EAI 01 ISSUE 04
100
Activewear ready for exponential growth globally
GERMANY
India yet to capitalize on the potential CHINA’S EXPORT SHARE TO EU, US DECLINES APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
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| July 2018
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APPAREL / CHAIRMAN’S MESSAGE
DEAR FRIENDS,
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e are indeed grateful to the Hon’ble Minister of Finance, Mr Piyush Goyal and Hon’ble Minister of Textiles, Smt Smriti Irani for their efforts and direction in having the relevant mandate provided to Drawback Committee to identify embedded Central and State taxes in apparel manufacturing. I am hopeful that once these taxes are reimbursed to us, it will help make our apparel exports more competitive and help reverse the 8 month trend of declining apparel exports from October 17 to May 18. AEPC has also requested that the identified Central and State taxes which are not being reimbursed against the current Drawback and ROSL schemes be reimbursed to industry with effect from October 1, 2017. AEPC has submitted its data on State and Central Taxes which are not subsumed in GST and are not refunded through ITC to Drawback Committee to consider it under ROSL. Collection of data for determination of drawback rates is underway. As part AEPC’s awareness initiatives, AEPC has successfully organized awareness workshops on Authorised Economic Operators (AEO) program in Gurgaon, Mumbai, Bangalore, Jaipur, Ludhiana & Tirupur. All those who joined us for these workshops are requested to follow up on this & get enrolled to the program as it will help in faster movement of good to all the major export destinations, besides giving your organisation the required credibility with regard to systems and safety issues.
AEPC is reviewing the current export promotion schemes and requirement of the industry with the view of develop new schemes. In this regard interaction meetings with exporters were organized in Mumbai and Tirupur. Your suggestions for developing new schemes that incentivise production, scales and employment are welcome. The sliver lining this month was that the Rupee crossed the 69 mark against dollar. On one side this will surely help in export competitiveness. However, we are also concerned about the rising cotton prices. With the hope that the industry finds opportunities to revive and grow - wish you all Happy Monsoons!
HKL Magu, Chairman, AEPC
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EAI 01 ISSUE 04
EAI 01 ISSUE 03
100
100
Activewear ready for exponential growth globally
GERMANY
India yet to capitalize on the potential CHINA’S EXPORT SHARE TO EU, US DECLINES APPAREL EXPORT PROMOTION COUNCIL MAGAZINE
| July 2018
CHAIRMAN AEPC Mr. HKL Magu CHAIRMAN EP Mr. Sudhir Sekhri ADDITIONAL SECRETARY GENERAL Anil Kumar Vasu Pillai ADVISOR AEPC Mrs. Chandrima Chatterjee PUBLISHER Apparel Export Promotion Council
Editor-in Chief & Publisher & CEO Sanjay Chawla Director - Salil Chawla Managing Editor - Sujata Dutta Sachdeva VP-Corporate Communications Shraboni Mukherjee Assistant General Manager - Saqib Meer Editorial - Narayan Subramaniam Editorial Asst. - Ranjit Kaur Correspondent - Ajay Kumar Goswami, Prerna Sharma Graphic Designer - Sanjeev D. Sonavane Production & Admn. - Dhansukh Rathod, Dinesh Poojary Mumbai Office: 38/314, Unnat Nagar 4, Off M. G. Road, MHADA Colony, Goregaon (W), Mumbai - 400 062. Ph: 022 2875 5181 e-mail: dfuif@yahoo.co.in / dfu@rediffmail.com Dehli Office: Salil Chawla, Business & Mktg: New Delhi - 110017, Mobile: +9193503 18639/ 95601 79633 e-mail: dfudelhi@yahoo.co.in Printing Press: VIBA Press Pvt. Ltd. C-66/3, Okhla Industrial Area, Phase-II New Delhi-110020 e-mail: info.vibappl@gmail.com
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C O N T E N T S EAI 01 | ISSUE 04
04 | The Broadcast
India’s Textile & Ready Made Garment (RMG)
Update for Index for Industrial Production (IIP) for FY (April) 2018-19
05 | The Broadcast
28 | COVER STORY
33| BRAND RETAIL
India’s Ready-Made Garment (RMG) Export Update for FY (April-May) 2018-19
06 | AEPC EVENTS
• AEPC holds AEO seminar in Jaipur • AEPC meets with exporters
10 | TRADE TREATIES
• India to request US to renew the GSP scheme • Tirupur hub awaits FTAs to boost exports
• Canada propose law to approve CPTPP agreement • Japanese Parliament approves bill for enactment of new CPTPP
• Malaysia wants CPTPP reworked • Sri Lanka to review FTA with China
Trump’s policies isolating the US, shaking up world trade order
16 | TRADE WAR
Mending trade relations with the US seems to be a tall order for India
18| EXPORT
• China top apparel supplier to the EU • EU textile imports up three per cent
19 | EXPORT
• Asia buffeted by trade tensions • Bangladesh garment shipments to India double • Vietnam textile exports to reach $200 bn by 2035
20 | SOURCING
US buyers diversifying their sourcing base
22 | OVERVIEW
China’s export share to EU, US declines, other Asian countries grow
24 | MARKETS
25 | MARKETS
• Italian menswear revenue up three per cent • China to lead global luxury buying
26 | MARKETS
Germany India yet to capitalize on the potential of world’s largest apparel import market
44 | PRODUCT FOCUS
Plus size fashion becoming mainstream in the US
46 | TECH TRENDS
Robots take centerstage in mass apparel manufacturing
48 | GREEN PROGRAM
Blue Jeans Go Green program gives new lease of life to used denim
50 | Fashion and its growing
Global fashion and growing inclination towards sustainability
54 | SUSTAINABILITY
• The North Face promotes circular fashion • Sportswear brands innovative methods to reduce pollutants
56 | GST NOTIFICATION
• Sub.: Advisory on circular no 49/2018 - GST dated 21-06-2018
57 | GST NOTIFICATION
• Sub.: Advisory on notification no 28 /2018 –CT Dated 19-06-2018 (Amendment to CGST Rules)
58 | NOTIFICATIONS
• Global cotton outlook reveals gap in demand and supplies • Global wearables market growth slows down
• House of Fraser to close more than 50 percent stores • H&M Q2 sales up two per cent
38 | FOCUS MARKET
• Global luxury apparel market to touch $60,793 m • Global luxury spending back on track
• Ralph Lauren adopts creative strategies to boost sales • India, a Market and sourcing hub for Tom Tailor
37| BRAND RETAIL
14 | TRADE WAR
• Gucci’s revenue up 49 per cent • US retailer PVH revises outlook
36| BRAND RETAIL
12 | TRADE TREATIES
• Christian Dior world’s largest retailer • Jimmy Choo to target millennial consumers
35| BRAND RETAIL
11 | TRADE TREATIES
• Luxury brands post remarkable growth • ABG acquires Nautica from VF Corp
34| BRAND RETAIL
Jyoti Apparels gets AEO certificate
08 | AEPC EVENTS
Lifestyle changes propelling growth in global activewear market
Ministry Notifications
59 | AEPC event calendar
CALENDAR OF EVENT - 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) 2018-19 INDEX OF INDUSTRIAL PRODUCTION Manufacture of textiles MoM Growth Rate Manufacture of wearing MoM Growth Rate (In %) apparel (In %) Month April
2017-18
2018-19
2018-19/2017-18
2017-18
2018-19
2018-19/2017-18
116
114.2
-1.6
155.5
134.6
-13.4 Source: CSO, 2018
Summary • Manufacturing of Textiles has shown a decline of -1.6% in April, 2018 and decline of -0.4% for the period of April-March, 2017-18
• Manufacturing of Wearing apparel has shown a decline of -13.4% in April, 2018 and -10.9% for the period April-March, 2017-18
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APPAREL / THE BROADCAST
India’s Ready-Made Garment (RMG) Export Update for FY (April-May) 2018-19 INDIA’S RMG EXPORTS RMG exports were to the tune of USD 1338.57 million in May 2018 with the decline of -16.62 per cent against the corresponding month of May 2017, which was USD 1605.37 million. In rupee term export for the Month of May 2018 was Rs. 9040.63 as against Rs. 10342.55 Cr. in May 2017 with the decline of 12.59 per cent. India’s RMG export to World in the April-May of 2018-19 was to the tune of USD 2688.38 mn. which has decreased by -19.82 per cent compared to the same period of previous financial year. During April-May 2017-18, India’s apparel exports were to the tune of USD 3352.81 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
-21.4
-22.76
May
10342.55
1605.37
9040.63
1338.57
-12.59
-16.62
April-May
21614.79
3352.81
17900.3
2688.38
-17.18
-19.82
Source: DGCI&S, Kolkata, 2018
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APPAREL / AEPC EVENTS
AEO Certificate awarded to M/s Jyoti Apparels, Mr. Balkishan Chhabra received certificate from Shri S. Ramesh, Member (Admn.), CBIC
J
Jyoti Apparels gets AEO certificate
yoti Apparels has been awarded AEO Certificate from Shri S Ramesh, Member (Admn.), CBIC. In view of growing concern among customs administrations about the threat posed through misuse of channels of import and export, there is a need to ensure security in global supply chain in international movement of goods. A business authorized by the Customs as an AEO can enjoy benefits flowing from being a more compliant and secure company as well as favorable consideration in any Customs proceedings coupled with better relations
with Customs. AEO status will also ensure a low risk score is incorporated into Customs ‘Risk Management System’ (RMS) and used to determine the frequency of Customs physical and documentary checks. The benefits may also include simplified Customs procedure, declarations, etc. besides faster Customs clearance of consignments of/for AEO status holders. M/s Jyoti Apparels said, “AEO is a very user friendly scheme providing several monetary and non-monetary benefits to importers and exporters. However, it has been seen that the entities are not showing full interest and not coming forward for the same. The custom department approach is very positive towards AEO program. In our opinion, more and more organizations should go for the affiliation of AEO program”. n
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APPAREL / AEPC EVENTS
AEPC holds AEO seminar in Jaipur
A
EPC in its initiative to create awareness and clarity about the AEO program among apparel exporters is organizing an AEO seminar series. AEO seminars have been successfully concluded in Gurgaon, Mumbai and Bangalore. AEPC in association with Office of the Commissioner of Customs, Jaipur, organized an AEO seminar in Jaipur on June 21, 2018. The presentation on AEO was given by Shri Manzoor Ali Ansari, IRS, Additional Commissioner, Customs, Jaipur, in presence of Shri Ravi Poddar, EC Member of AEPC, and President of GEAR with more than 40 garment exporters. n
OBITUARY
AEPC mourns on the sad demise of Shri Ranjit P Shah, Former EC Member, AEPC
(Left to Right) Shri R. N. Agarwal, Asstt. Director, AEPC Jaipur, Shri Ravi Poddar, EC Member of AEPC and President of GEAR, Shri Manzoor Ali Ansari, IRS, Additional Commissioner, Customs, Jaipur
AEPC meets with exporters
Meeting with member exporters in Tirupur (Top) and Mumbai (Bottom) to review the present export promotion scheme
RANJIT P SHAH 21/02/1933 - 21/06/2018
A
EPC has initiated an interaction meeting with member exporters and other stake holders to review the present export promotion scheme and to develop new schemes as per the requirement of the apparel industry. n
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Book Your Space Join us for the
International Sourcing Expo Australia (ISEA)
20 21 22
November 2018 Melbourne Convention & Exhibition Centre, Melbourne, Australia Australia’s leading sourcing expo for the Apparel, Accessories and Textile Industry Be part of the ultimate professional platform for international sourcing, learning and networking
Why Visit
Discover first-hand new trends in fashion and manufacturing meet, compare and connect with international Buyers and Buying experts expand your network commercial opportunities
Product Profile
Womenswear, Menswear, Childrenswear and Fashion Accessories
For further details, please contact: Mr. K S Bisht, Joint Director (Fairs & Exhibition) +91 124 2708156 (D), +91 9810527747, Fax : +91 124 2708004, E-mail: kbisht@aepcindia.com
The Application form may be downloaded from our website www.aepcindia.com (Highlights Section)
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APPAREL / TRADE TREATIES
India to request US to renew the GSP scheme
I
ndia plans to request the US to quickly renew the Generalised System of Preferences (GSP) scheme, which allows market access at zero or low duties for about 3,500 Indian products, including textiles and chemicals. US Trade Representative’s (USTR) office did not renew the scheme for India in April, saying it wanted to hold an eligibility review. GSP is the largest and oldest US trade preference program. Established by the Trade Act of 1974, GSP promotes economic development by eliminating duties on thousands of products when imported from one of 120 designated beneficiary countries and territories. Though the US Congress had voted to extend the GSP scheme through
2020, it was not done for India, Indonesia and Kazakhstan. Petitions were filed by the US dairy and medical device industries highlighting trade barriers in India and requesting a review of India’s GSP benefits. The United States is reportedly unhappy with recent caps imposed by India on medical products such as stents. n
Tirupur hub awaits FTAs to boost exports
T
irupur is looking for Free Trade Agreements (FTA) with the European Union, the US, UK and Russia. Exporters in the textile hub feel lack of access to key markets is hampering sector’s growth, making India lose market share to main competitor China. China, by using the advantages available to countries with predominant EU and US markets, has increased its exports and circumvented the Indian industry’s growth prospects in the global market. Till such time as FTAs are signed, Tirupur wants incentives to be available to the readymade garment sector, which will help create a level playing field for the
industry compared to competing nations. Exports of Tirupur in the last financial year have gone down by 5.6 per cent from the previous year. Among the reasons are the changes in duty and tax structure such as GST. There is no customs duty levied in other countries, especially Bangladesh and Sri Lanka, on import of yarn to produce fabric and garments meant for exports, except in India. Climate change too played havoc. Production of cotton remained minimal and could only meet five per cent of the requirements of Tamil Nadu spinning mills. About six lakh employees work for 6,500 knitwear and apparel units in Tirupur. n
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APPAREL / TRADE TREATIES
Canada propose law to approve CPTPP agreement
T
he Canadian government will soon propose the law to approve the pending Comprehensive and Progressive Trans Pacific Partnership (CPTPP) trade agreement. The government wants to be among the first ones to approve
the deal. The government’s decision was made public after Champagne presented the CPTPP agreement, formerly the Trans Pacific Partnership (TPP), in the House of Commons. The Trudeau government has been pressured by stakeholders to approve the agreement as quickly as possible. Mexico has already approved the multilateral trade deal, with Japan expected to have its ratification process concluded by the end of June. Australia has tabled the treaty in its Parliament and vows to expedite ratification, while Malaysia and Chile are both expected to ratify quickly. New Zealand, Singapore, Peru, Vietnam and Brunei also plan to approve the law soon. n
Japanese Parliament approves bill for enactment of new CPTPP
J
apanese Parliament’s upper house has passed a law ratifying the new CPTPP agreement of 11 countries, not counting one original member, the United States. Parliamentary approval is expected to help speed up related domestic procedures and add momentum toward the realization of an early enactment of the agreement. The TPP deal will enter into force once six or more countries complete their domestic procedures. Ever since his presidential campaign, pledging to withdraw, US President Donald Trump has been critical of the partnership. As a result, Trump signed a memorandum for US exit from the deal in January 2017. The pact mainly seeks to slash tariffs on farm and industrial products, protect intellectual property rights, simplify
customs procedures and establish rules on e-commerce. It was signed in March by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. n
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APPAREL / TRADE TREATIES
Malaysia wants CPTPP reworked
M
alaysia wants the CPTPP to be renegotiated and has urged protection for small countries in international trade. Eleven countries circling the Pacific signed a slimmed-down version of the CPTPP in March, opting to proceed with the deal after it was left for dead when the US pulled out. Malaysia’s ideal is a broad trade pact such as the East Asian Economic Caucus. Signatories to the CPTPP represent 13.5 per cent of the global economy and a market of 500 million people. The deal was pushed by the US in part as a way to counter growing Chinese commercial power. It cuts tariffs and requires members to comply with a high level of regulatory standards in areas like labor law and environmental protection. Malaysia does not want to be manipulated by the big players in the CPTPP. Its call to review the CPTPP agreement would be a blow for the eleven-member trade pact, which was finalized after tough negotiations earlier this
year following the withdrawal of one of the original signatories, the United States. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership, as it is now called following the US withdrawal, will reduce tariffs in countries that together amount to more than 13 per cent of the global economy. With the United States, it would have represented 40 per cent. n
Sri Lanka to review FTA with China
D
evelopment Strategies and International Trade Minister Malik Samarawickrama recently stated the
Sri Lankan government will hold ministerial level talks with China to review and iron out argumentative issues in the proposed Free Trade Agreement (FTA) between the two countries. The FTA was initiated by the Rajapaksa regime. The two sides also appointed negotiating teams. However, after the new government took office in 2015there was a change. The government recently signed a FTA with Singapore and held several rounds of talks with India for an Economic and Technology Cooperation Agreement (ETCA). Sri Lanka has already pledged its support to China’s Belt and Road initiative. n
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India Trend Fair Tokyo, Japan 19-21 Sep 2018
Have you booked your space yet
• More than 2500 professional visitors expected. • Organised by Apparel Export Promotion Council and Japan India Industry Promotion Association. • An exclusive Business Matching Event. • An opportunity for exporters to showcase their products and supply capabilities. • Special emphasis on Japanese fashion trends and requirements. • Buyer profile-Manufacturers, Wholesalers, Trading Companies, Importers, Speciality Stores, Departmental stores, Volume and Online Retailers etc.
TO AVAIL EARLY BIRD DISCOUNT APPLY BEFORE MAY 21 2018 For further details, please contact: Mr. K S Bisht, Joint Director (Fairs & Exhibition) +91 124 2708156 (D), +91 9810527747, Fax : +91 124 2708004, Email : kbisht@aepcindia.com The Application form may be downloaded from our website www.aepcindia.com (Highlights Section)
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APPAREL / TRADE WAR
Trump’s policies isolating the US, shaking up world trade order
W
ith the Trump administration imposing tariffs on a host of foreign-made goods, US trade scenario is becoming very challenging. Earlier it was China, and now it’s Canada’s turn to replicate it as the Trump government has imposed steel and aluminum tariffs on the European Union, Canada, and Mexico. Canadian Prime Minister Justin Trudeau deemed the tariffs an affront to the long-standing security partnership between Canada and the US, while French President Emmanuel Macron was warned that Trump’s action was illegal and creating economic nationalism.
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APPAREL / TRADE WAR
SHAKING UP GLOBAL TRADE DYNAMICS Going by the prevailing situation, Trump has stirred the entire trade dynamics in the country and that too in a negative way. Stats reveal every year Americans buy foreign goods & services worth $3 trillion. The EU, Canada, and Mexico have all retaliated against Trump’s metal tariffs by slapping duties on the US products from cheese to motorcycles. A trade collapse between the two biggest economies – the US and China – in the world would completely disturb the global economy. Add to that, a tiff between close partners Germany, France, and Canada would cause more danger than good to the US economy. By doing this, Trump administration claims they want to make trade fair and stop the rest of the world from taking advantage of the US and hurting American industry. As a matter of fact, some countries have been less open to foreign investment than the US and at times imposed higher tariffs or other barriers on American imports than the US does on its products. China has been an especially poor trading partner—pilfering US technology, blocking market access for US companies, and heavily subsidising competing industries. Because of this, cheaper imports have forced thousands of US factories to close over the past 20 years. As far as the North American Free Trade Agreement (NAFTA) renegotiation goes, one of the main sticking points is over a proposal to factor labor cost differentials into trade in automobiles. Adopting it would force Mexico to hike wages in its auto manufacturing sector by as much as five times or suffer extra duties on its car exports—effectively depriving the country of its comparative advantage. The idea is to push factories out of Mexico and into the US. In such a scenario, Trump may now favor negotiating bilateral deals with Canada and Mexico. Experts say, in all of these, Trump seems to be arm-twisting trading partners for concessions to aid and protect a small number of industries—steel, automobiles, agriculture, and
energy. He wants to hike tariffs on imported cars in the name of ‘national security’, a transparent attempt to force automakers to manufacture more cars inside the US. Analysts believe his trade policies aren’t about ‘fair’ trade, rather about solidifying his political base and rewarding his supporters. JörgWuttke, a former president of the EU Chamber of Commerce in China, stated Trump is badgering the Chinese state to intervene to redirect customer-determined flows of trade toward the US and away from other countries—including close allies. In doing so, the US is becoming isolated from its own partner countries. At a recent G-7 finance ministers meets, the other six ganged up on Mnuchin over Trump’s tariffs and demanded collective cooperation on resolving trade issues. It was the US against everyone else, said Japanese Finance Minister Taro Aso. Trump had a chance to team up with allies in Europe and Asia to pressure China to change its trade practices. Without the US support, the entire global order, which has produced so much growth and wealth over the past 70 years, could be quite dramatic, making way for dominant China and a diminished US. n
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APPAREL / TRADE WAR
Mending trade relations with the US seems to be a tall order for India
W
ith the US President Trump imposing import duties on Indian products such as textiles, gems and jewelry, automotive, organic chemicals and pharmaceuticals, it could spell trouble especially for SMEs in India. The impact could be huge, as the US accounts for nearly 16 per cent of India’s total exports. In 2017-18, India had a trade surplus of $21 billion with the US. The US’ industrial tariffs have fallen to close to zero after several rounds of trade liberalisation. But on the
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APPAREL / TRADE WAR
products like Harley Davidson motorcycles. The entire situation has made it worrisome for Indian garment exporters. Currently, the US import duty on garment import varies from 8 to 28 per cent. In comparison, India imposes customs duty on garment imports at a flat rate of 32 per cent. India’s garment exports in 2017-18 were 11 per cent lower than the preceding year. This declining trend has continued in the current fiscal. As much as 30 per cent of India’s garment exports go to the US.
TOUGH TASK AHEAD other hand, India still continues to impose high import duty, which the Trump administration aims to stop. For instance, India has kept high tariffs on automobiles and motorcycles (60-75 per cent), alcoholic beverages (150 per cent) and textiles (some ad valorem equivalent rates exceed 300 per cent). As per latest WTO data, in 2015 India’s average bound tariff rate was 48.5 per cent, while its simple ‘most favored nation’ average applied tariff was 13.4 per cent. The US claims because of this, exporters face tremendous uncertainty as India has considerable flexibility to change tariff rates at any time. During the G7 Summit, Trump had said the US is like the piggybank that everybody is robbing. He made it clear his tariff grievances went beyond developed economies. He especially mentioned India, which he said imposed prohibitively high tariffs on US
And to take control of the situation, the Trump administration has ordered a review of India’s compliance with 15 conditions outlined by the Congress for availing concession tariffs in the US market under Generalised System of Preferences (GPS). These tariff concessions are critically important for Indian SMEs exporting to the US. The Indian government has urged before the GSP subcommittee, which is conducting a review of India’s eligibility and will decide if the country is providing ‘equitable and reasonable’ market access as a quid pro for GSP benefits. But the chances of getting preference are meager. In fact, commerce minister Suresh Prabhu met the US secretary of commerce Wilbur Ross and US Trade Representative Robert E Lighthizer to resolve issues. The easy access that Indian exports have traditionally enjoyed in the US market could be a thing of the past, if the Modi government does not handle Trump’s demand on reciprocity in bilateral trade relations. n
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APPAREL / EXPORT
China top apparel supplier to the EU
I
n 2017, China supplied 33.3 per cent of EU’s apparel and textile; the country had a 34 per cent share of the EU’s clothing imports. Bangladesh ranked second, with a 17 per cent share. Turkey was third, with a 11.7 per cent share and India ranked fourth followed by Pakistan. The share of China, Bangladesh, and Turkey in EU clothing imports is 62.6 per cent. Textile products, including yarn, fiber, fabric and home textiles, imported by the European Union countries from all over the world in 2017 increased three per cent compared to the previous year. EU’s imports of textile products from Turkey last year increased 0.7 per cent compared to the previous year. The third largest textile supplier to the EU is India. Approximately €1.3 billion euro worth of textile products was imported from India in 2017. The fourth largest textile supplier to the
EU is South Korea. The EU itself has a vibrant textile and clothing industry. It covers a wide range of activities like transferring raw fiber into yarns and then yarns into fabric and then finally using the fabric to produce a wide range of finished products such as wool, bed linen, geo-textiles, clothing, and synthetic yarns. n
EU textile imports up three per cent
I
mports of textile products by the European Union in 2017 increased three per cent compared to the previous year. Textile products include: yarn, fiber, fabric, and home textiles. The most important textile supplier to the European Union was China followed by Turkey. The third largest textile supplier to the EU is India followed by South Korea. These four together have a 61.3 per cent share of EU textile imports. China’s clothing exports to the European Union ranked first, at about 34 per cent. The textile imports from Turkey last year increased by 0.7 per cent compared to the previous year. The share of EU clothing imports made in 10 countries is 89 per cent. There are three countries exporting over €10 billion worth of products to the EU. These are: China, Bangladesh, and Turkey. The share of these three countries in total clothing exports to the EU
is 62.6 per cent. Import of apparel and textile products to the European Union member countries, with a population exceeding 510 million, reached €110.9 billion in 2017. Of these, €92.6 billion were apparel products and €18.3 billion were textile products. n
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APPAREL / EXPORT
Asia buffeted by trade tensions
A
sia’s major manufacturing hubs are facing a hard time from rising global trade tensions. The biggest risk for China’s manufacturing sector stems from a potentially crippling trade war with the United States. Increasing trade tensions could put pressure on trade and related supply chain activities. Investment decisions in potentially affected industries have been delayed. New export orders for Chinese factories have fallen for second straight month. A full-blown Sino-US trade war will ripple through global supply chains, hurting economies from Europe to Mexico through to Australia and Japan. Any stress on Japanese exports will put more pressure on the economy which contracted at the start of the year. Japan’s domestic business growth is slowing and only a modest pickup is seen in export orders. Activity in South Korea, another major
Bangladesh garment shipments to India double
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angladesh’s garment shipments to India have more than doubled in the first 11 months of the fiscal year. Between July last year and May this year, $187.37 million worth of woven garments were shipped to India and $65.70 million worth of knitwear products. The reason for exponential rise is bulk purchase by western brands with operations in India and Indian clothing chains, which are finding Bangladesh garments more competitively priced for India’s bulging middle-class demographic. Besides Indian retailers like Tata, Reliance and Arvind, western brands like H&M, Zara and Mango are sourcing from Bangladesh in bulk. Like in previous years, woven garment shipments outnumbered knitwear as the demand for formal shirts is high in the country packed with office-going executives. Bangladesh’s garment manufacturers see India as an emerging market. In the next few years, they expect garment exports to India to cross the $1 billion mark. Bangladeshi garment exporters face a 12.5 per cent countervailing duty for shipments to India, although India has duty-free facility on all Bangladeshi products except some alcoholic and beverage items. Overall, Bangladesh exports to India increased 24.67 per cent year on year in the July-May period. n
export hub, reduced for third straight month as new orders continued to decline, prompting companies to cut staff at the fastest pace in almost a decade. Taiwan’s factory growth slowed in May to a 22-month low for new orders. India’s manufacturing sector grew at a softer pace in May. n
Vietnam textile exports to reach $200 bn by 2035
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ietnam’s garment and textile exports is likely to reach $200 billion by 2035 fuelled by import tax reduction brought about by free trade agreements, increased automation in production and favorable world market. Vietnam’s garment sector is likely to rake in $34.5 billion from exports this year. The sector has great potential for development to 2035. However, thorough preparations to meet the target export value are needed. Firstly, domestic material consumption rate needs to be raised, aiming at 80 per cent of fibers and 60-65 per cent of other materials by 2030-2035. Vietnam is now less dependent on Chinese materials as domestic materials can meet 4045 per cent of the sector’s demand. The rest of it is imported from China, Japan, Indonesia, the Republic of Korea and Thailand. n
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APPAREL / SOURCING
US buyers diversifying
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their sourcing base
or the past many years, two of the biggest global textile buyers, US and European, have been following the China + 1 or China + many sourcing strategies. Among these +1 or +many would be Asian countries like, Bangladesh, Vietnam, India, Sri Lanka. However, recent OTEXA statistics reveal even though US imports from these countries remain the highest they have
not clocked in the highest growth rates. Rather imports have enhanced from Turkey, Myanmar, Cambodia, AGOA countries for mass apparel as well as from Italy, France, and Spain. The reason for this is the consumers’ growing thrust on high value clothing rather than mass produced low end commodities.
CHINA’S DOMINANCE STAYS US apparel imports from China from January-March 2018, at $5802.021 million, were 0.87 per cent higher than in the same period of 2017. In volume terms, Chinese exports to the US amounted to 2482.089 million SME, an increase of 3.74 per cent during the period under review. In 2017, China’s apparel exports to the US fell 3.17 per cent to $27030.289 million, which was still 33.67 per cent of total apparel imports of the US in terms of value, and 42 per cent in volume. In the first three months of 2018, China’s share remains the highest, but the share seems to be on downfall. In value, China’s share in US apparel imports was 30.17 per cent, and in volume, 38 per cent. If experts are to be believed, Chinese imports are set to fall further owing to ongoing tariff and trade wars. Having said that even after an overall 25 per cent tariff increase by the US on imports of Chinese apparel, China will still be far more competitive than its counterparts. Vietnam, Indonesia and
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APPAREL / SOURCING
India will still remain costly affairs barring Bangladesh, which is set to boost the country’s exports in near term.
VIETNAM’S GROWING SHARE Vietnam is the second largest apparel supplier to the US. Apparel imports from Vietnam during January-March 2018 were $2858.357 million, an increase of 3.32 per cent compared to the same period in 2017. The US imported garments worth $1356.166 million from Bangladesh during January-March 2018, a drop of 0.92 per cent. In 2017, imports from Bangladesh were down by 4.46 per cent. The fourth largest supplier to the US market, Indonesia, has fell further 5.78 per cent to $1149.891 million. In 2017, imports were Indonesia were down 3 per cent. While India’s share remained stagnant. During JanuaryMarch 2018, US imports of apparel from India at $1036.066 million, were marginally lower by 0.79 per cent, compared to CPLY. In 2017, India’s apparel exports to the US registered an increase of 1.17 per cent.
million. Moreover, there has been an increased sourcing pattern from Turkey over the years. During January-March, US apparel imports from Turkey at $147.996 million were 21.75 per cent higher than in the CPLY. In 2017, the US imported apparel worth US$ 526.546 million from Turkey, which were 11.51 per cent higher than in 2016. Egypt also indicated high demand. During January-March 2018, imports from Egypt were up 15.78 per cent, to $203.355. In 2017, imports from Egypt at $726.547 climbed 5.13 per cent compared to 2016. Imports from Italy rose 20.52 per cent during the first three months of 2018. Imports from France recorded a growth of 11.24 per cent, to $41.756 million. Top exporting countries from AGOA include: Kenya, Lesotho, Madagascar, Mauritania, Morocco, Ethiopia and Tanzania. While most of these countries
EMERGING SOURCING DESTINATIONS Latest statistics indicate Cambodia can emerge as an important apparel sourcing destination for the US. While it offers the lowest prices, it does not have the capacities to match the demand of the US buyers. US imports from Cambodia went up 12.52 per cent to $587.715 million. In volume terms, too, imports registered a similar increase of 12.75 per cent to 262.845 million SME. US imports from Myanmar are quite negligible but growing at a fast pace. During January-March 2018, US apparel imports from Myanmar amounted to $33.785
registered double-digit export growth to the US this year, Ethiopia’s apparel exports grew 101.58 per cent during January-March 2018. US buyers imported apparel worth $21.955 million from Ethiopia. n
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APPAREL / OVERVIEW
China’s export share to EU, US declines, other Asian countries grow China’s leading position is continuously being threatened with the arrival of low coast production regions in Asia and ASEAN region. Latest Euratex and OTEXA reports suggest even though emerging countries are gradually gaining market share, some of the businesses are actually Chinese companies that have relocated here.
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hina’s leading position is continuously being threatened with the arrival of low coast production regions like Bangladesh and Vietnam. Euratex studies show Mediterranean countries, which have long benefited from their proximity to the EU-28, have held the same position for the last few years. Contrary to China, SAARC and ASEAN zones have grown slowly but surely since 2010, improving gradually their share in EU textile & clothing imports. In 2017, these four zones still accounted for over 86 per cent of total extra-EU textiles and clothing imports.
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APPAREL / OVERVIEW
ASIAN COUNTRIES GAINING MARKET SHARE IN EU As for products, China was the main supplier of woven garments. However, its share continued to decline only to the benefit SAARC and ASEAN regions whose shares went up. Traditional suppliers of the EU-28, the Mediterranean countries expanded their market share. In import of knitted garments, China was again overtaken by the SAARC region whose share now make up one third of total EU imports. Clothing accounted for more than half of EU-28 exports in 2017, due to sharp rises of exports to EU’s top customers. In 2017, extra-EU exports went to four main defined country groupings whose respective shares were Mediterranean countries: 13.3 per cent; Group of autonomous countries: 12.4 per cent; EFTA group of countries: 16.4 per cent; NAFTA group of countries: 17.0 per cent. These four groups accounted for 59 per cent of extra-EU textile and clothing exports in 2017. Woven fabrics were the major textile product in EU-28 textiles exports. The NAFTA zone and the Mediterranean countries are the biggest purchasers of textile goods. Articles of clothing accounted for more than half of all exports, almost two thirds of which was woven items. EFTA and NAFTA areas make
up the two main buyers. Items of apparel continued to interest developed countries and certain consumer categories in developing countries with increasing purchasing power.
CHINA LOSES SHARE IN US AS WELL China’s textiles and apparel exports to the US may have plummeted 10.9 per cent to 2 billion sq. mt. equivalents (SME) in April 2018. In dollar terms, China’s exports to the US in April fell 12 per cent to $2.3 billion, as industry imports overall rose 3.9 percent to $8.02 billion. But this hasn’t stopped textile and apparel shipments to the US from increasing by 1.1 per cent in April to 4.99 billion (SME) compared to a year earlier, led by major increases from Pakistan, Bangladesh, South Korea, India and Cambodia, according to the Commerce Department’s Office of Textiles & Apparel (OTEXA). Among the top 10 suppliers, imports from India rose 13.2 per cent to $707.27 million, Pakistan’s shipments increased 24.5 percent to $236.98 million, Bangladesh’s grew 16.8 percent to $460.88 million, Vietnam’s were up 6 percent to $978.22 million, South Korea’s rose 6.8 percent to $73.54 million, Cambodia’s increased 27.8 percent to $218.32 million and Indonesia’s were up 11.3 percent to $426.48 million. n
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APPAREL / MARKETS
Global luxury apparel market to touch $60,793 m
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s per a study, the opportunity in global luxury apparels market will be worth $60,793.7 million by the end of 2024 up from $1,8842.69 million in 2015. Between 2016 and 2024, the global market is expected to expand at a CAGR of 13.2 per cent. Increasing affordability of luxury apparels is one strong reason for mass production of goods, which has transformed the way of dress making. The luxury apparels market boasts of an esteemed clientele comprising high net worth individuals. However, over the years several designers and fashion brands have started reaching out the broader range of customers
through affordable products. Big brands such as Louis Vuitton, Prada, and Versace are expanding to developing countries, which has not only improved their geographical reach but also won them newer consumer base. n
Global luxury spending back on track
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hile the retail sector has performed well lately, the best growth is happening at the high end. With global economy going strong, millions of people are entering the middle class, especially in India and other Asian countries the trend is showing no signs of slowing down. And spends on luxury goods are growing. Take Movado for example, their shares have been on the rise, gaining 60 per cent year on year. The group has a range of watches, jewelry and accessories at multiple
price points. Its Swiss-made timepieces are sold both from its own branded retail stores and high-end department stores. Movado also manufactures goods under licensing deals
with other fashion brands like Coach, Hugo Boss and Lacoste. Tiffany continues to command premium prices for its jewelry and accessories in a business that has in many other cases become highly commoditized. Tiffany is the brand of choice for high-end jewelry customers. The company reported revenue growth in the Americas, Asia and Europe and improved gross and operating margins. It also announced the opening of four new retail stores, bringing the worldwide total to 314. Burberry manufactures luxury clothing and accessories. It’s known for its checked plaid pattern. After a difficult year in 2015, Burberry is back on track and shares have nearly doubled in the past two years. n
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APPAREL / MARKETS
Italian menswear revenue up three per cent
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ade-in-Italy men’s fashion posted a 3.4 per cent revenue growth in 2017, higher than the 2.1 per cent rise initially forecast last January. Total menswear revenue was equivalent to a 17.2 per cent share of Italy’s overall textile/fashion revenue, and a 27.4 per cent one of apparel revenue alone. Knitwear was up 7.6 per cent and garment manufacturing was up 3.4 per cent. Shirt and leather apparel production were down by more than two per cent and ties fell by 9.5 per cent. Exports accounted for 65.5 per cent of total menswear revenue. In 2017, Germany surpassed France as the main foreign market for Italian menswear exports, growing 10.1 per cent. Exports to the UK also grew by a healthy 8.3
per cent, making the UK Italy’s second-largest market. France was up 3.8 per cent and Spain 3.9 per cent though the latter slowed down after the 15.4 per cent leap in 2016. Russia was one of the most positive markets for Italian menswear in 2017, with exports growing 19.6 per cent. n
China to lead global luxury buying
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lobal sales of personal luxury goods, such as handbags and clothing, are expected to increase six to eight per cent this year. Growth is expected to continue at four to five per cent a year to 2025. China – and especially the country’s younger consumers – will account for the lion’s share of growth in 2018. The luxury goods market in China is expected to grow 20 to 22 per cent this year. Year 2018 has been off to a strong start. Currency, fluctuations will have an
impact but the healthy trend is expected to continue across all regions and customer segments. Brands are adapting to the tastes of local consumers, especially the young and tech-savvy users of social media. Local influencers and social media are also key to younger consumers in Japan, where the luxury goods market is expected to grow by six per cent to eight per cent this year. The rest of Asia, including key markets of Hong Kong and Macau, is expected to grow nine to 11 per cent. The Americas are expected to grow by three per cent to five per cent this year and Europe by two per cent to four per cent. n
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APPAREL / MARKETS
Global cotton outlook reveals gap in demand and supplies
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orld cotton consumption is projected to increase to 26.7 million tons in 2018-19 while world cotton production is estimated at 25.7 million tons. Production in China is projected to decrease to 5.6 million tons based on reduced planting area, while consumption is forecasted to increase to 8.4 million tons. US production, meanwhile, is projected to decrease to 4.2 million tons with exports projected to increase three per cent. Reduced yields in 2017-18 in India are contributing to lowered planted area for 2018-19 with exports projected at 8,40,000 tons representing a 24 per cent decrease from the previous season. Production in Brazil for the 2017-18 season is forecast to be 1.9 m tons, a 26 per cent increase from 2016-17, with 9,00,000 tons projected for export. Production for the West Africa region in 2017-18 is estimated at 1.2 m tons, representing a 13 per cent growth from
the previous season, with exports for the region expected at 1.04 million tons. A third consecutive season of growth in demand for cotton, coupled with a decline in world cotton production and poor weather conditions in both China and the US – the world’s leading exporter of the fiber – is adding another layer of uncertainty to the cotton market. n
Global wearables market growth slows down
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s per International Data Corporation (IDC), global shipments of wearables grew only 1.2 per cent in Q1 2018 – as compared to 18 per cent growth reported this time last year, as consumer preference shifted toward smarter devices and products diversified. The deceleration was driven by a decline of 9.2 per cent in shipments of basic wearables over the period, while advanced products. While watches and wristbands accounted for 95 per cent of all shipments in Q1 2018, other products also grew rapidly. Shipments of sensor-laden clothing, for example, grew by 58.6 per cent shipments of higher priced smart wearables actually increased 28.4 per cent in the quarter, suggesting that consumers are increasingly interested in the expanded capabilities of more technologically
compared to Q1 2017. The vast majority of these products are step-counting shoes but companies are offering increasingly diversified sensor-enabled apparel pieces, such as shirts and shorts, primarily with fitness tracking functionalities. n
M
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DISCOVER THE FASHION MARKET OF SPAIN! UNCOVER YOUR F UT URE MARKET GROW TH!
Join us for the
Buyer-Seller Meet Madrid, Spain
3-4 October, 2018
For further details, please contact: Mr. K S Bisht, Joint Director (Fairs & Exhibition) +91 124 2708156 (D), +91 9810527747, Fax : +91 124 2708004, kbisht@aepcindia.com The Application form may be downloaded from our website www.aepcindia.com (Highlights Section)
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APPAREL / COVER STORY
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LIFESTYLE changes propelling growth in global activewear market
CHANGING LIFESTYLES FUELLING GROWTH Activewear and athleisure will continue to move ahead and be the fastest growing category, clocking in 20-25 per cent growth. Within athleisure, menswear is increasing at 8-10 per cent, while women’s and kids’ wear is growing at 11-15 per cent annually. The spurt of new brands and new product launches is making athleisure one of the most favored apparel categories. A Euromonitor research showed athleisure has greatly benefitted sportswear market, which is expected to continue growing faster than the overall apparel and footwear segment till 2021. The trend is evolving across all apparel and footwear categories as the technical attributes of sportswear merge with the aesthetics of fashion. With health and wellness becoming a priority, investments in activewear is increasing. Athleisure has influenced multiple industries today, from apparel and footwear to sports nutrition. Consumers are seeking products that affirm their identity as an active individual such as wearable electronics. As exercise becomes a social activity, industries such as beauty are also benefitting.
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ctivewear and athleisure categories have becoming very dynamic today clocking in exponential growth. Athleisure is not only about trendy sportswearit’salso about relaxed apparels and a lifestyle change that comes with growing health consciousness and a new culture of leisure wear at workplace that has made it acceptable to wear T-shirts and other leisure wear to office. This change has been largely driven by millennials in the US where 28 per cent wear such clothes. APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | July 2018
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Growing on the back of increasing health and fitness awareness, the sportswear category is estimated to be $6-7 billion in India.
GROWTH TRIGGERS FOR ACTIVEWEAR
US THE BIGGEST MARKET, INDIA GROWING AS WELL Till now, the US was the leading market for athleisure brands however, China is fast emerging a close second. The market for activewear/athlesiure in the US with a population of 321 million people is estimated at $44 billion, says a NPD Group study. While the category is expected to continue growing, Morgan Stanley forecasts it will reach $83 billion by 2020. Meanwhile the Chinese market is brimming with opportunities. China began exploring national fitness policies as far back as 1978. Following the Beijing 2008 Olympics president Hu Jintao, announced a government-backed sports-for-all fitness policy.
Growing disposable income across the world, especially in emerging economies like China and India, is one of the many reasons for increased popularity of activewear. Studies show consumers who buy athletic apparel work out at least three times a week.Euromonitor International’s sportswear survey found running gaining ground because it does not require a specific field or equipment, with low entry barriers for ordinary people. Rising passion for running amongst average consumers gave rise to the rapid growth of running footwear and apparel. In fact, sportswear growth has been driven to a point where it’s threatening to overtake luxury goods market by 2020. In response, active wear market is rapidly diversifying, making room for smaller brands, hoping to capture an increasingly discerning group of consumers. In the past, luxury goods were seen as a status symbol. Now,mindsets have changed as consumers are more willing to invest on themselves, by traveling, going to cooking classes, exercising. So it’s not about a bag to show off rather it’s about mental enrichment. China has taken up fitness as the expression of reflecting oneself replacing traditional luxury goods to an extent. The Chinese market for activewear is going to be one of the biggest. The market is shifting as consumers want to express themselves and are looking for unique designs and products. For active wear shoppers, working out is less of an event and more of a lifestyle. Form-fitting, athletic-inspired clothes have become the ‘new casual’ and changed the way one dresses for the gym, casual and social occasions, or even office. With the United Nations General Assembly (UNGA) declaring June 21 as International Yoga Day, India and the world have seen an exponential rise in yoga and outdoor activities which in turn is fuelling the growth of activewearand athleisure categories.
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APPAREL / COVER STORY
ACTIVEWEAR BECOMES EVERYDAYWEAR A study on activewear showed one wears it for running errands (40 per cent), shopping (42 per cent), around the house (39 per cent), out to eat or a movie (33 per cent), and doing yard work (27 per cent). Nearly 6 out of 10 consumers (59 per cent) choose activewear for other activities because it’s comfort. Regardless of activity preference or exercise level, cotton (47 per cent) is by far the overall fabric preference in activewear, followed by cotton blends (20 per cent), rayon (7 per cent), and polyester (4 per cent). Further, 69 per cent say it’s the only fabric/one of the few fabrics they consider when shopping for athletic apparel.
INNOVATIONS BOOST SEGMENT
There are several opportunities for retailers and brands that adopt cottonoutdoor product. Because, although consumers know about active performance technologies like water repellent, thermal regulation and moisture management, research shows the percentage who actually purchased them is very few. A survey shows just 40 per cent people purchased cotton with water repellency, 35 per cent bought clothes with thermal regulating properties and 32 per cent bought apparels with moisture management. Research indicates consumers who bought apparel with performance technologies in the past are very satisfied (80 to 95 per cent) with their performance and twice as likely as non-purchasers to pay a premium for these added benefits. n
New technologies in moisture wicking and weather resistance are helping cotton overcome outdoor challenges in performance apparels. People in the active outdoor business are wary of traditional cotton fabric when indulging in activities like hiking and backpacking as the absorbent fabricsoaks in sweat, retaining moisture next to the skin giving the wearer a chill. But various technologies have proved performance cotton can repel moisture from the weather and wick moisture from inside and dry faster than traditional cotton and manmade fibers like polyester.
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APPAREL / PRODUCT FOCUS
Wool emerging a preferred material for activewear
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ool is emerging as a preferred material for activewearfor many athleisure companies like Adidas and Lululemon. Wool scores due to its inherent properties such as softness and odor-resistant capabilities. This trend was particularly evident at the recent ISPO fair in Munich. Norwegian brand Devold won ISPO Award 2018 for its Tuvegga Sport Air base layer. The reversible two-sided functional base layer is designed for high-performance activities and made from 100 per cent Merino wool.At the event, the Woolmark Company displayed products like wool footwear, seamless apparel and wool filling. While many outdoor brands already have wool in their collections, increasing number of brands are
introducing wool into their high-intensity categories. Greater Than A, the sportswear brand of Norwegian alpine ski racer Aksel Lund Svindal, an Olympic gold medalist, also uses wool in his sportswear brand. The brand aims to make functional clothing that looks and feels fantastic while not causing any harm to the planet.Aksel uses wool for training and has a race suit designed for aerodynamics. The trick is to get changed as soon as one can in the finish area. n
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APPAREL / BRAND RETAIL
Luxury brands post remarkable growth
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recent Deloitte Global Powers of Luxury Goods 2018 report reveals the world’s 10 leading luxury corporations generated nearly half of the Top 100 ranking’s aggregate sales. The three groups at the top of the ranking, LVMH, Estée Lauder and Richemont, posted double-digit growth year-on-year for every year in the last five years. Sales growth slowed down for the majority of corporations, partly due to comparison with high growth rates boosted by exchange rate differentials and also as a result of the tough economic environment and weakness of consumer demand for luxury products. In financial year 2016, the Top 100 luxury corporations are estimated to have generated revenue worth $217 billion in luxury goods, equivalent to only a 1 per cent growth, compared to 5.8 per cent the previous year at constant exchange
rates. However, 57 of the 100 groups ranked did increase their revenue, and 22 of them posted double-digit growth. n
ABG acquires Nautica from VF Corp
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he Authentic Brands Group (ABG) has acquired lifestyle brand Nautica from VF Corporation. VF still has The North Face or Timberland and Vans. Nautica is now the group’s largest brand, including Spyder. ABG’s portfolio increases globally to almost $7 billion in annual sales. This acquisition brings it closer to its goal of achieving a retail sales split of 50 percent international and 50 percent domestic and reaching $10 billion in annual retail sales by 2020. Nautica’s wholesale business, over 70 US retail stores, e-commerce and product development will be transferred to the operating company of Aeropostale, which is also part of the ABG Group.It now works
for both the clothing brand and Nautica. Aeropostale and Nautica together generate annual sales of approximately $2.4 billion worldwide. n
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APPAREL / BRAND RETAIL
Christian Dior world’s largest retailer
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hristian Dior has emerged the top a retailer in Forbes annual list of the ‘world’s largest public companies’ or the Global 2000. The report is being released for the 16th consecutive year and counts high-profile names like JP Morgan Chase, Berkshire Hathaway, Bank of America, Apple and Chase among its top-10 rankings. In general, Christian Dior is ranked as the world’s 150th largest company.The second-largest retailer in the apparel, accessories and footwear space is Zara followed by Nike in third place. Christian Dior definitively takes the top spot with a market value of $76.4 billion, with a combined score of revenues, profits, assets and market value higher than any similar numbers for other companies in its lane. The fashion house benefits from a 41 per
cent stake in LVMH, the French luxury empire that owns 70 brands including Louis Vuitton, Dom Pérignon and Sephora. LVMH, which is run by French billionaire Bernard Arnault, wholly owns Christian Dior. The companies have had a complicated ownership structure for years, with LVMH acquiring the remaining portion of Christian Dior that it didn’t already own last year in a $13 billion deal. The Oregon-based company, which was founded in 1964 by college track runner Phil Knight and his coach, initially distributed Japanese running shoes. It found success in sponsoring legendary athletes like Michael Jordan, Roger Federer and Lance Armstrong and is now the world’s largest athletic retailer with annual sales of $35 billion. n
Jimmy Choo to target millennial consumers
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uxury footwear brand Jimmy Choo is upbeat its prospects and is working hard to widen its appeal among millennial consumers while retaining its core, slightly older customer base.The company has expanded its accessories design team and will transition out of older accessories groups. Jimmy Choo’s pro-forma revenue is expected to rise around 10 per cent in fiscal 2019. Sales rise is predicted to come on the back of its red carpet activity, and continuing development of its core 24/7 collection and on more trendfocused fashion active offerings being added to the wider range.On store front, the company plans to increase the pace of openings adding around 30 new locations in fiscal 2019. The brand believes there is meaningful opportunity to expand its global presence with a particular focus
on Asia.The new team is working diligently to introduce multiple collections over the coming seasons. Jimmy Choo hopes to be a billion dollar brand. n
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APPAREL / BRAND RETAIL
Gucci’s revenue up 49 per cent
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ucci’s revenue grew by 49 per cent from a year earlier at constant currencies in the first three months of the year. The Italian fashion house wants to be the world’s biggest luxury label. Gucci also targets an operating margin of more than 40 per cent, compared to around 34 per cent in 2017. The brand expects sales to grow at twice the market rate in coming years. It has had a top-to-bottom makeover, from new
product ranges to stores redesigned to make them more welcoming, in vivid hues and draped in velvet.In a notoriously fickle industry, where tastes can change rapidly and ever more so with the influence of social media, brands are battling it out to capture buyers’ attention with eye-catching designs or events like spectacular catwalk shows. Gucci’s latest mid-season Cruise collection presented in France featured models in an intricate array of colorful prints making their way down a flamed-filled runway by night. With more store facelifts, Gucci aims to boost sales densities. Gucci is part of the Kering conglomerate that includes other labels like Saint Laurent.The luxury industry, fuelled by Chinese demand, is expected to pick up pace in 2018, with global revenues forecast to expand six to eight per cent at constant currencies. n
US retailer PVH revises outlook
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VH the company behind fashion brands like Calvin Klein, Tommy Hilfiger etc, has increased its full-year earnings outlook after posting better than expected revenue gains for the first quarter. Sales in the three months up to May 6 rose 16 per cent from a year ago to $2.3bn. Earnings came were $2.29 a share, versus 89 cents in the same period a year ago, thanks in part to a 20 cent-per-share boost from favorable currency exchange rates. Net income attributable to the company soared to $179.4million from $70.4million a year ago. Tommy Hilfiger’s revenue rose 21 per cent to hit $1bn, alongside a 25 per cent jump in the brand’s sales in foreign markets to $655million. Calvin Klein revenue rose 18 per cent to $890million from a year-ago, with international sales ringing in 25 per cent higher at $475million. Emanuel Chirico, Chairman and Chief Executive, PVH says the company is pleased with its Q1 2018 results, its performance underscored the power of the diversified business model and the continued momentum in global designer lifestyle brands, Calvin Klein and Tommy Hilfiger. PVH looks to increase its full-year earnings outlook, despite expectations that foreign-exchange tailwinds would subside.
Its previous guidance for earnings between $8.76 and $8.86 a share was raised to $8.81 to $8.91 a share. Demand for PVH’s recognizable brand names has helped it weather tough times in the retail sector, among changing shopping habits and consumer tastes. After rising 52 per cent last year, shares are up another 14.12 per cent so far in 2018. n
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APPAREL / BRAND RETAIL
Ralph Lauren adopts creative strategies to boost sales
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merican fashion house Ralph Lauren aims to increase sales to a billion dollars by 2023. Marketing spend will go up by $100 million over the next five years. The
last few years have been about cutting costs including closing 50 stores, eliminating more than 1,000 jobs and removing three lines of management.
The goal is to woo next generation consumers and increase gross margins by improving the core product (which makes up 60 per cent of overall revenue), amplifying under-penetrated categories (including women’s, outerwear and denim) and operating with discipline, which constitutes being more careful about discounts and promotions, more strategic when it comes to price, and cutting costs in creative-but-impactful ways. One example of this is fabric platforming. At Ralph Lauren, different categories (i.e. home, kids, Polo, ready-to-wear) use different quality of fabrics. Instead of each sub-brand buying its own fabric, Ralph Lauren is buying higher quality fabrics, which brings down the cost and increases the quality of lower priced products. n
India, a Market and sourcing hub for Tom Tailor
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erman fashion brand Tom Tailor will design and manufacture some lines in India to be retailed globally.These are: Tom Tailor Contemporary, in line with Indian motifs on western silhouettes; Tom Tailor Polo, focused on premium pique polo for men. The brand works with multiple manufacturers across the globe in countries like Indonesia, China, Sri Lanka, Vietnam, Turkey and Bangladesh. Tom Tailor is present in 35 countries with over 1,400 company stores and more than 11,600 other points of sale. It has seven exclusive brand outlets and more than 50
shop-in-shops in India. The plan is to open 55 stores in three years. It willlook at opening more stores in the four metros to create a stronger presence and aggressively expand in Tier I and II cities. The brand entered India in April 2017 and managed to close the last fiscal with a top line of over Rs 15 crores in the first year of operation. Ten per cent of the total sales are through
the e-marketplace while the majority comes from retail. Tom Tailor focuses on the industry’s best practices resulting in sustainable procurement and sourcing operations. Inceptra Lifestyle owns the exclusive rights of the brand in India. n
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House of Fraser to close more than 50 percent stores
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epartment store chain House of Fraser plans to close 31 of its 59 shops, affecting 6,000 jobs, as a part of a rescue deal.If the plan is approved, House of Fraser will lose 2,000
jobs, along with 4,000 brand and concession roles. The stores scheduled for closure, include its flagship London Oxford Street store, which will stay open until early 2019.The
retailer needs the approval of 75 per cent of its creditors to go ahead with the rescue plan. In May, House of Fraser’s Chinese owners Nanjing Cenbest reached a conditional agreement to sell a 51 percent stake to the Chinese owner of Hamley’s, C.banner. The sale is conditional on the restructuring plan being approved. Of the 31 stores it wants to shut, it is seeking a 70 per cent rent reduction for seven months, after which the stores will close. In addition to store closures, the department store chain is seeking to cut rents by 25 per cent on 10 of the stores it is keeping open. n
H&M Q2 sales up two per cent
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&M sales in Q2 rose two per cent compared to the corresponding quarter of previous year.The total number of stores in H&M group stood at 4,801 as of May 31, 2018, compared to 4,498 at the same time previous year. Sweden-based H& offers fashion and quality at best prices in a sustainable way. The group has 47 online markets and more than 4,800 stores in 69 markets including franchise markets. The number of employees are more than 1,71,000. H&M aims at using only recycled or sustainable materials by 2030. It launched a pilot project called ‘Take Care’ in Germany. The project features in-store
seamstresses, sales of garment care products and online advice. Take Care aims at encouraging H&M customers to extend the life of their clothes, giving them the means to take better care of their garments. On products side, H&M has developed a cleaning line with environment-friendly detergents, a stain-removing spray and cleansing wipes for sneakers. Also available are
a sewing kit, patches for worn-out clothes and a washing bag designed to prevent the dispersal in the water of the microscopic plastic particles shed by synthetic fibers. n
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GERMANY
India yet to capitalize on the potential of EU’s largest apparel import market Germany is the second largest importer of textile and apparel products and the largest importer of apparels in the EU. However, India’s share in Germany’s textile and apparel imports is only 3.5 per cent. Vietnam- EU free trade agreement which is expected to conclude by 2018, will allow Vietnam to emerge as a leading supplier of textile and apparel to the EU. This will affect the share of other suppliers like India in the process. India, being the larger and more resourceful country, is yet to capitalise on the potential, especially in terms of export of cotton textiles and apparel to Germany.
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major industrial nation and one of the world’s largest economies Gemrany weathered the economic and financial crisis of 2008 better than most countries. German industry has withstood the global downturn and continued to export successfully throughout the world. Germany’s biggest strength lies in Mittelstand – the legion of highly specialised small and medium-sized enterprises, many of which are based in German provinces. Its trade laurels don’t
• Germany’s total textile and apparel (T&A) imports remained stagnant over the last five years at $49 billion in 2016 • Exports decreased at a CAGR of -1 per cent to reach $33 billion • Textile and apparel trade balance recorded a deficit of $16 billion in 2016 • Apparel is the leading imported category in Germany, making up 73 per cent of total textile and apparel imports • India’s share in Germany’s textile and apparel imports is only 3.5 per cent • Apparels are followed by man-made textiles and cotton textiles with a share of 12 and 9 per cent respectively • Top 10 suppliers accounted for 70 per cent of textile and apparel imports by Germany • China is the largest supplier accounting for a 24 per cent share, followed by Bangladesh (11 per cent) and Turkey (10 per cent)
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rest on smart phones or iPads but machinery and other heavy equipment, which sets it apart from others. Fondly known as hidden champions as many as 1,500 companies help power Germany’s economy. Industries account for as much as 22 per cent of the German economy as a whole. In France, Italy, the UK, and the US, industry plays a much less important role in the economy. Almost 92 per cent of Germany’s visible exports are industrial goods. German companies are the biggest exporters in many sectors and in markets worldwide. The country’s strength lies in green energy when the whole world is challenging towards reducing carbon emissions. In the burgeoning sector of renewable energy, which includes photovoltaics, wind power, and highly efficient power plant technology, the German economy has a global market share of 30 per cent. Moreover, in 2015, Germany topped
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the European rankings, with 66,893 patent applications. Europe’s largest economy scores highest with its excellent infrastructure, its highly developed corporate and services sector, its system of higher education, its first-rate vocational training, especially in the skilled crafts and trades, INDIA’S IMPORT EXPORT TO GERMANY and, last but not least, its engineering, steel, metal and textile industries. Exports by capacity to deliver technological innovations. German mechanical engineering companies remain on a growth Digitisation is one field where the drive for course – despite the growing dark economic clouds on the innovation is really set to take off in Germany horizon. In the first four months of the current year, mechanical – the German government’s 2014-17 Digital engineering companies were able to increase their exports by a Agenda provides the political framework for nominal 4.4 per cent year-on-year to €56.1 billion. According making this possible. The digital revolution is to the figures released by VDMA, between January to April, changing industrial and work processes and imports of machinery and equipment into Germany grew only is having an impact in many different core 1.5 per cent to €23.7 billion, mainly due to exchange rate effects. sectors of the German economy. With over Talking about the EXIM scenario, Olaf Wortmann, 30,000 patent applications, accounting for economic expert, VDMA points out the strongest growth more than 11 percent of the applications filed spurts in exports came again from the US and China. Deliveries at the European Patent Office, Germany is at to the US benefited from the good capital goods market and the forefront of European innovation. thus increased by 7.5 per cent. These figures do not yet include INDUSTRIAL LANDSCAPE positive effects due to the possibility of immediate depreciation, The automotive industry is still the as the tax reform was adopted in December last year. Business mainstay of the country raking in €404 billion in China grew by 16.4 per cent. Compared to last year’s growth in 2016. Vehicle manufacturing also secures rates (22.6 per cent), growth here is gradually slowing down. earnings for other sectors, as it has close links This was expected as the Chinese Government had to focus with companies in the chemicals, electrical more on restructuring measures again. Nevertheless, exports
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to China can continue to rise, as the People’s Republic has a growing demand for high-quality machines from Germany with its ‘Made in China 2025’ initiative. Deliveries to the EU partner countries exceeded the previous year’s level by only 1.7 per cent. However, these figures are provisional. They will be revised upwards considerably in the coming months. After such a correction, growth here will also be much stronger. Exports to the United Kingdom (minus 2.2 per cent) and Turkey (minus 3.5 per cent) declined as expected.
THE FDI PACT A potential ‘Brexit effect’ has made itself apparent in Germany’s 2017 FDI figures, with the number of UK investment projects jumping by 21 per cent, according to German economic development agency Germany Trade & Invest (GTAI). Currently, the large share of these projects involves service offices opening, but it will be interesting to see whether production facilities are subsequently set up. As Thomas Bozoyan, Manager of Research, GTAI observes this increase in British FDI activity is a direct consequence of the Brexit decision. It’s a part of a larger trend, which has seen British FDI across Europe increase by 33 per cent. Financial services and ICT are the main recipient industries of the investments, but the shareholding acquisition of British companies and investors in German companies has also increased sharply, which adds to the impression that this is a strategy to deal with Brexit. Germany is, with 18 per cent of all British FDI in Europe, the most popular investment destination. Altogether, 1,910 greenfield projects were set up in Germany in 2017, which are set to create around 29,000 jobs in Germany overall. As in past years, corporate and financial services are the main sectors for investment. They represent about 20 per cent of all new projects, ahead of ICT & software with 16 per cent and consumer goods industry at 10 per cent. The USA topped the list of source countries with 276 projects. China was 218, Switzerland 204, the UK 152, the Netherlands 124 and France 95. The most important investment project source region for Germany remains the EU from where 41 per cent of all investment projects originate, while around 25 per cent of the investment projects come from Asia including China. The most popular activity remains opening of sales and marketing offices
(39 per cent). Production and R&D represent 19 per cent while business services account for 18 per cent of all investment projects. A further 1,925 investments were made in Germany by means of mergers, acquisitions and shareholdings.
IMPORT SCENARIO Germany imported goods worth $1.168 trillion from around the globe in 2017, down -1.6 per cent since 2013 but up 10.1 per cent from 2016 to 2017. German imports represent 7.3 per cent of total global imports which totaled $16.054 trillion one year earlier in 2016. From a continental point of view, 64.4 per cent of Germany’s total import value in 2017 were from other European countries. Asian trade partners supplied 22.1 per cent of import sales to Germany while 7 per cent worth of goods originated from North America. Germany’s top 10 imports accounted for almost two-thirds (63.2 per cent) of the overall value of its product purchases from other countries. Imported iron or steel had the fastest-growing increase in value among the top 10 import categories, up 25.7 per cent from 2016 to 2017. In second place was mineral fuels including oil category (up 22.6 per cent), followed by organic chemicals (up 12.2 per cent) then vehicles (up 10.7 per cent). The slowestgrowing categories year over year was optical, technical and medical apparatus (up 5.4 per cent) and machinery including computers (up 8.6 per cent).
INDIA & GERMANY: GROWING PARTNERSHIP India is an important market for German textile machinery, with export worth more than €255 million (+8 per cent) in 2017. Many German machinery builders have longstanding relations with Indian customers and quite a few of them also have production
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plants and training centres in India. The performance and service promise as well as the high-quality standards have made German machine suppliers most reliable partners. This positive result has by far not been reached by any other manufacturing nation from Europe or Asia. Investments in technical textiles and/ or nonwoven production seem to be the most favourite sectors in India. Germany is the second largest importer of textile and apparel products. However, India’s share in Germany’s textile and apparel
imports is only 3.5 per cent. Moreover, the Vietnam-European Union (EU) free trade agreement (FTA), which is expected to conclude by 2018, will allow Vietnam to emerge as a leading supplier of textile and apparel to the EU. This will affect the share of other suppliers like India in the process. A recent CII study points out India’s total trade with Germany increased from $15 billion in 2007-08 to $19.2 billion in 201516, reaching a peak in 2011-12 at $23 billion. Germany is currently India’s sixth largest trading partner, with total trade standing at $18.73 billion in 2016-17. India’s exports to Germany increased from $5.1 billion in 200708 to $7.2 billion in 2016-17, accounting for 17.2 per cent of India’s total exports to EU
countries. Indian exports reached a peak in 2011-12 with $7.9 billion. Indian imports from Germany increased from $9.9 billion in 2007-08 to $11.5 billion in 2016-17, accounting for 30.35 per cent of India’s total imports from EU countries. Apparel is the largest category with a share of 66 per cent in India’s T&A exports to Germany. This is followed by cotton textiles, carpets and man-made textiles having a share of 18 per cent, 10 per cent and 4 per cent respectively. India’s trade with Germany is well-diversified and composed primarily of manufactured products. Among India’s top imports from Germany, machinery and parts (HS Code 84) occupied the leading position in February-April 2016-17, accounting for 30 per cent of the total. Other major imports included electrical machinery and equipment, medical equipment and parts, vehicles and parts, and plastic and articles. In FebruaryApril 2016-17, the major Indian exports to Germany included machinery and parts, followed by apparel and clothing accessories (knitted), organic chemicals, apparel and clothing accessories (not knitted) and vehicles and parts. Germany is India’s 7th largest foreign direct investor in cumulative terms since 2000. FDI inflows during April 2000-March 2017 were placed at $9.7 billion. The major German investments in India are in the sectors of transportation, electrical equipment, metallurgical industries, services sectors, chemicals, construction activity, trading and automobiles. In the last few years, Indian investments to Germany have been steadily increasing. Indian corporate entities have invested more than $6 billion in Germany as on December 2016. Major Indian investments are in the sectors of IT, automotive, pharma and biotech. India, being the larger and more resourceful country, is yet to capitalise on the potential, especially in terms of export of cotton textiles and apparel to Germany. India has considerable advantage in terms of manpower availability and infrastructure. Its textile and apparel manufacturers need to undertake suitable investments for product and infrastructure expansion to cater to the German consumers’ demand. Focus on technology enhancement and manufacturing excellence will be a key mantra to increase the trade flow. Moreover, Germany recognizes India as a growing economic power and a strategic trade partner, and efforts from both sides indicate better trade prospects in the future. n
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Plus size fashion becoming mainstream in the US
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s per a research done by assistant professor Deborah Christel, at Washington State University’s Department of Apparel, Merchandising, Design and Textiles, the average American woman wears between size 16 to 18,. She has made it her mission to make the industry aware about inherent fat biases by teaching a class to expose weight discrimination as a social justice issue. For too long, the industry has been blinded by the fact that a consumer can be plus size and passionate about high-quality clothing and have the money to shop for it, observes Katie Smith, Retail Analysis & Insights Director, Edited. Social media has helped fuel discussions around inclusivity, acceptance and is challenging old stereotypes. Gen Y and Z consumers
are far more open-minded and inclusive. And their impact on luxury, advertising and beauty has been, and will continue to be, enormous. The increased bodypositivity these consumers are creating is finally hooking the fashion industry. The industry has been slow to learn lesson, things are getting on track. Women’s plus size fashion market has grown at over 38 per cent for past two years, reports Smith. The plus size market is the fastest-growing segment in the US but it still accounts for 1.6 per cent of the market, which is mysterious when around 67 per cent of women in the US wear a size 14 or larger. Nordstrom is now expanding its plus-size selections to include 100 brands
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and integrating them in with its core size range, rather than segregating it into a separate woman’s department, where the shopper is reminded that she doesn’t belong where the real fashion is. The company, however, said it will still maintain a separate plus-size department for convenience, but its ‘size-inclusive’ initiative will give size 14 shoppers access to the same styles as her size 2 shopping companion. A company statement stated that petite and plus sizes shouldn’t be considered special categories. They are just sizes. Now Nordstrom shoppers can select from extended size offerings from inclusive brands like Topshop, Rag & Bone, Theory and J. Crew’s Madewell on the same rack. Specialty fashion retailer Express is also broadening its range of sizes from 00 to 18, but only in 130 stores out of its total base of 600 full-priced and factory stores.
NUANCES OF DESIGNING PLUS-SIZE Designing plus-sized clothing requires greater expertise and awareness of how to dress the real woman’s body, not designers’ favorite 6-foot-tall, size-00 model. Tim Gunn, long-time chair of fashion design, Parsons the New School of Design, point out there is no reason larger women can’t look just as fabulous as all other women. The key is the harmonious balance of silhouette, proportion and fit, regardless of size or shape. Kim Camarella-Khanbeigi, Founder, Kiyonna and an early pioneer in plus-size fashion, feels the fit is science. You can’t just grade up and expect the style to flatter and fit the same. Today, her brand is displayed at 250 stores nationwide, as well as being available on its own website, Amazon and Zappos. The business opportunity to dress the curvy woman is great and growing.
BUSINESS OF LUXURY PLUS SIZE FASHION Only about 0.1 per cent of the luxury and premium market is plus
sized. What luxury brands don’t seem to pay attention to is that plus-size shoppers are already their customers, be it of their beauty, perfume, footwear, accessories or leather goods lines, rather than apparel. While it is true that affluent women are less likely than lower-income women to be plus sized, it is safe to assume that at least 25-33 per cent or more of the nation’s affluent women don’t fit into the luxury industry’s standard 0-12 size range. Gucci for one has paid attention and offers an increasing range of styles in large and XL sizes. It will also help Nordstrom fill its racks as it broadens its plussize offerings. Smith asserts that plus-size celebrities and influencers now have very visible global platforms for voicing their frustrations with an industry that can’t dress them. With social attitudes towards inclusivity shifting rapidly, luxury brands don’t want to lag in this opportunity. n
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Robots take
centerstage in mass apparel manufacturing
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echnology and automation has taken over manual work in the garment industry today. From harvesting cotton in farms, to making thread, weaving it into cloth in looms, followed by the stage of printing, the textile manufacturing cycle has largely been automated in the past 200 years.
algorithms, fast computing speed and the ever-decreasing cost of technological products. The sewbot work-line robots rely on high speed cameras, which see the individual threads in fabric, pinpointing the exact location where a needle strikes and adjusting the garment accordingly. Softwear Automation
SEWBOTS MAKE HEADWAY Atlanta-based Softwear Automation, has built an entire assembly line manned by robots that can pick a piece of garment, arrange it properly and then sew it. This technology is called the sewbot. While picking up a piece of fabric by a robot used to be a big achievement, today it can perform almost each and every task. Sewbots are a combination of powerful
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using a dissolvable chemical solution. This allows cardboard-like hard patches of material such as denim to be handled by robots. Once sewed, the garment is washed with water without compromising its quality. Zornow’s inspirations stem from 3D printing. The technology also uses water-soluble scaffolding to temporarily support objects as they are being created on the 3D printer. His robots come off the shelf, making it easier for companies to find replacements when needed.
believes that this as a disruptive technology, which will have a lasting impact on how apparel, home textiles and garments are made. And it can do that without workers. Palaniswamy Rajan, CEO, Softwear Automation, says sewbot work-line can produce nearly twice as many finished T-shirts in an eight-hour shift as manual sewing and can running 24 hours a day. It’s 80 percent more efficient.
GROWTH MOMENTUM Growth in industrial robot sales is led by Asia. Between 2011 and 2016, robot sales increased 12 per cent an average. Apart from Softwear Automation, sewbot is also bringing in dynamics shift in the way garments are being manufactured these days. Jon Zornow, Founder, Sewbo, devised a method to stiffen fabric by
BRINGING MANUFACTURING BACK TO THE US Big retailers like Walmart, which source garments and apparel from developing countries, have to wait months before they can put a new line of clothes on the shelf. This is because clothing samples are sent back and forth for approval. Softwear Automation has received funding from Walmart as the retail giant wants to meet demand before fashion wears out. Both Rajan and Zornow are focusing primarily on the US market for their robots. They see a timeline of at least five years for the technology to start making any marked change. Rajan informed that a brand or manufacturer that’s willing to commit can have up to 10 per cent of its manufacturing to the US within five years of setting up a Sewbot factory. However, sewbots are not meant to replace all garment manufacturing. Using automation for high-volume basic apparel enables sewing machine workers to focus more on complex garments, while advancing their skill sets and commanding higher wages all around the world. The shift to e-commerce and on-demand manufacturing makes this even more important. n
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Blue Jeans Go Green program gives new lease of life to used denim
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hen denim is worn out, it’s usually dumped. However, denim makers have a new way of reusing used denim. The Blue Jeans Go Green denim recycling program gives new purpose to old denim. As Roian Atwood, Director-Sustainability, Wrangler says in 2017, the company contributed more than 43,000 pounds of denim, which produced over 80,000 sq. ft of insulation. In 2006, Cotton Incorporated
started the program to help divert denim from landfills. Since then, more than two million pieces including jeans, shorts, skirts, jackets, dresses, and shirts, have been collected and turned into housing insulation. UltraTouch Denim Insulation is created through a partnership with Bonded Logic Inc. To create this insulation, denim garments are collected. Zippers, buttons and embellishments are removed. The denim is returned to its natural cotton fiber state and then upcycled into denim insulation. So far, more than four million sq. ft. of insulation has been manufactured from the Blue Jeans Go Green program. With this initiative, more
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than 1,000 tons of denim garments have been kept from being sent to landfills. Looking at the success rate, big giants such as Holt Renfrew, Madewell, Rag & Bone, and J. Crew, have also joined the move. When used denim is dropped in stores, the customer receives a dollar or a percentage towards buying something new from the new denim range. So far, Madewell has collected close to 300,000 pairs of jeans, and as a result more than 300 Habitat for Humanity homes have been built with insulation made from the pre-worn denim. The homes were built in cities like: New Orleans, Charleston, and Los Angeles. Wrangler is a new partner in the program. Currently, the company collects denim scraps, material and products from its internal manufacturing, product development and distribution centers. Atwood observes if customers want to mail their old denim to headquarters, the company will include it in its recycling program. In 2018, Wrangler is working with the Blue Jeans Go Green program to provide 130,000 sq ft of sustainable denim insulation to All Hands and Hearts – Smart Response for its rebuild effort after Hurricane Harvey.
UPCYCLING & RECYCLING INITIATIVES As per the Cotton Council International (CCI) and Cotton Incorporated Global Environment Survey, three out of four consumers or more say they recycle (82 per cent), use refillable bottles (74 per cent) and purchase energysaving appliances (72 per cent) in an effort to protect the environment. Then there are consumers who say they limit home water usage (69 per cent), recycle clothing or textiles (65 per cent), purchase local made products (62 per cent), and reduce overall consumption (55 per cent). Besides retailers and manufacturers, Cotton Incorporated’s Blue Jeans Go Green program has partnered nearly 60 colleges and universities across the US and collected more than 200,000 pieces of denim along the way. Atwood says the company is excited about the possibilities of engaging consumers in the program. The company has already been insulating homes in Lumberton, NC, post-Hurricane Matthew, and All Hands is already using the denim insulation for houses and schools in Northeast Houston. n
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Global fashion and growing inclination towards sustainability
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ashion industry is one of the biggest contributors towards the global economy, with an annual worldwide revenue of over £1 trillion. It aids millions of jobs around the world. A recent study by Global Fashion Agenda and Boston
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Consulting Group predicts a rise of 63 per cent in overall fashion consumption between 2017 and 2030, with increasing demand from developing countries leading swiftly towards a point where over 100 million tons of apparel and footwear will be purchased every year. This growth comes at a huge environmental cost. As a research by Ellen MacArthur Foundation says, if growth in fashion continues along its current trajectory, by 2050 the textile industry would account for around a quarter of the world’s total allowable carbon emissions, when considered under a scenario that would hold global warming below 2°C. In order to circumvent the eco impact, leading companies are coming up with sustainable solutions to chart green growth.
TOWARDS A SUSTAINABLE EXPANSE Lyocell for example is a fiber made from wood pulp and has a low environmental impact in its production and processing when compared to alternatives like cotton, although this comes with higher costs. Because of its growing sustainable properties, companies like Patagonia and Banana Republic are making it a feature within their product lines. Aiming to shift demand towards valuing fewer, higher quality products, which can command higher prices and result in lower total resource use, designers and brands are increasingly following the mantra of Dame Vivienne Westwood, ‘Buy less. Choose well. Make it last.’ WRAP’s Sustainable Clothing Action Plan reveals that making clothes that last just three months longer can help cut 3 per cent from the carbon, water and waste impact of companies in the fashion supply chain. Thanks to new age tech tools, one can produce unique variants of common designs with customer input. Brands including Nike, Adidas, Vans and Converse each now have their own online create-your-own offerings.
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CIRCULAR ECONOMY PRINCIPLES The Ellen MacArthur Foundation estimates an industry-wide move to adopt circular economy principles could add â‚Ź160 billion in value by 2030. Despite the fact that there has been a cultural shift, where some items that were once second-hand are now considered vintage, still only 18 per cent of clothing in the EU is currently reused or recycled. But there are signs of positivity with the industry becoming more collaborative and circular. Major retailers including Zara and Marks & Spencer are introducing collection points for old clothes at their stores. This has increased opportunity for recycling. Materials like wool have been recycled for hundreds of years but mass production technologies are now advancing so that more fiber recycling is becoming far more cost-effective. This is closing the loop, helping turn waste fabrics back into useful materials, cutting down the need to produce virgin fabrics. In line with this, companies like Rent the Runway are using e-commerce models to turn expensive dresses, often bought and only worn once, into something that can be worn once by many people. MUD jeans leases its products for one year, with free unlimited repair services, after which they can be changed for a new pair and returned for recycling or upcycling. Moreover, countries such as Uganda, Tanzania and Rwanda all are now looking for preventing the import of second-hand garments and shoes to protect their domestic industries. n
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Gucci launches sustainability initiatives
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lobal luxury brand Gucci has launched a couple of sustainability initiatives. The first amongst them is the - Gucci Equilibrium’ campaign designed to connect people, planet and purpose that showcases stories, ideas and the science behind environmental and social impact change, bringing Gucci’s perspective on some of these
critical issues. The initiative is anchored by three pillars covering the environment, people and new models of sustainable innovation.
The brand has developed ‘Scrap-less’, a program that runs in association with tanneries as a key way to improve its environmental profile. This profile is measured by Gucci by calculating the Environmental Profit & Loss (EP&L) of its products. An EP&L account allows a company to assign a financial value of the costs and benefits it generates for the environment, and in turn, to make more sustainable business decisions. n
Marks & Spencer increasing use of sustainable cotton
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arks & Spencer has stated for the first time more than three quarters of its cotton has been sourced from sustainable methods. Through its sustainable methods and ‘Plan A’ initiative the retailer managed to source 77 per cent of its cotton from sustainable sources and is on-track to source its entire cotton range by 2019. According to M&S, 83 per cent of its products now have an eco or ethical quality above the market normal and 30 million items of clothing are either reused or recycled with Oxfam.
Across the entire business, the company is delivering better value for customers, cutting prices and improving the products says Mike Barry, Director, Plan
A and sustainable business at M&S. Plan A plays a vital role in this transformation because the customers care about the products and its production. The company is helping to democratise sustainability by placing an eco or ethical quality into every product. M&S uses around 50,000 tons of cotton a year, with most of this sourced through the Better Cotton Initiative (BCI). n
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The North Face promotes circular fashion
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ctive wear brand The North Face has launched a pilot program that will promote a circular fashion system through the sale of recycled products. The collection features apparel sold by the brand that was returned to the company after use. Comprising returned, defective and damaged pieces, this campaign brings greater awareness to different sustainable shopping and manufacturing options. After customers provide worn apparel to the company, these are processed for resale. Following thorough inspection, products are cleaned and refurbished during a process that ensures the items are repaired according to The North Face’s standards. The line is meant to generate attention toward manufacturing and distribution that will reduce threats to the environment by using different methods of recycling. Through repairing and reselling secondhand items, The North Face hopes to fortify its presence as a vehicle for change toward greener practices in the apparel manufacturing industry. The North Face takes a holistic approach to sustainability. As the brand addresses the impacts of its products over their entire lifecycle, recommerce is an important next step in opening new markets and minimizing the impact on the planet. The brand
is furthering its sustainability goals without sacrificing durability or technical standards. Ultimately, it will be proving a larger, circular model for the industry. n
Sportswear brands innovative methods to reduce pollutants
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aced with government pressure to reduce pollutants and the need to adhere to corporate social responsibility guidelines, sportswear companies are now focusing on using less plastic while recycling old material and using newer technologies to alter the way they manufacture products. Nike for instance makes 75 per cent of its products from recycled material— including sneakers and premium jerseys. The company also claims to have diverted over 51 million pounds of waste materials globally between May 2016 and 2017. Similarly, US-based Alternative Apparel Inc., recycles over 100,000 discarded plastic bottles annually and uses organic cotton in place of conventional cotton.
Alcis Sports has been making T-shirts from waste plastic bottles for the past two years. Called Wonder Tee, each T-shirt uses about 8 plastic bottles. Alcis now aims to have 50 per cent of its products manufactured from recycled polyester, made from waste plastic bottles. Swedish clothing retailer Hennes and Mauritz AB’s H&M Foundation has partnered The Hong Kong Research Institute of Textiles and Apparel to develop newer technologies for recycling by 2020. n
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FIRST TIME EVER
Be at the very centre of the Fashion Supply Chain
PURE ORIGIN Uniting manufacturers and buyers in London’s busiest fashion trade hub
22-24 July, 2018 | Olympia London Pure Origin allows buyers, designers and retailers to meet with manufacturers and suppliers from all over the world under one roof at London Olympia. It connects you to the right people and gives you the opportunity to network with industry experts. Key brands and retailers include: Burberry, Dior, Giorgio Armani, Harvey Nichols, Marks & Spencer and Debenhams.
Book Your Space Now : Mr. K S Bisht, Jt. Director (Fairs & Exhibition) Apparel Export Promotion Council Apparel House, Institutional Area, Sector - 44, Gurgaon-122003, Haryana, (India) Tel: +91 124 2708156(D), 2708000-003, Fax: +91 1242708004 Mobile: +91 9810527747, Email : kbisht@aepcindia.com The Application form may be downloaded from our website www.aepcindia.com (Highlights Section) Limited Stalls available on First Come First Serve Basis
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APPAREL / GST NOTIFICATION
Sub.: Advisory on circular no 49/2018 GST dated 21-06-2018 (Regarding interception of conveyances for inspection of goods in movement etc.)
CBIC has issued circular no 49/2018- GST dated 21-06-2018 regarding modification of procedure for the interception of goods in movement, and detention, release and confiscation of such goods and conveyances as clarified in circular no 41/2018 – GST dated 13-04-2018. The gist of circular no 49/2018 is as under; • Circular no 41/2018 had prescribed a time limit of three working daysin para 2(e) for completion of inspection proceedings. This provision has been amended to replace the said time limit of “three working days” by “three days” This is a trade friendly move as the time limit for completion of inspection shall now be continuous and not get broken and extended just because some non-working days(like Saturday and Sunday) fall between the date of commencement of inspection and completion of inspection. • In FORM GST MOV-05, which is a release order, the circular no 41 did not have a provision to mention the date/ month/ year of release of goods inspected in transit. This was an inadvertent omission. This has been now rectified and the abovesaid FORM GST MOV-05 has been amended to incorporate the date, month and year of the release of goods. • Since various FORMS relating to transit checks are not yet available on the common portal, hard copies of the notices/ orders issued in specified FORMS by a tax authority can be shown as a proof of initiation of action by a tax authority to another tax authority as and when required • Detention/ confiscation is to be confined to only those goods and/or conveyances in respect of which there is a violation of provisions of GST Acts or rules made thereunder. • It implies that if out of total consignments being carried in a conveyance intercepted for inspection, only in some of the consignments there is a violation of provisions of GST (e.g. valid E-Way Bill is not there) then only those consignments and conveyance in respect of which there is a violation shall be liable for action and the remaining consignments shall not attract any action like detention/ confiscation For Detailed Notification: https://cbec-gst.gov.in/pdf/Circular-49-2018.pdf
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APPAREL / GST NOTIFICATION
Sub.: Advisory on notification no 28 /2018 –CT Dated 19-06-2018 (Amendment to CGST Rules) The CBIC has issued notification no. 28/2018 –(Central tax)dated 19-06-2018 http://www.cbic.gov.in/resources//htdocs-cbec/gst/Notification-28-2018-central_tax-English.pdf under which amendments to CGST Rules have been carried out. The gist of the relevant amendments is as under:
AMENDMENT TO RULE 58 • Rule 58 deals with maintenance of records by transporters and their enrollment • In rule 58 sub rule (1A) has been inserted • Sub rule (1A)enables the transporters having registration in more than one state or union territory against same permanent account number to obtaina unique common enrollment number for the purpose of chapter XVI of CGST Rules (i.e. E-Way Bill Rules). • For obtaining this unique common enrollment number the transporter shall have toapply in FORM GST ENR-02. • After the unique common enrollment number is issued the transporter shall have to use the same only and he shall not be entitled to use any of his GSTIN for the purpose of E-Way Bill rules. • This amendment will be useful for transporter having operations/establishments in a number of states/ UTs as they can use a common unique enrollment number for the purpose of E-Way bills rather than using multiple GSTIN.
AMENDMENT TO RULE 138(C) • Rule 138(C) deals with inspection and verification of goods in transit and provides that the proper officer shall record a summery report in part A of FORM GST EWB-03 with in 24 hours of inspection and final report in part B of the above form in 3 days of such inspection. • Vide the above amendment dated 19-06-2018, after sub rule (1) of Rule 138(C) a proviso has been inserted • The proviso enablesthe commissioner or any other officer authorized by him to extend the time limit for recording the Final report in Part B of FORM EWB-03for a further period not exceeding 3 days. • As the initial period provided in rule 138(C)(1) for recording the final report is 3 days and the proviso has provided for extension up to 3 days, the total period available for this purpose can go up to a maximum of 6 days. • An explanation to the above rule has also been inserted clarifying that thecounting of the period specified in the above rule (24 hours or 3 days as the case may be) shall start from the midnight of the date on which vehicle was intercepted. The above amendments are effective from 19-06-2018 Sub.: Circulars clarifying miscellaneous issues related to SEZ and refund of unutilized ITC for job workers CBIC in its Circular No. 48/22/2018-GST dated 14th June, 2018 has clarified that clarified that the fabric processors shall be eligible for refund of unutilized ITC on account of inverted duty structure For Detailed Notification: http://www.cbic.gov.in/resources//htdocs-cbec/gst/ Circular-48-22-2018-GST-updated.pdf
APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | July 2018
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APPAREL / NOTIFICATIONS
Ministry Notifications Sub.: Amendment in Foreign Trade Policy 2015-20 DGFT in its Notification No. 13/2015-20 dated 20 June, 2018 has amended the following: Paragraph 4.29 (vi) of Foreign Trade Policy 2015-20 is replaced as under: Earlier
: Separate DFIA shall be issued for each SION and each port Replaced : “Separate DFIA shall be issued for each SION.” Paragraph 4.29(vii) is replaced as under: Earlier
: Exports under DFIA shall be made from a single port as mentioned in paragraph 4.37 of Handbook of Procedures
Replaced : “Export under DFIA shall be made from any port listed in Para 4.37 of Handbook of Procedures. However, separate application shall be made for EDI and nonEDI ports. In case export is made from a non-EDI port, separate application shall be made for each non-EDI port.” For Full Notification: http://dgft.gov.in/Exim/2000/NOT/NOT18/Noti%2013%20eng.pdf
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APPAREL / AEPC EVENT CALENDAR
CALENDAR OF EVENT -
1
2018
2
9-12 July, 2018, HONGKONG
22-24 July, 2018, UK
Pure London UK Fair
Hongkong Fashion Week
3
4
12-15 August, 2018, USA
20-22 August, 2018, CANADA
Apparel Textile Sourcing, Toronto
Sourcing at Magic, Las Vegas
5
6
19-21 September, 2018, JAPAN
3-4 October, 2018, SPAIN
India Trend Fair at Tokyo
7
Buyer Seller Meet in Madrid
20-22 November, 2018, AUSTRALIA
International Sourcing Expo Australia APPAREL EXPORT PROMOTION COUNCIL MAGAZINE | July 2018
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AEPC AWARENESS INITIATIVES
Fashion Forecast Intelligence K n o w l e d g e Pa r t n e r
• • • • •
•
Mumbai . Noida . Jaipur . HK Chennai . Ranjan
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| Gurugam . . 9891754969| Ludhiana . J.S. 9929871619 R | Tirupur .
. 9871385078 | 9810035722| . 9449826354 |
6/30/2018 4:00:11 PM
• •
• •
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Contact: