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MARKET WATCH 12 JULY, 2017

NATIONAL

INTERNATIONAL

As GST kicks in, concerns about core inflation rise (ET)

Indians have started paying more for items ranging from movie tickets to cholesterol tests, thanks to the new goods and services tax, and that raises the prospect the central bank will grow more cautious about cutting interest rates deeply. 

Increases in charges for services, if sustained, threaten to push up core inflation, which excludes food and energy prices. Nomura estimates the annual core rate could rise as much as 60 basis points.

Although headline inflation slumped to 2.18 per cent in May, its lowest since a new series was adopted five years ago, core inflation has stubbornly stayed above 4 per cent for years. 

Statements from the Reserve Bank of India's monetary policy committee have cited core inflation as a key reason for keeping rates on hold at 6.25 per cent since October, given concerns it will spill over into broader prices and threaten the RBI's target of 4 per cent headline inflation.

An acceleration could make the central bank extra-cautious in reducing rates at a time many analysts believe the economy, weakened by over-leveraged banks and tiny private investment, could handle cuts of up to 50 bps instead of the single 25 bps trim expected at the next review in August. 

"Given that the long-term target is to have inflation at 4 per cent on a durable basis, the central bank is bound to exercise some caution while assessing core inflation," said A. Prasanna, economist at ICICI Securities Primary Dealership in Mumbai. "Therefore we can expect just one more rate cut."

India will post June inflation data on Wednesday, with the headline rate expected to ease below 2 per cent, though the core one is likely to stay around 4 per cent. 
 

EXECUTIVES FRET 
Under GST - India's biggest tax reform in the 70 years since independence from British colonial rule - tax rates for services have been broadly raised. 

The health-care sector is exempt from GST, but people taking cholesterol tests face higher charges, as clinics are passing along their higher input costs. Other services are directly impacted by GST; moviegoers in some places are paying up to 32 per cent more for a ticket.

Higher costs for services are meant to be offset by lower tax rates for goods such as food products, and the government has said it expects the GST to have a "broadly neutral to disinflationary impact" in prices. 

In practice, much remains uncertain about how individual businesses will respond. Executives in the services sector say they may be unable to offset the higher taxes through lower costs or by trimming profit margins.

Deepak Sahni, founder of Healthians.com, a medical test provider, said despite healthcare's exemption from GST, he is forced to raise test-costs at least 7-8 per cent due to taxes on inputs and equipments. 

"We operate on a thin margin," he said. "It's not possible for us to fully absorb this hit. We have to pass on the higher costs to consumers."

WORRIES OVERBLOWN? 
Although analysts broadly agree that core inflation is bound to accelerate, the RBI's repeated concerns about it have been controversial in markets. To the analysts, sluggish economic growth means that core inflation is unlikely to spill over and raise headline inflation.

India's gross domestic product had annual 6.1 per cent growth in January-March, the lowest since late 2014 - a factor that analysts say will keep prices in check given wage pressures are subsiding, output gap is declining and private credit is slow.

"Given the actual inflation level and the reality in terms of excess capacity, dismal credit growth and very low pricing power, the RBI's concerns on core inflation might be exaggerated," said Soumya Kanti Ghosh, chief economist at State Bank of India.

SOURCE: The Economic Times

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GSTN helpdesk gets 10,000 calls/day; to double manpower to 400

The GSTN helpdesk is inundated with calls, 10,000 a day to be precise, with queries ranging from "how do I register?" to the age old problem of forgotten passwords even as the government is on overdrive to create awareness about the new GST regime.

Such is the load that GST Network is looking to double its call centre strength to 400 agents in two weeks to help it handle queries related to filing returns, which is scheduled to commence from September.

GST Network (GSTN), the company building the IT backbone for the biggest indirect tax reform, had on June 25 opened a call centre and publicised the 0120-4888999 helpline number to help tax payers with enrolment related queries.

While over 69 lakh excise, VAT and service tax payers had already migrated to the GSTN portal earlier, as many as 4.5 lakh new tax payers have come on board. The Goods and Services Tax took effect from July 1.

The GSTN expects more businesses and traders to register or migrate to the GSTN platform.

"We are getting 10,000 calls per day at the call centre from tax payers. We plan to double the number of agents manning the call centre to 400 within 2 weeks so that we are in full strength at the time of return filing," GSTN Chairman Navin Kumar told PTI.

The most common problems which are being addressed by the Noida-based call centre pertain to enquiries on registration with the GSTN or logging to the portal, password recovery and problems relating to uploading of documents.

Besides, many businesses want to know how to generate the Temporary Reference Number (TRN) as well as the process for uploading digital signature certificate.

In case the agents are unable to handle a query, it is referred to a supervisor. For very complex enquiries, experts from GSTN step in to resolve the problem.

Kumar said the issues are mostly local and sometimes relate to the computer of the caller. The helpdesk also provides assistance by sharing video and tutorials with businesses or traders.

"We are now hiring agents who are adept in both tax and technology. These agents mostly have a finance or tax certification degree. Also they are being trained so that they know the GST law," Kumar said.

GST has simplified a complex web of indirect taxes in the country by unifying 17 different taxes including excise, VAT, octroi and service tax.

SOURCE: Business Standard

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Why India must have a new textile policy

We need a national textile policy document, an articulation much like the national telecom policy of 1999

India’s textile sector, covering everything from fibre to garments, has the second-largest employment after agriculture, employing an estimated 32 million workers. It has the potential to double this employment in the next seven years as per the vision document of the union textiles ministry. It is a sector which not only provides livelihoods to millions of households, but is a storehouse of traditional skills, heritage, and a carrier of heritage and culture too.

Artisans, weavers, handloom workers are custodians of designs and skills which they have been inheriting and bequeathing for ages. This is also a sector which is undergoing a huge churn due to automation, digital printing and the relentless rise of e-commerce. All these three developments threaten to completely change the face of this industry. What is India’s strategy to ride this disruptive wave? Should we leave it to free market forces to determine who survives, who prospers, who innovates and who perishes? Surely not.

We need a national textile policy document, an articulation much like the national telecom policy of 1999, which was a game changer, and led to the upsurge of India’s telecom revolution, An equally imaginative, bold and futuristic blueprint is urgently needed. The last official national textile policy is from 17 years ago. The one prior to that was in 1985. Talk of a new policy has been in the works for several years. We do have a vision document for 2024-25, from which we got the employment numbers quoted at the beginning of this column.

Consider this. The world operated under a patently unfair quota system called the Multi Fibre Agreement (MFA), which shackled the growth of India’s textile and garment exports. The MFA was dismantled completely in 2005 and India was supposed to surge ahead. Instead we have lost steam. India’s share of textile exports in total exports, at 12%, is half of what it was in 1996. If you think that’s not so bad, because other sectors like petrol and diesel went from zero to 20% of export share, think again!

Bangladesh’s garment exports exceeded India’s in absolute terms back in 2003. Today it exports more than $35 billion worth of garments, twice that of India. Indeed, there are Indian entrepreneurs who have set up operations in Bangladesh for exports to Western markets. Even late starter Vietnam overtook India in 2011, and now exports garments worth $32 billion. The fact that these two smaller nations have preferential access to the European Union and US markets doesn’t quite explain their huge lead over India. Their growth in exports has been at 20% per year, against India’s 8%. In overall textile trade globally, India has a share of merely 5%, against China’s 39%. In the sub-segment of synthetic fibres, India’s share is just 2%, against China’s 66%.

While India has a rich mix of synthetic and natural fibres and yarns, including cotton, jute, silk, polyester and viscose, it remains a cotton-focused country. The presence of cotton in yarn, fibre, fabric and garments is close to 70% of usage within India, which is also reflected in exports. Only 30% is from synthetics and man-made fibres. The global trend is exactly the obverse, i.e. 70% consists of man-made fibres. So India’s domestic and export mix is the opposite of global fashion and demand trends.

Till recently, thanks to the Chinese government’s support for stockpiling cotton yarn, India was also finding it profitable to export raw cotton to China. The inverse skew of fibre usage in India is due to the skewed tax treatment. Until the roll-out of the goods and services tax (GST), the cotton value chain was completely free of indirect taxation. Whereas the man-made fibre suffered a dead-weight tax of 12% excise, which resulted in unutilized VAT (valued-added tax) credit in the chain. That anomaly was supposed to be removed by uniform GST treatment for the textile sector. Instead of a fibre-neutral policy, we have a dual GST structure, with 18% GST on upstream, and 5% on all downstream, leaving an inverted duty structure. In addition, the offsetting credits cannot be used to get a refund by downstream entities.

This has already led to much disruption, as can be seen in shutdowns or strikes in powerloom clusters such as Surat, Bhiwandi or Coimbatore. Some of this is because of the reluctance of the informal sector to step into the limelight of the formal sector with GST. But some of it is also because of the effect of inverted duties and the disallowing of GST refunds.

The other big factor looming large on the sector is the overhang of excess capacity in the fibre and yarn sectors in China. That causes a downward pressure on prices and the flood of imports also remains a constant threat. With rising wages in China, the labour-intensive garment sector is perhaps moving out, and represents a great opportunity for India. But unless that is grabbed soon with a coherent and holistic national policy, we run the risk of losing to countries like Vietnam.

Textiles, along with agriculture, construction and tourism, has large-scale job creation potential. It is a sector dotted with small and medium enterprises, which make up 80% of the units. It is ideally positioned to be a poster child for Make In India. But it needs a national policy and implementation plan, which can address these challenges: changing consumer and fashion trends, a significant demand for investment and modernization of machinery, massive skill upgradation, meaningful export incentives, a fibre-neutral tax policy, a big digital push in design and automation, and lastly, meeting the needs of the e-commerce phenomenon. It’s a tall order, but surely we can untangle this web.

SOURCE: Livemint

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Farmers worried as cotton yield may be hit this year due to poor rains

Even as farmers seem inclined to bring more area under cotton this year, they fear a decline in yield due to deficient rainfall in major growing areas during the last three weeks.

The India Meteorological Department (IMD) forecast this year's monsoon, like last year's, to be normal. But, despite being a normal monsoon in terms of the long-period average (LPA), distribution remained a worry last year. While the middle, northern and eastern parts of India received above normal rainfall, the western and southern parts remained deficient. Experts have started fearing a repeat of last year, with reports of deficient rainfall in large cotton-growing regions.

Farmers' fears of lower yields this year assume significance as they had achieved record productivity and got better prices last year despite lower acreage. Encouraged by last year's realisation, farmers have slowed down the speed of cotton sowing after over 50 per cent increase in acreage early this season.

"While the Cotton Advisory Board (CAB) is likely to come out with cotton output forecast, we are estimating 10 per cent increase in acreage with an output of 350 lakh (35 million) bales this year," said Kavita Gupta, Textiles Commissioner, Ministry of Textiles, Government of India, on the sidelines of 65th National Garment Fair here on Monday.

Stagnating Cotton yield despite increase in area

Crop year (Oct-Sept)

Area (lakh ha)

Output (lakh bales)

Yield (kg/ha)

2010-11

111.42

339

517

2011-12

121.78

367

512

2012-13

119.78

370

525

2013-14

119.60

398

566

2014-15

128.46

386

511

2015-16

118.77

338

484

2016-17

105.00

351

568

2017-18

-

350

-

Source: Cotton Advisory Board, CottonCorporation of India; 1 bale=170 kg

Arun Dalal, a large city-based cotton trader and exporter, said, "The crop is projected to get delayed by at least a month and the yield prospect also seems to get affected due to a delay in sowing. Strong enquiries have been reported from the northern region, though a delay in upcoming crop may prompt immediate bargains. The demand of cotton has been good. Therefore, cotton prices may rise further and may sustain the prevailing range of Rs 42,500-44,500 a tonne.

Meanwhile, private weather forecasting agency Skymet had reported a four per cent surplus rainfall in June. But, it has forecast July to remain rainfall-deficient. "Rains over most parts of interior Maharashtra, Telangana, Andhra Pradesh, interior Karnataka and Tamil Nadu will remain subdued for the next 4-5 days. Gujarat, Rajasthan and western parts of Haryana and west Madhya Pradesh will also see scanty rains only," Skymet said in its latest report

Meanwhile, data compiled by the Ministry of Agriculture showed sowing area under cotton rose marginally to 7.2 million hectare (ha) by July 7 compared to 6.8 million ha by the same time last year.

"Rainfall during July and August are crucial for Indian agriculture. Hence, we will have to wait until the end of August before making any firm assessment on agricultural output this kharif season," said Madan Sabnavis, Chief Economist, Care Ratings.

Fears of started mounting in for re-sowing of cotton seeds in the areas where rainfalls remained deficient so far this season and crops damaged thereupon.

Meanwhile, farmers have increased sowing of cotton. During most period of last year, cotton prices remained above the minimum support price (MSP) unlike the case of oilseeds and pulses which continued to trade below the MSP almost throughout the season. Prompted by last year's realization, farmers have increased their cotton sowing area by a staggering 45 per cent so far this season.

Data compiled by the Cotton Advisory Board (CAB) under the Ministry of Textiles showed India's cotton yield at a record high last year at 568 kgs per ha compared to 484 kgs per ha for the previous year due to favourable climatic condition. The yield, however, remained abysmally higher than that of 566 kgs per ha received in 2013-14.

SOURCE: Business Standard

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Rising rupee to squeeze export margins: CRISIL

The appreciation of the rupee against the dollar in recent months might have dented the profitability of exporters during the June quarter, credit rating agency CRISIL said on Tuesday.

This held especially true for companies that sourced locally and had limited pricing power while those having natural offsets such as sizeable imports or foreign currency loans and currency hedges would be less affected, CRISIL said.

The rupee has since January risen by more than five per cent against the dollar to close at 64.54 on Tuesday. A weaker currency is an advantage for exporters and makes imports, foreign travel and education more expensive.

An analysis of the largest 10 export-oriented sectors from CRISIL’s rated portfolio shows leather, textiles, meat, seafood and basmati rice are the most vulnerable to a stronger rupee.

Foreign currency losses for these exporters were estimated at 200-300 basis points (bps) of net sales during the June quarter taking into account the 4 per cent rupee appreciation, CRISIL said.

For pharmaceuticals and agrochemicals, the impact would be lower at 150 bps, given their imports provided a partial hedge, CRISIL said. For the gems and jewellery sector, exports largely matched imports, leading to minimal impact, it added.

The information technology (IT) sector will be the least affected, given the extensive hedging practiced there, but the extent of hedging in terms of time period will determine the impact on individual companies.

“A majority of exporters have weathered the forex storm so far. Any significant rise in the rupee will impact credit profiles of exporters in the vulnerable sectors,” said Anuj Sethi, senior director, CRISIL. Exporters rated below ‘BBB-’ (moderate safety) are vulnerable to challenges on both the demand and supply sides.

Demand-side issues include the information technology, pharmaceuticals and leather sectors facing pricing pressure or sluggish demand in major markets like the US and the EU.

Supply-side issues such as the ban on cow slaughter have squeezed margins in the leather and meat industries.

"The worst is still to come. With the currency appreciating at a fast clip, competitiveness of Indian goods will go down," said Ajay Sahai, director-general of the Federation of Indian Export Organisations.

Major exporting sectors such as engineering products, readymade goods and automobiles are expected to come under pressure.

However, with the Merchandise Exports from India Scheme covering nearly 8,000 product categories, chances of further support are slim. Under this scheme, the government provides duty benefits to exporters at two, three and five per cent, depending on the product and country exported to.

SOURCE: Business Standard

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Govt procurement through GeM helps 20-30% cut in prices: Sitharaman

Procurement through the Government e-Market (GeM) platform has led to a 20-30 per cent reduction in prices compared to before, Commerce & Industry Minister Nirmala Sitharaman has said.

The Central and State governments procure goods and services worth over Rs. 5 lakh crore annually, and the GeM could help in saving a considerable amount of tax-payers money, the Minister said at a national consultative workshop for States on Tuesday.

“If that is the quantum of taxpayers’ money being spent on procurement of goods for the government, there needs to be an open and transparent process and therefore bringing it on board a platform like this (GeM) is absolutely important,” she said. GeM was launched in August 2016 to serve as a dedicated e-market for different goods & services procured/sold by government/PSUs.

On Tuesday, five States and a union territory including Gujarat, Arunachal Pradesh and Telangana inked MoUs with GeM for smart procurement of goods and services.

Through this agreement, the States would put in place a mechanism for smooth implementation of GeM framework.

The Minister said she was glad that GeM was being recognised as the national e-procurement portal. Most importantly, the sellers do not have to run from pillar to post to get their payment, which is made within 10 days of the delivery of goods.

Over 300 senior level officers handling procurement activities in state departments such as finance, treasuries, IT & e-governance, general admin, industry & commerce, women & child development (WCD), food, board of revenue and other departments that have major procurement activities are participating in the two-day workshop.

More than 250 major vendors on GeM are also expected to attend.

SOURCE: The Business Line

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FAQs on export and FTP related issues of GST

http://dgftcom.nic.in/exim/2000/DGFT-GST-FAQ.pdf

SOURCE: DGFT

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The tweets received by ask GST_GoI handle were scrutinized and developed into a short FAQ of 100 tweets.

http://www.cbec.gov.in/resources//htdocs-cbec/gst/tweet-faq.pdf

SOURCE: CBEC

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INTERNATIONAL

Bangladesh export grows at snail's pace in 2016--17 fiscal year

Bangladesh exports grew at a snail's pace in the just concluded 2016-17 (July 2016-June 2017) fiscal year, showing few signs of speeding up in the new financial year.

Exports inched up 1.69 percent to nearly 35 billion U.S. dollars in the 2016-17 fiscal year, an official from Export Promotion Bureau (EPB) told Xinhua Monday.

"2016-17 fiscal year export reached 34.83509 billion U.S. dollars."

With 3.04 billion U.S. dollars export earning in June this year, down 15.27 percent over the same period a year ago, the EPB official who did not like to be named said the country's overall export earnings in the immediate past fiscal year also fell short of the target of 37 billion U.S. dollars by 5.85 percent.

Bangladesh's export income in the previous 2015-16 fiscal year (July 2015-June 2016) was registered at 34.24 billion dollars.

As always the growth in 2016-17 fiscal year largely attributed to demand for ready-made garment industry though the country's main export engine performed poorly in the immediate past year.

According to the official, knitwear garment export grew 3.01 percent to 13.76 billion U.S. dollars while woven garments fell 2.35 percent to 14.39 billion dollars in the 2016-17 fiscal year, comparing with the same period of previous fiscal.

Growth in earnings from garment exports, which make up more than three fourths of the country's annual incomes since the beginning of this decade, hovered 15--20 percent.

But in the recent years ready-made garment (RMG) manufacturers remained in export doldrums.

The EPB official said, many other traditional major exportable items, like frozen foods, jute, footwear, home textiles, leather and leather products, did not perform well in the last fiscal year.

"Multifarious adverse conditions in international market have created slight pressure on RMG export," Bangladeshi Finance Minister AMA Muhith said.

Of the two major export destinations, Muhith said export to the European Union has improved significantly.

"I believe export to the U.S. market will also increase considerably with accelerated economic recovery in the United States," said Muhith in his budget speech last month.

The United States is by far the largest destination for Bangladesh's garment exports.

Bangladesh's apparel exports to the U.S. in 2016 reportedly declined 1.96 percent year-on-year to 5.49 billion dollars due mainly to the volatile U.S. economy and its presidential election.

Thanks to its cheap labor force, Bangladesh is now the world's second largest garments exporter following China, producing global brands for customers around the world.

The country's garment industry has been severely criticized for safety concerns and labour unrest over rock-bottom wages in recent years.

SOURCE: XinhuaNet

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Turkish Trade Center to Open in NYC Garment District on July 18

Istanbul Ready-Garment Exporters' Association (İHKİB), which provides 75 percent of Turkey's ready-to-wear export, has opened Turkish Trade Center in coordination with Turkish Exporter's Assembly (TİM) in New York in the region in the "ground zero" of the fashion world. The 4,000-square-foot showroom will operate at 10 East 34th Street in the heart of New York's garment district.

Ten different Turkish brands and manufacturers' showrooms will be organized at the center, targeting American fashion and ready-to-wear companies. Brands and manufacturers will exhibit their different products from street fashion and maternity clothing to from women's knitwear and denim. Company representatives will directly be reachable at the center where newly designed products will also be exhibited.

New York–Turkish Trade Center, will introduce the center by opening its gates for the press and potential customerson July 18. In addition to executive director of the board of directors from İHKİB, Hikmet Tanrıverdi; assistant chief, Mustafa Gültepe; and board members, executive directors of the Turkish Brands, and manufacturer companies will also be present at the opening.

Tanrıverdi underlies that Turkish ready-to-wear industry proved itself all around the world as the most important base of quality production. "Today, Turkish ready- to- wear sector is the 6th biggest provider in the World. We were among the important providers in the U.S market in the beginnings of 2000s. But in time this power of ours has eroded. Now again we initiate an another successful attempt with our designs, collections and brands at U.S. which is the biggest ready- to-wear importer of the world. We are going to evaluate the potential at this big market by presenting Turkish quality design and fashion products to the appreciation of the consumers.

"The research, analysis we have done support this view of ours," Tanrıverdi continued. "I believe that American consumers will know and appreciate the Turkish ready-to-wear fashion and design products from very different categories in a short period of time."

SOURCE: Apparel.edgl.com

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Fashion mergers and acquisitions, like a crop top, is hard to pull off

Mergers and acquisitions for fashion retailers are like a crop top t-shirt: A risk best braved by a select few and avoided after a certain age.

Abercrombie & Fitch Co, the teen brand with a 125-year heritage, became the latest to demonstrate that on Monday, ending talks about a potential sale after failing to agree terms with potential suitors.

Successful deals in the mercurial world of US fashion are rare, and now look even less likely to succeed as sales dip across the board. Cost savings can be counterproductive if it means squeezing money out of marketing and design, and buyers are taking a risk on a style that can easily go out of favor.

As a result, established brands like Abercrombie are having problems finding a saviour. "Often, as well as spending the money to buy the brand or business, you then have to spend more to do something strategic that will propel growth, and that means paying out twice before getting a return," said Neil Saunders, managing director of market research firm GlobalData Retail.

Five of the 20 companies involved in the biggest private equity apparel deals of the last decade have been restructured or gone bankrupt. All struggled under the debt load of a leveraged buyout. The biggest acquisition, Apollo Global Management's roughly $3.1-billion leveraged buyout of Claire's Stores Inc, restructured in 2016.

The second-largest acquisition, J Crew Group Inc, which TPG Capital and Leonard Green & Partners bought for about $3 billion, is now being restructured. Gymboree Corp filed for bankruptcy last month, seven years after Bain Capital's $1.8-billion purchase.

Many US fashion bosses are finding they have no option but to consider a sale as pressure mounts from more affordable fast-fashion chains from Europe such as Zara and H&M , and customers abandon malls in favor of Amazon.com Inc and other online retailers.

Outerwear brand Eddie Bauer, for example, is exploring a sale while also seeking relief from its debt load, sources have told Reuters. Teen brand American Apparel explored a sale last year before ultimately filing for bankruptcy.

As Abercrombie's experience shows, finding a willing buyer at the right price is difficult.

"Public company board members are reticent about green-lighting large-scale mergers and acquisitions because it's hard to find a good example of a business that has been rewarded by the equity market for doing so," said Rohit Singh, who specialises in retail at UBS Investment Bank, not speaking specifically about Abercrombie.

Struggling retailers are a tough sell to potential acquirers. Merging with another company risks double the trouble - more brands falling flat and more stores bereft of customers.

Most fashion retailers are locked into store leases, and as landlords watch their malls empty out, they are increasingly unwilling to give their tenants and easy path out.

"Perhaps the reason the Abercrombie deal didn’t get done was that they’ve got way too many stores in way too many malls that don’t make any money, and the cost to unwind those pieces and get out of those stores is just too great to compensate for the upside," said Mark Belford, a retail specialist at KPMG Corporate Finance.

After failing to strike a deal, Abercrombie now has no choice but to go it alone. On Monday, the New Albany, Ohio-based retailer said it will focus on its growing surf-wear brand Hollister and try to reposition its flagship brand, which has reported falling quarterly sales since 2014.

Sinking rocks

The most successful acquisitions have been those of younger brands, which have room for growth and have yet to develop expensive supply chains and costly, little-used store bases.

Gap Inc's $150 million purchase of athletic and yoga clothing line Athleta Inc in 2008, for example, gave it a foothold in a growing fashion trend. The acquisition helped save Gap when sales of its jeans slowed as shoppers shifted to leggings.

Apparel retailers which bought rivals in the hope of finding growth or eliminating competition have found little payoff.

“Oftentimes, the companies themselves aren't growing, so it doesn't solve the underlying challenge," said Josh Chernoff, managing director, retail at consultant Parthenon-EY. "If you tie two rocks together, they sink just as fast or faster." The changing winds of fashion derailed Wolverine Worldwide 1.2-billion acquisition of boat shoe maker Sperry and other brands in 2012, several of which Wolverine tried to sell this year.

Shoppers’ addiction to discounting crushed Men's Wearhouse Inc's $1.8-billion acquisition of rival Jos. A Bank, the value of which was almost written off. The suit retailer's sales plunged after it abandoned its famous "buy-one-get-three-free" specials in the wake of the 2014 merger.

Ascena Retail Group Inc, one of the few serial acquirers in US apparel, has been laid low by its roughly $2.1 billion acquisition of Ann Inc, parent of work-wear line Ann Taylor.

The 2015 acquisition was meant to give it a full portfolio of womenswear brands and enable it to cut $150 million over three years in costs as it centralised the different lines’ internet infrastructure, distribution and manufacturing.

But sales for all its brands have dropped, most recently a combined 8 percent in the third quarter of 2017. Ascena's market value is now $400 million, roughly 85 per cent lower than before the deal.

"Fashion is not something you can solve with math," said Belford. "Fashion - you either get it or you don't, and it either sells or it sits on the shelf."

SOURCE: Reuters

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Green Method Developed for Making Artificial Spider Silk

A team of architects and chemists from the University of Cambridge has designed super-stretchy and strong fibers which are almost entirely composed of water, and could be used to make textiles, sensors and other materials. The fibers, which resemble miniature bungee cords as they can absorb large amounts of energy, are sustainable, non-toxic and can be made at room temperature.

This new method not only improves upon earlier methods of making synthetic spider silk, since it does not require high energy procedures or extensive use of harmful solvents, but it could substantially improve methods of making synthetic fibers of all kinds, since other types of synthetic fibers also rely on high-energy, toxic methods. The results are reported in the journal Proceedings of the National Academy of Sciences.

Spider silk is one of nature's strongest materials, and scientists have been attempting to mimic its properties for a range of applications, with varying degrees of success. "We have yet to fully recreate the elegance with which spiders spin silk," said co-author Dr. Darshil Shah from Cambridge's Department of Architecture.

The fibers designed by the Cambridge team are "spun" from a soupy material called a hydrogel, which is 98 percent water. The remaining 2 percent of the hydrogel is made of silica and cellulose, both naturally available materials, held together in a network by barrel-shaped molecular "handcuffs" known as cucurbiturils. The chemical interactions between the different components enable long fibers to be pulled from the gel.

The fibers are pulled from the hydrogel, forming long, extremely thin threads - a few millionths of a meter in diameter. After roughly 30 seconds, the water evaporates, leaving a fiber which is both strong and stretchy.

"Although our fibers are not as strong as the strongest spider silks, they can support stresses in the range of 100 to 150 megapascals, which is similar to other synthetic and natural silks," said Shah. "However, our fibers are non-toxic and far less energy-intensive to make."

The fibers are capable of self-assembly at room temperature, and are held together by supramolecular host-guest chemistry, which relies on forces other than covalent bonds, where atoms share electrons.

"When you look at these fibers, you can see a range of different forces holding them together at different scales," said Yuchao Wu, a Ph.D. student in Cambridge's Department of Chemistry, and the paper's lead author. "It's like a hierarchy that results in a complex combination of properties."

The strength of the fibers exceeds that of other synthetic fibers, such as cellulose-based viscose and artificial silks, as well as natural fibers such as human or animal hair.

In addition to its strength, the fibers also show very high damping capacity, meaning that they can absorb large amounts of energy, similar to a bungee cord. There are very few synthetic fibers which have this capacity, but high damping is one of the special characteristics of spider silk. The researchers found that the damping capacity in some cases even exceeded that of natural silks.

"We think that this method of making fibers could be a sustainable alternative to current manufacturing methods," said Shah. The researchers plan to explore the chemistry of the fibers further, including making yarns and braided fibers.

Source: Google News

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