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US & Mexico Tackle Customs Issues
Page 1

New York Factory Accused of Violating Labor Laws
Page 1

Doha Talks 
Will Continue
Page 1

UK Junes 
Sales Drop
Page 2

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  August 1, 2008                                           Issue #222

                              Intimate Apparel

US And Mexico Tackle 
       Customs Issues
Leaders from textile trade groups in the US and Mexico have agreed to work together to stamp out fraudulent shipments into both markets as one of a number of measures to increase the competitiveness of North America's textile industry.
Other issues the industry representatives want to address include the threat of subsidies from China, and regional infrastructure. 
At a meeting in Gastonia, North Carolina, the National Council of Textile Organizations and Camara Nacional de la Industria Textil said they would work jointly with US and Mexican government officials to combat customs 
fraud, particularly the illegal use of Chinese yarns and fabrics to claim NAFTA and CAFTA origin. 
The two organizations also claimed that unfair subsidies to Chinese textile producers remained the most important threat to the competitiveness of North American textile industry.
And they called on the US government to extend the current Textile Monitoring Program to China. 

New York Factory Accused
 of Violating Labor Laws
Jin Shun Incorporated, a Queens-based garment contractor for some of the top US retail brands, has been accused of a range of labor law violations by New York State officials - including withholding $5.5m in unpaid wages.
The New York State Department of Labor released the findings July 23, saying that Jin Shun had also provided employees with mock question-and-answer sheets to memorize and use in response to investigators' questions.
Its probe allegedly found that employees there had worked "twelve-hour days, six to seven days a week, and were paid on a piece-rate basis".
Jin Shun Incorporated produced women's garments for retailers including Gap Inc, Limited Brands, Macy’s and Coldwater Creek.
In a statement Gap said: "Gap Inc is committed to doing business in a socially responsible way and we take this matter extremely seriously. 
"We appreciate the New York Department of Labor bringing this to our attention and we plan to fully cooperate with authorities to ensure the workers are treated fairly."
The retailer, whose Gap and Banana Republic brands had been made at the factory, said it currently has no production there - and added it is suspending any future production at the plant until the investigation is satisfactorily resolved.
Meanwhile, Limited Brands said: "I can assure you that our primary concern in a situation like this is the well-being of the workers involved. 
"Limited Brands holds its employees, suppliers and vendors strictly accountable for compliance with all applicable laws and our own business policies, including those relating to labor standards."
Macy's and Coldwater Creek spokespeople were unavailable to immediately comment on the reports.
New York State Labor Commissioner M Patricia Smith said: "This factory paid sweatshop wages, kept fake records, and coached employees to lie, even though it had signed retailer codes of conduct to comply with the 
"The Department of Labor will use all legal tools to stop this mistreatment of workers."
Commissioner Smith said that the department was referring the case to the Queens District Attorney's office for review for possible criminal charges.
Jin Shun, located at 47-51 33rd Street in Long Island City, on the outskirts of Manhattan, and its owners, Jikai Lin and Zhang Yun Chen, were accused of underpaying 100 workers out of nearly $3m in minimum and overtime wages since 2005.
Furthermore, the department said that prior to 2005 the factory operated under the name Venture 47, and underpaid $2.5m in minimum and overtime wages.
The state labor department has "tagged" 10,000 items of clothing made by the factory, affixing labels to the garments saying they were unlawfully manufactured.
New York State has enforced 37% more minimum wage underpayments in 2007 compared to prior years. 
Gap Inc, meanwhile, said it had conducted approximately 4,000 inspections - including unannounced inspections - of 1,879 global factories last year.

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Doha Talks Will Continue
The world Trade Organization (WTO) Doha Development Round will not die, despite this week's collapse in ministerial talks. 
That was the overwhelming consensus of opinion at a meeting on July 30 of the WTO's trade negotiations committee (TNC), which makes the formal decisions about the round. 
Some textile and clothing industry federations will have mixed feelings given that the round's non-agricultural market access (NAMA) talks were set to reduce protective duties on their products. 
Rich country industries have been concerned that smaller tariffs would expose them to more competition from lower cost competitors, such as China.
However, given that the round is designed to liberalize and promote trade in all economic sectors, there is little appetite amongst members for shelving it. 
Also, overall agreement was close, and was only thwarted by a failure to agree tariffs that developing countries could impose to prevent surges of cheap food imports damaging their domestic producers. 
WTO director general Pascal Lamy told the committee: 
"All members need now to seriously reflect about if and when we can jump the obstacle". 
He was "convinced that there will be a next time" for a Doha ministerial meeting. 
A WTO official said later a decision on the next steps would be discussed at the next TNC committee meeting, in September. 
However, few speakers at the meeting called for a swift return of trade ministers to Geneva, now unlikely until January's establishment of a new US administration. 
Meanwhile, the WTO talks committee chairs are drafting reports, which could preserve the agreements settled this and last week. 

June Retailers' Sales Review
Abercrombie & Fitch reported net sales of $309.7m for the June period, a 6% increase over net sales of $293.2m in the same period last year. June same-store sales decreased 3%.
Aéropostale, a mall-based specialty retailer of casual and active apparel for young women and men, said total net sales for the month increased 22% to $136.0m, from $111.4m in June last year. The company's same-store sales were up 12%.
American Apparel reported that for the month of June 2008, sales for stores open for more than 12 months rose 16% compared with the year ago period. For the month of June 2007, same-store sales increased 28%.
American Eagle Outfitters announced that total sales for the month were down 5% to $255.9m. The fashion chain's same-store sales decreased 11%.
The Bon-Ton Stores announced that same-store sales for the month of June decreased 6.5%, while total sales were down 6.6% to $261.2m compared to the prior year period.
The Buckle said that same-store net sales for June increased 28.9%, while net sales for the month increased 38.6%.
Cache Inc said that for the five-week period ended June 28, same-store sales increased 6%. Its total net sales for June 2008 increased 6% to $23.3m.
The Cato Corporation reported sales of $88.3m for June, a 7% increase over June 2007. Same-store sales for the five-week period increased 4%.
Chico’s reported that its June sales results for the month decreased 5.1% to $151.4m and that same-store sales decreased 12.9% for the period.
Dillard's saw sales for the five weeks slip to $593.3m, a decrease of 4% in total stores. Same-store sales were down 5% for the month.
Gap Inc reported net sales of $1.41bn for the month of June, which is a decrease of 2% as compared with the same month last year. The company's same-store sales fell 7%.
Gottschalks said its same-store sales for the month of June decreased 9.5% from the prior year. Total sales for the five-week period fell 9.8% to $51.9m, it added.
Hot Topic posted June sales of $63.2m, up 3.8%. Same-store sales, meanwhile, fell 0.3% during June.
JC Penney Company saw same-store sales decrease 2.4% for the month, bettering the company's guidance for sales to decrease mid-single digits and compared to a 0.7% decrease last year. Total sales in June fell 0.4%.
Kohl's Corporation reported that sales for the month increased 10.9% over last year. On a same-store basis, sales increased 2.3%.
Limited Brands posted same-store sales for June down 9% compared to the prior year period. The company reported net sales of $1.022bn for the month, compared to net sales of $1.205bn last year.
Mothers Work announced that net sales for the month of June 2008 dropped 2.1% to $45.9m and that same-store sales for June 2008 were up 0.8%.
Nordstrom reported sales of $731m for June, down 14.1% compared to sales in June 2007. Same-store sales decreased 18.6%.
Pacific Sunwear of California reported that total PacSun sales for the five weeks of fiscal June were $127.2m, an increase of 5% versus the same period last year. PacSun same-store sales increased 3% during the same period.
Saks Incorporated announced that owned sales totaled $243.8m for June, a 2.6% increase. Same-store sales increased 1.9% for the period.
Stage Stores reported that its total sales for the five week June period ended increased 6.4% to $142.0m, while same-store sales rose 1.2%. 
Stein Mart said its June sales fell 3.7% to $122.6m, while same-store sales there dropped 7.7%.
Target Corporation reported that its net retail sales for June increased 6.6% to $5,842m, compared to last year's period. On this same basis, June same-store sales increased 0.4%.
The TJX Companies said June sales were $1.8bn, up 9% over the $1.7bn in June 2007. Same-store sales for the month increased 5% over last year.
Wal-Mart Stores said that June sales were up 11.5% to $39.9bn, while same-store sales rose 5.8%.
The Wet Seal reported that sales increased 4.5% to $56.9 for the month of June, with same-store sales falling 2.95% during the period.
Zumiez Inc announced that total net sales in June increased 10.2% to $34.7m. The company's same-store sales were down 3.4% for the five-week period.

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