October 1, 2008
Issue #226
The McPete Sez
Lingerie Newsletter & Women's Wear Journal
5/24
Intimate Apparel
Sleepwear-Daywear-Foundations-Loungewear-Hosiery-
Lingerie-Swimwear-Dancewear-Clubwear
Ready-to-Wear
Uzbekistan Bans Use of
Child Labor in Fields
Uzbekistan has banned the use of child labor in its cotton fields after coming under pressure to end the
practice from apparel importers and retailers in the US and EU, according to local media reports.
The country's government signed two International Labor Organization (ILO) conventions against child
labor on 12 September - and says it will not allow children under the age of 16 to work during this autumn's cotton
harvest.
Uzbekistan, the world's third-largest cotton exporter, produces more than 3.5m tons of cotton annually.
But allegations that children as young as 10-15 years old are forced to harvest cotton have led major western
retailers such Levi's, Tesco and Wal-Mart to take measures to exclude Uzbek cotton from their
merchandise.
A group of four US trade associations urged Uzbek president Islam Abduganievich Karimov to put an end to
the use of forced child labor in the country's cotton fields, saying their members only work with "business
partners that follow workplace standards consistent with international labor
standards."
A model wears Panache during Lingerie Americas
Fashion Show on August 4 at Cipriani in New York.
1/24
US Trade Groups Pressure
to Extend Monitoring
The US textile industry is stepping up its pressure on the country's
government to expand the Textile Monitoring Program (TMP) currently in place on apparel imports from Vietnam to cover imports from China as
well.
Seventy-three US lawmakers, ten textile and fiber industry trade groups and the
labor union Unite Here have all sent letters to President George W Bush, US Secretary of Commerce Carlos Gutierrez and US Trade
Representative Susan Schwab in the last week urging an extension of the scheme.
They want the TMP to cover US textile and apparel imports from China from January
1, 2009 - the day after existing safeguards on its shipments to the US are due to end.
They say they fear a surge of dumped Chinese apparel products once the remaining safeguards are removed.
The groups want to replicate the program currently in place to monitor textile and clothing imports from Vietnam for illegal dumping - even though this biannual review has so far failed to show any evidence for initiating an
anti-dumping case.
Fears of an anti-dumping investigation, however, are hampering trade with the country and have meant that US importers and retailers are reluctant to
place too many orders in Vietnam.
Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition (AMTAC), argues the measure would protect the US
textile sector "from predatory imports from countries like China" and would "help preserve the 500,000 middle-class American jobs in the
textile and apparel sector."
Trade groups in 17 CAFTA and African countries that receive preferential treatment on apparel exports to the US using domestic components have also added their backing to the monitoring
program in a separate letter sent to the Bush Administration last month.
"By extending and expanding the monitoring program, the United States would be sending a clear message that it won't allow illegally priced goods
to be dumped into the market," said Ruth Stephens, executive director of the US Industrial Fabrics Institute.
Under the textile monitoring program, the Department of Commerce analyses import data from sensitive textile and apparel categories for signs
of possible dumping.
If the Department believes that dumping may be occurring, then it will open an investigation which could lead to the filing of a dumping case.
Data is analyzed by reviewing preliminary import figures for both volume and price; a typical dumping case would involve a surge in imports
accompanied by a significant fall in unit prices.
Every six months, the data would be formally reviewed, which includes industry input.
22/24
Photographed by
Lawrence O. Brown
Hanesbrands to Close Nine
Plants
Apparel maker Hanesbrands Inc is to close nine plants in five western hemisphere countries and axe 8,100 jobs
as it consolidates production into fewer and bigger facilities in Asia.
The company, which is behind brands such as Champion, Wonderbra, Playtex and Bali, says its latest supply
chain streamlining - which is part of a long-term plan to cut costs - is due to be completed by the end of
summer 2009.
It also will complete the migration of the company's large knit-fabric textile production from the United
States.
The measures will lead to restructuring and related charges of $76m, of which approximately two-thirds are
likely to be incurred in the third quarter of 2008.
"We are making significant progress in expanding our supply chain production capability in Asia and
consolidating into fewer, larger facilities located in lower-cost countries around the world," Hanesbrands
chief executive officer Richard A Noll said.
"Globalizing our supply chain, and eventually balancing production between Asia and the western hemisphere, is
a critical plank in our strategic efforts to reduce costs, improve product flow and increase our
competitiveness."
By the end of 2008, Hanesbrands is expected to substantially close seven plants - a sewing plant in El
Salvador, affecting 2,600 employees; a sewing plant in Honduras, affecting 1,250 employees; a sewing plant in
Costa Rica, affecting 1,250 employees; and two yarn plants, a knit-fabric textile plant and an inventory
storage warehouse in the US, affecting 745 employees.
By the end of summer 2009, the company also expects to also close a sewing plant in Mexico, affecting 1,650
employees, and close its last large knit-fabric textile plant in the US, affecting 600 employees.
"In addition to improving cost competitiveness, these moves will lay the foundation for completing our Asia
build out and improve the alignment of our sewing operations with our end-state flow of textiles," added
Gerald Evans, Hanesbrands president, chief global supply chain officer.
"We regret that employees will be affected by this production streamlining, but our supply chain
globalization is necessary to strengthen our overall company and keep us competitive around the world."
Textile production from the latest closings will be absorbed into existing textile plants in Central
America.
Hanesbrands has expanded the fabric production levels at its textile facilities in the Dominican Republic and
El Salvador, and also plans further expansion in Central America.
Most of the sewing production from the shuttered Central American plants will
be moved to the company's new Asian facilities.
Hanesbrands has opened or acquired four sewing plants in the past two years - two in Thailand and two in
Vietnam - and expects to increase its workforce in Asia from 4,000 today to 6,000 by the end of 2008.
The company is also constructing a textile fabric plant in Nanjing, China, which is expected to begin the ramp
up of production in 2009 to supply fabric to the company's expanding Asian sewing network.
Since its spin-off from Sara Lee three years ago, Hanesbrands estimates it has now taken $204m out of the
planned $250m in restructuring charges.
See behind the scenes and new designs hot
off the Tia Lyn New York Runway on page 3
August Retailers' Sales Review
Abercrombie & Fitch reported net sales of $405.5m for the four-week period ended 30 August, a 5% decrease over net sales of $425.4m for the four-week period ended September
1, 2007. August same-store sales decreased 11%.
Aéropostale announced that total net sales for the four-week period ended August
30, increased 24% to $207.9m. The company's same-store sales increased 13% for the month.
American Apparel reported that for the month of August 2008, sales for stores open for more than twelve months increased 31% over the year ago period, on a constant currency basis. For the month of August 2007, same-store sales increased 34%. There were 147 stores in the sales comparison for August 2008.
American Eagle Outfitters announced that total sales for the four weeks increased 3% to $320.0m, compared to $311.3m for the four weeks ended September 2007. Same-store sales decreased 5% for the month.
The Bon-Ton Stores announced same-store sales for August down 10.3% compared with the prior year period. Total sales decreased 9.3% to $207.1m in the month.
Cache Inc posted same-store sales down 6%, as compared to an increase of 7% for the four-week period ended August
25, 2007. Total net sales for the period decreased 5% to $16.3m.
The Cato Corporation reported sales for August of $55.6m, a 6% decrease from the four-week period ended September
1, 2007. Same-store sales decreased 8%.
Chico’s reported that its net sales for the four-week period down 2.2% to $116.2m from $118.8m in August last year. Same-store sales decreased 10.0%.
Dillard's announced today that sales for the four weeks ended August
30, were $500.7m compared to sales for the four weeks ended September 1, of $537m. Sales decreased 7% on both a total and same-store basis.
Gap Inc reported net sales of $1.14bn for the four-week period ended August
30, 2008, which is a decrease of 5% as compared with net sales of $1.20bn for the same period ended
September 1. The company's same-store sales for August 2008 decreased 8% too.
Gottschalks announced that same-store sales for the month of August decreased 11.1% from the prior year. Total sales for the four-week period decreased 13.3% to $37.2m.
Kohl’s Corporation reported sales for the four-week month ended August
30, up 2.6% from the four-week month ended September 1, 2007. On a same-store basis, sales decreased 5.8% though.
Limited Brands reported a same-store sales decrease of 7% for the four weeks ended
August 30. The company reported net sales of $588.4m for the four weeks, an increase of 4% compared to net sales of $565.2m last year.
Mothers Work announced that net sales for the month of August decreased 5.0% to $44.8m from $47.1m reported for the month of August 2007. Its comparable store sales increased 7.2% for the month of August 2008.
Nordstrom reported preliminary sales of $558m for the four-week period ended
August 30, a decrease of 4.2%. Same-store sales decreased 7.9%.
Ross Stores reported sales of US$504m for the four weeks ended
August 30, a 9% increase over the same month last year. Same-store sales for the four weeks rose 3%.
Saks Incorporated announced that owned sales totaled $200.5m for the four weeks compared to $213.5m for the August 2007, a 6.1% decrease. Same-store sales there decreased 5.9% for the period.
Stage Stores reported that its total sales for the four week August period decreased 3.0% to $119.8m, with same-store sales decreasing 8.3%.
The TJX Companies said sales for the four-week period ended August
30, were $1.5bn, up 4% over the $1.4bn achieved during the four-week period last year. Same-store sales for the four-week period were flat compared to last year.
Wal-Mart reported total company sales up 8.75 for August, at $30.6bn. The company's same-store sales rose 3.1%.
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