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June 15, 2006
Women's Wear Journal
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Chinese Markets To Crack Down on Pirated Products
Some of the world’s biggest fashion and sportswear brands signed a deal with landlords at Beijing’s retail markets to stop the sale of counterfeit bags and clothing.
Chanel, Gucci, Louis Vuitton, Adidas and Levi’s were among the 23 brands who signed the memorandum with the landlords who have pledged to suspend or evict any tenants found selling pirated products.
Representatives from the luxury brands will monitor the markets and report copyright violations to landlords.
Evidence of a first copyright violation by a particular vendor will lead to a suspension, while a second offence would result in the vendor being ejected from the market.
The voluntary agreement is an attempt to head off further legal action by the brands against the landlords of Beijing’s retail markets.
The landlords of major markets such as Silk Street and Hongqiao have agreed to work with the brand owners to draw up rental agreements that set out the potential consequences of counterfeiting. Regular surveys will test the ‘Two Strike Rule.’
If successful, brand owners will pursue similar agreements with landlords of major markets in other big cities in China, including Shanghai, Guangzhou and Shenzhen.
AAFA Pushes for Renewed
Burma Import Ban
The AAFA (American Apparel & Footwear Association) is urging Congress to renew import restrictions against Burma which are due to expire on July 31.
In letters to key members of the House and Senate, AAFA president and CEO Kevin M Burke stated tough sanctions against Burma’s ruling military junta are necessary “because of its continued violations of human rights.”
The current import ban is contained in the ‘Burmese Freedom and Democracy Act of 2003,’ and will expire unless Congress passes, and the President signs into law to renew the ban by the end of July.
“Regrettably, the ruling military junta in Burma has shown no willingness to address the many problems that made [sanctions] by the US government necessary,” Burke said.
He added that the most recent US State Department Human Rights Report states Burma’s human rights record “worsened during the year , and the government continued to commit numerous serious abuses.”
China's New Quota Website
China’s first electronic trading platform for textiles export licenses went online on June 6, to help ease the process of buying and selling quotas.
The website, which is sponsored by the Shanghai Foreign Economic Relations and Trade Commission, should also avoid the problem of fluctuating prices, which occurs when agents hoard quotas, and cut the time for authorities to examine and approve quotas from five days to two days.
Last Year, the European Union and the United States re-imposed quotas on some Chinese textiles exports.
Exporters are allocated a certain number of quotas and can sell surplus quotas or bid for more if required.
Raica Oliveira, Brazilian national soccer player Ronaldo's
girlfriend, models a garment by Triumph in Munich.
Some Chinese Footwear
Relocate to Indonesia
Up to ten shoemakers and footwear companies in China are relocating their factories or orders to East Java, Indonesia.
The moves will create jobs for 20,000 locals in some districts of East Java province, including Pasuruan, Surabaya, Gresik and Mojokerto.
"The relocation will be done not only by Chinese companies but also by Korean and Taiwanese firms that have invested in China," said Cipto Budiono, head of the East Java Trade and Industry Office.
"The relocation is one of the Chinese companies' strategies to evade anti-dumping sanctions from US and European Union (EU) authorities.”
The anti-dumping penalty means Chinese shoes exported from Indonesia will only cost 14% in import duty.
2006 'Bra Wars'
A delegation from the UK's largest retail groups will meet Peter Mandelson, the European Union trade commissioner to voice fears that the "Bra Wars" could be repeated in 2006. Millions of pounds worth of Chinese-manufactured clothing was stuck in UK ports because of the re-imposition of quotas during the summer of 2005.
Executives from Tesco, Asda, Marks & Spencer and Kingfisher are expected to join the British Retail Consortium (BRC) at a meeting with the commissioner.
The BRC fears that complaints from manufacturers in Italy, Spain and Portugal over the high volume of Chinese imports could lead to tariffs or quotas being imposed on up to seven new product categories. Such tariffs could lead to logistical problems and higher prices for retailers.
The EU is already considering placing duties on plastic bags made in China and Thailand in a move that would cost UK retailers £30m. Other categories that the BRC is worried about include furniture, metal chairs and denim jeans.
The BRC will also say that the procedure by which complaints are made to the EU by "protectionist" nations needs to be re-examined. Mandelson has already announced a review into this.
" If we are getting more of these claims for protection then we want a solution that will be least damaging for our industry," said Kevin Hawkins, the BRC's director-general.
He added that a solution needs to be found that would suit both the EU and China. "Due to the size of the Chinese manufacturing sector and the competitive advantage that it has, we really have to step back from having a trade war with the Chinese," he said.
These comments were echoed by Mandelson, who last week urged China to open its economy to foreign investment and crack down on piracy or risk seeing its soaring exports to the EU hurt by protectionism.
DSW Profits Jump 150%
Speciality footwear retailer DSW enjoyed a robust first quarter, with sales and income up markedly on last year.
Net income hit US$17.5m, more than double last year’s figure of $7m, with sales up from $281.8m to $316.5m. Comparable store sales for the quarter ending April 29, were up 4.2%.
As a result, the company has raised its estimate for 2006 EPS to a range of $1.24-1.27, compared to its previous forecast of $1.22-1.25. Comparable store sales are projected to rise by 3-5%, and DSW plans to open 30 new stores during the year.
UK's May Retail Sales Up 3.6%
UK retail sales rose for the second month in a row, helped by the build-up to the World Cup and demand for summer clothing.
According to the latest data from the British Retail Consortium, revenue at stores open at least 12 months climbed 3.6% from a year earlier. This follows a 6.8% rise in sales in April.
In a three-month comparison from March to May, sales rose 2.7%. However, it warned consumer confidence remains fragile.
Charming Shoppes to Set
Intimate apparel retailer Charming Shoppes is planning to set up the largest commercial website of its kind in the US.
The company will use existing stock from catalogue and internet inventories to support the site, which it is considering giving the name
charming.com. It acquired catalogue company Crosstown Traders last year to expand its range of merchandise.
The plan is that the site will offer bras and other intimate apparel items for
women of every size and age. The company already has a reputation for its clothing designed for larger women.
Charming Shoppes, which owns the Catherine’s and Cacique retail chains, the Fashion Bug clothing range and a number of catalogues, hopes to
launch the new site by the end of the year.
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