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DR CAFTA to be Investigated
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Sri Lankan Trade Unions Threaten Protest
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Australia Forced to Cut Cotton Production
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800,000+ Mislabeled Cashmere Products Recalled
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 March 1, 2007                                        Issue #188


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The US International Trade Commission has begun an investigation to assess the likely economic effect of proposed modifications to the DR-CAFTA rules of origin for certain apparel goods from Costa Rica and the Dominican Republic. 
The modifications to the Dominican Republic-Central America-United States Free Trade Agreement relate to the rule of origin for apparel containing pocket bag fabric and other modifications to tariff treatment under the agreement. 
If necessary, the president can authorize modifications to the Harmonized Tariff Schedule, subject to congressional consultation and layover requirements – but only after seeking advice from the ITC. 
The results of the ITC’s investigations are expected in late May.

Spain's Apparel Sector Needs    
 Help to Fight Counterfeits
Spain’s apparel sector is asking the government to help curb a growing trade of fake goods which is costing high-street retailers over EUR72m (US$94.57m) a year, a spokeswoman for trade lobby Acotex said.
"We need more police and law enforcement initiatives to fight against apparel and textile brand counterfeits," she said, adding that the EUR72m figure represents the value of seized parallel goods. 
Brands are suffering additional losses from the negative impact that fakes have on their image, the spokeswoman noted.
The call for action came as Spain’s textiles and apparel industry reported a 2.2% turnover jump to EUR22.4bn in 2006, helped by rising clothing consumption. 
Spaniards’ average apparel spending rose 2.2% to EUR1,880, Acotex reported.
Despite previous concerns that the industry would collapse amid a soaring rate of Chinese imports, its efforts to specialize in "more quality goods" in fewer quantities is helping it beat the Asian threat, the Acotex spokeswoman said.
Acotex said women accounted for 37.5% of apparel purchases last year while men took up 32.3%, roughly in line with 2005 statistics.

Sri Lankan Trade Unions
     Threaten Protest
Sri Lankan trade unions say workers will down tools in a day of protest if a settlement is not reached to increase wages of workers in the private sector.
The garment industry, the biggest employer in the manufacturing sector in Sri Lanka with around 300,000 workers, says it has already increased worker salaries.
However, the trade unions say the salary increase is not enough and are demanding a 25% increase on a minimum salary of LKRR5,000 (US$50).
This amounts to a wage increase of around Rs 1,250 (US$ 12.5) per worker.
"The companies previously agreed to increase salaries using the existing mechanism which is the Wages Boards but now they are making objections," said Anton Marcus, joint secretary of the Free Trade Zone and General Services Employees Union.
Trade unions are also asking the government to introduce laws to make the salary increase mandatory to all private companies inside and outside the free trade zones. 
The Joint Apparel Association Forum said back in January the salary increase would cost companies more than the agreed amount when applied.
"This is the minimum increase. Most companies will actually increase salaries by more than that under their internal wage schemes," said deputy chairman of JAAF, A Sukumaran.

Australia Forced to Cut 
    Cotton Production 
Australia, faced with worsening drought, has been forced to more than halve its cotton production area. 
The Australian Bureau of Agricultural and Resource Economics said that the country’s estimated 143,000 hectares sown to cotton in 2006-07 is 57% below that planted in 2005-06, and the smallest area since 1983-84. 
Production of cotton lint is expected to be down 58% for the period, to around 250,000 tons, the bureau said.
The very dry spring and lack of irrigation water in Australia, the world’s fourth largest cotton producing nation, caused total summer crop areas to be cut by half in 2006-07, to 743,000 hectares. 
In addition, the country’s total summer crop production is forecast to fall by nearly 60% in 2006-07 as most of the main growing areas in southern Queensland, northern New South Wales and the Riverina remain in the grip of drought.

8/24              Photographed by Michael Brouwer

Tanzania Granted Duty Free   
  Export License to SACU
Tanzania has been granted a five-year export license to supply textiles and garments duty-free to the member states of the Southern African Customs Union (SACU).
The deal extends a six-month interim agreement that allowed Tanzania to export its textile products to SACU members South Africa, Botswana, Lesotho, Namibia and Swaziland.
And it follows an earlier five-year accord under which Malawi, Mozambique, Tanzania and Zambia were granted quotas to export textile products to SACU member states between 2001 and 2006.
Dr Juma Ngasongwa, Minister for Planning, Economy and Empowerment, said that Tanzania qualified for preferential market access because of its ability to produce both fabrics and garments.


         800,000+ Mislabeled 
      Products Recalled
More than 800,000 mislabeled cashmere products exported to Japan have been recalled by the Cashmere and Camel Hair Manufacturers Institute.
On February 13 the CCMI announced that the products, including sweaters and mufflers, had been manufactured in China and were exported into Japan by various companies. 
"We had representative garments tested at independent laboratories and they were found to have actual cashmere content significantly less than that stated on the labels," said CCMI's Japan representative, Kenneth Shimizu. 
Karl Spilhaus, CCMI president, said: "This is about fairness of trade and protection of consumers, our ultimate objective is not prosecution.”
The CCMI president has also praised Japanese retailers and importers for their responsible action in recalling the product when mislabeling was found. 
Spilhaus said: “These problems could have been avoided by sufficient attention, on the part of the importers, to the quality of the articles sourced in China. CCMI is ready to work with the trade providing the latest accurate information on fiber testing and evaluation.”


Matalan Might Axe 100 Jobs
UK discount retailer Matalan could cut 100 jobs held by head office, field and distribution centre employees, as part of cost-cutting measures.
Matalan’s cuts drive could save the company in excess of $58.9m.
The company said: "Matalan recently returned to private ownership. As a result of this all structures have been reviewed to identify ways in which we can reduce the cost base to a financially viable level going forward to allow the business to be competitive and grow.
"Regrettably the outcome of the review is that the level of staffing is unsustainable and as a result an immediate reduction of the workforce is necessary. This affects roles across head office, the distribution centers and field based roles. 


Creating an Ethical Future
 for the Fashion Industry
The role played by fashion students in helping to improving conditions for garment workers is the focus of a new conference taking place next month. 
Leading high street brands Gap, Zara, Next, and Topman are also expected to be at the event, ‘Creating an Ethical Future for the Fashion Industry,’ at the Fashion and Textile Museum on March 7, along with garment workers, industry specialists, and tutors.
Organized by Fashioning an Ethical Industry, a project of Labor Behind the Label, the day-long event will focus on how fashion students – as the next generation of industry players – can have a significant role to play in bringing about any lasting change.
Liz Parker, project coordinator from Fashioning an Ethical Industry, said: “Fair trade companies and alternative brands have taken up the challenge of sourcing more ethically. 
“Yet low pay, lack of rights and unacceptable working conditions are still the norm for millions of garments workers across the world. 
“Fashion students could have a crucial role in raising standards in the fashion industry of the future.”

     Colombian Clothing 
Exports to US Down 12%

Colombian clothing exports to the US fell 12% to $520.3m in 2006, 
compared to $591m in 2005, according to the latest data from the 
textile division of Colombian business association Andi. 
The US takes around one-third of Colombia’s textile and clothing 
shipments, making it the country’s largest export market.
Around 90% of Colombia’s clothing exports to the US last year took 
advantage of preferences under the Andean Trade Preference and Drugs 
Eradication Act.

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