Apparel industry briefing

The International Cotton Advisory Committee (ICAC) is reducing the estimated cotton production for Pakistan from 1.5m tonnes to 1m tonnes for the 2022/23 season following the country’s devastating floods.

For 2022, Lululemon now expects net revenue to be in the range of US$7.87-$7.94bn, representing a three-year compound annual growth rate of approximately 26% after a 29% increase in second-quarter net revenue to $1.9bn.

Digital retailer Very, which is operated by The Very Group, has launched a new own-brand collection in response to the UK’s cost of living crisis with 85% of items under GBP30 (US$35).

Despite the UK Government announcing a typical household will pay up to an average GBP2,500 (US$2928.62) a year on energy bills for the next two years, a GlobalData analyst says apparel spend will still be reduced and some retailers will struggle with overheads, which could restrict growth for the sector.

Textile exports from Vietnam have risen by 20% in the first seven months of the year to US$22.24bn in value.

Global logistics company AP Moller Maersk has announced the construction of what it claims to be a first of its kind ‘green’ warehouse in Denmark.

US fashion companies doubled their efforts to reduce sourcing from China in 2022 in response to the newly implemented Uyghur Forced Labor Prevention Act (UFLPA) and growing geopolitical risks.

The African Export and Import bank (Afreximbank) has pledged up to US$300,000 grant-matching funds to support cotton value chain development in Africa, however, UN and global organisations at a cotton conference recently said more investments are needed.

The UK has rolled out the Developing Countries Trading Scheme which applies to goods including clothing and food and cuts tariffs for 65 developing export countries.

Current growth projections indicate a need for more than 10,000 new skilled workers in the textile industry in Honduras alone over the next five years.

“This year is stacking up to be one marked by rising inflation for both raw materials and finished products. Shortages in the cotton supply due to weather calamities in Pakistan, the US and elsewhere will only fuel price inflation. For mills, expect higher prices for cotton.”

“Energy is a significant cost, particularly for the textile sector, and we know that members have seen energy bills rise by over 50% already. For those manufacturing clothing, it is proving very difficult to pass on the costs to retailers or consumers and therefore they have had to swallow the costs themselves.”