Strong rupee & weak trade to affect textile exporters
Farmers return to BT cotton after experiment with desi variety fails
Kids' fashion takes big steps in e-sales
How MapmyIndia is charting a new course with GST-based IoT devices
India joins S African ‘Blankets for Madiba’ initiative
1,200 overseas buyers visit Home Expo 2017
Burkina Faso cotton output to rise in 2017-18 season- Industry official
Bangladesh: Demand for better price of RMG products
US retailers closing shop at alarming rate
Textile and apparel exporters' earnings and EBITDA margins will be impacted in the near term due to the Indian rupee's 5 per cent appreciation against the dollar in 2017 year to date and weak apparel imports from markets such as US and UK, says a recent report. The on-going strength of the INR vs USD constrains the price competitiveness of textile exporters.
Apparel exporters' value-added garments mix, partially hedged forex exposure, debt-light structure and reasonable liquidity support the overall business and financial risk profile, according to India Ratings and Research (Ind-Ra). Furthermore strong domestic foothold of large spinners and weavers will mitigate any major impact on their business and credit risk profile.
Unabated strengthening of INR vis a vis USD in the current calendar year has added to the challenges of the textiles industry. Ind-Ra had highlighted in the report ‘Stable Input Prices, Fiscal Incentives to Support Textile and Cotton in FY18’ the muted performance in 3QFY17 due to high cotton prices (17 per cent higher prices yoy), demonetisation and slow global trade. The easing of liquidity over February – March 2017 propelled a recovery in production output and export volumes; however Ind-Ra believes export realisations will get dented due to the strong rupee.
More than 70 per cent of Indian textile and apparel exports are dollar denominated. Strong INR vs USD is likely to have an adverse impact on the export trade volumes and earnings, since fresh export orders will have reduced competitiveness. As on date, INR has strengthened by more than 5 per cent in 2017, while there has been negligible or a favourable movement of 1 per cent, 0.5 per cent and -1 per cent for major competing nations namely China, Bangladesh and Vietnam respectively.
Ind-Ra estimates that INR realisations will shrink by 3-5 per cent in the near term and hence would impact the profitability of the companies across the textile value chain. Ind-Ra believes that this may offset some of the gains which will accrue from the government of India's export stimulus package, GST implementation and USA's exit from the Trans Pacific Partnership.
Ind-Ra believes that export-oriented apparel manufacturers with unhedged receivable positions will hurt the most, due to their geographically concentrated (US and Europe) earnings profile, low market share and restricted bargaining power with their global clients. Ind-Ra expects EBITDA margin erosion of around 150bp yoy in 4QFY17.
Earnings and EBITDA margins of Ind-Ra rated large spinners and weavers will be relatively less impacted due to their diverse earnings profile, coupled with cost and quality leadership of their products. While domestic demand has recovered from the negative impact of demonetisation, however strong cotton prices coupled with increased price competitiveness of imported yarn and fabric will pressurise margins. Thus balance sheet deleveraging over FY17-FY18 may not be met fully, due to the likely shortfall in operating profits.
Source: Fibre 2 Fashion
After the experiment with the desi cotton failed to bear fruits, farmers are returning to the BT cotton in the next kharif season.
While there is no taker for the desi cotton seed available with the government agencies, the BT cotton seed is being sold at a premium in the open market, as the seed is not available with the Haryana Seeds Development Corporation.
The farmers say due to high demand, BT cotton varieties were being sold at premium rate by the private seed sellers in the open market. On the other hand, they said, there were no takers for the desi varieties.
“The farmers prefer three varieties of BT cotton— 773, 776 and US 21. Due to high demand, the seed traders have been manipulating the market to create a shortage. Though some unscrupulous elements succeeded in selling these varieties at a premium of Rs 200 per packet above the MRP, the market has stabilised now and these vareties are also available at the MRP of Rs 800,” says a seed trader in Hisar.
Anil Kumar, assistant marketing officer of the Haryana Seeds Development Corporation, says the desi varieties are in low demand this time. “Just 120 packets have been sold till. Last year, I had sold 1,400 packets,” he says, maintaining that the corporation will make some varieties of BT cotton available to the farmers soon.
Farmers say good BT cotton crop in the last kharif season had turned the farmers back to these varieties, as desi cotton was not even able to recover the input cost.
Zile Singh, a farmer from Bir Babran village who sowed desi cotton last time after he lost the BT cotton to the whitefly two years ago, said he was returning to BT cotton this time again.
Source: Fibre2Fashion
As children are online from a very early age, fashion brands for children are increasingly turning to ecommerce platforms. And for the latter, kids' fashion has become one of the fastest growing categories within fashion.
When women fashion brand Chemistry launched a brand for girls aged between 7 and 15 two years ago, they launched exclusively on Amazon. It has since launched on other e-commerce platforms, including Myntra and Jabong.The brand, Chemistry Girls, wanted to reach a wider audience and test the market before setting up physical stores.Amazon India said the number of units of kids' fashion sold and the number of customers buying kids' fashion in the first quarter of 2017 were both twice that in the same period last year. Children are getting influenced by what they see online. They have access to the internet and they want newer styles.While the children in this age group might not all be online, their parents would all be in their 30-40 age bracket and more comfortable shopping online. So it made sense for us to launch online first. Also, there is no capital cost," said Sunil Jhangiani, owner of the Mumbai-based brand.The girls, he says, have a mind of their own, and they want to look hip and can convince their parents on what to buy for them online. Denims and T-shirts with cool graphics on them are particularly strong, he says.
"With 35% of our custom ers buying kids' fashion new to apparel purchases on Amazon, it is expanding the overall fashion business of the company ," Arun Sirdeshmukh, head of Amazon's fashion business, told TOI.
Flipkart says kids' fashion has been the highest growing segment in the fashion category in the past few years. Rishi Vasudev, head of Flipkart Fashion, said the space grew at more than twice the growth of the overall lifestyle segment for Flipkart last year and currently contributes close to 10% of apparel sales. "We have a lot of labels brands that are exclusively on Flipkart and are doing extremely well. Izod kids is exclusive with us. We have special lines of collection from Disney, Chemistry, 612 League and other character merchandise (Marvel, Avengers, Shiva, Jungle Book) which are only available on Flipkart," Vasudev said.
For kids' brand Mothercare, which has a significant presence offline, the online space now contributes to more than 10% of revenue."We have seen a 50% jump in online sales in 2016-17 and in a couple of years, online revenue should contribute to 20% of overall revenue," said Timmy Sarna, MD of DLF brands, which runs Mothercare.Mothercare sells on platforms like Amazon, Jabong, and has 95 stores across 20 cities.
Kids' wear brand Gini & Jony saw a 100% growth in online revenue in 2016-17. Online contributed 3.5% of revenue in 2015-16, this rose to 10% last fiscal. "Customers were very price conscious earlier. But now, the brand has become important for the customer, the price doesn't matter. If a pair of jeans was priced at Rs 2,000, they would hope to get it online for Rs 1,000. Now, the average ticket size is equal in both online and offline," said Prakash Lakhani, CMD of Gini & Jony.
Radio taxis are dependent on good quality maps, so are e-commerce firms that need to have the exact address so that the delivery boy knows where to hand over the package. The online travel agent again needs to lay his hands on maps with the minutest of details to make the going smooth for his customer. As India goes increasingly online, MapmyIndia, which pioneered digital mapping in the country way back in 1992, is creating digital solutions including GPS-based IoT devices and location-based enterprise SaaS suitable for Indian businesses and citizens. Already, companies such as Ola, Avis, Idea, Flipkart, Amazon, Ola, Uber and the State Bank of India use MapMyIndia technologies integrated into their offerings.
RealView is one such solution. Touted as a rival to Google’s Street View, it aims to create a digital twin of the real world, with a virtual recreation of India. “It will be an all-India map of the outdoor and indoor, in 360-degree and 3D, highly accurate and updated live, available in all local languages, captured from the ground as well as skies where each place and object is given a unique, simple, standardised identity, that we call eLoc,” said Rohan Verma, executive director and chief technology officer, MapmyIndia, adding, “eLoc code hopes to be for addresses what Aadhaar is for people.”
The maps and navigation systems provider has also announced partnerships with government and private agencies, such as Indian Space Research Organisation (ISRO), Idea Cellular, Reverie Language Technologies, in order to expand its product offerings and consolidate its position in this niche sector. Take for instance, MapmyIndia’s partnership with Bengaluru-based Reverie Language Technologies. Collaborating on the existing MapmyIndia platform, they have localised India’s largest repository of digital map data on a new language-based intelligent keyboard app, with map intelligence and assistance integrated, called Hey Map.
“This effort should enable all Indians to benefit from map and location information, regardless of the language, app or website they are comfortable using,” he said. He added that it will allow users to enter MapmyIndia’s new eLoc solution, which shortens and simplifies confusing long Indian addresses into six alphanumeric characters into the address input field of any app or website, be it an e-commerce, taxi or food delivery app, and help in enabling accurate and efficient doorstep directions, deliveries and drop-offs across the country.”
MapmyIndia and ISRO have joined hands to build an indigenous solution for space, ground and satellite mapping and navigation technologies. As such, the space agency’s satellite-based mapping portal Bhuvan, indigenous satellite navigation system NAVIC,and MapmyIndia’s maps have been integrated for a mapping solution. MapmyIndia has built a fisherman and Coast Guard alert app to help prevent fishermen from straying beyond Indian waters through the tracking and geo-fencing features in its Map app.
There’s an innovative solution for street light automation too, made in collaboration with Aatapaha, which specialises in street light automation and associated services. Also referred to as CCMS (Centralised Control and Monitoring System), it runs on GPRS technology and connects to a server application that records events and energy data for each feeder point in the city.
“As we look to the future of India and MapmyIndia, we are focused on creating maps so advanced they mirror the real world and build location technologies so powerful that they can leapfrog India to the forefront of the digital world. Our business is strong and fast-growing, with a CAGR of 40% YoY during the last decade,” said Rakesh Verma, managing director and co-founder, MapmyIndia.
SOURCE: Financial Express
India will join the UK and the US to spread out thousands of blankets, knitted in memory of Nelson Mandela, in major South African cities this week as part of a global initiative to help needy and disadvantaged people.
The blankets will be distributed to charities after being spread out on Sunday as part of the ’67 blankets for Madiba’ project initiated by South African philanthropist Carolyn Steyn in 2014.
In India, the project is being spearheaded by Rani Thomas at St Theresa’s College in Cochin. Thomas is the proud holder of a Guinness World Record for the World’s Largest Crochet Blanket. She is also the Indian
Ambassador for the ’67 blankets for Madiba’.
Steyn took up the challenge of knitting 67 blankets on Nelson Mandela Day, never expecting that the project would become an international venture where 27,000 blankets were distributed to those in need.
India wrested the Guinness honour from South Africa in 2016 with a blanket measuring 17,000 square metres.
“Throughout the year people from all walks of life, including prisoners and school goers pour care and compassion into their knitting, stitching the country together one stitch at a time,” Steyn said.
“67 Blankets has changed my life and many lives. It has become my raison d’etre. What I have learned over the past three years is the importance of alliance, partnership, friendship and relationships embodying trust, respect, kindness and common purpose,” Steyn said.
“None of what we have collectively achieved would have been remotely possible without these elements. And
together with our friends in countries like India we have achieved some great things, Steyn added.
On Sunday, there will be a family “Hook-Up” Day where KnitWits, as the participants who crochet the blankets are popularly known, will gather in most major South African cities at the foot of the statues of Mandela (fondly known as Madiba) to spread out the blankets they have knitted before they will be handed out to charities ahead of the harsh South African winter.
In the UK, the event will take place at the bust of Nelson Mandela near the Royal Festival Hall in London, while the events in the US will take place in the states of California, Maine and Maryland. (PTI)
SOURCE: Tecoya Trend
Around 1,200 overseas buyers, buying agents and their representatives, including domestic retail volume buyers visited the 6th edition of Home Expo India 2017 at India Expo Centre & Mart in Greater Noida.
Home Expo India has taken shape over six editions as a strategic sourcing platform to meet India’s leading
manufacturer exporters of home textiles, furnishing, furniture, houseware and decorative and allied products as well as artisans and craftspersons from select craft concentration regions, Rakesh Kumar, Executive
Director, EPCH, said today.
Companies from various countries, including the US, Germany, Japan, came to source their requirements from the show. Domestic retail volume buyers also visited the three-day show, which concluded today, to source the requirement from exhibitors who were ready for retail sale during the show.
Ajay Shankar Memorial awards for best designed and displayed marts were also distributed to the participants in three product categories.
Africa’s top cotton grower sees output rising by as much as 20 percent in the 2017-18 season.
An industry official in Burkina Faso said cotton output will surge to 820,000 metric tons and added that the target is realistic and achievable if rains are favorable and well distributed over the season.
According to Bloomberg, Georges Yameogo, general secretary of the country’s cotton association, told reporters this on Saturday in the capital, Ouagadougou.
Burkina Faso harvested 683,000 tons of cotton in the 2016-17 season, which was below the target of 700,000 tons due due lack of rains in September. This is still 17 percent higher than the 586,000 tons harvested in the 2015-16 season, Georges revealed.
The price for the new season was set at 245 CFA Francs ($0.40) a kilogram up from 235 Francs the previous season.
SOURCE: Africa News
Economists Prof Rehman Sobhan and CPD Distinguished Fellow Dr Debapriya Bhattacharya speak at a seminar marking the fourth anniversay of Rana Plaza tragedy in Dhaka on Sunday Rajib Dhar
'The country’s garment sector operates in a deeply unjust global value chain where a $5 shirt made in Bangladesh is sold at $25 at Wal Mart stores or at much higher prices in countries such as Sweden"
Bangladesh economists and manufacturers urged the international buyers to deconstruct the current value chain of Bangladeshi apparel products to ensure better price.
“The country’s garment sector operates in a deeply unjust global value chain where a $5 shirt made in Bangladesh is sold at $25 at Wal Mart stores or at much higher prices in countries such as Sweden,” said eminent economist Prof Rehman Sobhan.
“Where exactly does the $20 go? Is this a natural working of the market mechanism or a manifestation of an unjust global order?,” he questioned while addressing a seminar styled as “Catalysing social dialogue in the RMG sector of Bangladesh” held at hotel in Dhaka on Sunday.
Centre for Policy Dialogue (CPD) and International Labour Organisation (ILO) jointly organised the event marking the fourth anniversary of Rana Plaza tragedy.
Distinguished Fellow of CPD Debapriya Bhattacharya moderated the discussion while Secretary of Ministry of Labour and Employment (MoLE) Mikail Shipar, Vice-President of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) Mahmud Hasan Khan Babu, President of National Garments Workers Federation (NGWF) Amirul Haque Amin and Secretary General of Bangladesh Trade Union Shangha (BTUS) Chowdhury Ashiqul Alam spoke, among others.
Rehman Sobhan said the current business model forces suppliers to squeeze their workers as much as they can as they would have to produce the shirt within $5.
“Unless there is a major investigation of professional nature, political nature and in the end of the day international nature, the Oxfam and Action Aid, and everyone has to join together to deconstruct the value chain,” he added.
Former President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Fazlul Haque said: “Selling a product by $5, we, the manufacturers have to give all the detail information how the price comes at $4.95 not $4.75, what is the costing of factory, what is the costing of labour, what is my profit; each and everything, that buyers called, ‘open costing’.”
“I would like to request the international buyers only one thing: just mention in your products tag that the selling price of the product is $25, while the buying price was $3 or $4 or $5. I think, if you (buyers) can do this, all the problems will be solved regarding unjust value chain,” he said.
BGMEA Vice President Mahmud Hasan Khan Babu said the buyers threatened Bangladeshi manufacturers to shift their sourcing in other competitor countries, while they demanded a just value chain.
According to a study on “Prices and Development in the Global Apparel Industry: Bangladesh in Comparative Perspective”, prices of men and boys cotton trousers exported to the US market declined by 40.89% in the last 14 years.
Mark Anner, associate professor at the Penn State University, conducted the study.
SOURCE: Dhaka Tribune
Credit Suisse says there is more than twice as many closures this year compared to the same period last year.
American retailers are closing stores at a record pace this year as they feel the fallout from decades of overbuilding and the rise of online shopping.
Just this past week, women’s apparel chain Bebe Stores said it would close its remaining 170 shops and sell only online, while teen retailer Rue21 announced plans to close about 400 of its 1100 locations.
“There is no reason to believe that this will abate at any point in the foreseeable future,” said Mark Cohen, the director of retail studies for Columbia Business School and a former executive at Sears Canada.
Up to April 6, closings have been announced for 2880 retail locations this year, including hundreds of locations being shut by national chains such as Payless ShoeSource and RadioShack. That is more than twice as many closings as announced during the same period last year, according to Credit Suisse.
Based on the pace so far, the brokerage estimates retailers will close more than 8600 locations this year, which would eclipse the number of closings during the 2008 recession.
At least 10 retailers, including apparel seller Limited Stores, electronics chain Hhgregg and sporting goods chain Gander Mountain, have filed for bankruptcy protection so far this year. That compares with nine retailers that declared bankruptcy, with at least $US50 million ($66m) liabilities, for all of 2016.
The seeds of the industry’s current turmoil date back nearly three decades, when retailers, in the throes of a consumer buying spree and flush with easy money, rushed to open new stores. The land grab wasn’t unlike the housing boom that was also under way at that time.
“Thousands of new doors opened and rents soared,” Richard Hayne, chief executive of Urban Outfitters, told analysts last month. “This created a bubble, and like housing, that bubble has now burst.”
The over-storing, including the influx of fast-fashion and off-price chains, resulted in a brutally competitive landscape that made it difficult for retailers to raise prices. “A pair of men’s dress pants costs less today than they did a decade ago,” Manny Chirico, chief executive of Calvin Klein and Tommy Hilfiger parent PVH, said recently.
As retailers rushed to expand their physical footprint, the internet was gearing up to do to apparel companies what it had already done to booksellers: sap profits and eliminate what little pricing power these chains commanded.
Despite the view that shoppers prefer to try on clothing in physical stores, apparel and accessories are expected this year to overtake computers and consumer electronics as the largest e-commerce category as a percentage of total online sales, according to eMarketer.
Helena Cawley, 37, said she used to be a “diehard” department-store shopper. But with two small children, the Manhattan entrepreneur doesn’t have time to visit physical stores the way she once did. “I buy much more online now,” she said. “With free returns and free shipping, it’s so easy.”
But that shift has come at a high cost to retailers. It is less profitable to do business online than in a brick-and-mortar store, largely due to the higher shipping, customer acquisition and technology costs of the digital world. Retail margins on average fell to 9 per cent last year from 10.5 per cent in 2012, according to consulting firm AlixPartners.
Over that period, e-commerce sales increased to 15.5 per cent of total sales from 10. per cent.
The internet has also made it easier for consumers to comparison shop, thereby erasing any pricing leverage retailers may have had. “The internet has acted as the great price equaliser,” said Joel Bines, the co-head of Alix’s retail practice.
To be sure, retailing has gone through shake-outs before, whether it was the superstores such as Wal-Mart Stores, Target and Kmart that killed mom-and-pop shops, or category killers like Barnes & Noble and Toys “R” Us that did the same to smaller booksellers and toy chains.
And even today, there are chains that continue to grow, such as off-price retailer TJX, which is opening hundreds of stores under its Marshalls, T.J. Maxx and HomeGoods banners, as it steals market share from Macy’s and other department stores.
“This is not the end of retailing as we know it,” Mr Bines said. “People are not going to stop going to stores.”
Others have given up waiting for a recovery that seems always out of reach and are settling into what appears to be the new normal. “We’re planning as if the environment is not going to improve,” Jerry Storch, chief executive of Saks Fifth Avenue and Lord & Taylor parent Hudson’s Bay, told analysts earlier this month.
SOURCE: WSJ
