Blog: Leonie BarrieA mixed bag for retailers in January

Leonie Barrie | 6 February 2012

For many retailers January is the quietest month of the year as shoppers tighten their belts after Christmas and stores try to clear unsold inventories. But post-holiday discounts helped many US retailers lift their sales in January, according to monthly figures released last week.

Overall results, however, were mixed as consumers continued to shop cautiously amid the struggling economy. And for apparel retailers there was the added challenge of warm weather curbing sales of winter coats, boots and other winter basics, as well as tougher year-ago comparisons.

Groups representing Cambodian garment workers are this week hoping to get a fair wage commitment from retailers and brands who source from the country. A two-day "people's tribunal" is taking place in Phnom Penh to investigate factory pay and conditions - and follows a spate of mass faintings in the sector, as well as a series of strikes. It hopes to draw attention to the concerns of those employed in the garment sector.

The World Trade Organization, meanwhile, has approved a request from the European Union to temporarily lift duties on 75 products from Pakistan - the majority of which are textiles, apparel, and footwear. The two-year tariff waiver is intended to help the country recover from massive floods in 2010, and measures will be in effect until 31 December 2013.

Domestic market expansion, new materials development and the transfer of production bases are all priorities under the 12th five-year plan for the domestic textile industry, released by mainland China's ministry of industry and information technology. The government predicts the export value of all textile products will reach US$300m by the end of 2015, with an annual growth of 7.5% from 2011.

Slower global economic growth and ample supplies could place downward pressure on cotton prices, after the International Cotton Advisory Board (ICAC) cut its global demand estimates for the fibre. The latest forecast released this week by the inter-governmental group sees world cotton demand for the 2012-13 season down by more than 510,000 tonnes from earlier forecasts.

And for this year's annual management briefing on apparel industry issues to watch in the year ahead, just-style asked leading executives for their feedback on the challenges and opportunities likely to emerge in 2012. Their insight provides a fascinating overview of the state of the sector today. Global economic uncertainty, swings in commodity prices, labour shortages and rising costs, especially in China, all add up to a worrying year. But e-commerce and growing spending power in emerging markets, as well as faster cycle times and stronger relationships across the supply chain, might offer some respite in these volatile times.


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