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Guatemala Lost 38,000 Apparel Jobs in 2005
Page 1

Indian's Market May Open to Retailers
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Iran's Exports Up 10.4% 
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Fairtrade Clothing
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Government Banned Fur Lined Underwear
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  February 1, 2006                                               Issue #162


13/24

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 Guatemala Lost 38,000 
  Apparel Jobs in 2005
Guatemala’s apparel industry lost 38,000 jobs or roughly 35% of its workforce last year - worse than a prior 20,000 estimate - as China continued to eat away business from key markets in the US.
The industry saw 58 apparel producers close shop, leaving 13,327 people out of work. 
Other industry restructurings prompted an additional 24,673 dismissals, an official for Guatemalan Apparel and Textile Industry Commission said.
Local apparel concern Koramsa (which manufactures for Levis and GAP) was the poster child of the industry’s woes, dismissing 3,500 workers to streamline its business.
Guatemala lives from clothing exports to the US, but after China’s quotas were lifted last year, Chinese businesses and other Asian producers have taken over the world’s biggest market, elbowing Guatemalan producers to the side.
Last year, the industry reported a 5% revenue decline to €1.6bn, hurt by falling US exports.
However, to fight the Chinese, many producers have successfully expanded into the fashion market, helping boost the industry’s profits 17% to €620m last year. 


2/24  

India's Market May Open 
To International Retailers

India’s growing market is currently closed to international retailers that wish to operate their own stores. 
As of now, international companies can only sell their branded goods through franchise stores, or through wholesale operations.
This may be set to change if the Indian cabinet accepts recommendations submitted by a Group of Ministers (GoM). The GoM proposed that foreign investment of up to 51% should be allowed in operations that produce and sell a single brand.
Under this proposal companies such as Tommy Hilfiger, Louis Vuitton and Mango could take control of their own stores in India. 
The government has rebuffed criticism from parties on the Left that these large international retailers will kill off competition from small domestic retailers. The GoM note said that the two cater to different customer segments.
While this may be true of international fashion brands that are targeted at the uppermost niche of the market, even supermarket chains such as Tesco, Carrefour and Wal-Mart could be allowed to enter if they only sell private label products through their stores.    


10/24   
Iran's Exports Up 10.4% 
Iran exported over US$105m of clothing in the first three quarters of its year
The figures were 10.4% higher than the same period last year.
Over 84.5% cent of exports were to Azerbaijan, Afghanistan, Iraq, Georgia and Kyrgyzstan. 
Iranian deputy commerce minister Mehdi Ghazanfari said: "To strengthen the infrastructure of non-oil exports, the idea that it is the government's duty to provide the necessary capital should be removed." 
The Iranian year started on 21 March 2005.

                 
A model displays a creation by Colombian fashion designer Maria Adelaida Penagos at the Colombiatex show in Medellin, Colombia
                

11/12 
            Federated to Close 5 Distribution Centers in 2006
Federated Department Stores said it would close five distribution centers in 2006 as part of its realignment of the Macy’s business.
The consolidation follows Federated's acquisition of The May Department Stores Company and is aimed at maintaining efficiency and reducing duplication, the company said. The five facilities closing in 2006 are among 31 distribution centers operated by the company. 
Federated will close centers in Manchester, Connecticut and Baltimore, Maryland in June 2006. The company will then close centers in Aurora, Colorado; Portland, Oregon and Salt Lake City, Utah in August.
Responsibility for merchandise handled by these facilities will be shifted to other distribution centers operated by Federated in each region of the country. 
The company will try to offer affected employees transfers to facilities elsewhere, and severance packages will be provided to employees who are laid off as a result of this consolidation. 
Federated said last year that it will add about 330 Macy's locations nationwide in 2006 as it converts regional department store nameplates acquired its merger with The May Department Stores Company.


            
13/24
  Sri Lanka Customs Cuts 
   Down Illicit Shipments
Sri Lanka Customs is upping its observation of apparel exports via the country’s Colombo port.
Sri Lanka Customs have so far detained 45,000 pieces of clothing masquerading as being of Sri Lankan origin that were actually from China.
L M Nelson, Head of Sri Lanka Customs Central Intelligence, was quoted as saying the goods were headed for Europe. Nelson believes the illicit shipment was carried out in collaboration with a local party.
Sri Lankan clothes can access the EU market on a duty-free basis under the EU’s GSP (Generalized System of Preferences) scheme. The EU introduced the scheme to Sri Lanka to help its recovery after it was hit by the Asian tsunamis of December 2004.
Customs are now keeping a close eye on shipments that pass through the Colombo port and are working closely with the Commerce department and the Board of Investment.  

       Allure Leather     
19/24
Indonesia's Textile Industry    
   Concerned Over Power 
       Tariff Proposal
Indonesian textile entrepreneurs are concerned that the government’s proposal to increase the electricity basic tariff will push up manufacturing costs.
A report said textile businessman feel at threat following a fuel hike last year and new minimum wage legislation.
A handful of textiles companies have already been forced to axe workers.


6/24
Paraguay's Textile Exports
         Jump 31% 
Paraguay’s textile exports grew 31% to US$21.4m in 2005.
81.3% of the country’s exports went to the South American trade 
bloc in 2005, AIC said. 58% of exports went to Argentina, 17.6% to 
Brazil and 6.0% to Uruguay. 
The US and Mexico were the fourth and fifth biggest importers, 
respectively.           

              
10/12
                Fairtrade Clothing 
Department store chain Marks & Spencer has unveiled a new ethical trading campaign and also said it would become the first major UK retailer to sell clothing made from 100% Fairtrade cotton.
The campaign, called 'Look behind the label', is designed to tell customers about the way goods are sourced and made.
All M&S stores will feature messages and imagery about M&S products and their health, quality and environmental aspects. One such message will be: "It's not just our green dyes that won't harm the environment".
M&S said it would launch the Fairtrade range, which will be made from 100% Fairtrade cotton, in March 2006. T-shirts and socks will be sold in stores and also on the company’s e-commerce site.
According to a YouGov survey commissioned by the company, consumers are thinking more about ethical and health issues when they buy clothing and food. 
"Customers care more than ever how products are made," said chief executive Stuart Rose.
Almost one third of survey respondents said they had decided not to buy an item of clothing because they felt concerned about where it had come from or under what conditions it had been made. 
78% said they would like to know more about the way clothes are made including the conditions in the factories where they come from and the use of chemicals when they are manufactured.
"Look behind the label is the first time we've talked about the lengths we go to to ensure everything we sell is produced in a responsible way,” said Rose. 
"Launching Fairtrade cotton builds on our innovative work in areas such as sustainable fishing, reducing fats, salt and additives in our food and banning harmful chemicals from children's clothing."
Fairtrade executive director Harriet Lamb commented: "Fairtrade-certified cotton only became available in the UK late last year and we're delighted that M&S is the first high-street retailer to introduce its own range. 
"Fairtrade aims to start a new trend by guaranteeing disadvantaged farmers a fair and stable price including a premium to invest in long-term farm development as well as social projects in their local communities.
                   

4/24
   
 US' Apparel & Textile 
     Output Up in 2005
The US Federal Reserve reported that both US textile and apparel output grew on an annual basis in the same calendar year for the first time since 1996.
Despite a slight decrease in December (-0.9%, seasonally adjusted), total US textile output rose by 2.1% for the year 2005 – only the second increase in annual production in the last six years. 
Textile output crept up 0.3% in the first half of the year but grew sharply by 1.7% in the second half, including 4% growth from April to November. 
Moreover, U.S apparel output was up 1.7% for the month of December and up 0.9% in 2005. 
The US apparel production mid-year turnabout was even more dramatic than the textile sector's. US output declined 5.0% in the first half of the year but soared 6.2% in the second. 
The six-month growth of US apparel output is the strongest growth on record going back to 1984, and the annual growth is the first since 1996.
US textile groups believe that the imposition of safeguards on various Chinese imports last year, followed by the negotiation of a bilateral agreement with China in November 2005, has helped stabilize US textile output.
Lloyd Wood, a spokesman for the American Manufacturing Trade Action Coalition, said "There is no question that the deal has really boosted US production.
Wood said the agreement is offering the US industry much-needed stability and the knock-on effect of this had been to secure more of the sector's jobs, which had before been at threat by China's growing domination.
"We have got a little bit of breathing space", he added. "The key is what we can do to enhance long-term stability but for now, the deal has allowed us a certain amount of peace of mind."      


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3/3   
Cortefiel To Axe 230+ 
           Workers
A year after it closed its Madrid factory cutting 150 jobs, Cortefiel intends to dismiss at least 230 workers from its Confecciones del Sur factory in Malaga, Southern Spain to end costly apparel production there. 
Moreover, the fashion retailer announced it sold 50% of its smallest Moroccan factory (which made trousers) back to the Pantco ownership holding for EUR200,000. 
The decision will help maintain its distribution and retail competitiveness, Cortefiel reported.
Ana Maria Jimenez, Malaga’s workers’ committee chief, said Cortefiel wants to dismiss a minimum of 230 of roughly 400 working at the site, where it makes women’s suits and apparel for the high-street Pedro del Hierro banner and Cortefiel trademark.
"They’ve told us we are very expensive and that they want to let go of the production side and, depending on how negotiations go, they could layoff all the factories’ workers," Jimenez explained.
In a statement, Cortefiel said Malaga’s "excessively high costs make it unviable to produce competitively and profitably." 
Therefore, it presented the redundancy scheme. 
The company said it intends to focus on more value-added and differentiated product lines that can be made quickly, it added.
Jimenez said that Malaga’s other 170 staffers work in design and research and that Cortefiel may retain those jobs, but "we don’t really know what’s going to happen yet."
Cortefiel did not say where it would transfer Malaga’s production to. The company has three factories in Morocco and one in Hungary.  Cortefiel employs 9,000 worldwide and operates more than 1,500 stores.

 
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