The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 14 FEB, 2017

NATIONAL

INTERNATIONAL

Textile India Conclave to be held in Gandhinagar

AHMEDABAD: Textile India Conclave Mahatma Mandir and Exhibition is scheduled to be held at in Gandhinagar from June 30 to July 2, 2017. The three-day global textile industry event will be inaugurated by Prime Minister Narendra Modi.

"The government is organizing Textile India Conclave and Exhibition in Gujarat, which will be a big platform for industry players to showcase their products," said textile secretary, government of India,Rashmi Verma during a regional conference on textiles in Ahmedabad on Monday. "Big players (of the textile industry), who source from India, chief operating officers (CEOs) and industry leaders are expected to participate. There will also be business-to-business (B2B) meetings," added Verma, who was in Ahmedabad to interact with textile and apparel industry representatives about the Rs 6,000 crore special package announced for the sector. Even six months after the package was announced, it has found few takers as too few applications for benefits have been received. According to senior government officials at the industry interaction, the package has not taken off as was expected. "The scheme was launched six months ago, after accommodating suggestions and demands from the industry. However, it has not translated into an increase in investment, employment generation or more exports," Verma. The interaction was aimed at understanding the reasons for the lukewarm response. The government is also planning to reach out to industry players by meeting associations and camps to further explain what the package constitutes. "Not everyone is aware of the scheme. Awareness needs to be raised. We have asked the state government to chip in," Verma said.

Source: Times of INDIA
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Shima Seiki to show knitting machines at BSTIM show

Shima Seiki Mfg., Ltd, leading Japanese computerised flat knitting machine manufacturer, is set to exhibit its line of computerised flat knitting machines at the upcoming Best Solutions in Textile Manufacturing Fair (BSTIM), focussing on subcontracting, textiles, fabrics, and home textiles in Igualada, Spain, on February 22 and 23, 2017, in booth 24-29.

Shima Seiki will show the latest line of computerised flat knitting machines, including those capable of Wholegarment knitting whereby an entire garment can be produced in one piece on the machine without linking or sewing. The flagship Wholegarment knitting machine MACH2XS is capable of knitting items requiring tight, high-quality fabrics in all needles, thanks to its four needle beds using the company’s original SlideNeedle. The smaller SWG091N2 Wholegarment knitting machine provides opportunities for highly flexible Wholegarment production over a wide range of items including industrial textiles, in a compact, economical package. The novel SRY123LP computerised flat knitting machine features loop presser beds with inlay capability, offering new and exciting possibilities in knit-weave hybrid fabrics as well as technical textiles. The benchmark SVR series, as well as the SSR series workhorse shaping machines will round out the display with the latest in Shima Seiki computerised flat knitting technology. Among these is the new SVR123SP machine with loop presser bed and inlay capability. Also shown will be the SDS-ONE APEX3 3D design system. Key to Shima Seiki’s “Total Fashion System” concept, APEX3 integrates all stages of apparel production into one smooth and efficient workflow from planning and design to production and sales promotion. With ultra-realistic product simulations, APEX3 is also capable of virtual sampling that minimises the costly time- and resource-consuming sample-making process.

Source: Fibre2Fashion

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Marquee labels including Gap, Zara to come with smaller price tags

NEW DELHI: Global marquee fashion and lifestyle brands such as Gap, Zara and The Body Shop are resorting to price cuts to stay competitive and increase their market share in the price-sensitive Indian market.

UK’s cosmetic brand The Body Shop slashed prices across categories in India by 20-30% on Friday while US fashion brand Gap is looking to bring down prices of certain products by 10-15% by allowing its India franchisee Arvind Lifestyle Brands to manufacture them locally.  

Arvind will produce 30-40% Gap merchandise in India to be sold here, said J Suresh, chief executive at Arvind Lifestyle Brands. “The process has started and we will introduce them in spring summer 2018,” he said.

Spanish brand Zara, the market leader in fast fashion, too is looking at slashing its prices to bring them closer to Swedish rival H&M, said two people familiar with the matter.

Experts say price cut is one of the most effective ways to increase sales and market share in a price-sensitive market like India, particularly in highly competitive and fast-growing segments such as branded apparels and beauty products.

“Most brands strategically lower prices for the value conscious Indian consumer,” said Devangshu Dutta, chief executive at retail consultancy firm Third Eyesight. “In most cases prices are reduced to drive the demand further,” he said.

Gap currently imports all its merchandise into India and its products are about 40-50% more expensive than those of rivals Zara and H&M. Local production will help it bring down prices and compete better with the two faster-growing rivals.

Suresh of Arvind Lifestyle Brands said his company had an agreement with Gap to produce in India since May 2015 when they entered India, but was waiting for attaining a “minimum quantity” to produce here.

Gap has been struggling to keep pace with Zara and H&M in the Indian market. According to business head of a prominent mall in Delhi that has all the three brands, Gap’s sales are at times less than half of sales of Zara and H&M.

AGap spokesperson in San Francisco said, “We tailor sourcing strategies as appropriate for the markets and channels we operate in to enable competitive positioning.” A Zara spokesperson declined to comment on a specific query about any price cuts in the near future.

The Inditex-owned fashion brand had reduced prices by up 15% when H&M entered the Indian market in October 2015 with its global strategy of aggressive pricing. The move helped record a 17% sales growth during FY16, though that was its slowest sales growth since opening its first store in the country in 2010. Zara posted sales of Rs 842.5 crore during FY16.

Shriti Malhotra, chief operating officer at The Body Shop India, said the price cut will make its products more accessible to consumers. “Lower prices of our best sellers will bring affordable cruelty free beauty closer to diverse consumers across age groups and geographies, recruiting new fans along the way and strongly reinforcing our philosophy of beauty beyond boundaries,” she said.

Price correction is a tried and tested strategy to revive sales in India.

In September 2015, when Arvind Lifestyle Brands took over the business of beauty and wellness retailer Sephora from former franchisee DLF Brands, the first thing it did was a price correction. “We looked at pricing in Dubai and Singapore and we kept it in the band of 5-10% lower than that,” said Vivek Bali, chief executive of Sephora in India.

The company still does small tweaking of prices here and there on slow moving products.

Source: Economic Times

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Etailers, Sellers Differ Over Draft GST Clause

Bengaluru: The top bosses of rival ecommerce platforms Flipkart, Amazon India and Snapdeal found themselves on the same page last week — more specifically on the page on the draft GST law that relates to collection of tax at source (TCS) — but even while they cited the negative impact on sellers, many online merchants are making another argument. The TCS clause mandates online marketplaces to deduct 2% per transaction and hand it over as collection towards GST to the government under the Act. This does not apply to retail sellers offline.

Seller associations such as the All India Online Vendors Association (AIOVA), which represents 1,800 sellers, say that TCS will only hit sellers evading taxes, and said that the issue of capital blocking on online platforms is already a problem for them. “The TCS clause will remove the problem of tax evasion among many sellers and the ‘unnatural’ competition emerging from it. Secondly, since the ecommerce companies are already holding seller money, TCS will not affect our liquidity,” said a spokesperson of AIOVA. The e-Commerce Sellers Association of India, which was earlier known as eSellerSuraksha, says the clause will create a level-playing field among sellers. “Merchants without proper registration will be forced to move out. This makes a level-play- ing ground for all online sellers in terms of product pricing. The merchants who evade tax may also quit,” the seller body said.

However, sellers do have some concerns over TCS. “Product returns in apparel ecommerce range between 15% and 20%. We will be required to claim the TCS from the department directly which is a cumbersome process,” said Dhiraj Agarwal, cofounder Campus Sutra, an online-first apparel brand. Associations such as AIOVA have also made certain recommendations to the GST Council on keeping a threshold limit for TCS based on the business of the online seller, especially if the current VAT liability for the merchant is less than the TCS amount. Ecommerce companies have said that TCS will deter merchants from selling online and will badly hit the digital ecommerce industry, holding up working capital. “Working capital will be hit. Also compliance is an added burden for ecommerce companies. Majority of the products carry a return date of 30 days and given 15-20 million transactions per month and the returns, refunds to sellers have to be done with utmost care,” said a spokesperson for public policy at Amazon India.

“With TCS, capital will be locked away for periods between 20-50 days depending on the transaction date. The significant impact on the cash flow will force smaller firms to seek additional working capital or ignore the ecommerce marketplace altogether, as it may not offer envisaged convenience and benefits,” said a spokeswoman for Snapdeal.

Ecomm cos say that TCS will deter merchants from selling online and will badly hit the industry, holding up working capital

Source: Economic Times

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PSBS’ STRESS LEVEL DOWN WITH BETTER RECOVERIES

Large public sector banks (PSBs) have shown substantial improvement in loan recoveries and upgrade of accounts under stress in the first nine months (April-December) of the current financial year, over the same period last year. This, said bankers, gave them confidence on follow-up action. However, they added, banks will remain hobbled by big-ticket stressed accounts and without resolution of the latter, no meaningful change could come to the asset quality profile. Seven large PSBs— including State Bank of India, Punjab National Bank and Bank of Baroda, the largest three—showed between 40 percent and 136 percent growth in recoveries from stressed loans in April-December over a year before. Only Can ara Bank was an exception, with a 23 percent decline in this. Total recoveries for the seven banks grew 59 percent to ~25,639 cr ore. AB HI J IT LE LE& SAME ER M UL GA ON K AR report

Large public sector banks (PSBs) have shown substantial improvement in loan recoveries and upgrade of accounts under stress in the first nine months (April-December) of the current financial year over the same period last year.

This does, said bankers, give them confidence on follow-up action. However, they added, banks would remain hobbled by big-ticket stressed accounts and without resolution of the latter, no meaningful change can come to the asset quality profile.

Seven large PSBs — including State Bank of India, Punjab National Bank (PNB) and Bank of Baroda (BoB), the largest three — showed between 40 per cent and 136 per cent growth in recoveries from stressed loans in April-December over a year before. Only Canara Bank was an exception, with a 23 per cent decline in this. Total recoveries for the seven banks grew 59 per cent to ~25,639 crore.

These recoveries and upgrades are predominantly from retail (meaning, individual borrowers), small & medium enterprises and agriculture, and a one-off large corporate account. Repayments from large units remains a challenge.

Union Bank of India chairman Arun Tiwari said the trend of improvement across banks was the outcome of systematic follow-up over 18-24 months.

The sector would show a better performance for recoveries in the coming quarters. Seconding Tiwari’s view, a senior BoB executive said the Reserve Bank of India’s Asset Quality Review exercise forced them to recognise the extent of true stress.

The pressure on loan books, public opinion and better coordination among lenders, especially on companies, has begun to give results. Delhi-based PNB saw cash recovery and upgrades in the nine months of ~14,724 crore. The target for the full year is ~20,000 crore. Recoveries were hit in the aftermath of demonetisation, as banks were caught in the work of currency withdrawal and dispensing money across the branch network.

Source: Business Standard

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January retail inflation falls to lowest in 2 years

The Consumer Price Index-(CPI) based inflation for the month of January 2017 plunged to 3.17 per cent, the lowest in at least two years, primarily due to a marginal increase in food prices. The retail inflation was 3.41 per cent in December and 5.69 per cent in January last year.

The Consumer Food Price Inflation (CFPI) for the month of January was 0.53 per cent, compared with 1.37 per cent in December and 6.85 per cent in January last year. Year-on-year prices of vegetables and pulses fell to 15.6 per cent and 6.6 per cent, respectively, last month. Inflation in January is well below the central bank’s target of 4 (+/-2) per cent.  The low inflation for January “was brought about mainly by a decline in food price inflation to 0.53 per cent, aided by negative growth rates in both vegetables and pulses,” said Madan Sabnavis, chief economist with Care Ratings. He added that ‘curiously’ non-food components such as clothing and footwear, housing, fuel and light showed higher price increases.

“Clearly, the non-food components have registered an increase and going ahead would tend to be upward moving. Higher global commodity prices will get ingrained in these components while food items will be unaffected,” Sabnavis noted. “For the next two months, we expect the CPI inflation rate to move towards 3.5-3.6 per cent range,” he added.

“A reversal in the base effect and the seasonal rise in prices of perishables are expected to push up the next two readings of CPI inflation. We continue to expect March 2017 inflation to exceed 4.5 per cent,” said Aditi Nayar, principal economist with ICRA. “The impact of the note ban on demand is not pervasive across the sub-groups of the CPI, with the effect being most apparent in the decline in inflation for clothing & footwear, household goods & services, and personal care & effects,” Nayar added.

Source: Business Standard

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Remarkable resilience

Corporate results from the “demonetisation quarter” (October-December 2016-17) have delivered a positive surprise. A turnaround in the global commodity cycle, strong agricultural performance and low interest rates helped India Inc overcome some of the impact of demonetisation. The third quarter of 2015-16 was also weak, which created a favourable base effect as well. The results of 1,660 listed companies that have declared results so far show that net profits grew at 27.7 per cent, year on year (YoY), which was the fastest pace in over two years. Revenues, including other income, were up 9 per cent, also the best in two years. However, there are points of concern.

One big contribution came from the metals sector, which benefited from an uptick in the global cycle and from protection. Energy prices also remained in a sweet spot, with both producers and refiners delivering high profits. Sugar and other agricultural commodities saw an upsurge. Banks delivered high profits, based on treasury gains and lower provisioning. On the flip side, the three perennials – information technology (IT), pharmaceuticals and fast-moving consumer goods (FMCG) – had anaemic performances. While IT and pharma were hit by American protectionism, cyclical slowdowns and regulatory concerns, FMCG suffered due to low domestic consumption. Construction and real estate also suffered with losses across these two related sectors. Automobiles and auto-ancillaries had spotty results.

Some of the out-performing sectors may not be able to sustain these results. Sugar is seasonal and cannot contribute again until the second half of 2017-18. Agrochemicals and pesticides, which were up 15 per cent in terms of sales and 52 per cent in net profits, will also not contribute much until the second half of 2017. Most critically, the balance sheets of public sector banks (PSBs) remain under pressure. Banks enjoyed windfall profits during November-December as swelling deposits led to a crash in treasury yields, which have since moved up because the Reserve Bank of India did not cut rates in its last two policy reviews. Moreover, PSBs reduced badloan provisioning during the quarter. In many cases, the non-performing asset and the stressed asset ratios have worsened, even as PSBs reported higher profits.

In energy, PSU marketers delivered excellent profit gains as did the crude oil and gas producers. The sector enjoyed a low-base effect, which wears off in the fourth quarter. Metals pulled out of a massive hole, especially the steel sector, which drastically reduced its losses. But again, given problems in Europe, Tata Steel will find it hard to improve profitability and SAIL is still suffering big losses. Automobiles were boosted by a great performance from Maruti, and good returns from tractor majors, but two-wheeler majors and commercial vehicle manufacturer saw profit reduction. This may be a reflection of easing of discretionary spending. Construction and real estate remained in the doldrums. In the capital goods segment, BHEL saw a turnaround which augurs well, but power generation saw a downturn.

The overall results certainly indicate a heartening degree of economic resilience. However, there were some visible negative impacts from demonetisation and there may have been an “advance consumption” effect, with people using up old notes. A fast recovery from notebandi will be required if these cyclical gains are to be transformed into a more sustainable pattern of long-term growth. At the same time, the rising mountain of NPAs must be tackled.

Source: Business Standard

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Industry leaders launch HYDRO_BOT to revolutionise moisture management

Five textile industry leaders have joined forces to launch HYDRO_BOT, a new revolutionising technology for moisture management. HYDRO_BOT will solve one of the biggest challenges in sports, work and protective clothing: to transport moisture to matches human sweat rates in various climates, conditions and activity levels.

ISPO, Munich (PRWEB UK) 6 February 2017

Behind HYDRO_BOT is Osmotex, a Swiss-Norwegian start-up dedicated to developing solutions for electro osmosis for moisture management.

“HYDRO_BOT is the result of ten years of intense research and development in Switzerland. Over the past two years, the development has reached a new level with four strategic partners involved in the development effort. We are confident that HYDRO_BOT will represent a generational advancement in moisture management,” says Trond Heldal, Director of R&D and Operations at Osmotex and the lead researcher on the decade long research and development effort.

  • The Swiss leading textile manufacturer, Schoeller Textil AG is the production partner for the HYDRO_BOT panels.
  • The world leading premium sportswear brand KJUS is the primary product development partner and will be the first leading brand to take HYDRO_BOT to market in selected skiwear products planned for the 2018/2019 season.
  • The high-tech wearable technology company Belginova is the technology partner for HYDRO_BOT. They are providing operating systems and switches for applying the moisture management solution. Belginova will also deliver HYDRO_BOT products through their own brand 30SEVEN.
  • Empa, the Swiss Federal Laboratories for Materials Science and Technology, has played a key role in conducting cutting-edge materials and technology research. Together with Osmotex and its three development partners, Empa is now involved in the final development to ensure the necessary durability, washability and performance of HYDRO_BOT under different conditions.

“The consumer is the central focus of our developments. We want to support people in their work, leisure and sporting activities with intelligent textile products. For this reason, we develop and produce highly-functional fabrics, knits and innovative textile technologies. We are very excited about the prospects for HYDRO_BOT as we see a great synergy for even smarter textile performance”, says Siegfried Winkelbeiner, CEO of Schoeller Textil AG.

“KJUS is renowned as the leading innovator in ski-, golf- and lifestyle wear. As such, we teamed up with Osmotex to create an industry changing ski jacket. HYDRO_BOT opens up new levels of skiwear comfort for our product development, and we are excited about the new alpine layering system in the pipeline”, says Nico Serena, CEO of KJUS.

“Based on many years’ experience of developing car seat heating, I designed the world’s first safe, durable, washable heating system: Novaheat®. Now we are very happy to innovate wearable clothing again using HYDRO_BOT as the engine for moisture management”, says Pol Speleers, co-founder of 30Seven and Belginova.

“As the place where innovation starts we are very excited at Empa to contribute to new textile developments like HYDRO_BOT with our in-depth knowhow in materials science and computational simulation and to work with a group of outstanding companies covering the entire value chain of sports and performance clothing,” says Prof. Dr. Gian-Luca Bona, CEO of Empa.

Source: PRWEB UK

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Mafatlal Industries: 'We have the potential to be global leader in textiles'

Optimistic about market scenario, Aniruddha Deshmukh, MD & CEO, Mafatlal Industries says “We really see a good opportunity in the market.” Mafatlal does B2B and B2C trade and also direct selling to end consumers. He says “These days, consumers are attracted towards innovations. They come to the market to see new offerings. In fashion business, you can’t sell if the product is the same as trends change fast and you have to keep pace with this change. You are supposed to innovate consistently,” Deshmukh explains.

Innovations, the way ahead

Deshmukh says in women’s wear, there are a lot of prints in the market. Viscose has good demand. “In denim, we are making good movement. We are seeing growth in high-end fashion denim.” Similarly, in white fabric, people are looking for more varieties. Mafatlal has introduced dobbies keeping demand in mind. Talking about maintaining lead, he adds, “There is distribution channel since we are into B2B and B2C both, we have to be aligned with brands and end consumers. Supply and value chain is another area to work on. Supply chain efficiency and on time delivery matters a lot to stay ahead. Competition is there, all you need to do is find your niche, and start dominating the market.” Mafatlal Industries is into denim and shirting, as well as school uniform and ready to stitch clothing. “In shirting, we are the leader in white fabric category, which is used for shirting, kurta payjamas etc. Then comes polyester cotton and cotton blends, we do fair amount of prints too such as cotton and viscose prints. We are number one in school uniform segment. We do corporate as well and are leading in this segment. And we are well established in ready to stitch segment,” informs Deshmukh.

Domestic demand a big plus

Since textile does not come under any taxation, the only uncertainty is GST and its applicability on the sector. Rest everything is almost certain, opines Deshmukh. The sector has potential as textile is an essential sector and has to grow. What is needed at this point is how we can generate more employment and contribute to the growth of the sector. “The government is taking a number of initiatives for the betterment of the sector, especially garment sector. States are setting up textile parks and policies to encourage growth,” he avers. Talking about other Asian competitors he says, “Countries such as Bangladesh and Vietnam have big scale setups. They are connected well with overseas companies, and are doing a good job. But the fact of the matter is they don’t have domestic demand and this goes to our advantage. We have an equal opportunity in export and domestic market. Since China is dipping in some areas, it is good for India and we should capitalise on it.” India needs to boost its exports and domestic markets, he feels. “China is giving us space and we should utilise it. We are the second largest in the world after China in textiles. Indeed Bangladesh and neighbouring countries are growing well in garmenting sector but as far as textiles are concerned, we have the potential to be a global leader,” Deshmukh sums up.

Source: Meenakshi Kumar, FashionUnited

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Global Crude oil price of Indian Basket was US$ 54.87 per bbl on 13.02.2017 

The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 54.87 per barrel (bbl) on 13.02.2017. This was higher than the price of US$ 54.66 per bbl on previous publishing day of 10.02.2017.

In rupee terms, the price of Indian Basket increased to Rs. 3674.49 per bbl on 13.02.2017 as compared to Rs. 3658.93 per bbl on 10.02.2017. Rupee closed weaker at Rs. 66.97 per US$ on 13.02.2017 as compared to Rs. 66.94 per US$ on 10.02.2017. The table below gives details in this regard:

Particulars     

Unit

Price on February 13, 2017 

(Previous trading day i.e. 10.02.2017)

Pricing Fortnight for 01.02.2017

(Jan 12, 2017 to Jan 27, 2017)

Crude Oil (Indian Basket)

($/bbl)

                  54.87             (54.66)       

54.03

(Rs/bbl

                 3674.49       (3658.93)       

3680.52

Exchange Rate

  (Rs/$)

                  66.97             (66.94)

   68.12

SOURCE: PIB

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China's pain, Italy's gain: high costs push textile buyers west

International textiles buyers are increasingly switching away from China, and back to Western suppliers, as rising labor, raw material and energy costs make the world's dominant producer more expensive. In Biella, a small town in the foothills of the Alps at the heart of northern Italy's wool industry, factory owners say a narrowing price difference with China and demands for nimbler production nearer home are winning back higher-end customers. In the office of his family business, Alessandro Barberis Canonico recounts how one high-profile European client called him recently to say he was giving up on China because of rising costs there and the increased demand for quality - and would need help from Biella for a big collection. "He had tried his luck going abroad; things did not go well, so he's now back," Barberis Canonico said. For sure, China remains a world leader in textiles: employing over 4.6 million people, contributing a tenth of GDP and with exports, including apparel, of $284 billion in 2015, according to data from China's National Bureau of Statistics, the Ministry of Industry and Information Technology, and the China Chamber of Commerce for Import and Export of Textile and Apparel. But wages there have been rising at an annual compound growth rate of more than 12 percent, outpacing the economy, and are simply no longer cheap enough to compete just on price.

At the same time, China's textiles sector faces rising costs of inputs such as cotton and wool, hefty import taxes for basic manufacturing equipment, and costlier environmental rules. The government's five-year plan for textiles, released in September, acknowledged that higher costs are weakening its international advantage, and it faces a 'double whammy' from developed countries - like Italy - with better technology and developing countries with lower wages. "LESS ATTRACTIVE" The labor cost gap between Italian and Chinese yarn narrowed by around 30 percent between 2008 and 2016, to $0.57 per kg from $0.82/kg, according to International Textile Manufacturers Federation (ITMF) data. The hourly wage for a Chinese weaver last year was $3.52, according to the ITMF, up 25 percent since 2014, though still a fraction of the more than $27.25 paid in Italy, an increase of 9 percent over the same period. "When China's wages are not that low, the process of shipping materials so far to China and then shipping products back to Europe becomes a lot less attractive," said Shiu Lo Mo-ching, Chairman of Hong Kong General Chamber of Textiles Ltd and CEO of textile manufacturer Wah Fung Group. "They'd rather take the production back to Europe. This trend has been very obvious." That proximity is also an advantage at a time when Western clothing brands are under pressure to offer more collections, and customers increasingly want customized looks. Their suppliers need to be closer, and faster. "In China ... their supply chain is not close, and is scattered, giving (Italy) a competitive advantage," said Ercole Botto Poala, CEO of Italian textile producer Reda. Italy's textile imports from China fell 8.7 percent in the first 10 months of last year, to 347 million euros ($370 million), according to SMI, Italy's textile and fashion association. Its exports to China rose 2.8 percent to 165 million euros in the same period, though total textile exports last year dipped 2 percent to 4.3 billion euros. For buyers, quality and transparency are also key. "Before, given (brands) were paying much less, they turned a blind eye to quality," said Giovanni Germanetti, director general of Italian yarn and textile producer Tollegno 1900, one of several producers who told Reuters that clients were returning for what he described was better value for money. Alessandro Brun, professor at the MIP Milan Politecnico, said brands are also motivated by concerns over product traceability, and want to avoid potential reputational risk.

While suppliers were reluctant to name specific brands they sell to, so as to protect business confidentiality, several international apparel firms are switching to Italian wool fabrics so they can name the mill they source from on labels to differentiate from rivals, producers said. Italian high-street brand Benetton [EDZINB.UL] said it used yarn from Tollegno 1900 in a newly-launched Made-in-Italy line of limited edition seamless wool jumpers. MOVING AWAY More than 9,000 kms (5,600 miles) from Biella, in the bustle of the biennial Canton Trade Fair, some buyers said they were moving away from China. "We already buy 60 percent less from China compared to two years ago," said Olesia Pryimak, who attended the trade fair late last year to source material for her plus-sized fashion firm Opri in Ukraine. She said her company is turning increasingly to Turkey for fabrics, because of quality, price and proximity to Europe. Many of the producers and buyers interviewed said it was too soon for data to show the flow out of China. China's textile exports to the European Union grew a modest 1.4 percent in the first ten months of last year, but dropped 4.1 percent in October, according to Chinese data.

In Zhuhai in China's industrial southern belt, middle-aged workers load bundles of white wool for washing and dyeing at a spacious, well-lit factory owned by Hong Kong-based Novetex Holdings, a supplier of wool and cashmere yarn to international brands including Burberry (BRBY.L) and Max Mara. The company employs about 1,100 workers during peak season, but rising wages mean it is now investing in more automation, and will cut two-thirds of its workforce in two years. "The overall cake is smaller. Many agents and smaller factories have shut down," said director and CEO Milton Chan.

Source: Venus Wu Giulia Segreti

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Argentina amends content declaration for textiles

The Argentinean government has amended the Product Composition Sworn Declaration (DJCP) requirements for domestically-produced and imported textiles, apparel, and footwear. DJCPs will be generated through the Integrated Foreign Trade System (SISCO) using a unique numeric or alphanumeric product identification code that will be valid for 180 days. As per Resolution 70/2017, the validity of product identification code has been increased to 180 days from the previous 120 days. The effective date of the new requirements announced in December 2016 has been postponed to May 5, 2017 from the earlier date of February 4. Likewise, the requirement for DJCPs to be accompanied by a laboratory test report supporting the fibre/constituent material content declaration of the product has been delayed from June 4, 2017, to May 5, 2018. The resolution, 404-E/2016, announced by the Bureau of Trade of Argentina in December 2016 required that DJCPs be presented to the Bureau of Trade of the ministry of production by manufacturers and importers of textile and footwear. The declaration must contain the percentage composition of the fibres or of the constituent materials in the product. The declaration will include supporting evidence regarding the validity of the information stated on the product label. Moreover, it required that DJCPs be filed electronically on the SISCO, and an acceptance certificate and code would be issued thereafter. Both the certificate and the code would be valid for a period of 120 days during which the product can enter the Argentinean market. This period has now been extended to 180 days. For the purpose of this resolution, any product would be considered a textile product, if it has at least 80 per cent of its mass consisting of fibres or textile filaments. It defines textile as any item in its raw, semi-processed, semi-manufactured, manufactured, semi-finished, or ready-made state, consisting exclusively of fibres or textile filaments. The correctness of the declaration made by manufacturers, importers, distributors, wholesalers and retailers regarding fibre or material composition can be assessed by the Enforcement Authority, with the help of National Institute of Industrial Technology (INTI). For outstanding stocks of textiles and footwear without a corresponding DJCP, a grace period of 360 days from the date of enforcement of the resolution is provided to sell such stocks.

Source: Fibre2Fashion

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Denim dilemma: US cotton farmers fret over Trump trade policy

Bales of raw cotton awaiting processing at Bowles Farms Cotton Gin in Cantua Creek, California. There’s nothing more American — and Mexican — than a pair of jeans. US cotton bales are gathered from Texas to the Carolinas and shipped as fluff, yarn or fabric across the border to Mexico, where they are cut, sewn and pieced together. About 40 per cent of men’s and boy’s jeans in the US are imported from Mexico, according to the US International Trade Administration, and some of the world’s largest denim companies, including Levi Strauss and VF Corporation, maker of brands Lee and Wrangler, have a presence in Mexico. “Mexico is my domestic market,” said Alan Underwood, a cotton trader in Lubbock, Texas. His bales of cotton are driven to the border about five hours away and end up in Mexico City’s textile mills, where they are assembled into apparel. Mr Underwood said it was closer and cheaper to ship cotton to Mexico than to much of the US. Cotton is a sector of the US economy that stands to lose under a US government move to snatch back manufacturing jobs from Mexico. With President Donald Trump’s plans to build a wall at the border, renegotiate the North American Free Trade Agreement and levy a tax on Mexican imports, cotton traders and farmers are increasingly worried their relationship with Mexico will be up-ended. They fear his policies will hurt prices for one of the country’s historic crops, close factories in Mexico and fail to bring back jobs to the US. “During the last two decades, Mexico has always been among the top three importers of US cotton,” said Wallace Darneille, chairman of Amcot, a trade association. “This longstanding relationship benefits both countries, as it provides significant employment on both sides of the border,” he said.

The US cotton industry directly provided 126,553 jobs in 2015, according to the National Cotton Council. In a 2016 report, the ITA reported employment in the Mexican textile and apparel industry at 415,000 jobs, or about 6 per cent of the country’s gross domestic product. Textile and apparel jobs in the US, meanwhile, have been on the decline for three decades. The lack of visibility as to whether, when or how Mr Trump’s ideas will come to fruition has some farmers more sanguine about the future and others at a loss for how to proceed with their business. Prices in the cotton futures market have risen since the US election. “He’s just bargaining,” said Richard Anderson, a North Carolina cotton farmer, referring to Mr Trump. In California’s Central Valley, where some of the world’s finest cotton is grown, Cannon Michael’s 1600ha cotton farm has been picked clean, the fibre moved to the nearby gin where he is a part owner. Soon it will be planting season again. Mr Michael said he wasn’t sure how to plan or how to protect his business in light of Mr Trump’s trade policy rhetoric. “There’s so much speculation right now. It’s really hard to tell what he is going to implement. Will there be a 20 per cent tax? Who pays it? It just throws up a lot of question marks,” he said. Under NAFTA, which Mr Trump has called “a catastrophe” for the US, the American cotton industry has enjoyed a steady market for its exports and Mexico has benefited from a ready-made market for its apparel, particularly denim. It isn’t just cotton. Mexico is the biggest buyer of US crops like corn and the third biggest market overall for US agricultural exports, spending some $US18 billion ($23.5bn) in 2015, according to the US Department of Agriculture. Without NAFTA, American farmers could face tariffs of up to 25 per cent for some of their products. Nearly 100 per cent of Mexico’s cotton and yarn imports are from the US, according to the USDA, and the US in turn relies on labour from the Mexican textile industry to produce US apparel at a fraction of the cost. Growers are worried that more stringent immigration policies would make it harder to find workers. Field crops like cotton rely heavily on both legal and illegal labourers from Mexico, according to a USDA survey of farm workers. About 22 per cent of labour used in field crops is unauthorised, mostly from Mexico. Mr Trump’s policies are aimed at bringing jobs back to the US Chief among them are manufacturing jobs like those in the apparel industry. In the US economy, cotton doesn’t carry the heft of other industries. The output of US farms, including cotton and other agricultural commodities, contributes just 1 per cent of gross domestic product, according to the USDA. The most labour-intensive part of building a pair of jeans — the cutting and sewing — is cheaper in Mexico and those jeans can be reimported into the US under NAFTA without penalty. The result is that 98 per cent of garments sold in the US are imported, according to Cotton Inc, the research and marketing arm of the US cotton industry. The main ingredients tend to be produced in the US, in mostly automated factories with high-speed looms, multi-million-dollar dye printing machines and relatively few workers. “In the early 90s, one by one, the apparel plants started going by the wayside, particularly when NAFTA kicked in,” said Jack Mathews, who worked for 16 years for a denim mill based in Littlefield, Texas, before it closed in 2015. He says bringing apparel manufacturing back to the US is a fantasy. “Some other Asian country would be a beneficiary,” he said. Mr Michael, the cotton grower, echoes that sentiment. “People think the textile industry is going to see some kind of resurgence and become competitive again worldwide? I don’t see that happening,” he said.

(Source: Julie Wernau, The Wall Street Journal

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EU and Mexico agree to accelerate talks for new FTA

he EU and Mexico have agreed to accelerate negotiation schedule for a new, reformed Free Trade Agreement (FTA). Last year, both parties had agreed to initiate negotiations to update the existing FTA signed in 2000. Global trade patterns have changed substantially during the 16-year period, pointing to the need for a broader and more far-reaching FTA.

As part of accelerated negotiation process, two rounds for the EU-Mexico trade negotiations will take place in April and June. This was agreed by EU commissioner for trade, Cecilia Malmström, and the minister of economy of Mexico, Ildefonso Guajardo. As part of the new schedule, the two also agreed to meet in Mexico City between these rounds to take stock and push negotiators for further progress.

“We will take our trade relations fully into the 21st century. We will be able to boost growth, making our firms more competitive and widening choices for consumers while creating jobs. Together, we are witnessing the worrying rise of protectionism around the world. Side by side, as like-minded partners, we must now stand up for the idea of global, open cooperation. We are already well underway in our joint efforts to deepen openness to trade on both sides. Now, we will accelerate the pace of these talks in order to reap the benefits sooner,” said Malmström and Guajardo in a joint statement.

The objective of the modernising process of FTA is to better mirror other ambitious trade deals that the EU and Mexico have negotiated lately, the EU website said.

Between 2005 and 2015, the yearly trade flow of goods between EU and Mexico has more than doubled from €26 billion to €53 billion, against the backdrop of the existing FTA. (RKS)

Source: Fibre2fashion
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Chinese textile firms continue to invest in Ethiopia

Few large Chinese companies, including textile and garment manufacturing industries, have decided to invest in Ethiopia in the first half of the current Ethiopian budget year. The investment has come after the Ethiopian Investment Commission (EIC) started according priority to large, effective companies that can offer more and quick employment. Following the new strategy, Ethiopia has managed to attract investment from ten large Chinese companies, according to EIC commissioner Fitsum Arega. About half of these are in textile and apparel manufacturing, and this includes Jiangsu Sunshine Group, which has decided to invest nearly $1 billion in Ethiopia. The decision by the Chinese companies to invest in Ethiopia clearly shows that the East African nation has continued to become a favourable investment destination, Arega told Ethiopian news agency. Speaking on the change in EIC’s strategy in attracting foreign investment, Arega said, “The ongoing direction is not focusing on increasing number of participants coming in the name of investors. Rather the country prioritised attracting some but large, effective companies which can meet the targets of both the company and the country.” Competitive wages, trainable workforce, ongoing infrastructure development, fast growing economy, government support and favourable investment climate are among the factors that attract large companies to invest in Ethiopia.

“We recommend any investor worldwide to invest in Ethiopia because of its economic, political, and social stability, which is enthused by incredible government commitment and incentives towards the textile sector,” says Osman Basoglu, general manager of Etur Textile Plc, a part of Yuskel Group, on EIC website.

(Source: Fibre2Fashion

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Trending: Breakthrough Textiles Help Fashion Industry Close the Loop

Even more brands are making moves towards a more circular economy through textile innovation and consumer engagement. Recently, Kering H&M debuted its new “Bring It” garment recycling campaign, as well as a new BIONIC-based Conscious Exclusive collection, while announced the next stage of its ambitious sustainability plan. Now, Lenzing, G-Star and Patagonia are launching new initiatives to bring the fashion industry closer to closing the loop. Back in October, Lenzing released a new TENCEL product made from cotton waste. Now, four months later, the textile manufacturer has developed a new fiber generation based on cotton scraps and wood. “For Lenzing, developing circular business models in the fashion industry ensures the decoupling of business growth from pressure on ecological resource consumption. It reduces the need to extract additional virgin resources from nature, and reduces the net impact on ecological resources,” said Stefan DoboczkyRobert van de KerkhofPremier Vision textile fair in Paris, Refibra is the first cellulose fiber featuring recycled material on a commercial scale. Made from cotton scraps and wood during the TENCEL production process, the textile will solidify Lenzing’s reputation as a leader in the field of environmental fiber technology and is expected to push new solutions in the textile industry towards a more circular economy by recycling product waste. “The brand name Refibra and the claim ‘Reborn Tencel fiber’ illustrate immediately that this new kind of fiber is made of recycled materials promising reduced reliance on natural raw materials,” said van de Kerkof., CEO of Lenzing Group and , CCO of Lenzing Group. Launched at “Tencel itself is an environmentally responsible fiber of botanic origin. With Refibra, we add to the future of manufacturing and start to reassess waste as a resource. We will not stop our innovation before we are there. Lenzing is working for a better planet.” The company has simultaneously developed a new identification system that will assure consumers that the fiber is made from recycled material. The system will help to identify the Refibra fiber in the finished textile. This guarantees transparency in the overall processing chain. The Refibra fiber itself is part of the global Lenzing Branding Service and the brand is licensed once the textile has undergone a certification process.

Meanwhile, G-Star is making moves to create 100 percent Bluesign products in 2017. The company expects to have prototypes of its first line of Bluesign label products ready in the next few weeks, and a full line of products could launch as early as this year. The brand is currently in the process of ensuring that it uses all Bluesign components for the collection, from zippers and rivets to labels and lining. “We need to make sure that these components are sourced from Bluesign-approved suppliers and are produced according to Bluesign criteria,” said Sara Fessler, G-Star Raw’s Restricted Substance List and environmental specialist. “This is our challenge for this year.” Beginning in 2017, G-Star also plans to launch a new sustainable production innovation every other year. Fessler said the innovation will be based on either materials or washing levels — steps she said that will help close the loop in denim. G-Star combines Bluesign’s chemical usage guidelines with support from the ZDHC Foundation and its own individual action plan, which entails a team of technical engineers working with G-Star’s 28 key suppliers to clean up their chemistry. The company joined Bluesign in 2013, allowing the sustainability solutions provider to set its standard for responsible chemical use. In 2015, G-Star teamed up with Calik, the first Bluesign denim mill, and together produced the first Bluesign-approved denim fabrics, which came onto market in 2016. “We believe we are on the right path. And we’re working hard to constantly improve our processes.” Said Fessler. “Our mission is blue. We’re pioneers in denim and we’re one-of-a-kind and we take up the challenge to detox our denim processes and the industry.”

Finally,Patagonia minimizes microfiber pollution continues its war on microfiber pollution with new initiatives that will educate consumers about the harmful effects of synthetic apparel. The apparel company’s consumer engagement plans include tips about synthetic garment care and the launch of Guppy Friend, an eco-friendly machine-washing bag that from laundry cycles.

With each purchase of a synthetic apparel product from Patagonia, consumers will receive tips about synthetic garment care, which apply to all forms of synthetic clothing — not just Patagonia products. The universal tips – which includebuying high-quality apparel, washing more sustainably and using a fiber filter device for laundry — aim to help consumers reduce the shedding of microfibers in the wash and ultimately out of the Earth’s main watersheds.

According to Patagonia’srecent study with researchers from the University of California, Santa Barbara, a low-quality, generic-brand fleece sheds more than Patagonia’s products. The company urges consumers to buy higher-quality apparel, so they may use garments longer and minimize their personal impact on the planet. Patagonia also urges consumers to only wash their garments occasionally and spot clean if possible to remove stains. As illustrated through previous Patagonia research, synthetic jackets washed in top-load washing machines shed over five times as many microfibers as the same synthetic jacket in front-load washers. To minimize the number of microfibers transported from washing machines, Patagonia suggests consumers use front-load washers for more sustainable laundry cycles.

Consumers are also advised to use a fiber filter bag to reduce the flow of microfibers in drains. To promote the use of fiber bags, Patagonia will begin offering consumers the Guppy Friend sustainable fiber bag at cost. The bag filters out 99 percent of microfibers released during washing, which allows consumers to remove microfibersbefore they move to waterways. Developed by a German-based Patagonia partner, the Guppy Friend will enable consumers to drastically reduce microfiber pollution with washing machines.

Launched in 2006, Sustainable Brands has become a global learning, collaboration, and commerce community of forward-thinking business and brand strategy, marketing, innovation and sustainability professionals who are leading the way to a better future.

(Source: Sustainable Brands,

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20 Key Figures and Facts about Fashion Industry in the UK

The fashion industry in the UK has always been a major business, and has been well-recognised as a form of soft power in the global market, making the country one the world’s most influential players in fashion designing, manufacturing, retailing and even fashion education. According to the latest report from the British Fashion Council (BFC), the British fashion sector directly contributed £28 billion ($ 35.2 billion) to the UK’s economy in 2015, with over 880,000 people employed by the industry in roles varying from manufacturing to retail.   Here are some shocking figures and facts about the fashion industry in the UK     1 .The total export value of the UK’s textile and fashion products is over £6.5 billion a year.   2. The total import value of the UK’s textile and fashion industry is over £24.3 billion a year.   3. The total sales of footwear, including men’s and women’s, reached £10.3 billion in 2015, up by 6.5% year on year.   4. The sales of luxury goods in the the UK topped £32.2 billion in 2013, and is forecasted to reach £51.1 billion in 2019.   5. Next PLC is currently the largest fashion company in the UK, valued at £8.5 billion in 2015, followed by Marks & Spencer and Arcadia Group.   6. Burberry is the top luxury fashion company in the UK. The iconic British fashion brand has a market value of £5.8 billion pounds, with revenues of about £2.5 billion a year.   7. The menswear market is the fastest growing segment in the UK’s fashion industry, reached £14.1 billion sales in 2015, grew by 4.1% from previous year, compared to 3.7% growth in womenswear in the same year.   8. The womenswear market in the UK recorded £27 billion sales in 2015, and is expected to hit £32 billion in 2020, marking a 23% growth in the five-year period.   9. Total fashion accessories sales in the UK reached £2.7 billion in 2015, increasing by 3.4% from 2014   10. In 2015, over half of the female population in the UK purchased a handbag.   11. The UK is the world’s leader in fashion education with 6 of the world’s top 20 leading fashion universities.   12. The UK spent £57.7 billion on garments, footwear and fashion accessories in 2015. This figure is expected to grow by 12.89% from 2015 to 2020.   13. Online shopping for fashion items in the UK totaled £12.4 billion sales in 2015, increasing by 16% from the previous year. This figure is projected to reach £19 billion by 2019.   14. Clothing and footwear are the most popular products purchased online, representing 29% of the total online spending in the UK.   15. Online footwear sales in the UK increased by 17% in 2015, representing the biggest sales growth across the whole fashion industry in that year.   16. In 2014, 8% of women over age 55 bought clothes online, while this figure had a massive leap to 59% in 2015.   17. London Fashion Week, a vital showcase for the UK’s industry and talent, is one of the ‘big four’ international fashion festivals in the world, and has an audience of over 35 million across different channels and platforms every year.   18. Over £100 million worth of orders are placed during London Fashion Week each season, of which over 70% of the purchases come from abroad.   19. London Fashion Week (#LFW) was mentioned 503,404 times on Twitter and tagged 113,348 times on Instagram during 2016’s spring and summer show.   20. Consumers in the UK have an estimated £37.2 billion worth of unworn clothes in their closets.  

Sources: British Fashion Council, The Telegraph, LFW

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Cotton Production in the US sets to Rise in 2017

Cotton industry in the US has always been an important contributor to the country’s economy. As one of the top three cotton producing countries in the world, the US benefits from its enormous cotton planting area in southern and western states, including Texas, California, Arizona, Arkansas, Louisiana and Mississippi. In fiscal year of 2015-16, the total cotton production in the US totalled 12.9 million bales, declined from previous year’s 16.3 million bales. But with the expanding cotton area planned in the country, the cotton production in the US is expected to rise in 2017.   According to the prediction of the International Cotton Advisory Committee (ICAC), the cotton planting area in the United States is expected to expand by 10% to 4.2 million hectares in 2017-18, following a season of higher than expected yields and stable cotton prices. The average yield was up by 12% to 958 kg/ha in 2016-17, which means the production is likely to reach 3.7 million tons by 2017. In 2017-18, production is estimated to increase by 7% to 4 million tons or 14.3 million bales, based on the assumption of an average yield at 935 kg/ha.   Texas is currently the biggest cotton producing state in the US, and its leading position is expected to continue through 2017 as over 200,000 acres extra planting area has been planned for cotton production. Georgia is set to remain as the second largest cotton producing state this year, despite the cotton planting area here will not have a big change. The increasing planting area for cotton production in 2017 has also been reported in North Carolina and Alabama.   When it comes to the cotton export, the USDA suggests that the US cotton export is expected to hit 11.5 million bales in 2016-17, increased by over 13 %, due to expectations for higher U.S. exportable supplies and relatively tight foreign stocks outside of China. With this rise on the cotton export, the United States is likely to account for over 34% of the world trade share in 2016-17, up from 27% in 2015-16, this is also the highest share since 2010-11.   Currently, the major challenges faced by the cotton production in the US are the increasing production costs of labour and land, as well as more and more fierce competition for resources and producing lands with other agricultural crops such as corn and soybeans. To improve the cotton market, the US cotton production is pursing the higher yields mainly driven by the R&D of technological progress, such as greater adoption of bio-tech cotton and seeking substantial potential for cotton production to grow.

SOURCE: International Cotton Advisory Committee

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Global Kidswear Market on the Rise

The global kidswear market is booming, and is becoming one of the most profitable businesses in the global market. According to statistics from Business of Fashion (BOF), the global kidswear market scooped total sales of US$145.6 billion in 2015, up from $131.1 billion in 2010. As for the market size, the global kidswear market is expected to reach a value of $173.6 billion by the end of 2017, growing at a CAGR of more than 6% by 2020, making it one of the fastest growing segments in the global fashion and apparel industry.   The kidswear market maintained steady growth during the period of global economic crisis, and was recalled as “the perfect text book case for a market pattern” by fashion intelligence company Fashionbi, due to its impregnability from economic dynamics and temporary fashion trends. BOF suggests that the growth of the kidswear market is mainly driven by demographic shifts in birth rate and the increasing purchase power of parents across the globe.   Spending on children’s clothing is also increasing, although the amount spent annually can have a huge difference from household to household. According to Mat Bodimeade’s article on the children’s wear market. The average family spends $107.28 on children’s clothing every year. Interestingly, the average spend on girls is $123.79, and on boys is $90.77. Households with an income under $10,000 spend an average of $24.67 on boys’ clothes and $49.75 on girls’ clothes, while households that earn $70,000 or above spend an average of $167.04 on boys’ clothes and $216.57 on girls’ clothes.   Currently, Europe and the U.S. are the largest consumers of children’s wear, due to the growth in double income earning families and a working population with increased purchasing power.   Meanwhile, the kidswear market in Asia Pacific is expected to have a higher growth rate than the one in Europe and the US, thanks to its booming middle classes with increasing disposable income and the rapid expansion of international brands launching their childrenswear lines in the region. In 2015, the Asia Pacific childrenswear market topped $47.3 billion and is projected to reach about $70 billion by 2020. Brands such as Uniqlo, Adidas, Nike and H&M are among the top ten childrenswear brands for market share in Asia Pacific.   Interestingly, social media and the influence of celebrity offspring have been playing increasingly vital roles in driving global kidswear sales over the recent years. BOF reports that social media influencers like Farouk James, a four-year-old childrenswear model whose Instagram account has totalled around 159,000 followers, are potentially driving parents around the world to spend more on kidswear.

SOURCE: BOF

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Trump Trade Speculation Adds Uncertainty to an Already Fragile Industry

NEW YORK, United States — These days my phone has been ringing a lot. Every day brings news of big changes in Washington, and both brands and retailers are anxiously trying to make sense of what it all means for them.

It’s not a secret that the apparel industry has taken a beating lately, one that — in my opinion — may be irreversible. The last thing retailers need is an unfavourable tax code or sky-high tariffs, but that’s just what is coming out of the Republican party and the new Administration.

For those not familiar with the proposed tax overhaul, here’s the part that has everyone so nervous:

The Border Adjustment Tax would drop overall corporate taxes to 20 percent, down from the current 35 percent. And revenue associated with exports would be exempt from taxation. Sounds good, however, all costs of goods sold (COGS) associated with imports would no longer be deductible from a company’s income. This means that companies could end up paying an extra 20 percent tax on the cost of all their imports, including those originating from free trade areas or those that include US content.

Let’s do some simple math. Let say a company earned $10 million in revenue on $7 million of imported garments, and it had an additional $2 million in overhead costs. Based on today’s tax structure, this company would pay 35 percent on its $1 million profit or $350,000.

Based on the new tax, this company can only write off its overhead, making its tax liability 20 percent of $8 million, for a total of $1,600,000 in tax liability.

In this case, this company would have a tax bill larger than its total profit, which leaves three alternatives: 1) the company goes out of business, 2) the company raises its prices and passes the increase onto its consumers, or 3) the company starts making its product back in America.

With retail in such a highly deflationary and promotional cycle, I can’t imagine any companies being able to raise their prices enough to absorb such high increases. But returning production to America would be even more of a challenge — it would be next to impossible to reshore apparel manufacturing. The costs are too high, and we lack the labour, the capacity and the raw materials… to begin enumerating a very long list.

That’s why apparel associations and individual corporations have been lobbying to stop the border tax. And it’s not just our industry — this Border Adjustment Tax would negatively impact a wide variety of consumer goods categories. If Congress were to take a serious look at the hard realities, they would quickly see that a law they’re trying to pass to help the US economy would actually end up tanking most companies based here.

While at one point Trump was against the Border Adjustment Tax, it’s unclear where the White House stands now. The president seems more focused on an increased tariff on products coming out of China. But as the largest exporter of apparel, this also puts unnecessary pressure on the industry’s supply chain.

The only way for brands and retailers to protect themselves and prepare for any substantial change in tax or trade policy is to stay on top of the news, work with their local politicians and join associations like the AAFA, USFIA and AAPN. These groups support organisations that are working in Washington to represent the best interests of our industry. Finally, retailers and brands must have a diversified supply chain or risk being overexposed in one market.

Other than these small forays into activism, we have to wake up and conduct business as usual. Our jobs may be getting harder, but one thing is certain — we will all be wearing clothes a year from now.

SOURCE: BOF

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