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US Files Complaint
 with WTO
Page 1

VF Closes Intimates Sale
Page 1

Australian Counterfeiters  Seized
Page 1

China to Cut Export Tax Rebate
Page 1

West Coast Watch
Page 2

Buyers' Best Sellers
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Ask Andy
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McPete Sez
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Editor Cleared of Charges
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International Lingerie Fair & Interfeliere
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 Kylie to Launch Swimwear Line
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 Stewart Angers Father Over Ultimo Deal
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 April 15, 2007                                        Issue #191


             McPete -Sez, 
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US Files Complaint With
The US filed official complaints with the World Trade Organization (WTO), on April 10, against what it describes as China's inadequate protection of intellectual property rights.
The two complaints lodged with the WTO for dispute settlement consultations concern "deficiencies in China's legal regime for protecting and enforcing copyrights and trademarks on a wide range of products", and China's barriers to trade in books, music, videos and movies.
"Piracy and counterfeiting levels in China remain unacceptably high," US trade representative Susan C Schwab said in a statement. 
"Inadequate protection of intellectual property rights in China costs US firms and workers billions of dollars each year."
She added that because bilateral dialogue "has not resolved our concerns, we are taking the next step by requesting WTO consultations".
The formal action is the US' first intellectual property filing against China since it joined the WTO in 2001. 
The complaints are fuelled by the soaring US trade deficit, which set a record for the fifth consecutive year in 2006 at $765.3bn.
However, China has hit back at the US complaint, warning that the move will have a negative impact on trade relations between the two countries.   

   VF Closes Intimates Sale
VF Corp's stock hit a 52-week high April 2, after the company took the license for The North Face brand in China in-house and closed the divestiture of its intimate apparel unit to Fruit of the Loom.
Shares of the Greensboro, North Carolina-based apparel marketer topped out at US$83.47 in intraday trading on the New York Stock Exchange before closing at $83.24, up $0.62 or 0.8%.
In announcements VF said that it had completed the sale of its global intimate apparel business to Berkshire Hathaway's Fruit of the Loom subsidiary for $350m, plus an adjustment for working capital, and later that it had acquired the license for The North Face branded business in China from Youngone Corp, its South Korean-based licensee.
VF estimated that the brand, which operates a freestanding retail in Beijing in addition to its wholesale business, has the potential to generate $40m in volume in five years.
Financial details of the transaction with Youngone weren't disclosed. 
VF said that proceeds from the sale of its intimates business would be used to repurchase shares this year. Brands included in the deal are Vanity Fair, Lily of France, Vassarette, Bestform and Curvation in the US and Lou, Gemma and Belcor in Europe. 
Within Fruit of the Loom, the labels will operate as Vanity Fair Brands, a wholly owned subsidiary.   

Australian Counterfeiters Seized
Counterfeiters in Australia, allegedly copying goods produced by surfwear giants Billabong and Quiksilver, have been stopped in their tracks by a police blitz coordinated by trademark investigators. 
According to a report, around 10,000 pirated Billabong products were among the 100,000 items seized from a Melbourne warehouse. 
Counterfeited Billabong products included clothing and bags, while fake products branded with the Nike, Adidas, Louis Vuitton, Chanel, Playboy, Quiksilver and Roxy labels were also seized.

11/24              Photographed by Michael Brouwer
China to Cut Export Tax Rebate
The Chinese government is preparing to cut the export tax rebate on textile products, local media sources reported today.
The decision, outlined in the China Securities Journal, is intended to help balance the country's trade surplus, and a figure on the reduction is now being negotiated
The rebate rate on cotton and manmade textile products, will fall from 11% to 9%, said the source, while the rate on garments would be reduced from 13% to 9% and on chemical fiber products from 9% to 5%. 
The China National Textile and Apparel Council has lobbied to keep tax rebates as they are, but policy makers believe the move will help to trim the country's trade surplus which hit $177.47bn last year.

China's Textile Profit 
China's textile industry has reportedly made a profit of CNY11.2bn (US$1.45bn) in January and February. 
According to Asia Pulse citing statistics by the National Reform and Development Commission, the industry surged 38.7% in the two-month period. 
The added value of the textile industry climbed 17.9% year on year, the report said - 1.2% higher than growth of the same period last year, the report said. 


Hanesbrands to Close Plant
Hanesbrands Inc, the underwear and casual apparel maker spun off from Sara Lee last September, is to close its Stratford Road textile manufacturing plant in Winston-Salem with the loss of 610 jobs. 
The manufacturer, whose brands include Hanes, Champion, Playtex, Bali, Just My Size, barely there and Wonderbra, says it will move production to existing lower-cost plants in the Caribbean basin and Central America.
Production at the Stratford Road plant, which makes underwear and panty fabric, will end by the end of June, while the plant's print fabric operation is expected to cease production by the end of the year. 
"Determining that we need to close our hometown Stratford Road textile manufacturing plant to remain competitive was a very difficult decision, although the closure is absolutely necessary," said Gerald Evans, Hanesbrands' executive vice president and chief global supply chain officer. 
Moving the Stratford Road textile production to the company's existing manufacturing facilities in the lower-cost Caribbean basin and Central America regions is part of the company's continuing long-term global supply chain strategy. 
"Over the past several years, we have developed our textile manufacturing capability in the Caribbean and Central America in order to improve the competitiveness, effectiveness and value of our supply chain operations," Evans said. 
"This move is an economic necessity in today's competitive global market and gives us the opportunity to generate growth that allows our overall organization to thrive." 
Hanesbrands expects to take gross restructuring and related charges of approximately $16m for the plant closure, including severance costs and accelerated depreciation of fixed assets.

France Asks for Extension 
    on Import Quotas
The President of France's Union des Industries du Textiles (UIT), Lucien Deveaux, has called for quotas on Chinese imports into the EU to be prolonged until end-2008 in line with agreements between the US and China. 
He said that if the quotas were lifted at the end of this year as scheduled, it would lead to enormous pressure from China on Europe, especially as the US market would continue to be protected.
"The European Commission is more attentive to our requests now than before," Devaux claims - ever since the French and Dutch voted "No" to the European Constitution - and he is counting on the new French President (when elected) to defend the position of French industry on the issue. "If we obtain one year more [of quotas] this will allow us to be better organized in the face of Chinese imports," Devaux underlined. 

H&M Shanghai Store
Swedish fashion retailer H&M today took opened its first store in mainland China, just a month after it took its first step into Asia with a new store in Hong Kong.
"China is a strategic and exciting market with great fashion awareness and spending power," said H&M chief executive Rolf Eriksen. "We therefore see vast potential for expansion". 
The new four-storey shop in Shanghai's Lu Wan shopping heartland was launched with a special appearance by pop singer Kylie Minogue.
The store will debut her new "H&M Loves Kylie" capsule beachwear collection four weeks before it goes on sale around the world.
The retailer, which has around 1,400 H&M stores in 28 countries, plans to open its second store in Shanghai's Pudong district later this month. 

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