The apparel and textile business blog from Leonie Barrie
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Waterless dyeing takes step forward
09 Dec 2013 16:00
A dyeing process that eliminates water and reduces the use of chemicals is moving towards commercial production, with Nike set to launch sportswear early next year that uses the fabric.
A water-free dyehouse that opened last week with Taiwanese contract manufacturer Far Eastern New Century Corp (FENC) is described as a "manufacturing revolution". Initial indications are said to show the ColorDry process is both more efficient and more consistent than traditional, resource-intensive dyeing methods.
Fears of a slowdown in US apparel imports from Bangladesh appear to be unfounded - with the latest trade figures showing a massive 42.5% hike in shipments during October. The numbers contrast with September's data, which saw the country's import growth stall - and suggest US retailers have instead ramped up their purchases of key holiday season merchandise from Bangladesh.
Other data showed that apparel production in the US was up in the third quarter for the first time in many years - indicating sustained economic recovery but also suggesting efforts to grow domestic manufacturing may be starting to take hold.
But steep discounts, flexible store opening times, price matching and free shipping were not enough to win US shoppers over in November, after apparel retailers delivered disappointing comparable store sales during the month.
Retailers also remain cautious going into the holiday season - the biggest selling period of the year. A combination of cold weather, promotions and price cuts saw millions of Americans shop for holiday gifts over the Thanksgiving weekend, but first figures suggest that while shopper numbers were up on last year, they're spending less.
And Italy's most powerful trade union has pledged to expose black market practices and assert workers' rights in the clothing industry after a fatal fire at a Chinese-run garment factory in Tuscany. Seven people died when the blaze swept through an illegal dormitory in the roof space of the factory.
H&M takes matters into its own hands
02 Dec 2013 16:54
Frustrated by slow progress towards the process of implementing fair living wages in the apparel supply chain, Swedish fashion retailer Hennes & Mauritz has decided to take matters into its own hands.
The company last week set out plans to pay a fair living wage to some 850,000 workers in its clothing supply chain by 2018 - a move that in its own words "takes the wage issue to the next level."
Working in Bangladesh and Cambodia with three of its best suppliers, H&M will look at the best way to implement a living wage that covers workers' basic needs. This will then be rolled out to 750 factories producing around 60% of its products over the next five years.
H&M has also joined IC Companys, owner of the Tiger of Sweden, By Malene Birger and Peak Performance brands, in banning the use of angora in all of its products after an investigation by animal rights group PETA exposed "shocking" conditions in the industry.
Having spent the past two years building up massive cotton stockpiles that now account for around half of the world's supply, the Chinese government last week began selling off some of its reserves. But with the sale priced about 50% higher than this year's average, it is unlikely to have a major impact on the market.
Hong Kong-based quality cotton shirt manufacturer Esquel Group has successfully navigated the Chinese cotton issue, as its vice chairman and CEO John Cheh told just-style in an interview. He also explained how the group continues to grow, sustain and innovate.
But controversy continues to be generated by the cotton harvest in Uzbekistan, where 11 people are said to have died this year. The Central Asia country, which is one of the largest exporters of cotton in the world, continued to use forced and child labour in its harvest, according to a new report.
New research has also been released on the inexpensive private label apparel market, coming to the conclusion that growth is ending as the sector becomes less and less competitive.
Factory inspections get underway
26 Nov 2013 17:00
Inspections got underway last week to assess the structural, fire and electrical safety of at least 2,000 garment factories in Bangladesh, after three separate groups agreed on a common set of standards.
The inspections, being led by the government-backed National Tripartite Committee, will cover those facilities that are not already part of the Alliance for Bangladesh Worker Safety or the Accord on Fire and Safety in Bangladesh - which are supported by retailers and brands in North America and Europe.
It remains to be seen if these efforts will be enough to safeguard Bangladesh's apparel exports.
Initial results of inspections at Bangladeshi factories supplying garments to retail giant Wal-Mart Stores found that more than 30 posed a safety risk - but most have since made improvements. The US retailer has assessed more than 200 factories in Bangladesh, and released details on 75 of them.
And a report by the International Labour Organization (ILO) has warned that recurring industrial accidents may be a deterrent to international buyers and investors. If steps are not taken to improve working conditions in the country, then economic growth could also suffer, it says.
The first signs of a slowdown in US apparel imports from Bangladesh were seen in September's trade data. A massive double-digit hike in US apparel imports from Vietnam outpaced more modest single-digit gains by China and Bangladesh - with the latter's growth the slowest since factory safety issues came to the fore earlier this year.
Meanwhile, in Burma, the first comprehensive survey of the country's labour force for more than two decades is to get underway. It could also pave the way for a Decent Work monitoring and reporting scheme.
In other news, the turnaround of struggling US department store chain JC Penney is beginning to take hold, according to its CEO - even though third-quarter losses widened to US$489m on lower revenues and margins.
And a new report from just-style suggests the lingerie sector will not fully recover from the global slowdown until 2017 - with the bulk of this growth expected to come from emerging markets Russia and China.
The end in sight for Bangladesh pay talks
18 Nov 2013 18:09
It would finally seem that an end is in sight to the protracted negotiations to raise the minimum wage for millions of garment workers in Bangladesh.
After more than 200 of the country's apparel factories were shuttered last week amid on-going protests by workers calling for higher pay, factory owners finally agreed to the 77% hike tabled by the government-appointed wage board.
According to the latest details, pay is set to rise 77% to BDT5,300 (US$68.17) per month, with the new wage due to take effect from 1 December. The basic salary is also set to rise by 5% each year.
Problems encountered in sourcing from, and setting up, factories in Bangladesh are believed to be among reasons why Japanese brands and retailers are sourcing more garments from China. Indeed, a range of supply issues across Asia should also resonate with buyers in the US and EU too.
Hot topics under discussion at the annual meeting of the rebranded United States Fashion Industry Association (USFIA) included major trade negotiations - including the Trans-Pacific Partnership (TPP) pact and the EU TTIP - and the changing concerns of the US apparel industry.
The typhoon-hit Philippines is also hoping for accelerated beneficial trade access to the US and EU in the wake of the disaster.
Meanwhile, UK-based retailer Marks & Spencer has set its sights on expansion in India, targeting around 80 stores by 2016 and establishing the country as a key sourcing hub. We ask whether M&S is being overly ambitious in its plans? What challenges does it face? And would it be better-served exploring opportunities elsewhere?
And it's not so long ago that teens were something of a sweet spot on the retail landscape. But all this has changed. Today's teens are not spending money like they used to. Not only do they get fewer bucks from their cash-strapped parents, but their earning capacity has fallen in line with a drop in hiring. They're also choosing to spend their money elsewhere.
Confusion hangs over Bangladesh's wage talks
11 Nov 2013 17:26
Confusion and conflict seem to have characterised progress on plans to raise the minimum wage for millions of garment workers in Bangladesh.
According to an announcement by the government appointed wage board last week, pay is set to rise 77% to BDT5,300 (US$68.17) per month.
But labour leaders say that as far as they are concerned, discussions are still on-going, the rise was made without comprehensive consultation - and that they plan to hold out for a hike to a living wage of US$120.
Bangladesh's apparel manufacturers, meanwhile, have threatened to shut down all facilities if the proposed wage rise is not lowered within the next 15 days.
Efforts by Levi Strauss & Co to make its products more socially and environmentally sustainable have been taken to new heights with a smart design initiative said to benefit consumers, apparel workers and the environment. The "ground-breaking" approach is seen for the first time in the Dockers Wellthread capsule collection of khakis, jackets and T-shirts for men.
And for Hong Kong based Crystal Group, one of Asia's largest garment manufacturers, efforts to put sustainability at the heart of its business are seen as key to driving improved productivity and profitability. Progress towards its goals has just been outlined in the company's fourth and latest sustainability report, which takes the theme of 'Total Innovation.
Despite low expectations, US apparel retailers managed to overcome a number of hurdles in October - including the government shutdown and soft economic growth - to post same-store sales gains for the month. But many chains continue to express caution heading into the all-important holiday season.
Teen apparel chains are facing some of the toughest times, and Abercrombie & Fitch is no exception. The retailer is making changes to its assortment, sourcing and inventory planning strategies as part of a raft of new initiatives to try to win back customers after third-quarter comparable sales tumbled 14%. It also said it will shutter its standalone Gilly Hicks stores.
And a question mark continues to hang over Marks & Spencer's clothing performance after the retailer recorded its ninth consecutive quarterly decline in like-for-like general merchandise sales - despite the much-publicised re-launch of its autumn/winter women's wear ranges in September.
Textile sourcing spotlight shines on Cambodia
04 Nov 2013 16:49
The sourcing spotlight seems to be shifting to Cambodia's garment industry, which is currently fighting to maintain its competitive edge while tackling a range of labour problems.
Although exports are up 32% in the first six months of the year, the country has suffered from poor working conditions and industrial unrest sparked by poor pay. It is, however, trying to improve its standards, bolstered by the ILO's Better Factories Cambodia monitoring initiative.
One such project has seen thousands of garment and footwear workers take part in a pioneering mobile phone call-in project. But while many callers had a good knowledge of the issues covered, 32% incorrectly believed that striking workers were entitled to receive wages.
Clothing retail giant H&M is leading calls for the Cambodian government to conduct an annual review of the minimum wage, to help ease worker unrest. The review should take into account national inflation and the consumer price index, the fashion firm says.
But government officials, garment manufacturers and union leaders in Bangladesh last week failed to agree on a rise in the minimum wage paid to garment workers. A 50% increase to BDT4500 (US$57.88) per month offered by factory owners was rejected as "unacceptable".
The latest update from The World Bank sees Bangladesh's apparel industry at a critical crossroads, describing the industry's image as "severely tarnished" following a series of deadly industrial incidents.
Meanwhile, environmental pressure group Greenpeace International is stepping up efforts to assess companies' progress at eliminating toxic chemical discharges from their supply chains. Its new Detox Catwalk describes Nike, Adidas and Li Ning as "greenwashers" who have failed to follow through on commitments - although both Adidas and Nike say they have made "meaningful progress" towards their goals.
And apparel group Hanesbrands has posted a double-digit third quarter profit increase, boosted by fatter margins and improved market share. The US company said all four of its business segments had recorded double-digit operating margins, while the group's overall gross margin rose 240 basis points to 35.2%.
Efforts to improve safety in Bangladesh continue
28 Oct 2013 15:46
In the week that marked six months since the collapse of the Rana Plaza factory building in Bangladesh, attention not surprisingly turned to ongoing efforts to improve garment worker safety - and the progress made so far.
One major development saw the Better Work Bangladesh programme finally get the go-ahead. The move is part of a wider US$24.2m package running over three-and-a-half years, that focuses on minimising the threat of fire and building collapse and ensuring the rights and safety of workers. It is being overseen by the International Labour Organization (ILO).
But a report from labour rights groups claims not enough progress has been made on delivering compensation to families and workers affected by the Rana Plaza collapse. While acknowledging that some developments have been made on compensation, activists say the majority of brands linked to the disaster have yet to commit to making a contribution.
Among those companies singled out for their efforts to contribute are clothing retailers Primark and Loblaw. Both are moving ahead with plans for long-term compensation for Rana Plaza workers and their families - and calling on other brands to contribute their "fair share" of aid.
And the group of North American brands and retailers working to improve fire and building safety in Bangladesh factories that supply its garments has agreed the standards against which facilities will be assessed. It has also established a committee of third-party experts to help with implementation.
Meanwhile, companies sourcing garments from Cambodia - including Gap, H&M, Levi Strauss, Nike and Puma - have raised their concerns at attempts by local manufacturers to "undermine" plans to publicly disclose details of factory audits.
The 13 buyers have hit out at instructions urging factory operators to refuse entry to ILO monitors unless they are accompanied by government officials, describing the conditions as "deeply troubling."
And after booking a 13.8% hike in third-quarter profit, boosted by strong sales in its outdoor & action sports and jeanswear businesses, executives at apparel giant VF Corporation are in buoyant mood. Net income surged to $433.8m and revenue rose 5% to $3.3bn, making the owner of Timberland and The North Face confident about its full-year prospects.
Brands push forward on Bangladesh safety agreements
21 Oct 2013 16:12
There were major developments last week from the two groups of brands and retailers working to improve fire and building safety in Bangladesh's garment factories.
The first saw the North American Alliance publicly release details of more than 620 factories used to supply its clothes. The move comes two weeks after the largely-European Accord published a list of nearly 1,600 Bangladesh factories used by its members.
The Accord has also filled a number of key roles in its leadership team, including its chief safety inspector, and heads of international and Bangladesh operations.
The progress come as latest figures show Bangladesh's ready-made garment exports are continuing to soar, rising by more than 24% in the first quarter of the current fiscal year despite on-going labour unrest, political turmoil and factory safety issues.
Whether improved transparency in clothing supply chains will be enough to guarantee a sustainable future for outsourcers in South Asia remains to be seen, but a conference in Sri Lanka heard plenty of calls for improved openness.
A parallel event staged as part of the annual Sri Lanka Design Festival was also told that the growing retail market in the Asia-Pacific region may enable emerging economies such as Sri Lanka realise ambitious dreams to become regional production hubs.
But the much publicised talks to strike a free trade agreement between China and Sri Lanka are sparking intense debate about its potential impact.
In Cambodia, an on-going dispute at SL Garment Processing has now been running for more than two months. Around 500 workers are still on strike, and the Singapore-owned company has attempted to clarify the situation to customers by outlining its version of events.
Garment factories in Haiti supplying top brands and retailers have been accused of minimum wage violations that routinely deprive workers of nearly one-third of their pay. Research carried out by a US-based labour rights group claims that workers in Port-au-Prince are paid an average of 32% less than they should be under the country's minimum wage and overtime laws.
Meanwhile in Nicaragua, manufacturing giant Grupo Karim's has acquired the former Cone Denim Mills plant in a $35m deal. The move will add woven fabric and garments to the company's already-strong vertical knit operations.
But basic apparel manufacturer Hanesbrands is to lay off nearly half of Maidenform Brands' 1,330 staff worldwide as part of its US$583m merger with the rival intimate apparel maker.
Fabric mill fire fuels puts new spotlight on safety
14 Oct 2013 17:36
The safety of Bangladesh's textile and garment industry has been called into question again after at least seven people were killed last week in a fire at a fabric mill. More than 50 people were also injured in the blaze at Aswad Composite Mills Limited, part of the Palmal Group.
Retailers and brands including George at Asda, H&M, Next, Gap, Primark, Carrefour, Loblaw and Hudson's Bay Company have told just-style they are investigating - but are keen to make the distinction they had no direct contact with the facility even though its fabrics might have been used in their products.
The latest tragedy has led to renewed calls for efforts to ensure safe conditions in the country's garment sector - as well as questions on the extent to which audits need to be carried out further down the supply chain.
As a fabric supplier, Aswad Composite Mills was not listed in the nearly 1,600 factories used by signatories to the Accord on Fire and Building Safety in Bangladesh - and as such would not be included in the current inspection plan.
Whether the on-going labour unrest, political turmoil and factory safety issues will weigh on Bangladesh's garment exports remains to be seen. While a new assessment expects a slowdown, the latest export figures tell a different story, showing a surge of 24% in the first quarter of the current fiscal year.
New forecasts for cotton prices this season have also been released, putting them on a par with last year and reflecting higher world stocks and lower consumption estimates.
While senior figures within the global cotton industry are considering promoting sales of their fibre proactively for the first time, as price shifts are allowing synthetics to seize more market share.
In its quest to improve the sustainability of its business, the latest milestones achieved by Crystal Group's Yida jeans making facility highlight its progress in reducing the carbon footprint of each garment made.
And lacklustre back-to-school sales, warmer than average temperatures, waning consumer confidence, worries over a government shutdown, and stagnant wage growth all combined to give another mixed sales bag for US apparel retailers in September.
For Fifth & Pacific Companies change is also afoot after the apparel firm agreed to sell Juicy Couture to Authentic Brands Group for US$195m. The move enables it to focus on the popular Kate Spade line - and if the industry rumour mill has it right, could soon be a single brand company.
H&M leads the apparel brand wagon
11 Oct 2013 17:31
The latest listing of the best global brands might be dominated by the technology, financial services and automotive sectors - but apparel, sporting goods and luxury names managed a strong showing too.
Interbrand's annual rankings put H&M in at number 23 on its top-100 table, with a brand value of $18.2bn, up 10% from 2012. Last year H&M ranked No 23.
Fast fashion stalwart Zara, meanwhile, inched up one place to 36, with an estimated brand value of $10.8bn, a rise of 14% on last year.
A 14% rise in value was also calculated for Ralph Lauren, which came in at No 88 at $4.6bn. And last but not least in the top-100 was Gap, its position unchanged but its brand value seen to have risen 5% to $3.9bn.
For sporting goods, Nike leads the field, with its position on the chart up two places to No 24, with an estimated brand value of $17.1bn, a rise of 13% on last year. Rival Adidas jumped five places to No 60, with its value up 12% to $7.5bn.
Nor surprisingly, luxury brands also stayed strong, led by Louis Vuitton (No 17) at $24.9bn, followed by Hermès (No 54) at $24.9bn; Prada (No 72) at $5.6bn; and Burberry (No 77) at $5.2bn.
Interbrand has based its rankings on three key aspects that contribute to a brand's value: financial performance, the role the brand plays in influencing consumer choice, and its ability to command a premium price or secure earnings.
Apple topped the 2013 list with a brand value of $98.3bn, followed by Google at $93.3bn. And for the first time in the report's history, Coca-Cola fell to third place with a $79.2bn brand value.