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8 September

Spike in forced labour detained goods from outside China  

Since the inception of the Uyghur Forced Labor Prevention Act (UFLPA), US Customs and Border Protection (CBP) has detained over $1.7bn worth of goods. Credit: Image via Getty Images

New data from risk intelligence agency Kharon shows a rise in the number of goods being stopped when shipped from locations other than China. According to the CBP third-country manufacturing, where countries beyond China produce goods made with inputs from Xinjiang, is becoming increasingly common. Since there is no de minimis threshold for the Uyghur Forced Labor Prevention Act (UFLPA), any product that contains even a trace amount of inputs made with forced labour is subject to possible enforcement action. 

The value of detained goods from Malaysia and Vietnam is said to be more than six times that of goods imported directly from China since UFLPA enforcement. This suggests the US crackdown on third-country pass-throughs is gaining steam. Kharon’s ‘UFLPA: From Enforcement to Evolution’ study points out that since the enforcement of UFLPA, US Customs and Border Protection (CBP) has detained over $1.7bn worth of goods under these claims. 

Apparel, footwear, and textiles as well as industrial and manufacturing materials have been primary detention targets with a combined 1,806 shipments detained worth $98.81m since enforcement began in June 2022. The UFLPA targets the Xinjiang Uyghur Autonomous Region of China, and requires companies, including apparel brands and retailers, to ensure goods mined, produced, or manufactured wholly or in part with forced labour are not imported into the United States. 

31 August

Uganda’s second-hand clothing import ban dresses up complex issue 

Discussion about the ban on importing second-hand clothing into Uganda to stimulate the country’s own textiles industry has revealed a more complex issue. 

The directive, announced by Ugandan President Yoweri Museveni last Thursday (24 August), is intended to make space in the clothing market for items newly produced in the country. It is part of the government’s Buy Uganda Build Uganda policy aimed at stimulating growth in the country and will also cover electricity meters and electric cables. 

Speaking at a ceremony for new factories at the Sino-Uganda Mbale Industrial Park, Museveni said: “We have people here who produce new clothes, but they cannot infiltrate the market.”

The President also thanked China for encouraging investment in Africa, which he said would result in jobs within the textiles industry for Uganda’s youth. 

However, Francis Muhire an economist at the Makerere University Business School, has pointed out that, while the import ban may spur growth in the domestic textiles industry, the large number of people employed in Uganda’s second-hand clothing industry would suffer. 

31 August

Bangladesh urged to raise garment worker minimum wage  

Five non-profits have sent a letter to the chairman of Bangladesh's Minimum Wage Board to support a minimum wage increase for garment workers, which they claim is "currently well below the rising cost of living" in the country. 

Ethical Trading Initiative, amfori, Fair Labor Association (FLA), Fair Wear, and Mondiaal FNV explain in their letter to Bangladesh’s minimum wage board chairman, Liaquet Ali Molla, they have supported local union demands for a higher minimum wage. 

The wage data from FLA member companies, as reported in its Fair Compensation Dashboard suggests that average monthly net wages for garment workers in Bangladesh increased less than 1% from 2019 to 2022. 

FLA states the Bangladesh Bureau of Statistics shows inflation in Bangladesh rose to 9.02% in 2022-23 – the highest average inflation rate in 12 years. 

The five organisations stress the importance of trade union consultation in setting the minimum wage, as well as overall respect for freedom of association and collective bargaining. 

30 August

Stitch Fix confirms UK exit, result of macroeconomic climate   

San Francisco-based online personal styling service, Stitch Fix has announced it will be leaving the UK market due to the change in the macroeconomic environment. 

In its third quarter financial result of the fiscal year 2023 (6 June), Stitch Fix mentioned it was exploring an exit from the UK market and it has now confirmed through an Instagram post that orders will progressively decrease and end by 31 October. 

When it announced the possibility of the exit after its net revenue dropped by 20% in its Q3 it said: “Since we entered the UK market four years ago, the macroeconomic environment and our business have changed… we have concluded the need to explore exiting the UK market in FY24.” 

Its decision came down to its ongoing strategy refocusing, initiated in a bid to improve efficiency and maintain profitability. 

In its social media post, the company said: “Stitch Fix was inspired by a very human problem: to help people look and feel their best by finding clothes they love. 

“Over the past four years, we’re proud to have helped thousands of people in the UK discover their personal style. Now, we’re sorry to say that our Stitch Fix UK journey is coming to an end.” 

In the past year, Stitch Fix has seen a number of leadership changes with founder Katrina Lake resuming the role of CEO in January, which was later passed on to Matt Baer in June, a former executive from Macy’s with a background in customer relations and digital operations. 

29 August

Global apparel sector splurges on $2.5bn M&A deals in Q2 2023 

A report by GlobalData suggests the value of apparel merger and acquisition (M&A) deals increased 20% to $2.5bn in Q2 2023 compared to Q1. 

According to GlobalData’s Apparel M&A Deals Q2 2023 report there were 89 global apparel sector deals recorded in Q2 2023 which is 41% higher than the previous quarter and 39% higher than the previous year. 

Health & wellness turned out to be a leading theme of M&A activity in the quarter with eight deals registered worth $685.3m. 

Two of the top four M&A deals registered in Q2 were driven by this theme. The highest value deal was JD Sports‘ acquisition of Courir France for $572.4m, followed by Fielmann‘s $112.3m deal to acquire SVS Vision. 

The Aditya Birla Fashion and Retail (ABFRL) deal which involved a definitive agreement to acquire a 51% stake in TCNS Clothing for $201.7m was classified as an individualism & expression theme deal by GlobalData. 

Geographically speaking, Europe stood out as the region with the highest deal value in the quarter, registering 40 deals worth $1.9bn. 

GlobalData forecasts the biggest themes driving growth in the apparel sector moving forward will include technology (artificial intelligence, big data), industry specifics (customer loyalty, health & wellness), macro (covid-19, demographics) and ESG (environmental, social, governance).