AEPC Apparel India EAI 01 | Issue 11

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APPAREL EXPORT PROMOTION COUNCIL MAGAZINE

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AppArel / Chairman’s Message

Dear Friends,

T

he year 2019 has started on a good note, with exports recording a growth of over 26 per cent (in rupee terms) in the last quarter - raising hopes of a higher growth

trajectory this year. The industry has also got a shot in the arm from some positive policy announcements. I am thankful to Ministry of Finance for including merchant exporters in Interest Equalization Scheme. This decision will benefit over 2,800 apparel merchant exporters who can now avail of lower packing credits. The decision of the GST council in its 32nd GST council meeting to increase the threshold limits for exemption from Registration and Payment of GST from Rs. 20 lakh to Rs 40 lakhs will also help many small job workers in the apparel value chain. Similarly, increasing the Turnover Limit for the existing Composition Scheme upto 1.5. cr will also provide operational ease to many smaller manufacturers. Vietnam is expected to get preferential access in Peru, Mexico & Canada under CPTPP this year. This will increase

production and export enhancement strategies. Since

the competition for Indian garment exporters as India

many of them are high value products with very high

does not have preferential access in these countries yet,

global demands, I see this as an important opportunity

although, India is negotiating with Peru and Canada for

to diversify our export basket. I invite your comments

trade agreement. We request government to fasten the trade

on a product development strategy that can help in

agreements with Peru and Canada and explore the feasibility

developing capacities and a good supplier base for

of India- Mexico trade agreement. The Council is working

some of these products in a time bound manner.

with NITI Ayog and Ministries for optimizing our trade with old partners like Russia and FTA partners like Japan.

Competitiveness strategies are about positioning too. India is uniquely positioned – not only as one of

In order to remain competitive, the Indian garment

the largest suppliers, but also as a responsible sourcing

industry will have to develop capabilities to tackle both

destination. Recognising this fact, AEPC has signed an

larger volume orders and manage rapid turnaround with

MOU with Marks and Spencer’s for promoting Gender

short lead times for diverse fashion garments. Scales

Equality in the apparel sector. Under this programme

and product development are key to growth for an

AEPC will support Marks and Spencer’s in capacity

economy like ours. AEPC is working towards enabling

building of apparel units in respect of workforce

our members to move to new products - specially in

sensitisation, trainings on gender equality, POSH issues,

the technical textile segment. The Ministry of Textiles

awareness on laws pertaining to violence against women

has recently identified 207 HSN codes for technical

and functional Internal Complaints Committees. Our

textiles. This includes 12 apparel products which are

calendar for this year also takes this message forward.

presently being traded under traditional textile products. This identification will help in developing focused

Happy 2019! n HKL Magu, Chairman, AEPC

APPAREL EXPORT PROMOTION COUNCIL MAGAZINE

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C O n T e n T s

04 | the broadCaSt

India’s Ready-Made Garment (RMG) Export Update for FY (April-December) 2018-19

05 | the broadCaSt

India’s Textile & Ready Made Garment (RMG) Update for Index for Industrial Production (IIP) for FY (April-November) 2018-19

CHAIRMAN AEPC Mr. HKL Magu CHAIRMAN EP Mr. Sudhir Sekhri

06 | aEpC aCtiVitiES

AEPC signs MoU with Marks & Spencers, India for equal workplaces

10 | aEpC EVEntS

Seminar on AEO Program, Trade Facilitation Agreement & Currency Risk Management organised by AEPC

ADVISOR AEPC Mrs. Chandrima Chatterjee PUBLISHER Apparel Export Promotion Council Apparel House, Sector-44, Institutional Area, Gurugram, HARYANA – 122003. Phone: 0124-2708000 www.aepcindia.com

12| marKEtS

Printing Press: VIBA Press Pvt. Ltd. C-66/3, Okhla Industrial Area, Phase-II New Delhi-110020 e-mail: info.vibappl@gmail.com

Millennials to drive Chinese luxury market

28 | ConCErn

Deep-rooted concerns in textile industry needs attention to fast forward growth

30 | brand rEtail

Six new brands enter ‘Top 50 Valuable French Brands 2019’ ranking

33| brand rEtail

• Burberry works on its strategy to boost bottom lines • Uniqlo Japan’s profit to rise in H2 2019 • M&S’ UK to reshape product offerings

34| brand rEtail

• Retail sales grows highest in six years • Luxe brands focus on accessories to attract customers • Gap shuts down weaker stores to increase profitability

13| marKEtS

35| trEndS

Content & Design DFU Publications New Delhi Email: dfudelhi@yahoo.co.in

• Denim jeans market to grow at 8.5% by 2025 • Revenues for global winter wear to grow at 5.8 % CAGR

26 | luXury

• Global spandex market to grow at a CAGR of 8 per cent by 2023 • Robust growth expected for the global lingerie market

14 | CoVEr Story

Innovative trends to drive the fashion industry in 2019

18| tradE trEatiES

Ripples of impending Brexit to be felt across the globe

20| tradE trEatiES

• Vietnam becomes the seventh country to ratify TPP11 • UK explores both TPP and TPA with Japan • India seeks enhanced trade opportunites with Vietnam

21| tradE trEatiES

• Govt focuses on making India’s FTA more efficient • UK plans entry into both TPP and TPA with Japan • US seeks rules of origin for its trade agreement with EU

22| rEGional tradE Regional supply chains to determine future global textile, apparel trade

24 | priCES

Labor, input costs to push up global apparel prices in 2019

• Denim trends in 2019 to be influenced by consumer opinions • Under Armour returns to its roots with sportswear • Demand for yoga wear in US increases by 35.8%

36 | buSinESS

US: Apparel sales hit all time high this holiday season, inventory worries persist

38 | marKEtS

China to emerge the largest fashion market in 2019, beating the US

40| aEpC aCtiVitiES

Textile Ministry launches coffee table book on the industry

42| aEpC EVEntS

AEPC organises seminar on currency risk management and GST update

43 | EVEntS

Global Textile Expo 2019 & IND -TEXPO, 2019 held in Coimbatore

44 | rEtail

Online retailers adopt ‘click to brick’ strategy to augment business

46 | SuStainability

Sustainability Initiatives: Repair not replace gaining ground globally

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48| Sustainability

• Youth driven consortium increases upcycling among new designers and businesses • UK apparel brands plan to minimize waste • UK apparel brands plan to minimize wasteIncreased consumption creates millions of tonne of textile waste

49| Sustainability

• Recent British poll indicates consumers’ lack of trust in fashion brands • Lenzing ramps up recycling for Refibra • Americans seek transparency from clothing brands

50 | rEVIEW

700 international visitors mark their presence at IIGF 2019

52 | eventS

Upcoming The Fairyland for Fashion in Paris to attract 1,800 exhibitors

54 | eventS

• Pitti Bimbo to be held in Italy • Tommy Hilfiger’s next show to be held in Paris • Tommy Hilfiger’s next show to be held in ParisPure Origin London to showcase innovations and materials for AW21/SS22

55 | Compliance

• AAFA’s new guidelines for denim finishing facilities to create better industry • Oeko-Tex updates standards for use of chemicals in textiles and leather

56 | Infrastructure

• India creates a export promotion cell for a MSME enterprises • Retail sector likely to add 39m sq ft space by 2022 • Center for excellence for research and training opens in Tirupur

57 | MINISTRY NOTIFICATIONS 58| GSt Update 59| GSt Update 60 | AEPC EVENT CALENDAR

CALENDAR OF EVENTS 2019

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APPAREL / The BrOaDCasT

India’s Ready-Made Garment (RMG) Export Update for FY (April-December) 2018-19 India’s RMG Exports RMG exports were to the tune of USD 1374.3 million in December 2018 with the growth of 2.77 per cent against the corresponding month of December 2017, which was USD 1337.20 million. In rupee term export for the Month of December 2018 was ` 9720.59 cr. as against ` 8590.47 Cr. in December 2017 with the growth of 13.16 per cent. India’s RMG export to World in the April-December of 2018-19 was to the tune of USD 11350.44 mn. which has decreased by -8.35 per cent compared to the same period of previous financial year. During April-December 2017-18, India’s apparel exports were to the tune of USD 12384.72 mn. india’s rmG Export to World month

fy 2017-18

mom Growth of 2018-19 over 2017-18 (%)

fy 2018-19

in inr Crore in uS$ million in inr Crore in uS$ million

inr

uS$

April

11272.24

1747.44

8859.67

1349.81

-21.40

-22.76

May

10342.55

1605.37

9040.63

1338.57

-12.59

-16.62

June

9979.57

1548.59

9202.63

1357.46

-7.79

-12.34

July

8262.94

1281.95

8757.23

1274.83

5.98

-0.56

August

8552.24

1336.95

8986.67

1292.18

5.08

-3.35

September

10704.85

1661.19

7967.69

1103.32

-25.57

-33.58

October

5401.86

830.02

8327.42

1130.95

54.16

36.26

November

6719.85

1036.01

8112.46

1129.02

20.72

8.98

December

8590.47

1337.20

9720.59

1374.30

13.16

2.77

Total

79826.57

12384.72

78974.99

11350.44

-1.07

-8.35

Source: DGCI&S, Kolkata, 2018

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APPAREL / The BrOaDCasT

India’s Textile & Ready Made Garment (RMG) Update for Index for Industrial Production (IIP) for FY (April-November) 2018-19 indEX of induStrial produCtion manufacture of textiles month

mom Growth rate (in %)

manufacture of wearing apparel

mom Growth rate (in %)

2017-18 2018-19 2018-19/2017-18 2017-18 2018-19 2018-19/2017-18

april

116

114.2

-1.6

155.5

134.6

-13.4

may

116.7

116.1

-0.5

156.8

136.8

-12.8

June

116.4

115.5

-0.8

145.2

151.6

4.4

July

116.4

119.8

2.9

134.2

147.3

9.8

august

116

125.1

7.8

121.4

144.3

18.9

September

115.2

121.4

5.4

118.8

143.6

20.9

october

113.5

120.5

6.2

106.3

136.1

28.0

november

117.7

112.0

-4.8

118.1

144.2

22.1

total

116

118.9

2.5

132

143.1

8.4

Source: CSO, 2019 Summary • Manufacturing of Textiles has shown a decline of -4.8% in November, 2018 and growth of 2.5% for the period of April-November, 2018-19 • Manufacturing of Wearing apparel has shown a growth of 22.1% in November, 2018 and growth of 8.4% for the period of April-November, 2018-19

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AppArel / aepc ACTIVITIES

Signing of the AEPC – Marks & Spencer, India MoU. Mr. HKL Magu (Chairman, AEPC ) and Ms. Nidhi Dua( Country Manager, M&S, India) signed the MoU

AEPC signs MoU with Marks & Spencers, India for equal workplaces

T

he Apparel Export Promotion Council of India and Marks & Spencers, India signed a Memorandum of Understanding on 3 January 2019 to explore avenues for working together on a program on Gender Equality through work place training. Through this collaboration, both the organizations have ground their support for the larger objective of creating just and equal workplaces, and in turn, equal societies and perception. The MoU is valid for three years, to start with. As custodians of the sector that employs the second largest work force in the country and a large women work force, AEPC is

well aware that it shoulders a huge responsibility in national development. Representing over 8000 Apparel exporters of the country who export garments worth 18 billion USD, they are proud providers of over 3 billion USD wages to women workforce alone. AEPC will use its massive outreach network to encourage Apparel export manufacturing units all over India to voluntarily join the program. AEPC will support the design and dissemination of the message. In the words of Chairman AEPC, “We look at this partnership with Marks & Spencer as a great opportunity to support the dissemination of such an initiative and help magnify the outcome to reach an 11.2 million workforce through our member exporters. I promise our unstinting support towards making this a countrywide movement.” To start with, the AEPC Annual Calendar of 2019 has been

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AppArel / aepc ACTIVITIES

Unveiling of AEPC 2019 calendar. Seen here from L to R are Mr. Anand( Change Alliance), Mr. Malhotra ( oASG, AEPC), Mr. HKL Magu ( Chairman, AEPC ), Ms. Nidhi Dua( Country Manager, M&S, India), Mr. Ranjeeb Sarma (Head of Compliance, CSR, Plan A & Administration,M&S India)

designed on this very theme and is a testament to the council’s unstinted commitment to supporting and promoting Gender equality in apparel factories of India. Apart from playing the role of a catalyst along with M&S to facilitate the program, AEPC would also help create awareness about this program (in consultation with M&S and implementing agencies) through outreach mechanisms including emails, hosting web banners on AEPC website, fortnightly e-blasts to its data base, social media campaigns, monthly features in the AEPC eMagazine, dedicated seminars and other events. Under Project POWER (Providing Opportunities to Women with Equal Rights), as it is rightly called, a very well structured program, led by Marks & Spencer, India, will be implemented by Change Alliance and Swasti Health Catalyst. The objective of the project is to have safe and enabling work space, happy workforce, which is aware, assertive, responsible and productive, leading to reduced attrition and absenteeism and benefit to factory as firms join and commitment to better work. This is basically a capacity building program

for apparel manufacturing units, covering workforce sensitization and training on gender equality, stereotypes, roles, behaviour and attitude (women and men both – workers and managers/ supervisors), capacity building of women and men (workers and managers/ supervisors) on sexual harassment at workplace (POSH), awareness on laws pertaining to violence against women (VAW) and gender based violence etc and functional internal complaints committees (ICC) and technology assisted grievance and management reporting systems, etc. It is expected to help the garment industry in India, to address gender issues (working with both men and women) and empower women to have the skills and confidence to take up leadership roles, contributing to a safe and gender equal society. The trainers shall implement the modules as per agreed methodology, implementation plan, eligibility criteria of garment factories and other related matters in consultation with M&S. Says Nidhi Dua, “We are very excited about M&S and AEPC partnering together to work on our Gender Equality program, POWER (Providing Opportunities to Women for Equal Rights). This program has been running successfully for the past two years in our factories and it has benefitted a number of stakeholders

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AppArel / aepc ACTIVITIES

including workers, factories and brands, it has also had a far reaching impact on communities. While we continue to run and scale this program to its next phase, we feel encouraged to share the program modules

and the knowledge gained with the wider industry for implementation and greater good. The support of AEPC and the vision of Chairman HKL Magu will give it the impetus, reach and impact.� Work is already underway on the project and the project will soon be rolled out. n

AEPC 2019 calendar based on the theme of Gender equality

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AppArel / aepc events

(L to R) Mr. HKL Magu, Chairman, AEPC, Mrs. Chandrima Chatterjee, Advisor, AEPC, Shri Rajesh Kothari, Joint Commissioner - Mumbai Customs, Mr. Ravi Kumar, Asst. Commissioner - Mumbai customs, Ms. Rachna Bhusari, VP-SME- NSE, Mr. Vivek Acharya, Sr. Manager – NSE & Mr Ankur Kapoor, AVP - Emkay Global

Seminar on AEO Program, Trade Facilitation Agreement & Currency Risk Management organised by AEPC

A

EPC organised a seminar on AEO Program, Trade Facilitation Agreement & Currency Risk Management, in association with Mumbai Customs & Emkay Global Financial Services on January 24, 2019 in Mumbai. HKL Magu, Chairman, AEPC elucidated on the current scenario in the garment industry. He highlighted that

that results in the last two quarterswas encouraging for garment industries. Although growth has slowed down due to the introduction of the GST, it is now going upwards. In future, India is likely to remain remain the favorite destination of many sourcing countries

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AppArel / aepc events

Ravi Kumar, Asst. Commissioner, AEO cell, Mumbai Customs Department gave a the power point presentation on authorized economic operator. Rajesh Kothari, Joint Commissioner, Mumbai Customs was also present at the seminar. Indian Customs Department signed two mutual recognition agreements with the Customs Administrations’ of South Korea and Hongkong. The department is negotiating future MRAs with United States of America and Taiwan. These MRA proposals have been forwarded to major trade countries in South East Asia like Malaysia, Singapore,

Thailand, Philippines & Indonesia. Additionally, few major regional economic blocks like East African Community have proposed MRA with India. These proposals are being earnestly studied and actively pursued. Exporters were also informed about the currency risk managementtools like hedging foreign exchange risk and were explainedabout the advantage of having hedging and how they can prepare a strategy to dodge that risk related to currency fluctuations. n

Participants at AEPC seminar in Mumbai

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AppArel / marketS

Denim jeans market to grow at 8.5% by 2025

T

is

to offer denim jeans products for athleisure and active wear

anticipated to grow at a healthy 8.5 per

he

global

denim

jeans

market

besides work wear and casual wear. Manufacturers are trying

cent from 2018 to 2025. The major driving

to adopt product differentiation to gain a competitive edge.

factors of this growth include rising disposable

The growth of the global denim jeans market is mainly bound

individual incomes, surging e-commerce

to various macro-economic and micro-economic factors. The

industry

for

major restraining factors of the global denim jeans market are

denim jeans. Manufacturers are adopting

changes in consumer lifestyles and the introduction of yoga

fiber technologies that have enabled them

pants and other active wear. n

and

increasing

preference

Revenues for global winter wear to grow at 5.8 % CAGR

R

evenues of the global winter wear market are expected to increase at a CAGR of 5.8 per cent during 2018

to 2027. Favorable trade policies, growing apparel production globally, rise in per capita income, favorable demographics, and shifting consumer preference to branded products will boost the demand for winter wear during the forecast period. Other key factors driving the growth of the winter wear market are population density, downstream industry effectiveness, and changing economic policies as well as business legislation. Abundant availability

of raw materials such as wool, silk, cotton, and others

customers. Manufacturers have also adopted various key differentiation

is another driver of the winter wear market.

strategies to have a competitive edge.

Companies across the globe are focusing on

Factors such as increasing population, rise in adoption of e-commerce

the launch of new products with latest fashion and

have led to a surge in the growth of the B2C. Consumers are seeking products

high quality along with expanding market presence

online. Growth of the global online sales channel along with a widening winter

through establishing new manufacturing facilities

wear product portfolio through new product launches is projected to further

as well as sales channels to reach potential

accelerate the growth of the global winter wear market. n

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AppArel / marketS

Global spandex market to grow at a CAGR of 8 per cent by 2023

T

he global spandex market is estimated to grow at a CAGR of more than 8 per cent from 2016 to 2023. The spandex

market is expected to grow with the recovery in the US economy post recession. Technology advancement with moisture management properties coupled with performance efficiency is likely to benefit this growth. Factors such as superior elasticity, regaining original shape, durability, lightweight, resistance to UV light are likely to favor spandex market demand. Increase in automobile production, particularly in the Asia Pacific, is also likely to drive this growth. n

Robust growth expected for the global lingerie market

R

ecent industry research has indicated

People and Stella McCartney, are making intimate wear

that the global lingerie market, fuelled

and changing the space that was previously dominated by

by the rise in the ‘HER Economy’ will

industry leaders like Victoria’s Secret.

reach $59.15 billion by 2024. The sector, in

The expansion of the intimate market is set to continue

2018, saw an ushered in era of functionality,

due to rising consumer demand across various sectors,

form and sustainable credentials. Brands

ranging from maternity to multifunctional intimates. With

now seek products that are functional,

this diversification, there is likely to be rapid technological

eco-friendly

Many

advancement in intimate wear production, with growing

fashion brands are also diversifying into

new technologies that support multiple functions in intimate

the intimate wear space. Labels like Free

wear catering to consumer needs. n

and

comfortable.

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AppArel / COVER STORY

Innovative trends to drive the fashion industry in 2019

A

recent report on State of Fashion 2019 by Mckinsey/ BOF predicts a lower growth rate of 3.5 per cent for 2019 over 4.5 per cent in 2018. However, this growth rate is likely to differ by geography and segment. The trends that will drive the fashion industry in 2019 are

Novelty through new products, business solutions A British survey revaled, an average person buys 60 per cent more clothes compared to 15 years ago. They are also retained for only half as long time. To maintain their novelty, brands need to respond quickly to changing trends, launch the right products and innovate their business models.

Technology, social media enable instant gratification According to a 2017 study, about half the respondents were influenced by bloggers, influencers compared to just 20 per cent placing faith on in-store assistants. To minimise the time between the want moment to have moment, players need to use technology solutions. Also, offline retailers need to promote products in-store with social/influencer credibility with real-time intelligence.

Big data solutions guarantee maximum returns With a potential slowdown in global economy by 2020, players will need to work on key areas to get maximum returns on invested capital. This can be achieved by using technology/ big-data to drive decisions along with human intuition.

Improving market relevancy through start-ups As per Mckinsey millennial survey, up-and-coming brands show high saliency and engagement in social media. Incumbents

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AppArel / COVER STORY

fashion brands to deliver customised services and to examine consumer’s preferences. More important, Artificial Intelligence has the capacity to play a complementary role in fashion design. With the help of AI, fashion designers can not only predict upcoming trends, dictated by current fast-changing environment of fashion, but also examine and minimise the environmental impacts in their production process.

Increase in sustainable need to build a way to stay relevant by learning how to think small, working with start-ups, building innovation bandwidth internally or through an incubator.

Exploring demand model through data analytics, automation Innovations in the data analytics and automation will enable players to explore “on demand� model of fulfilling demand. However, with the help of social media, consumers are establishing trends as opposed to brands and retailers. To retain their brand identity players need to induct data based demand sensing tools in the development process and nearshore products.

Artificial intelligence to deliver customised services Artificial intelligence (AI) aids brands to mine a big pool of data on any specific subject. This information can help

fashion projects More efforts and deep expertise will be devoted to developing projects that save animals from suffering for the sake of fashion all over the globe.Stella McCartney, a well-known vegan designer, has already implemented many innovative ideas and presented garments made in a laboratory. The material of the garment was similar to silk but made from natural materials.

3D printing in fashion 3D printing enables professionals to transcend any boundaries of design, as it gives

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AppArel / COVER STORY

them a chance to turn the most improbable projects into reality.3-D textile projects, implemented despite their overall complexity, combine different materials into one piece of cloth, for instance, waterproof textile with a flexible one, and so on. Another important trend, customisation helps in achieving fittings depending on individual parameters, such as size, height, etc. Surely adoption of tech in fashion brings more value than is visible.

Emerging methods of products’ access Today’s consumers seek innovative, sustainable and affordable products. To achieve many brands are resorting to resale and rental consumers are shifting away from traditional ownership to newer ways to access product.

Increasing transparency in brand operations Ongoing data breaches at apparel companies have fueled a rising distrust that brands and retailers will need to counter. They’ll need to ramp up transparency, in many cases, as McKinsey explained, by specifying

costs of materials, labor, transport, duties, and mark-up—a level of ‘radical’ transparency that has helped fuel success for companies like Everlane.

Self disruption emerges a major norm Technology and social media are enabling a new breed of ‘challenger’ brands that disrupt a sector or category where incumbent players have rested on their laurels. To compete and stay relevant among demanding young consumers, traditional brands are disrupting their own brands, offerings, and business models.

Brands to provide value added services E-commerce players will continue to innovate by adding profitable value-added services either through acquisitions, investments or internal R&D. They will strengthen their lead over those remaining pure players who rely solely on retail margins and existing offerings.

Delivering on-demand In 2019, more companies will step out to deliver on ondemand as many a startup in the space has already done. This will result in increase in just-in-time production, reduce levels of overstock and increase importance of small-batch production cycle.

Made-to-measure clothing, the future of fashion To cater to individual needs new made-to-measure business model will be the trend in future. Fashion brands

Social media has become a tool for showcasing lifestyles, express fashion tastes and promote selfconstructed images. The emergent of such digital mediums, in hand with the aid of Artificial intelligence (AI), has created a field of global data mining pools, from where marketers can investigate any imaginable subject, on any possible consumer segments. 16 / APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | February 2019 Apparel_February_2019_Gaurav.indd 16

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AppArel / COVER STORY

are tailoring each garment to customer’s size, body type and — in some cases — style preference. Businesses, such as Zozo and Red Thread, are using mobile technology to acquire a 3-D body scan for an accurately-sized garment, while others like Olivia Rose The Label -make their pieces, taking individual measurements and aesthetics into account.

Digital printing emerges as the future of commercial printing Conventional textile printing is giving way to digital printing inorder to accommodate short runs, fast turnarounds, or new products. The market is supported by a complex and well-established textile supply chain, of which printers are only a very small component. Commercial printers therefore, need to focus on more accessible textile segments similar to applications they already produce, such as textile-based sign and display graphics and direct-to-garment (DTG).

Textile signage market to grow Keypoint Intelligence – InfoTrends’ wide-format consulting service reports the market for soft signage is expected to see a compound annual growth rate (CAGR) of 6 per cent between 2017 and 2022, reaching 91.3 million square meters of output by the end of the forecast period.

Higher profit margins for soft signage applications Soft signage applications have higher profit margins in relation to most other commercial printing applications. Based on 2017 estimated street price of $60.2/m from InfoTrends’ Wide Format Application Forecast, PSPs can expect a profit margin in the range of 40 per cent to 60 per cent. These margins are difficult to find in commercial applications.

DTG printing to experience strong CAGR According to InfoTrends, the DTG market will experience a strong CAGR of 13 per cent between 2016 and 2021, reaching a global value of nearly $10 billion. This segment is also witnessing new developments. The use of synthetic fibers (eg, polyester) is growing leading suppliers to seek ways to print directly into these materials. The market recently introduced a new pigment-based technology that enables the printing of white ink, followed by CMYK. n

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AppArel / trade treaties

Ripples of impending Brexit to be felt across the globe

F

or the last two and a half years, Brexit has consumed the entire United Kingdom. The UK’s negotiations with the EU have dragged on, and the consensus is that the economic fallout will be felt far more acutely in Britain than in the EU, and elsewhere. Still, the rest of the world is facing profound challenges of its own. Political and economic systems are undergoing farreaching structural changes, many of them driven by technology, trade, climate change, high inequality, and mounting political anger. In addressing these issues, policymakers around the world would do well to heed the lessons of the UK’s Brexit experience.

UK to feel the pressure When Britian decided to leave the EU, experts predicted that the UK economy would suffer an immediate and significant fall in output following the 2016 referendum. However, Brexit was different. There was no immediate break in British-EU trade. In the absence of clarity on what type of Brexit would ultimately materialise, the economic relationship simply continued “as is,” and an immediate disruption was averted.

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AppArel / TRADE TREATIES

Tax and regulatory arbitrage are likely to become increasingly common as well. And economic policymaking will become a tool for addressing national security concerns (real or imagined). How this approach will affect existing geopolitical and military arrangements remains to be seen.

Uncertainty about economic growth The question therefore, is not whether the UK will face a considerable economic reckoning, but when. The UK economy is already experiencing slow-moving structural change. Foreign investment is falling contributing to the economy’s disappointing level of investment overall. Moreover, this trend is accentuating the challenges associated with weak productivity growth. Companies with UK-based operations have also begun to trigger their Brexit contingency plans after a prolonged period of waiting, planning, and more waiting. In addition to shifting investments out of the UK, firms will also start to relocate jobs. And this process is likely to accelerate even if British Prime Minister Theresa May manages to get her proposed exit deal through Parliament. The Brexit process thus provides a preview of what awaits an increasingly fractured global economy if this continues: In this context, costly self-insurance will replace some of the current system’s pooled-insurance mechanisms. And it will be much harder to maintain global norms and standards, let alone pursue international policy harmonisation and coordination.

Lastly, there will also be a change in how countries seek to structure their economies. In the past, Britain and other countries prided themselves as “small open economies” that could leverage their domestic advantages through shrewd and efficient links with Europe and the rest of the world. But now, being a large and relatively closed economy might start to seem more attractive. And for countries that do not have that option—such as smaller economies in East Asia—tightly knit regional blocs might provide a serviceable alternative. Brexit holds important lessons for and about the global economy. We live in an era of considerable technological and political fluidity. The outlooks for growth and liquidity will likely become even more uncertain and divergent than they already are. n

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AppArel / Trade Treaties

Vietnam becomes the seventh country to ratify TPP11

V

ietnam, recently became the seventh country to ratify the Comprehensive and Progressive Agreement for Trans-Pacific

Partnership, popularly known as TPP-11. The other six countries include Vietnam, Australia, Japan, Mexico, New Zealand, Canada and Singapore. Vietnam’s entry into the pack on January 14, 2019, creates an interesting dynamic in the cotton trade. Vietnam’s textile sector is burgeoning and is since 2013/14 when the export from the United States was about

in good need of cotton. In the last three seasons, Vietnam is the number

one million bales.

one importer of United States’ cotton. In the

Vietnam is followed by China in terms of U.S. exports, while other

2017/18 season, about 2.98 million bales (480

major importing countries are Turkey, Indonesia, and Pakistan.

lbs. each) were exported to Vietnam from the

Interestingly, Bangladesh is marching closely with Mexico in importing

United States. The export has more than doubled

U.S. cotton.n

UK explores both TPP and TPA with Japan

T

he U.K. is exploring entry into the Trans-Pacific Partnership as well as a free-trade agreement with Japan after it leaves the European Union at the end of March. The

India seeks enhanced trade opportunites with Vietnam

I

ndia is seeking investment opportunities in Vietnam. India is one of the major material suppliers to Vietnam’s garment and textile sector but trade value between the two sides remains

modest. The two sides have defined garment and textiles as a prioritised sector in bilateral ties. In the first 10 months of 2018, bilateral trade between the two countries increased by 47 per cent over the same period in 2017,

economic

bringing the countries closer to the target of 15 billion dollars in

partnership

two-way trade in 2020. Under the free trade agreement between

agreement between

India and Asean, most cotton and woven cotton fabric and knitted

Japan and the EU

fabrics imported from India will enjoy tax exemption from January

will take effect in

1, 2019, making India a competitive supplier of garment and

February,

textile materials and machines for Vietnam. n

allowing

the U.K. to trade under that framework as long as it remains in the bloc. But Britain will fall outside the treaty’s jurisdiction should a no-deal Brexit materialise, making a new trade pact necessary to maintain a smooth trading relationship with Japan. London is open to both bilateral and multilateral deals like the 11-nation TPP, which recently went into force, to ensure that Japanese companies can stably enter the British market.n

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AppArel / Trade Treaties

Govt focuses on making India’s FTA more efficient

T

he government is at present

the ASEAN, Japan and Korea came

focused on how to make India’s

into effect. Trade deficit with the

free trade agreements deliver

three countries, which stood at $4.5

more for all stakeholders and has also

billion in 2004 and $16.4 billion in

employed three think-tanks to analyse

2010, shot up to $29.7 billion in 2015

the on-going RCEP negotiations. A

before cooling down a bit to $26.6

study published by think-tank Third

billion in 2016.The three CEPAs not

World Network, India’s three free trade

only resulted in rising imports but also

agreements with the ASEAN, Japan

a progressive slowdown of exports.

and South Korea have resulted in

Available trends in both exports

growing deficits in merchandise trade.

and imports point to a hollowing

After the initial spurt in middle of the

out

previous decade, trade imbalances

of

the

manufacturing

base, which has prompted the

increased sizably after the three Comprehensive

present government to initiate measures for the revival of the

Economic Partnership Agreements (CEPA) with

manufacturing sector. n

US seeks rules of origin for its trade agreement with EU

UK plans entry into both TPP and TPA with Japan

T

he US wants its trade agreement with the EU to develop rules of origin that ensure that preferential benefits go to products

T

he UK is exploring entry into the Trans-Pacific Partnership as well as a free-trade agreement

genuinely made in the United States and the EU. Apart

from wanting a comprehensive duty free treatment for textiles

with Japan after it leaves the European Union

and apparel products, the US wants rules of origin to incentivize

at the end of March. The economic partnership

production in the US and EU and establish origin procedures that

agreement between Japan and the EU will take

streamline the certification and verification of rules of origin and

effect in February, allowing the UK to trade under

that promote strong enforcement, including with respect to textiles.

that

as

In customs and trade facilitation, the US aims at building

long as it remains in

framework

mechanisms to ensure shipments are released quickly after

the bloc. But Britain

determining

will fall outside the

laws and regulations. In addition, objectives

treaty’s

jurisdiction

in this area include providing for streamlined

no-deal

and expedited customs treatment for express

should

a

Brexit

materialise,

delivery

compliance

shipments,

with

simplified

applicable

customs

making a new trade

procedures for low-value goods and a more

pact

reciprocal de minimis shipment value–the

necessary

to

maintain a smooth trading relationship with Japan.

minimum value for goods that can enter the country duty-free–all generally aimed at promoting cross-border e-commerce.

London is open to both bilateral and

The US also wants to create a mechanism to take appropriate action if the

multilateral deals like the 11-nation TPP, which

EU negotiates a free trade agreement with a non-market country, such as

recently went into force, to ensure that Japanese

China. Additionally, the US wants to strengthen existing procedures and create

companies can stably enter the British market. n

new ones to address antidumping and countervailing duty evasion. n

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AppArel / REGIONAL TRADE

Regional supply chains to determine future global textile, apparel trade

A

Vietnam. Based on relatively lower wages, the less developed countries typically undertake the most labor-intensive processes of apparel manufacturing and then export finished apparel to major consumption markets around the world.

Asian supply chain: Economically advanced Asian countries such as Japan, South Korea, China and India supply textile raw material to the less economically developed countries such as Bangladesh, Cambodia, and

European supply chain: Developed countries in Southern and Western Europe such as Italy, France, and Germany, serve as the primary textile suppliers. Regarding apparel manufacturing in EU, products for the mass markets is typically produced by developing countries in Southern and Eastern Europe such as Poland and Romania, whereas high-end luxury products are mostly produced by Southern and Western European countries such as Italy and France. Furthermore, a high portion of finished apparel is shipped to

growing phenomenon - RPTN refers to geographically proximate countries forming a regional supply chain. Deepening of this RPTN increases the concentration of world textile and apparel exports. Broadly, three primary textile and apparel regional supply chains operate in the world today:

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AppArel / REGIONAL TRADE

developed EU members such as UK, Germany, France, and Italy for consumption. US supply chain: Here, the United States serves as the leading textile supplier, whereas developing countries in North, Central and South America (such as Mexico and countries in the Caribbean region) assemble imported textiles from the United States or elsewhere into apparel. The majority of clothing produced in the area is eventually exported to the United States or Canada for consumption. Associated with these regional production and trade networks, three trade flows are important: Asian countries emerge major sourcing hub for Asia: In 2017, close to 80 per cent of Asian countries’ textile imports came from other Asian countries, up from around 70 per cent in the 2000s. EU intra-region trade in textile, apparel stable: In 2017, 55 per cent of EU countries’ textile imports and 47 per cent of EU countries’ apparel imports came from within

the EU region. Over the same period, 68 per cent of EU countries’ textile exports and 75 per cent of their apparel exports also went to other EU countries.

Western hemisphere supply chain becomes unbalanced In 2017, as much as 80 per cent of textiles and 89 per cent of apparel exports from the Western hemisphere went to the same region. However, the operation of Western hemisphere supply chain is facing competition from Asian suppliers. For example, in 2017, only 24.8 per cent of North, South and Central American countries’ textile imports and 15.7 per cent of their apparel imports came from within the region, a record low in the past 10 years. Implementation of several new free trade agreements, such as CPTPP, RCEP, EUVietnam FTA, and the potential US-EU and US-Japan FTAs are in process. How they affect regional pattern of world textile and apparel trade remains to be seen. n

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AppArel / Prices

Labor, input costs to push up global apparel prices in 2019

A

s per the US Bureau of Labor Statistics, retail apparel prices, following months of rise, fell to a seasonally adjusted 0.9 per cent in November. The prices, compared to last year, declined 0.4 per cent. Now some of these retailers expect prices to increase as cotton prices went up $1 per pound in June only to level off at around a current 75 cents a pound. According to Cotton Incorporated, average import prices for cotton-dominant apparel increased 0.9 per cent month-overmonth in October. Year-over-year, cotton-

dominant apparel import prices were 2.7 percent higher. Glenn J Chamandy, President and CEO, Gildan Activewear, recently said cotton and polyester prices have gone up during the year, as have other costs across the supply chain. Gerald W Evans Jr, CEO, Hanesbrands, also instituted price increases of around 4 to 5 per cent in its innerwear business due to higher raw material costs.

Rising labor, input costs a concern As per Moody’s Investor Services, apparel companies face input cost inflation from labor and cotton. However, it’s the US-China trade war and threats of stiff tariffs on the industry that poses the biggest dilemma. The uncertainty has already caused importers to make major changes in their sourcing strategies, while increases labor and other costs in Asia and elsewhere have made it more challenging than ever to chase the cheapest needle.

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AppArel / Prices

Tariff war a bug bear A tariff survey by Purchasing Manager’s Index, IHS Markit revealed that the US manufacturers expect tariffs to increase prices over the next two years. In the survey, conducted in second half of October, 44 per cent respondents expect tariffs and trade wars to lead to higher domestic prices for their goods in the US over the next two years.

Fear leads to price rise Fear is an important factor that will lead to price rise, believes Rick Helfenbein, President and CEO of the American Apparel & Footwear Association. The retailers, even with all the leverage they have will not be able to avoid increase in prices. They may force some of it back to their vendors—and that would be part of the natural process—and vendors will try to force some of it back to their factories. At the end of the day, there will be an increase in prices. n

Nicole Bivens Collinson, President of International Trade and Government Relations at Sandler, Travis & Rosenberg sees the tariffs threats a long-term, multiyear trend. The results will be an overall rise in global prices. President Trump first imposed $50 billion worth of tariffs aimed at China that left the apparel industry largely unscathed. The next 10 per cent tranche came in the form of an additional $200 billion in tariffs, hitting certain apparel items, some leather, and hats and handbags.

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AppArel / Luxury

Millennials to drive Chinese luxury market

A

survey by Bain & Company reveals, millennials, who make up one-third of China’s total consumers, were responsible for the growth in Chinese market which touched 142 billion yuan in sales in 2017, about 20 per cent higher than earlier. Millennials are the generation born between in the early 1980s and early 2000s. In China, millennials comprise two distinct groups: those born after 1980 and those born after 1990. They are referred to as the single most important demographic group on the planet today by Goldman Sachs. Indeed some luxe brands have caught the attention of millennial customers.

Brands cash in on Gen Y Alexandre Arnault, the youngest CEO in luxury fashion, has re-launched collaborations with artist Olafur Eliasson, Fendi, M/M and cult streetwear brands Supreme and OffWhite, to make the century-old suitcase brand one of the most sought-after names among his peers. In June, Arnault released a couple of transparent polycarbonate suitcases costing $1,000 in partnership with the streetwear sensation Off-White by Virgil Abloh. In 2016, Bernard Arnault’s LVMH bought 80 per cent stake in Rimowa for $716 million and immediately appointed Arnault as co-CEO, alongside Dieter Morszeck, the grandson of the suitcase’s founder. Today, it’s extending its reach to become more than a travel companion by marrying the ‘Made in Germany’ concept with LVMH’s business acumen.

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AppArel / luxury

are sneakers. Its sock-sneakers infiltrated the wardrobes of celebrities and fashionistas, especially the limited-edition, bright-red pair reinvented by Parisian retailer Colette. The stacked-sole Triple S, which costs US$850, is a global bestseller online and offline.

Millennials to rule over luxe market

Balenciaga is another brand that has caught the eye of millennials. In the Lyst Index, Balenciaga raced ahead of Gucci for three quarters in a row to become the most popular fashion brand. According to Cédric Charbit, the brand’s CEO, Balenciaga is also the fastest-growing brand at its parent company, Kering. Last year, Balenciaga saw over 100 per cent growth in several categories, thanks to the millennials who make up 60 per cent consumer base of the iconic label. Men’s fashion is also becoming a strength for the coutureturned-edgy brand. In 2016, Gvasalia brought the men’s line back to the house after 17 years. The brand is no longer the couture house that Cristóbal Balenciaga founded in 1919, nor the elegant brand imagined by former creative director Alexander Wang. They now offer flea-market vintage, cool hoodies, big logo prints and off-the-shoulder parkas. Balenciaga products that have made the biggest impression

Nowhere is Balenciaga’s influence more noticeable than among China’s millennials. In late April, an incident involving Chinese customers being mistreated as they were queuing for the new Balenciaga sneakers in a Paris department store went viral on Weibo. It led to a short boycott of Balenciaga, and prompted an apology from the brand. The luxury industry is being universally disrupted by the young game changers, from sellers to shoppers. The young, affluent, savvy yet ephemeral millennials have taken the industry off guard. The Chinese cohort will continue to dominate the market as the nation’s economy booms and the balinghou and jiulinghou take over as the consuming class. Capturing the coterie is crucial for luxury companies. A distinctive brand identity with high-quality products is just an essential start; a cultural understanding of their needs and desires is the key for brands to win the battle in this hefty fashion reshuffle. n

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AppArel / Concern

Deep-rooted concerns in textile industry needs attention to fast forward growth

T

he Indian government, in order to support the industry, has increased import duty on several textile items. However, to ensure long-term sustainable revival, it first needs to address certain deeprooted problems. Currently, the industry is finding it extremely difficult to compete with players like Bangladesh and Vietnam.

Tackling competition from other Asian countries Valued at around $127 billion, the textiles and apparels industry is a huge foreign exchange earner, and second-largest employer in India. However, the country’s share in

global textiles exports is just 5 per cent, which is minuscule as compared to China’s share of 38 per cent. Much smaller players like Bangladesh and Vietnam, having a share of 3 per cent in global exports, are increasingly threatening India’s exports. Other bug bears are domestic issues. Textile exports were expected to increase with the abolition of the Multi Fibre Arrangement (MFA) in 2005-06. However, this growth did not materialise, as the industry faced increased competition from low-cost producers like Vietnam and Bangladesh. Growing Chinese labour cost could also have provided an opportunity to increase India’s share in global textiles industry. But domestic issues including outdated technology, inflexible labour laws, infrastructure bottlenecks, and a fragmented nature of the industry remained a bug bear. As per World Trade Organisation’s Agreement on

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AppArel / Concern

Subsidies and Countervailing Measures, a country needs to phase out export subsidies for a product as it achieves export competitiveness, defined as 3.25 per cent share in world trade. As per this agreement, India needs to end export subsidy for the textiles sector by 2018. The industry needs to abolish some of the existing export subsidies such as Merchandise Export from India Scheme (MEIS) and the Export Promotion Capital Goods (EPCG) Scheme.

Skill development, technology upgradation need of hour The government needs to focus on regional, cluster, technology upgradation and skill development subsidies, which benefit all producers. Globally, manmade textiles and garments are in high demand. However, India, despite being the second-largest textiles exporter, lags in this category due to the unavailability of manmade fibres at competitive prices. The total textiles and clothing exports from India, cotton accounts for around 75 per cent. We need to align our production with the global consumption patterns.

Flexibility in labor laws and adequate skilling is likely to boost the textiles sector in a big way. For instance, allowing women to work in all three shifts, after taking into account adequate safeguard measures, will enable the industry to employ more female workforce. Technology upgradation schemes will help Indian players increase both their productivity and competitiveness. In addition, the government needs to carefully evaluate various trade agreements—Bangladesh and Vietnam benefit from favorable access to some of the big apparel markets. Although India has the required ingredients in the form of raw materials and abundant labor to make the industry a success, outdated technology, inflexible labor laws and infrastructure bottlenecks hamper its growth. The government needs to re-look at fibre neutrality and evaluate various trade agreement opportunities, while domestically focusing more on technology upgradation and skill development. n

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AppArel / BRAND RETAIL

Six new brands enter ‘Top 50 Valuable French Brands 2019’ ranking

S

ix new brands have entered the ‘Top 50 Most Valuable French Brands 2019’ ranking, released by WPP and Kantar recently, along with popular luxe brands brands Louis Vuitton, in the first position, Chanel at second at Hermes third. The luxury sector, accounting for 47 per cent of the total value holds a prominent position, in the ranking. This is the second annual BrandZ France ranking, released by WPP and Kantar.

Total brand value declines with lack of innovation The new entries include: Céline at the 38 position, Van Cleef & Arpels 43rd , Vichy at 41st,Tefalon 46th, Carte D’Or on 44th, and Maisons Du Monde 49th. The total value of top 50 brands rose 12 per cent, which

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though is significantly ahead of the 2.3 per cent increase in the country’s GDP, is less compared to the 21 pe rcent rise in total brand value seen in the BrandZ Global Top 100 Brands. The primary reason for this is comparatively low perceived innovation score for France’s top brands. Taking 100 as the benchmark for this measure, the Top 50 most valuable French brands average 103 compared to 113 for both BrandZ Global Top 50 and the US Top 50 rankings. The number of brands that aim to be socially responsible has also grown 14 per cent over the past year, double the rate for brands that are low scorers. Some French brands emphasise on innovation by media and providing opportunities for consumers to test products. Brands in the Top 10 for CSR include: Decathlon,Michelin,Air Franceand Credit Agricole. encouraging staff to act as brand ambassadors on social

Emerging trends Commissioned by WPP, the valuation behind the BrandZ™ Top 50 Most Valuable French Brands was conducted by brand equity research experts Kantar Millward Brown. The methodology is similar to the one used to calculate the annual BrandZ Top 100 Most Valuable Global Brands ranking, now in its 13th year. But some French brands are delivering on innovation with initiatives that include: encouraging staff to act as brand ambassadors on social media and providing opportunities for consumers to test products. Sports retailer Decathlon is viewed by consumers as the most disruptive brand in the ranking. Some emerging innovative trends in the index are:

Dior registers highest growth Dior registered highest growth in the ranking. It by 58 per cent; Rémy Martin followed closely with 39 per cent growth and Saint Laurent by 34 per cent.

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AppArel / BRAND RETAIL

Promoting regional products Preference for fresh products on the rise The percentage of French consumers opting for fresh produced has risen 33 per cent from 29 per cent a decade ago. More than half of French consumers say they are willingly paying more for higher quality.

Percentage of experienced consumers increase Nearly one third of the French population is over 55 years. They account for over 40 per cent of expenditure on consumer goods and prefer great food, fashion, travel and tech.

Supermarkets and national brands are now promoting regional heritage of selected produce, and a new brand, C’est qui le Patron, co-created with consumers, is successfully selling a growing range of fresh food, from milk and butter to burger patties. The ranking combines rigorously analysed market data from Bloomberg and Kantar Consulting with extensive consumer insights. Globally, the research covers 3.6 million consumers and more than 122,000 different brands in over 50 markets. In France, it interviewed more than 101,000 consumers for over 1,100 brands in 88 categories. As the only brand valuation ranking grounded in consumer opinion, BrandZ’s analysis enables French brands to identify their strength in the market and provides clear strategic guidance on how to boost value for the long-term. n

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AppArel / Brand RetaiL

Burberry works on its strategy to boost bottom lines

B

ritish brand Burberry is having distribution

into positive business performance will take

problems. The company’s supply chain

time. Most discussions to evolve its wholesale

remains weak. The brand’s strategic

distribution are now complete and the required

focus is on igniting brand heat — starting with

changes to its third-party distribution network are

influencers and key opinion leaders, which

expected to accelerate.

will cascade to all consumers. But shifting

All regions performed in the first half. The

consumer perception, transitioning product,

UK and Italy grew, with an improvement in

and transforming the distribution will take time.

the second quarter, while the Middle East

Burberry is undergoing a major transformation,

remained weak due to macro factors. But Asia

with a new designer, a new focus on ultra-

Pacific grew by a mid-single-digit percentage.

luxury, a new logo and a change to the

The company has seen the successful launch

way it drops its product. But while early signs

of its new go-to-market model. The broader

are encouraging, transitioning the product

luxury industry faces the prospect of slowing

offer, evolving its distribution, changing wider

economic growth globally and weak demand

consumer perception and seeing this translate

from Chinese consumers. n

Uniqlo Japan’s profit to rise in H2 2019

J

apan Uniqlo profit is expected to rise sharply in the second half of the year on strong cost control. Fast Retailing is the

M&S’ UK to reshape product offerings

M

&S’ UK sales declined by 2.2 per cent on a like-for-like basis and 2.7 per cent in total. International sales too fell, although the large size of drop was mainly due

to the sale of its Hong Kong business to its franchise partner

owner of Uniqlo. The retailer’s overall operating

and the closure of stores in loss-making markets. Factoring

profit fell eight per cent over September to

those out, international revenue was down only 1.4 per cent.

November. The domestic business is expected

Reducing consumer confidence, mild weather, Black Friday,

to record a larger-than-expected decline in

and widespread discounting by competitors made November

profit in the first half due to the discounting.

a very challenging trading period for the company.

The company will increase discounting

Improvements to its online proposition and operations helped it to

in Greater China and South Korea to offload

mitigate lower footfall to stores resulting from, in part, the increasing

winter inventory. However, Uniqlo’s international

pace of change in the store estate. Women’s wear online growth

business is expected

significantly outperformed, driven by areas including dresses and

to rake in strong first-

knitwear. Stock that went into its clearance sale was down around

half revenue and profit

25 per cent, as a result of a planned reduction in stock levels.

growth.

Operating

The company is still in the early

profit for the business

stages of far-reaching changes in

jumped

per

range, style, customer focus and

cent in the reported

channel mix. Its objective is to reshape

quarter, boosted by a

its buy, deliver market leading value

double-digit growth in China. The firm opened

and focus on stylish and wearable

78 stores in China last fiscal year, expanding

wardrobe must-haves as it grows the

to 633 locations, while it closed four stores in

business with family-aged customers

Japan, ending the year with 827 stores. n

seeking style, quality and value.

12.6

n

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AppArel / Brand RetaiL

Retail sales grows highest in six years

M

astercard

SpendingPulse,

which

increased 19.1 per cent over

provides insights into overall retail

last year. The expenditure

spending trends across all payment

on home improvement was

types, including cash and check, reported a

recorded at 9 per cent. Sales

5.1 per cent holiday sales increase to over $850

in the home furniture and

billion this year – the strongest rate since 2012.

furnishings

The research firm reviewed holiday shopping

increased by 2.3 per cent.

from November 1 through December 24.

category

also

However, sales in electronics and appliances declined by 0.7

Led in part by a surge in home improvement

per cent. Department stores sales also slipped by 1.3 per cent

spending, this season’s holiday retail sales were

following two years of growth below 2 per cent. Online sales growth

at their highest in six years. Online shopping

for department stores, however, increased by 10.2 per cent. n

Gap shuts down weaker stores to increase profitability

Luxe brands focus on accessories to attract customers

V

etements has created a phone case with tech accessory brand Casetify, which has also collaborated with

luxury brands including Moncler and Saint Laurent for relatively affordable accessories with a luxury brand name attached. The case is being sold through Casetify and retail partners like Ssense. This is part of a growing trend in the luxury business of leaning into the accessibility of accessories. Luxury brands rely on the exclusivity of their more expensive apparel

offerings

that

and

G

ap is closing hundreds of its stores that don’t fit its expectations, whether in terms of profitability, customer experience or traffic trends. Instead focusing on higher-

performing shops, Gap hopes to save some $100 million and strengthen healthier stores.

accessories offer a good way to do that. Customers

Gap offers apparel, accessories, and personal care products

who are not affluent enough to be regular Gucci

for men, women, and children under the Old Navy, Gap, Banana

customers and drop more than $1,000 on a jacket

Republic, Athleta, and Intermix brands. Its products include denim,

can instead save up and get a Gucci belt or a pair

tees, button-downs, khakis, and other products; and fitness and lifestyle

of socks. At the same time, the brands are able

products for use in yoga, training, sports, travel and everyday activities.

to sell more product and create relationships with

The operating model improvement process at the company’s

customers who may make further purchases in

namesake brand has been fraught with inventory problems.

the future without having to lower any of the prices

As a result, the company was saddled with excess inventory

for their more expensive items — something that

coming into the first quarter, which consequently impacted the

luxury brands are loath to do normally.The phone

company’s sales from this brand as well as its ability to optimize

case costs around $250. n

its margins, since it forced the brand to be more promotional. n

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AppArel / trends

Denim trends in 2019 to be influenced by consumer opinions

D

enim trends for 2019 are expected

Flare

and

crop

flare

to be shaped by consumers and

are gaining traction in the

the environment around them. The

women’s market, while men’s

relationship between denim and politics is

is moving toward straight cuts

expected to pick up steam in the coming year

with an exaggerated cuff.

as the next US presidential election nears and

Bolder

historic

younger generations continue to find their voice.

come

through

A

whole

generation

is

getting

references in

washes

into

like acid, enzyme and tie-

demonstrating and gaining a voice about

dye. Raw denim is shifting

what’s happening around the world. Millennials

toward something that looks

and Gen Z will likely follow in the footsteps of

handmade

young generations from the ’60s and ’70s, which

a-kind. This is an artisanal

took bold actions to fight racism and injustice,

direction, which will challenge

fought for women’s rights and protested the

many companies, particularly

Vietnam War. Their fashion will follow, too.

those that manufacture on a large and cheap scale. n

Under Armour returns to its roots with sportswear

U

nder Armour is returning to its roots as a sportswear company, refocusing its

and

one-of-

Demand for yoga wear in US increases by 35.8%

T

he number of yoga products

in

stock

in US in 2018 has

increased by 35.8 per

attention on making clothes for athletes.

cent compared to 2016.

This refocus comes at a critical time for the

Yoga leggings skyrocketed

Baltimore-based company. Earlier this month

by 87 per cent compared

it issued an underwhelming financial forecast

to 2017. What was once

at an investor day, while its culture has

a simple stretchy legging

also been in the spotlight after a report that

has become a wardrobe phenomenon.

employees put strip club visits on expenses.

Pricing in the traditional sports market, despite some

Under Armour, started in 1996, expanded

fluctuations, has generally maintained a consistent level.

aggressively and took on the likes of Nike

Traditional active wear retailers are having to compete to

and Adidas. But its shares have fallen by 68

maintain their valuable relationship with customers. Non-

per cent since 2015 while sales have flagged

traditional sports retailers are getting in on the game and

in North America. Under Armour seeks to

launching their own active wear collections at a more

capitalise on rising demand

accessible price point for consumers.

for athletic-themed clothing.

So retailers need to harness the power of data and

The company’s ventures into

understand when to buy-in or buy-out of trends. Grey and

sports-inspired fashion included

white are the most favored color for new active wear products,

a tie-up two years ago with

holding almost 23 per cent of the color palette. High rise

designer Tim Coppens, known

leggings are the most popular style for replenishments – not

as Under Armour Sportswear. It

surprising seeing they are a flattering design that suits all body

has since been discontinued. n

types.

n

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AppArel / Business

US: Apparel sales hit all time high this holiday season, inventory worries persist

U

S’ apparel industry is bouncing back with shoppers flocking stores such as Lululemon, Abercrombie & Fitch, Old Navy and Urban Outfitters this holiday season. As Abercrombie & Fitch CEO Fran Horowitz reveals, outerwear sales are trending higher during the fourth quarter, thanks to cooler temperatures finally hitting much

of the country, in addition to soft and cozy items like sherpa hoodies and pajama sets flying off shelves.

Leading brands fuelling apparel sales growth As per consulting firm Customer Growth Partners, spending on apparel registered the highest growth since 2011, increasing 5.4 per cent over Black Friday weekend. The category, as Craig

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AppArel / Business

Jonhson, President of CGP reveals, normally registers a growth of only 1 to 2 per cent only. The National Retail Federation predicts overall holiday sales will grow between 4.3 and 4.8 percent this year, with apparel retailers making nearly a quarter of their annual sales during the holidays. Some retailers are known to continuously outperform, with the biggest outperformers being off-pricers. TJ Maxx owner TJX, for example, reported a 7 per cent increase in sales in the latest quarter, with net sales increasing 12 per cent from a year ago to reach $9.8 billion. Brands such as Nike, Adidas and Under Armour are fuelling gains in apparel sales. Targeting women, these brands are rivaling Lululemon and Gap’s Athleta brand, which are now trying to appeal to more men. Nike, for example, will open up studios to sell yoga pants in some of its stores.

Active wear gains ground Johnson points out, performance wear is currently the fastest-growing category as more and more women are now

comfortable wearing leggings, graphic tees and jogger pants outside the house. Brands like Bandier, Outdoor Voices and Fila are taking over Instagram feeds, and their puffer jackets and sports bras are on many women’s holiday wish list. Amazon too is expanding its active wear range. Coresight Research reveals the e-commerce company recently listed over one million women’s and men’s clothing products on its site, registering a 25 per cent increase from February 2018. Basics brands like Gildan and Calvin Klein, along with Under Armour and Adidas, are gaining popularity on Amazon.

Inventory still a bug bear for retailers However, retailers such as Gap and J Crew are struggling to balance supply and demand, so they don’t end up with too much inventory on their shelves or in stock rooms. Nomura Instinet analyst Simeon Siegel noticed during the third quarters that department stores, as a group, reported their first quarter of inventory growth after 10 quarters of declines. These stores have managed to pass on excess apparel inventory to off-price chains such as TJ Maxx and Ross Stores more easily in the past, However, it’s becoming increasingly difficult for them to do so now. There are fears, apparel companies might get more promotional in 2019 increasing the pressure on retailer’s margins. However, US President, Donald Trump and Chinese President Xi Jinping have decided to delay increasing tariffs in early 2019 on many consumer goods, including clothing. And this truce is expected to benefit a number of retailers, including Fossil, Stitch Fix, Skechers and Steve Madden. n

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AppArel / Markets

China to emerge the largest fashion market in 2019, beating the US

A

s per ‘State of Fashion 2019’ report by McKinsey & Company and the Business of Fashion (BoF), China will go beyond the US as the world’s largest fashion market for the first time in 2019. The report predicts leading trends expected to shape luxury fashion industry in 2019.

Trade war a business dampener Despite predicting year-on-year growth of 3.5 to 4.5 per cent for the fashion industry, experts remain pessimistic. This pessimism could be driven by fears of the accelerating trade war between China and

the US, and uncertainty in Europe over how Brexit will impact the global fashion market, according to the study. However, in the report, Joann Cheng, Chairman of Fosun Fashion Group & Lanvin, expresses her belief that the trade war will have minimal effect on China’s business.

Oomnichannel integration on the rise Technology-impacted consumer shifts are among the most important trends predicted in 2019. Luxury fashion brands in China have been quick to utilise the country’s most popular social-media-turned-e-commerce app WeChat, which boasts over one billion daily active users. Around 54 per cent of the McKinsey-BoF State of Fashion Survey respondents prioritise omnichannel integration alongside investing in e-commerce and digital marketing as their number one priority for 2019.

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AppArel / Markets

Consumers demand transparency

While 51 per cent of executives in the premium and luxury fashion sector believe fashion sector will ‘become better; in 2019; 19 per cent believe it will stay the same. In North America, staggering 64 per cent executives believe the industry will become worse suggesting America is more cautious of impending trade war tariffs.

China’s growing domestic demand China is the world’s fastest-growing consumer market, accounting for more than 18 per cent of all final goods consumed. Chinese manufacturers are using its vast production abilities to cater to surging domestic demand even for luxury products. China’s Singles’ Day shopping holiday in 2018 hit an estimated $30.8 billion in sales, surpassing both Black Friday and Cyber Monday in the United States combined.

The discerning customers are demanding specific information on materials, labor conditions, duties and mark-up. According to the report, fashion companies must cater to demand of distrusting consumer and ensure full transparency across the value chain. 65 per cent of respondents cited consumer needs for trust in product authenticity and creative originality among their top 5 trends for 2019. Surveying over 270 global fashion executives, the report uses McKinsey & Company’s database of over 500 private and public companies to analyse and compare the performance of individual business against their peers by category segment and region. It recognises the top 20 companies leading charge in the global fashion arena. These “super winners” now account for 97 per cent of global economic profit, compared with 70 per cent in 2010, showing their increasing dominance in the market. These 20 companies include: Inditex, Nike, LVMH, TJX Companies, Hermès, H&M, Richemont, Ross, Adidas, Kering, LBrands, Pandora, Fast Retailing, Next, VF, Luxottica, Michael Kors, Gap, Hanesbrands and Burberry. n

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AppArel / aepc ACTIVITIES

Dr. A Sakthivel, Vice Chairman, AEPC, ( 2nd from R) Mr. Rahul Mehta, EC member, AEPC and President, CMAI( Extreme L) , at the launch of India series- The Textile Story- by Smt. Smriti Zubin Irani, Honorable Union Minister of Textiles, GoI

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AppArel / aepc ACTIVITIES

T

he India Series- the Textile Story- Coffee Table book 2019 was launched by Smt. Smriti Zubin Irani, Honourable Minister of Textiles, GoI, on 16 January 2019 at Udyog Bhavan, The book has been curated and published under the guidance of the Ministry of Textiles, by Trendsetters Marketing Services Pvt. Ltd. Dr. A Sakthivel, Vice Chairman, AEPC, Mr. Rahul Mehta, EC member, AEPC and President, CMAI, and Mr. Gautam Nair, EC Member, AEPC, were invited to the afternoon launch by HMoT. Impressive stories and details about the diverse and huge Indian Textile and Apparel industry have been brought together in this edition of the book to focus on the future of the Textiles and Apparel Industry of India. On the occasion, Dr. Sakthivel, Vice Chairman, AEPC said, “There is perhaps no better time to be having such a publication than the onset of 2019. I say this because the textile and apparel sector, much like the broader Indian economy, is experiencing a process of overwhelming transition and metamorphic structural change. And this change presents both opportunities and challenges. More opportunities than challenges...” All the leading Textiles and Apparel councils and associations of India have participated and contributed stories and data to the book, focusing on the journey of growth over the last four years. Apart from AEPC, Export Promotion Council of Handicrafts, Clothing Manufacturers Association of India, Confederation of Indian Textiles Industry have been a part of the making of this edition. Dr. Sakthivel went on to say, “I am happy to share that the Indian Apparel exports have closed 2018 on a very optimistic note. We exported readymade garments worth USD 1374.3 million in December 2018, with a growth of 2.77 per cent against the corresponding month of 2017, amounting to Rs. 9720.59 cr (as against Rs. 8590.47 Cr. in December 2017 with the growth of 13.16 per cent). This gives us immense confidence to ride the new wave of global fashion and find new ways of improving our game through the smart use of technology and innovation.” He congratulated the Government, saying there is no better time to be in India than now from his textiles career spanning more than four decades. He said “I would like to compliment this government for balancing the economic growth trajectory carefully with social development, without disturbing the diverse environmental and cultural heritage of the country. I, as an Indian, feel fortunate to be witnessing such

exemplary partnerships and participation of the government, the states, the industry and most importantly, the people. We are all connected like never before.” He went on to say, “ As we all strive to achieve an all round growth and build a resurgent nation, the government has been working on building and augmenting the infrastructure to support this massive expansion. Sector specific zones and parks, Industrial corridors and smart cities are being developed based on state-of-the-art technology.” He gave credit for the success of the sector to the “able guidance and unstinted support of our Honorable Minister Smt Smriti Zubin Irani. From handling the roll out of unique reforms like GST to making our workplaces safer for women workers through Internal Complaints Committee, the Minister has brought about ground-breaking transformation of the sector.” He also expressed gratitude to the Honorable Minister for showcasing this fragmented and highly diverse sector on one unified platform through events like Textiles India 2017, in Gandhinagar, Gujarat. He spoke about the ‘Symphony of Indian Textiles 2019’, recently hosted by the Minister, that brought together the entire value chain of Indian textiles once again. Such events, he said, are a testimony to the continually improving presence of India on the global textile map. Sakthivel proudly said that the Indian Textiles industry has evolved! “We are now host to the best fashion brands of the world. We are increasingly engaging with global brands and buyers to plan for greater sourcing from here. This gives me the confidence to invite all Buyers of the world today to source from and sell in India.” He complemented the publishers on the compilation of the unique and beautiful coffee table book and expressed confidence that the insights from this coffee table book will help the Indian Textiles and Apparel sector to position itself far stronger and improve its brand image globally. n

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AppArel / aepc events

Dr. A Sakthivel, Vice Chairman, AEPC, ( 2nd from R) Mr. Rahul Mehta, EC member, AEPC and President, CMAI( Extreme L) , at the launch of India series- The Textile Story- by Smt. Smriti Zubin Irani, Honorable Union Minister of Textiles, GoI

AEPC organises seminar on currency risk management and GST update

A

EPC organised a seminar on Currency Risk Management, Outlook of Rupee & GST Update in Noida on December 21, 2018. The seminars covered rupee`s

outlook and efficient ways to manage the risks, exchange traded derivatives and SME listing and information on minimising forex risks & hedging followed by session on GST Update like latest changes in GST procedures, process or any other issue. n

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AppArel / events

(L to R) Dr. A Sakthivel, Vice Chairman, AEPC, Shri S P Velumani, TN Minister of Municipal Administration and Rural Development, Smt. Smriti Zubin Irani, Hon’ble Union Minister of Textiles, Shri O S Manian, TN Minister for Handlooms and Textiles during the inauguration of Global Textile Expo 2019 & IND -TEXPO, 2019

Global Textile Expo 2019 & IND -TEXPO, 2019 held in Coimbatore

G

lobal Textile Expo - 2019 & IND -TEXPO, 2019” at Codissia Trade Fair Complex, Coimbatore during 27 - 29January, 2019 was inaugurated by the Hon’ble Union Minister of Textiles Smt. Smriti Zubin Irani in presence of Hon’ble Minister of Tamil Nadu Mr. O.S.Maniyan, Minister of Textiles, Mr. S.P.Velumani, Minister of Municipal Administration & Rural Development and Mr. Pollachi V.

Jayaraman, Dy.Speaker, Tamil Nadu Govt.,District Collector Coimbatore, Vice Chairman, AEPC Dr. A. Sakthivel and other dignitaries. Dr. A. Sakthivel, Vice Chairman, AEPC thanked the Hon’ble Union Minister of Textiles Smt. Smriti Zubin Irani for her continuous support to the industry by earmarking Rs.6000 Crores special package, support in increasing MEIS from 2% to 4%, announcing HSN code for Technical textiles of 207 products, taking efforts to increase ROSL, conducting Textile’s conclave in New Delhi for the benefit of the industry etc., He has also thanked Govt. of Tamil Nadu for taking initiatives for the benefit of Textile Industry in Tamil Nadu. n

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AppArel / Retail

Online retailers adopt ‘click to brick’ strategy to augment business

T

ill recently, most online brands depended only on one form of retail and brick and mortar stores were passé. Companies like Warby Parker, Bonobos and Casper relied more on their well-designed website to boost sales. However, growing competition, surging online advertising costs and cheap mall space are prompting many digital retailers to open offline stores. In fact, 90 cents of every retail dollar in the US is spent on a physical location. This “clicks-to-bricks” phenomenon encompasses big names like Amazon Books and Casper as well as less-known startups

such as men’s shorts purveyor Chubbies and hair color brand Madison Reed.

Brick and mortar stores a good back up plan Physical presence is necessary for a brand’s long-term growth. Retail startups now include a store opening plan in pitches to venture firms. Bonobos, acquired last year by Walmart, recently opened in Lexington, Kentucky, and will soon have stores in over 60 locations. Buying ads on Google, Facebook and Instagram once made a lot of sense as it allowed nascent brands to narrowly target shoppers and grow fast. Now social feeds are jammed with posts from obscure brands. The competition to grab attention has pushed up the cost of ads even as they become less effective

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AppArel / Retail

sales. In July, Margaux opened a permanent store in Manhattan’s Greenwich Village. She’s planning more.

Physical stores boost bottomlines

with so many of clamoring for attention. With millions of square feet of space available across the country, opening a physical store has become cheaper. Landlords are offering leases as short as a year with extension options. That flexibility extends to temporary locations, too, with spaces dedicated to rotating pop-ups so tenants can easily test concepts. To further reduce risk, they’re offering to help pay for store remodeling and taking a small percentage of sales instead of monthly rent. A physical store offers instant gratification, merchandising, employee service and dressing rooms to get shoppers to buy more and return fewer items. Alexa Buckley, co-founder women’s shoe purveyor Margaux, outlines the merits of having a store when she rented a loft space in Philadelphia. Despite heavy rains and wind from the remnants of a hurricane, 200 women showed up and generated almost a month’s worth of

Profit margins in physical stores are better, too, without the brands needing to pay for shipping or as many returns. Plus, offline customers tend to buy more, and after the store’s debut there is a noticeable lift in the surrounding area’s online sales. On the heels of that brick-and-mortar success, Kleiner Perkins Caufield & Byers, an early Amazon backer, invested $30 million in UntuckIt so it could open more stores. Bonobos’s “guide shops” are set up for customers to try on and order clothes. The brand focuses not on sales-per-square-foot — a traditional industry metric — on how much the stores drive sales online and off in a particular market. Digital natives are absorbing many of the lessons honed by retailers for the past century: that people like to feel the fabric, try on glasses, get face-to-face shopping tips. The question is whether Bonobos, Warby Parker and the rest have also learned the painful lessons — how over-expanding can cannibalise existing stores — that laid low so many specialty retailers in recent years. n

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AppArel / Sustainability

Sustainability Initiatives: Repair not replace gaining ground globally

F

or a long time, the global apparel industry has been greatly impacted by the use and disposal of clothing. A paper by WRAP suggests if consumers use their clothes for even nine months longer, they can reduce their eco-footprint by around 20 to 30 per cent. Applying this principle, outdoor manufacturers like Vaude, Patagonia, and Peak Performance are extending the lifecycle of their products through their second-life initiatives.

Measures for a sustainable value chain Peak Performance in collaboration with the Sustainable Apparel Coalition (SAC) has developed the popular Higgs Index, which offers standardised measures for a more sustainable value chain. Companies are also incorporating life-prolonging measures into the planning of their garments. Accessories like zippers, cords, and push buttons are being offered as spare parts. Many also offer and promote repair service. Vaude recently joined the online platform ifixit to develop repair instructions, while Patagonia repairs damaged clothes on site free of charge. It also explains the sustainable use of functional clothing in its workshops.

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AppArel / Sustainability

Sharing, exchanging and renting on the rise Lately, ownership of clothes has lost value. Clothes today are shared, exchanged and rented depending on the function and occasion. The industry’s second life initiatives are building on this attitude. Companies now take back used clothing from their customers. They are recycled, resold, or donated to charitable associations. Since October 2018, sporting goods retailer Decathlon has been offering an online platform for resale of sporting goods by customers. At so-called Trocathlons, it is also possible to buy and sell used goods in the chain’s stores similar to a flea market. disposal, upcycling, and recycling. Houdini sets up recycling boxes in its outlets and collects sorted-out polyester clothing. Customers can use the containers with a clear conscience. Houdini guarantees professional recycling. Recycling till now was limited to the outer fabric. Jack Wolfskin presented its Texapore Ecosphere jackets at ISPO Munich 2018. The outer fabric of these jackets, as well as the membrane and inner lining, are made of completely recycled material. In the winter of 18/19, shells, fleece, and hybrid models will also appear in fully recycled materials. n Vaude, in cooperation with eBay, has set up an online shop that consumers can use to sell their used Vaude products. The company is neither the operator of the platform, nor does it earn anything from it. The second-use website is one of many lifeextending measures for products. Burton’s sustainability program focuses on returns. The snowboard brand, which earlier focused on replacing damaged clothes, now aims to repair. The company has targeted a repair quota of 40 per cent by 2020. The North Face offers returned goods and items with production defects in their own US online store – at reduced prices and with a one-year guarantee on wear and tear. James Rogers, Head of Sustainability at The North Face, sees resale as an important measure “to reduce the ecological footprint and open up new markets.

Recycling the new mantra When used clothing no longer meets the requirements for resale, all that remains is environmentally friendly

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AppArel / Sustainability

Youth driven consortium increases upcycling among new designers and businesses

T

he rise of upcycling among new designers

uptick in younger sustainably minded brands

and businesses is increasing due to a youth-

could possibly stem from design schools, too,

driven consortium within the fashion industry

which have been adding more sustainability-

which is poised to support brands that create

focused courses into their curriculums, training

things in a positive way. With this, the process

their students to adopt new ways of thinking

works well for younger, smaller brands who find it

about fashion systems. Programs teach young

easy to buy deadstock or vintage garments for

designers to think critically about how fashion

the purpose of upcycling in place of expensive

is made and consumed, and to reconsider

fabrics that often require minimum orders. This

both its processes and outcomes. n

UK apparel brands plan to minimize waste

M

ore than 80 companies have signed up to the Sustainable Clothing Action Plan (SCAP) to

date, including ASOS, Next and Primark. By selecting more sustainably-produced fibers such as cotton and viscose, SCAP signatories have reduced the lifetime water

Increased consumption creates millions of tonne of textile waste

I

ncreased

consumption

patterns

have

millions

of

created

tonne

of

textile waste in landfills and unregulated settings.

footprint per ton

Negative consequences at

of clothing they

each step of the fast-fashion

produce by 15

supply chain have created a

per cent. The

global environmental justice dilemma. While fast fashion offers

signatories have

consumers an opportunity to buy more clothes for less, those

also

reduced

who work in or live near textile manufacturing facilities bear a

their

collective

disproportionate burden of environmental health hazards.

carbon footprint

From the growth of water-intensive cotton, to the release of

by 11.9 per cent

untreated dyes into local water sources, to low wages and poor

and have made moves to become more

working conditions, the environmental and social costs involved

resource-efficient, such as redesigning

are widespread. Potential solutions include sustainable fibers,

their approach to pattern cutting or donating

corporate sustainability, trade policy and the role of the consumer. In North America, the fast fashion market is likely to face

factory offcuts to be upcycled. The Sustainable Clothing Action Plan

tremendous growth in the coming years owing to swiftly

(SCAP) was founded in 2012 in a bid to

increasing number of fast fashion retailers in the region. The

help big-name fashion brands minimise

European market is pegged to foster high revenue in future

their waste, water and carbon footprints

owing to growing adoption of new fashion trends. In India,

while

China, and Japan, the market is poised to expand further in the

sourcing

materials.

n

more

sustainable

coming years due to high purchasing capacity and penetration of major fast fashion retailers in the region. n

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AppArel / Sustainability

Recent British poll indicates consumers’ lack of trust in fashion brands

A

recent poll in Britian indicated six in 10 people

provided by clothing companies. The poll based on

are willing to spend upto 5 per cent more

interviews with 7,700 adults across seven nations from

on clothing if garment workers are paid the

Britain and France to the United States - found that

so-called “fair living wage” that would allow them

consumers considered luxury brands to be no better

to cover the basic needs of their families. However,

than budget or high-street retailers when it came to

according to an opinion poll by Ipsos MORI, over

sustainability. About 6 per cent of respondents associated Italian

two-thirds of consumers found it difficult to know if

label Gucci and budget chain Primark with having sustainable

these brands have high ethical standards, while less

supply chains, the poll, commissioned by the Changing Markets

than a fifth would trust information on sustainability

Foundation and the Clean Clothes Campaign, stated. n

waste it’s recycling for Refibra. In 2019,

Americans seek transparency from clothing brands

Lenzing will begin offering Refibra made

ccording to a recent study, four

Lenzing ramps up recycling for Refibra

L

enzing is ramping up the amount of

with 10 per cent more post-industrial cotton, increasing the amount of waste recycled from

A

in five Americans believe clothing brands should provide information

on their environmental commitments and

20 per cent to 30 per cent. Lycra has made strides to improve performance of stretch technologies, and

the measures they are taking to minimize pollution in their supply chain.

advance both their comfort and sustainability

Around three quarters of the American

in denim. The company’s latest innovation,

public also believe that clothing brands

Lycra T400 with EcoMade technology,

should be responsible for what happens in the manufacturing

maintains the stretch, recovery and retention

process, and that they need to take measures to ensure clothes

characteristics of Lycra T400 fiber but with a sustainable

are produced in an environmentally friendly way. About half would be put off buying from a brand that does not pay workers a fair living wage. The majority of consumers are

twist. Lycra T400 with EcoMade

also willing to pay 2-5 per cent more for their clothing to allow

cent

factory workers to earn a fair living wage. These are among the

sustainable fibers. Fifty per

findings of a Ipsos MORI poll, carried out in the United States,

cent of the fiber is made

France, Germany, Italy, Poland, Spain and the UK.

comprises

68

per

from recycled PET and 18

American consumers want more information on working

per cent made from plant-

conditions in fashion supply chains and would be put off

based materials. The fiber

buying from brands that are not paying a fair living wage. Most

fits in nicely with brands

American consumers are skeptical about the credibility of

that have 2020 sustainability

information communicated by brands, with only a quarter of

goals to meet, and lives up to the performance

Americans saying they would trust the sustainability information

standards of its popular predecessor. n

provided by clothing brands themselves. US consumers make up the biggest apparel market worldwide. n

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APPAREL / reVieW

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APPAREL / REVIEW

A

round 700 international buyers, stores and retail chains from 62 countries and 300 agents attended the india international garment Fair, that was held from Jan 1618, 2019 at Expo Mart in Greater Noida.

latest collectioNs aNd iNNovatioNs oN display The three day fair, presented latest innovations in women’s wear, men’s wear, ki’ds wear, bags, fashion accessories etc. exhibitors included leading apparel companies from across india. it displayed the autumn/ Winter 2019-20 collections of european Union, Usa, middle east and other western markets.

atteNdaNce by distiNguished lumiNaries The fair was inaugurated by Union Textile minister, smriti irani, who was also the Chief guest. it was attended by other dignitaries including ajay Tamta, minister

of state for Textiles as the guest of honour; rahul mehta, Chairman, igFa; a shaktivel, Vice Chairman, aePC; Lalit Thukral, Vice Chairman, igFa and mohan sadhwani, executive Director, Cmai. irani inaugurated the fair by cutting the ribbon, lighting the lamp and the hand spinning the yarn on the charkha in the CFB area of iemL. n

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APPAREL / eVenTs

TEXWORLD / APPAREL SOURCING

Upcoming The Fairyland for Fashion in Paris to attract 1,800 exhibitors

T

he Fairyland for Fashion, the banner under which bi-annual Paris trade fairs held by messe Frankfurt France at the Le Bourget exhibition centre are grouped, is dedicated to materials, clothing and forward planning for textiles, clothing and accessories. The event includes: apparel sourcing, avantex, Leatherworld, shawls& scarves, Texworld and Texworld Denim Paris shows. They will be held from February 11-14, 2019 in Paris Le Bourget.

an absolute must for anyone involved in designing collections of clothing and accessories, The Fairyland for Fashion will feature over 1,800 exhibitors, producers from every continent, who will on average meet over 14,000 principals. The event will include lectures, round-table discussions, catwalks and specific itineraries for fabrics.

apparel sourciNg to see a wide raNge of rmg oN display apparel sourcing Paris, the biggest trade fair in europe for sourcing, comprises 600 clothing manufacturers from 17 countries. From basics to high-end, the fair covers the whole range of ready-to-wear for women, men and children, grouped by area of expertise in fashion clothing: knitwear, dressmaking, tailoring, sportswear, evening wear, made-to-measure, lingerie and swimwear, workwear, textile accessories, etc.

avaNtex, to showcase techNological iNNovatioNs avantex Paris is the first international trade fair dedicated to technological innovation and sustainable development in the fashion industry. Featuring 38

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AppArel / Events

And a dedicates Shawls and Scarves fair

exhibitors from nine countries, the fair brings together companies, from the design phase through to retail, to offer effective solutions for encouraging and shaping tomorrow’s fashion. Far more than just an exhibition, it is a real network bringing together brands, industries and research that share a similar determination to integrate fashion and technologies for the future and explore the challenges and prospects for tomorrow’s markets in a series of highly regarded lectures.

Leatherworld to display flexible materials

Shawls&Scarves Paris is the only international trade fair dedicated solely to scarves and shawls. It will feature headscarves, wraps, capes, ponchos, etc in materials like cashmere, wool, silk, cotton, linen, bamboo, etc, from entry level to very high end, both woven and knits. The fair will feature 33 exhibitors from 17 countries in September 2018. The Fairyland for Fashion, the French agency for Messe Frankfurt France, was established in Paris in 1953. The Messe Frankfurt France subsidiary was founded in

Featuring 58 exhibitors from seven countries, Leatherworld Paris is dedicated to flexible materials used in particular in certain branches of fashion such as leather goods, footwear, gloves and fur items. A vast range of fashion articles and accessories made of leather, fur and related materials that attest to a wealth of technical skills. In this domain, the finished product is certainly not overshadowed and stands its own among the other offers at the trade show, which is now attracting a growing number of retailers, in addition to buyers of fabrics or manufactured products.

2002 in order to acquire the Texworld trade fair. Since then, its portfolio has expanded with Apparel Sourcing Paris, Avantex Paris, Leatherworld Paris, Shawls&Scarves Paris and Texworld Denim Paris. The company is firmly rooted in the global fashion industry environment while actively promoting young design at the same time. Today, with 20 staff, a turnover of €26.2 million and 75 marketing agencies throughout the world, the company is in a position to organise every type of trade fair in France. In 2017, the company’s trade shows brought together around 3000 exhibitors from 21 countries and 30,000 visitors from 110 countries. n

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AppArel / events

Pitti Bimbo to be held in Italy

P

itti Bimbo will be held in Italy from January 17

Pitti Bimbo expects around 10,000 visitors.

to 19, 2019. This is a trade show dedicated

A new addition for the upcoming season

to children. The program will feature 553

is the launch of KidsLabs, a partnership

brands, of which 60 per cent are international. Among the brands that will exhibit at the

with museums that will offer children a chance to participate in workshops with the Science and Technology Foundation.

show, around 40 will be from France, including

A space dedicated to licensed products will also be part of the

Bonton, Arsène et les Pipelettes, Tartine et

trade show as the Bologna Licensing Trade Fair and the Bologna

Chocolat, Bleu comme Gris, luxury baby shoe

Children’s Book Fair which will feature around 20 franchises

brand Jolee Môme and Yves Salomon Enfant.

including National Geographic, Miffy, and Pokemon. n

Tommy Hilfiger’s next show to be held in Paris

Pure Origin London to showcase innovations and materials for AW21/SS22

F

ashion

festival

Pure London, Pure Origin

will

launch

its own forward trends catwalk

showcasing

key

innovations

looks,

and materials for AW21/

T

SS22. Pure Origin will

will be held from Feb. 25 to March 5, 2019. It

supply chain expo. Major players in the industry will showcase

will allow the label to show off the fruits of its

new technologies and emerging trends that will shape the

collaboration with American actress and singer,

future of fashion and help businesses to stay ahead of the curve

Zendaya. Tommy Hilfiger chose Paris for its next

in today’s fast-changing retail landscape. Offering a visual

show, following a string of previous events in

platform, the catwalk will showcase the latest trends for sourcing,

Shanghai, Milan, London, Los Angeles and New

sustainability and manufacturing including fabric, raw materials,

York. The brand will present a see-now-buy-now

apparel, footwear and accessories.

ommy Hilfiger’s next show will be held

be held from February

in Paris, on March 2, 2019 during the

10 to 12, 2019. This is

Paris Womenswear Fashion Week that

a manufacturing and

collection, in line with its current strategy.

Pure Origin will bring together over 200 exhibitors from 13

The event will showcase Tommy Hilfiger’s

countries to create a wide range of business and networking

latest creative collaboration. It will also

opportunities, new thinking and innovation. Garment and fabric

showcase the first pieces from the spring 2019

suppliers, denim and textile designers and technology brands

line ‘TommyXZendaya.’ All of the looks shown

attract buyers, sourcing, and technical personnel. With its own

on the catwalk will be available for sale after

seminar stage,

the show in over 70 countries, via the label’s

change-makers debating the future and how to make it

stores, partners and e-commerce store. n

sustainable and circular. n

Pure Origin features speakers and leading

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AppArel / Compliance

AAFA’s new guidelines for denim finishing facilities to create better industry

T

he American Apparel and Footwear

and contracted out by brands. They include afety protocols

Association (AAFA), through its Safety

for common techniques in denim finishing, like bleaching

in

or creating wear marks that a more general understanding

Denim

collaborated

Finishing with

Working

industry

Group,

professionals

and outside consultants to release a new

of workplace safety might not properly cover.

set of guidelines and best practices for

Those tapping into the denim

denim finishing facilities in December. These

safety guideline will find several

guidelines are expected to create a better

indicators for success, the least

industry for both workers and the brands they

of which is an increased level

represent.

of production and return on

The guidelines are specifically designed

investment for brands that should come as a result of fewer

for denim finishing facilities, giving facility

production accidents and employee illnesses. Brands will also

managers—most of which are independent

be able to attract better workers and better press.n

Oeko-Tex updates standards for use of chemicals in textiles and leather

O

eko-Tex has updated its standards for

The even more stringent requirements for residues in textile materials

chemical use in textiles and leather.

will result in an overall lower impact on the environment, workers and

These new regulations will come into

consumers. Standard 100 by Oeko-Tex is a worldwide consistent,

effect on April 1 after a three-month transition

independent testing and certification system for raw, semi-finished and

period.

finished textile products at all processing levels, as well as accessory

Important changes for companies that are part

materials used.

of Oeko-Tex’s various certification programs have

For over 25 years, Oeko-Tex’s strategy has not been to wait for

the substance benzene and four amine salts have

legislation but to be proactive in the field of consumer protection as

being included in the Standard 100 by Oeko-Tex

a pioneer. n

and Leather Standard by Oeko-Tex programs with limit values defined. The substance quinoline, which has been under observation by Oeko-Tex since 2018, is now also regulated with a limit value. Limit

values

have

been

made stricter for Standard 100 by

Oeko-Tex

(softeners),

for

phthalates

alkylphenols

and

alkylphenolethoxylates, as well for perfluorinated and polyfluorinated compounds.

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APPAREL / inFrasTrUCTUre

India creates a export promotion cell for a MSME enterprises

a

n export promotion cell has been created

join the Trade Receivables e-Discounting System

to create a sustainable ecosystem for

so that MSMEs don’t face troubles in cash flow.

micro, small and medium enterprises.

GST-registered enterprises will get a 2 per cent rebate on an

The cell will evaluate the readiness of these

incremental loan of up to a crore. The interest subvention on pre

enterprises to export their products and services,

and post shipment credit for exports by micro, small and medium

identify areas where improvements are required

enterprises has been increased from three per cent to five per cent.

in order to be able to export effectively and

A Rs 6,000 crore(US$ 852 million) package has been announced

efficiently and attempt at integrating the

for technological upgradation of these enterprises. About 20,000 hubs

enterprises into the global value chain.

and 100 tool rooms will be developed around the country for this.

In addition all companies with a turnover of more than Rs 500 crore (US$ 71 million) have to

Retail sector likely to add 39m sq ft space by 2022

Mandatory sourcing by PSUs from small enterprises has been increased to 25 per cent from the previous limit of 20 per cent. n

Center for excellence for research and training opens in Tirupur

a

center for excellence has been set up in Tirupur by the Apparel,

Made-ups,

and

Home Furnishing Sector Skill Council. The center to take up research and training in apparel production The center will be involved in

a

research in apparel manufacturing technology and processes,

to add about 39 million sq ft of space in

units. It has the capacity to train about 30 members for a course

four years to the end of 2022, of which 71 per

and accommodate 100 candidates at a time. The aim is to give

cent will be in metros and tier-I cities. Ahmedabad,

candidates the experience and exposure to best practices and

Bhubaneswar, Ranchi, Kochi, Lucknow, Surat and

skills in the industry. The facility has machinery for the entire apparel

Amritsar are among the metros and tier-I cities

production process, including automatic cutting machines, sewing

where the next chapter of growth is likely to unfold.

machines, embroidery machines, and finishing equipment. There is

ccording to Anarock Property Consultants.,

conducting short-term management development programs,

India’s organised retail sector is expected

supervising development programs for those employed in apparel

The organised retail segment is projected to

machinery for made-ups and home furnishings and trainings will be

grow to 19 per cent of the overall retail market

conducted for personnel working in these units too. It will function on

by 2020, up from 4 per cent 10 years ago,

a paid model, with industries paying for the training and courses will

boosted by rapid urbanisation, digitisation, rising

be conduct by the center’s own resource personnel. So far some

disposable incomes and lifestyle changes.

6.5 lakh candidates have been trained across the country, covering

Over the past two decades, the Indian retail market

jobs such as tailoring, ironing and cutting. The plan is to train another

has transformed from traditional shops to large multi-

eight lakh workers this year. Another such center will be opened in

format stores in malls offering a global experience and

New Delhi. While the one at Tirupur is mainly for knitted products, the

on to the highly tech-driven ecommerce model.n

one in New Delhi will be for woven products. n

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APPAREL / nOTiFiCaTiOns

Ministry Notification Sub.: List of HSN Codes of Technical textile DGFT in its notification number 54/2015-2020 dated 15 January, 2019 have notified the list of 207 technical textiles items. In the list of 207 products there are 174 products are from the textile value chain, with 12 products which fall under rmg category. For Full Notification: http://dgft.gov.in/sites/default/files/ Notification-54%20dt-15.01.2019%28E%29.pdf

Sub.: Interest Equalization Scheme on Pre and Post Shipment Rupee Export Credit included Merchant Exporters RBI in its notification no. RBI/2018-19/107 dated 11 January, 2019 stated that it has been decided by the government of india to include merchant exporters also, w.e.f. January 2, 2019, under the ongoing interest equalization scheme for Pre and Post shipment rupee export Credit and allow them interest equalization at the rate of 3% on credit for export of products covered under 416 tariff lines identified under the Scheme. For Full Notification: https://www.rbi.org.in/Scripts/ NotificationUser.aspx?Id=11453&Mode=0

Subject: Amendment in Para 4.14 and 4.16 (ii) of the Foreign Trade Policy 2015-20 DGFT in it Notification No. 53/2015-20 dated 10.01.2019 has extended the exemption from integrated Tax and compensation cess for import against advance authorizations upto 31.03.2019 For Full Notification: http://dgft.gov.in/sites/default/files/ Notification%20No.%2053%20English%2010-01-2019_0.pdf

Sub.: Mandatory recording of information on DGFT website about transfer of MEIS scrips issuesd from 14.01.2019 onwards (for EDI ports only) DgFT in its Trade notice no. 42/2015-2020 dated 11 January, 2019 has stated that in order to improve ease of doing business, it is being planned to discontinue issue of meis scrips in physical form. For Full Notification & Procedures: http://dgft.gov.in/sites/ default/files/Trade%20Notice%20No.%2042%20dt.%2011.01.2019_0.pdf

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APPAREL / gsT UPDaTe

1. compositioN scheme Section 10 of CGST Act 2017 stated that a registered person, whose aggregate turnover in the preceding financial year did not exceed, - rs. 1 Cr. in normal category of states including Uttarakhand and Jammu & Kashmir - Rs. 75 lacs for special category states (Sikkim, Assam, Arunachal Pradesh, Tripura, nagaland, manipur, meghalaya, mizoram, himachal Pradesh), may opt to pay tax under composition scheme.

s.No.

category of registered presoN

rate of tax

1.

manufacturers

1% of turnover

2.

restaurant services

5% of turnover

3.

traders or any other supplier eligible for composition levy er supplier eligible for composition levy

1% of taxable turnover

Turnover of all businesses with same Pan has to be added up to calculate turnover for the purpose of composition scheme. Composition scheme was not eligible for following categories of supplier: • Supplier of service other than restaurant owners(Serving foods and nonalcoholic drinks) • Supplier of non-taxable goods • If the person in engage in the inter-state supply/export of goods/supply from domestic tariff area to seZ unit • Supplier supplying goods through E-commerce operator, who is eligible to collect TCs • Supplier of tobacco, pan masala, and ice cream and other edible items containing cocoa, • Casual taxable person or a non-resident taxable person. Note: There is no restriction procuring goods from inter-state suppliers/imports for composition dealers in latest 32nd GST Council meeting held on 10th January 2019, following amendments have been made which are effective from 1st April 2019.

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APPAREL / gsT UPDaTe

For Supplier of Goods: - annual Turnover limit for availing composition scheme - in the normal category of states including Uttarakhand & Jammu & Kashmir has been increased from Rs 1 Cr. to Rs. 1.5 Cr. - Special category states would have to decide within a week about their turnover limit in their respective states. For Supplier of Services: - a composition scheme shall be made available for supplier of services (or mixed supplies) with a tax rate of 6% (3% CgsT +3% sgsT) having an annual Turnover in the preceding Financial Year up to rs. 50 lakhs. The said scheme shall be applicable to both service providers as well as supplier of goods & services. after this meeting, now service providers as well as supplier of goods & services also eligible for composition scheme, but exporters or supplier to seZ are not eligible. however, import of goods or services does not restrict the eligibility for composition scheme. NoteThey would be liable to file one Annual Return with Quarterly Payment of Taxes (along with a simple Declaration) Conditions to be satisďŹ ed by a composition dealer: 1. not allowed to avail input tax credit of gsT on purchases. 2. a Composition Dealer has to issue Bill of Supply. They cannot issue a tax invoice. 3. The taxable person is required to furnish gsTr-4 on a quarterly basis and an annual return in FOrm gsTr-9a. 4. not allowed to collect composition tax from the buyer. 5. Composition scheme if opted will apply for all businesses associated with this Pan.

2. exemptioN threshold limit another major amendment has been made in the threshold limit for exemption. earlier it was rs. 20 lacs in the normal category of states and rs. 10 lacs for special category of states. now, there would be two Threshold Limits for exemption from registration and Payment of gsT - For the suppliers of Goods i.e. Rs 40 lakhs and Rs 20 lakhs. states would have an option to decide about one of the limits within a weeks’ time. - For Service Providers would continue to be Rs 20 lakhs in case of normal states and in case of Special Category States at Rs 10 lakhs. This amendment also applicable from 01st april 2019

3. reveNue mobiliZatioN for Natural calamities gsT Council approved Levy of Cess on Intra-State supply of goods and services within the state of Kerala at a rate not exceeding 1% for a period not exceeding 2 years.

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AppArel / aepc event calendar

CALENDAR OF EVENTS -

1

February, 2019, USA

2

2019

March, 2019, Uruguay & Chile

Sourcing at Magic, Las Vegas, USA

3

July, 2019, HONG KONG

Buyer Seller Meet at Uruguay & Chile

4

July, 2019, JAPAN

Hong Kong Fashion Week at Hong Kong

5

August, 2019, USA

India Trend Fair (ITF) at Tokyo, Japan

6

September, 2019, France

Sourcing at Magic, Las Vegas, USA

7

October, 2019, SPAIN

WHO’s Next, Paris – France

8

November, 2019, AUSTRALIa

India Apparel & Accessories fair at Madrid, Spain

International Sourcing Expo Australia

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