06 October 2023, Mumbai

The ITMF's Global Textile Industry Survey (GTIS) conducted in mid-September 2023 found that survey participants exhibited a cautious sentiment regarding the current business situation. 

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Summary:

The indicator for the business situation stood at -27 percentage points (pp), as companies in the entire textile value chain were struggling with rising costs and weak demand. 

Business expectations have remained unchanged since July at around +20 pp. 

Welcome trend; Order intake recovered in May 2023, but flattened in July and remained very weak in September (-28 pp). 

The entire textile value chain is running on minimum levels of orders. 

As long as brands and retailers do not increase orders, the entire value chain will continue struggling. 

Order book

Order backlog slightly increased globally, from 1.9 months in July to 2.2 months in September 2023. 

This indicator has been on a falling trend since the end of 2021. The average capacity utilization rate dropped again globally (69%). 

Textile manufacturers expect this rate to remain low in six months’ time as well. Weakening demand has been the major concern in the global textile value chain for a year. 

Growing concerns

In September 2023, this concern grew even stronger due to high inflation rates measured in the last few months, a phenomenon fueled by high energy and high raw material prices. 

Nevertheless, participants seem not to be concerned by order cancelations and inventory levels remain average along the textile value chain. 

Quick point

The GTIS survey findings suggest that the global textile industry is facing a number of challenges, including rising costs, weak demand, and supply chain disruptions. 

However, participants seem to be optimistic about the long-term prospects of the industry.

5 key insights :

• Cautious sentiment
• Rising costs, weak demand
• Order intake flat
• Capacity utilization low
• Long-term optimism

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03 October 2023, Mumbai

The Indian government has recently announced the extension of the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for an additional nine months until June 30, 2024. 

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Assuring Uninterrupted Support to Exporters

This scheme offers exporters of 18 products, including items like sarees and lungis, a refund for the duties and taxes they incur. The primary objective of the RoDTEP scheme is to enhance the competitiveness of Indian exports in the global market.

RoDTEP Extension to Empower Exporters in the Global Market

The Ministry of Commerce and Industry has expressed that the RoDTEP extension would empower exporters to negotiate more favorable terms for their export contracts, given the prevailing international circumstances. 

The scheme fully complies with WTO regulations and operates through an IT-based system.

Review and Recommend Ceiling Rates

The government has also reconstituted the RoDTEP Committee within the Department of Revenue. 

This committee will be responsible for reviewing and recommending ceiling rates for different export sectors covered by the scheme. The Committee recently held its inaugural meeting in New Delhi, collaborating with Export Promotion Councils (EPCs) and Chambers of Commerce. 

They discussed various aspects of the scheme and its implementation, including methodologies.

EPCs Request Increased Budget Allocation

During these discussions, the EPCs emphasized the necessity of increasing the budget allocation for RoDTEP and providing higher rates for all export items. This, they argued, would help exporters navigate the challenges posed by rising input costs and global competition. 

Furthermore, they requested timely notifications of RoDTEP rates for all sectors and a simplified claims process. 

The Committee assured the EPCs that their suggestions would be taken into serious consideration, and they pledged to expedite their work accordingly.

Welcome step

The extension of the RoDTEP scheme and the government's commitment to supporting exporters are welcome developments. 

The scheme is expected to play a vital role in boosting India's exports and enhancing the country's global competitiveness.

5 key insights:

• RoDTEP scheme extended by 9 months
• To support exporters and boost exports
• Offers refund for duties and taxes
• To enhance competitiveness in the global market
• The government committed to supporting exporters

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30 September 2023, Mumbai

Discounts and Advertising Costs Challenge Fashion Retailers

Fashion retailers are bracing for profit margin pressure in FY2024 due to two key factors: increased discounts to combat a demand slowdown and elevated spending on advertising and promotions to drive revenue growth, according to ICRA's analysis.

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Operating Margin Conundrum

Margin Projection Despite Revenue Growth

Despite anticipating a robust 13% year-on-year (YoY) revenue growth, fashion retailers are expected to see their operating profit margins decline by approximately 120 basis points (bps) to 5.2% in FY2024. This projection concerns 11 listed retail entities that collectively account for 23% of the industry's revenue.

Sector's Resilience

Stable Outlook Amid Challenges

ICRA currently maintains a stable outlook for the retail sector, indicating confidence in its resilience despite the impending challenges.

Potential for Industry Changes

Impact on Individual Retailers and Industry Consolidation

While the sector as a whole may remain robust, the profit margin pressure could impact individual retailers, potentially leading to industry consolidation.

Strategies for Survival

Adaptation and Innovation Are Key

To counter profit margin challenges, fashion retailers should focus on cost optimization, refine their product mix, and enhance the overall customer experience. Exploring new avenues, such as expanding into online retail and offering value-added services, can also be beneficial.

Mixed Outlook

Balancing Growth and Margins

In summary, the fashion retail industry's outlook for FY2024 is a mixed bag. While revenue growth is expected to persist, profit margins face increasing pressure. Successful retailers will need to proactively manage costs and prioritize customer satisfaction to thrive in this demanding landscape.

5 key insights:

• Discounts and ads challenge margins
• Revenue growth expected, despite margin pressure
• Industry resilience despite challenges
• Profit margin pressure could impact individual retailers
• Retailers must adapt and innovate to thrive

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05 October 2023, Mumbai

Celebrating Branding Excellence

Apparel Group's internationally renowned footwear brand, Crocs, has won the prestigious Superbrands status. The award was presented at a grand ceremony held on the 28th at the Intercontinental Hotel, Dubai Festival City.

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Superbrands Recognition

The Superbrands organization is a globally renowned independent authority and arbiter of branding brilliance. 

The Superbrands status is awarded to brands that have achieved exceptional levels of brand recognition, quality, and customer satisfaction.

Neeraj Teckchandani's Perspective

Neeraj Teckchandani, CEO of Apparel Group, shared his strategic perspective on the recognition, stating, "Receiving this prestigious Award is both an honor and a valuable affirmation of our strategic commitment to excellence and innovation. This recognition underscores our relentless pursuit of delivering unparalleled quality and value, reflecting the strength and resilience of our brand portfolio. 

I am immensely proud of our dedicated team, whose consistent efforts enhance our brand's reputation and strategically position us for continued growth and success in the competitive global market."

Crocs' Exceptional Ability

This award bears witness to Crocs' exceptional ability to grow and exceed in the competitive market, reinforcing its status as a leading brand in the global fashion and lifestyle industry. 

The award demonstrates Crocs' unique ability to resonate with consumers, offering products and experiences that stand out in the marketplace.

Apparel Group's Success

This recognition capitalizes Apparel Group's exceptional ability to nurture and grow brands in the competitive market, further solidifying its position in the global market.

Sum & Substance

The Superbrands status is a significant achievement for Crocs and Apparel Group. It is a testament to their commitment to excellence and innovation, and their unique ability to connect with consumers.

5 key insights :

• Crocs wins Superbrands status
• Celebrates branding excellence
• Recognizes brand recognition, quality, and customer satisfaction
• Commitment to excellence and innovation
• Unique ability to connect with consumers

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02 October 2023, Mumbai

Key takeaways:

• Revenue growth to be driven by domestic demand and export revival
• Lower cotton prices and easing supply chain issues to support growth
• Volume growth estimated to be 6-8%, higher than last year

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However:

• Revenue growth rate to be lower than last year due to stabilized raw material prices and lower realizations

Overall:

The Crisil Ratings report paints a positive outlook for the RMG sector in FY24, with revenue growth expected to be higher than the previous fiscal year, driven by strong domestic demand and export revival. However, the revenue growth rate is expected to be lower than last year due to stabilized raw material prices and lower realizations.

Additional notes:

• The RMG sector is a major contributor to the Indian economy, accounting for over 10% of the country's exports.
• The sector employs over 50 million people, making it one of the largest employers in the country.
• The Indian government is targeting to increase RMG exports to $100 billion by 2030.

Conclusion:

The RMG sector is poised for growth in FY24, driven by strong domestic demand and export revival. However, manufacturers and retailers should be mindful of the lower revenue growth rate due to stabilized raw material prices and lower realizations.

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29 September 2023, Mumbai

Revenue Growth Expected to Reach 7-8% in FY23-24

A recent report by CRISIL Ratings has revealed that brick-and-mortar apparel retail is returning to normal, with revenue growth expected to reach 7-8% in the financial year 2023-24 (FY23-24).

This is being driven by the upcoming festive and wedding seasons, as well as the return to office and buoyant corporate activity.

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Data points; The report, which analyzed 39 apparel retailers who accounted for 25% of Rs 1.9 lakh crore revenues in FY22-23, also found that demand from the premium segment is rising gradually, with consumers increasingly preferring branded garments. This is helping to offset muted-to-low demand from the economy and value segments, which generate 60% of total revenues.

Observation

However, the report also cautioned that there are some challenges that retailers need to be aware of, such as commodity inflation, the impact of erratic monsoons, and inflationary pressures on purchasing power.

Additionally, the report found that capital expenditure on store expansion in FY23-24 is expected to be around Rs 2,000 crore, lower than the Rs 2,500 crore spent in FY22-23.

Overall, the report is optimistic about the future of brick-and-mortar apparel retail in India, with revenue growth expected to reach 7-8% in FY23-24. However, retailers need to be aware of the challenges that lie ahead and take steps to mitigate them.

Indications of the road ahead

Despite the optimism of the CRISIL report, the indications so far have been mixed for retailers. For example, leading retailer Aditya Birla Fashion and Retail Limited (ABFRL) reported a consolidated loss of Rs 161.6 crore in Q1 2023-24, while Page Industries reported a 23% drop in consolidated net profit to Rs 158.3 crore in the same period.

However, Raymond got lucky with a consolidated net profit of Rs 1,066.7 crore after having gained from the sale of the consumer division to Godrej Consumer Products.

It remains to be seen whether the brick-and-mortar apparel retail sector will be able to sustain the positive momentum predicted by the CRISIL report.

However, the upcoming festive and wedding seasons are expected to provide a boost to sales.

5 key insights:

• Revenue growth: 7-8% in FY23-24
• Drivers: Festive and wedding seasons, return to office, buoyant corporate activity
• Premium segment: Rising demand
• Challenges: Commodity inflation, erratic monsoon, inflationary pressures
• Store expansion: Capital expenditure to be Rs 2,000 crore

04 October 2023, Mumbai

Ambition to Action

The Global Fashion Summit: Boston Edition, held on September 27, 2023, convened hundreds of representatives from brands, retailers, NGOs, policy, manufacturers, and innovators to transform ambition into action. 

The Summit explored the 2023 editorial theme, ‘Ambition to Action’, while reflecting on and responding to what happened at Global Fashion Summit: Copenhagen Edition in June.

Speakers and Topics

Attendees heard from over 40 speakers from a range of companies and organisations, including Levi Strauss & Co., Tapestry, Neiman Marcus Group, Thunder Voice Hat, H&M Group, Alice and Olivia, BBC StoryWorks, New Standard Institute, Conservation International, Worldly, Trove, Ceres, Aditya Birla Fashion and Retail Ltd, and many more. The Summit also featured esteemed Indigenous speakers on the programme.

The programme featured bold panels, case studies, and leadership roundtables reflecting on topics including ‘Indigenous Leadership Perspectives’, ‘Exploring Fashion’s ESG Concept’, ‘On The Ground: Adaptation or Mitigation?’, ‘The Global Approach to Circularity’, and ‘Innovation for Value Chain Challenges’.

Highlights

Fashion CEO Agenda 2023

GFA published Fashion CEO Agenda 2023, a concise report to support the establishment and implementation of leadership strategies to achieve a net positive fashion sector. In a first for the Fashion CEO Agenda, this edition has been developed to include subsequent action areas for brands, retailers, and producers.

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GFA Designer Challenge 2023

GFA unveiled the latest response to the GFA Designer Challenge 2023, presented by Smiley. Julius Juul, Creative Director & Co-Founder, Heliot Emil, created an alliance with Upcycle Labs. 

The outcomes were showcased at the Summit through the release of a captivating new video depicting the journey of the designer.

GFA Policy Matrix: Americas

GFA launched the GFA Policy Matrix: Americas - a non-exhaustive document that encapsulates a wide array of policy efforts across the Americas. 

The Matrix complements the GFA Policy Matrix: EU edition released in June and summarises the key legislations going on implicating the textiles industry.

Fashion Redressed

Taking a glimpse into the dynamic world of fashion and textiles, the Summit presented a new online series titled ‘Fashion Redressed’ that was launched on 19 September with a collection of unique stories. 

This series expresses the creativity of the fashion world, spotlighting those who are working to find the stylish side of a more sustainable sector.

Circular Models

Trove and Worldly delved into their newly launched study, ‘Where Are Circular Models Effective Sustainability Strategies for Fashion Brands?’, which reveals where and how circular models play an important role for brands working to reduce their emissions when combined with upstream supply chain interventions.

Next Gen Assembly

The eight members of the first iteration of GFA’s Next Gen Assembly presented their manifesto via a powerful video message to attendees – outlining their aims and ambitions for the groups’ continued work to impact the fashion industry by supporting a sustainable trajectory.

Higher Ground?

The recently launched ‘Higher Ground?’ report, by ILR Global Labour Institute and Schroders, was discussed during the session ‘On The Ground: Adaption or Mitigation?’ The report covers the impacts of climate change on global apparel production.

Alliance for Chemical Textile Recycling (ACTR)

During the Global Circular Fashion Forum session, the Alliance for Chemical Textile Recycling (ACTR) was launched, representing a group of textile chemical recyclers for cotton, polyester, and blends. 

The alliance seeks to contribute to solutions for addressing the textile industry’s impact on society, the environment, and businesses.

Innovation Forum

Global Fashion Summit: Boston Edition also presented an Innovation Forum, enabling attendees to meet with 14 sustainable solution providers from across the value chain– equipping them with the concrete tools to expedite meaningful actions. 

GFS Connect facilitated over 90 connections between fashion companies and exhibitors during the Summit.

The Global Fashion Summit: Boston Edition was a successful event that brought together key players in the fashion industry to discuss and address the most pressing sustainability challenges. 

The Summit provided a platform for collaboration, innovation, and action, and it is clear that the industry is committed to transforming ambition into action.

The future is bright:

• Ambition to Action: The Summit explored how to turn sustainability goals into reality.
• Collaboration is key: The Summit brought together key players from across the industry to work together.
• Innovation is essential: The Summit showcased new technologies and solutions to address sustainability challenges.
• Action is needed now: The Summit participants are committed to taking immediate action to achieve a net positive fashion sector 

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30 September 2023, Mumbai

FY2022-23

• Readymade garment export contributed 84.5 per cent of Bangladesh's total exports valued at nearly $47 billion.
• The US is its largest market where unfortunately, growth was negative at -5.5 per cent.
• Garment exports to the UK and the EU fared much better, registering a positive growth of 11.8 and 9.9 per cent respectively.
• Non-conventional markets like Brazil, Turkey, and Japan fared exceptionally well with over 71 per cent, nearly 50 per cent, and nearly 46 per cent growth respectively.

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FY2023-24 (First two months)

• Bangladesh sees moderate demand growth in both traditional and non-traditional markets.
• Apparel export worth $7.99 billion, a growth of 12.46 per cent from $7.11 billion in July-August of this fiscal.
• The US is the largest single export destination with exports worth $1.46 billion, a year-on-year growth of 2.95 per cent.
• The UK is the third highest destination with exports worth $976.8 million, a growth of 19.1 per cent year-on-year.
• Apparel export to other major destinations such as Spain, France, Netherlands, Italy, and Poland also registered positive growth.
• The US's Generalized System of Preference program has included Bangladeshi apparel, making it duty free as opposed to the 11 per cent it is being taxed as customs.

Conclusion

BGMEA is satisfied with Bangladesh's export performance in FY2022-23 and FY2023-24. 

Bangladesh has fared well as per course, especially in non-traditional markets despite depressed orders from traditional markets. 

The US's decision to make Bangladeshi apparel duty free is a positive development for the garment sector.

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29 September 2023, Mumbai

An overview

Intex India is a significant B2B international sourcing trade show that provides a unique opportunity for direct access to the vast Indian, South Asian, and global markets.

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Leveraging India's robust manufacturing capabilities and the immense domestic demand it commands, Intex India offers unparalleled opportunities for international suppliers seeking entry into this expansive market.

Sweet spot

India is currently the world's fastest-growing major economy and is expected to witness its GDP surge to $7 trillion by 2030. 

This remarkable growth trajectory is also expected to translate into a 9.5% increase in disposable income from 2022 to 2026, with consumption projected to soar to $1.8 trillion by 2030.

India's Gen-Y population, with over 808 million individuals under the age of 35, has a growing appetite for fashionable attire. 

Tailwinds; This trend is propelling the domestic fashion and apparel brands market towards an impressive $220 billion target by 2025. 

The active wear sector is set to reach $6 billion by 2024, while the sports apparel market is anticipated to hit $2.2 billion by 2029. These flourishing sectors are well-supported by the fashion retail market, which aspires to reach $118 billion by 2028, and the rapidly expanding online sales segment, potentially reaching $130 billion by 2026.

Multiple data points

India's textile and apparel exports surged to an impressive $44.4 billion in FY22. The readymade garment exports are projected to sustain a compound annual growth rate (CAGR) of 12-13%, ultimately surpassing $100 billion by 2030.

Leveraging

In alignment with this growth, India's textile and apparel imports also witnessed a robust uptick, surging by 26.7% to $8 billion in 2022-23.

In this thriving ecosystem, Intex plays a pivotal role in assisting businesses in expanding their operations and harnessing the abundant opportunities that lie ahead.