per cent,
• Atleast 30 per cent additional working capital at lower rates without any collateral, cllateral-free lending for loans up to Rs. 2 crore and max
• Relaxing RBI norms for declaring the defaulting unit as NPA for one year Fiscal support
• Cover all textile, garments and made-ups products under RoSCTL, IES & MEIS benefits
• Increase Interest Equalization Scheme to 5 per cent for all garments and made-ups for FY 2020-21.
• Provide 3 per cent additional ad-hoc export incentive for one year
• Exemption all raw materials, dyes & chemicals, intermediaries, spares, accessories, etc., from basic customs duty and anti-dumping duty
• Defer payment of EPF and ESI contributions for 6 months
• Extend support to the industry for payment of salaries and wages to the workers during the lockdown period.
India’s advantage
The current situation also presents an opportunity for India as it helps brands to reduce dependency on China. It also provides it with an opportunity to explore alternate options such as Bangladesh, India, Vietnam, Cambodia or any other South East Asian suppliers.
Increasing e-commerce focus
Though malls and retailers have closed their brick and mortar stores, their e-commerce channels are still operational in certain countries. These brands and retailers are now driven to incorporate digital strategy in their buying process. Online marketplaces are expected to become more popular as brands and retailers look to maximize digital options of showcasing their products and facilitating the buying and selling process.
Maximising internal capabilities
To fight the economic consequences of this pandemic, manufacturers should maximise their internal capabilities and focus on building their efficiencies. Companies should also adopt digital ways of connecting with buyers. Companies may also focus on planning for the winter or next spring summer season and target the channels of value retailing and ecommerce. Indian companies should also look out for new markets beyond US and EU like Japan, South Korea etc. and focus on diversifying both markets and products.
With depressed prices of raw materials like polyester, cotton etc. textile and apparel companies can also look at hedging raw material prices and wherever possible stock raw material which will be helpful once the market opens again. Companies could also explore emerging product categories such as medical textiles and other textile items required for healthcare facilities like hospital bedsheets, mattresses etc.
