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Gas Prices Reduce US Retail Spending
Page 1

Parliament to Criminalize Counterfeiting
Page 1

Cambodia's Pans May Result in Strikes
Page 1

Hanesbrands to Cut 1400 Jobs
Page 1

The Adult Halloween Show
Page 2

Buyers' Best Sellers
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Ask Andy
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McPete Sez
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Adult Halloween Show Continued
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Vanity Fair to Cut 210 Jobs
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Ask Kevin
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 Adult Halloween Show Continued
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 18,000 Naked People in 
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Gisele to Leave Victoria's Secret Page 4

The Adult Halloween Fashion Show
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     May 15, 2007                                        Issue #193


             McPete -Sez, 
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Gas Prices Reduce US 
    Retail Spending
US consumers, battered by surging gasoline prices, have cut back spending for clothes, cars and other items in April, raising worries about the already weak economy.
Retail sales fell .2% in April, the first decline in seven months, the Commerce Department reported. Meanwhile, the Labor Department said that wholesale prices surged .7% led by a third consecutive big rise in gasoline prices.
The weak retail spending and the big rise in gasoline prices were seen as delivering a double whammy to the economy. The worry is that if gasoline prices spike further and the troubles in housing deepen, then consumers could significantly trim spending and the country could move toward a recession.
In Washington, a city with some of the longest commuting times in the country, consumers were definitely feeing the pinch of the higher gasoline prices.
"It's highway robbery," said one woman who is spending about $90 per week in gas for her commute from Washington to Baltimore. "I just started to do a lot more home entertaining, just trying to find ways to make up the difference" in the higher gas costs.
Growth in the overall economy slowed to a lackluster 1.3 percent rate in the first three months of this year, the slowest pace in four years.
Analysts were looking for that figure to be revised even lower based on a string of weaker-than-expected economic reports, raising the odds that some unexpected jolt that could turn weak growth into an outright downturn.


Parliament to Criminalize
The European Parliament has approved in principle a directive criminalizing across the counterfeiting and pirating of goods across the European Union, although MEPs weakened the proposed legislation with amendments. 
In its first reading, the parliament excluded patent rights abuse from its scope and also decided its minimum criminal punishments should apply only to deliberate and commercial counterfeiting. 
A parliament spokesman explained: "Piracy committed by private users for personal, non-profit purposes is therefore excluded." 
Nonetheless, the agreement in principle is one of two major hurdles to be cleared before the directive comes into force, the other - approval by EU ministers. 
The proposed directive says serious counterfeiting crimes committed by a criminal organization should incur maximum penalties of EUR300,000 (US$407,000) and/or four years' imprisonment. 
Today, maximum fines for violating EU intellectual property rights range from GBP586 in Greece to GBP67,000 in the Netherlands; maximum 
prison sentences from three months in Greece to 10 years in Britain.


Cambodia's Plans May 
          Lead to Strikes
The Cambodian government is planning to forge ahead with controversial measures to cut nightshift wages for garment workers, despite warnings from union leaders that the move could lead to a national strike.
Prime Minister Hun Sen said May 8, that cutting the nightshift pay will create thousands of new jobs in Cambodia's clothing sector by encouraging companies to hire more people to work in the factories during the evening. 
Under current labor laws, nightshift workers are paid twice the rate as those who work on the day shift. In Cambodia the daily rate averages around US$50 a month.
Cambodia's National Assembly, the country's lower house of parliament, plans to vote on May 17 on the new labor law to lower nightshift wages by 70%. 
However, Chea Mony, president of Cambodia's largest labor organization, the Free Trade Union, warned that instead of cutting workers' wages there are better ways to boost business in Cambodia, such as "eliminating corruption, bureaucracy, and improving security and infrastructure." 
He said the Union plans to call a general strike if nightshift wages are lowered from 200% to 130% of day rates later this month - but would agree to a night rates being 150% of day rates if the working week was cut from 48 to 44 hours.
In contrast, other groups have come out in support of the measure. 
Ken Loo, secretary general of the Garment Manufacturers Association of Cambodia, said Cambodia's high nightshift rate was a strong deterrent for manufacturers. 
Currently only six or seven of Cambodia's garment factories have night shifts, he says, adding that if all factories were to instate a nightshift, employment in the garment sector, which now stands at 350,000, could "easily double."
And John Ritchotte, chief technical advisor for the International Labor Organization's labor dispute resolution project said that global norms for night wages are 130 to 150 percent of day rates. 
Lowering the rate will make it more attractive for employers to put a night shift in place.
Cambodia currently has 300 garment factories which last year exported garments worth about US$2bn, nearly three-quarters of which were shipped to the US.

13/24              Photographed by Michael Brouwer

Wacoal FY Profit Soars 
Japanese underwear firm Wacoal Holdings Corp has increased full-year profit by 220%, primarily as a result of strong domestic growth. 
Net income at Wacoal leapt 220% for the full year period, to JPY9.0bn (US$75m), the company said. Its operating income increased to JPY12.9bn, compared with JPY1.3bn yen in 2006.
Net sales for the year increased 1.4% to JPY166.4bn, compared to JPY164.1bn last year, and a cash dividend of JPY22.0 yen per share was declared, up JPY2.0 from the previous year. 
"During the fiscal year ended March 31, 2007, the Japanese economy generally moved from recovery to gradual expansion, with improved corporate profits and a steady improvement in consumer spending," the 
company said. 
Wacoal added that business results in the women's fashion industry were generally weak due to early spring low temperatures, a prolonged rainy season and a relatively warm winter. 
Regarding sales by geographic location, Japan represented JPY141.6bn, accounting for 85.2% of group sales, whereas Asia accounted for 4.0%, and the US and Europe accounted for 10.8% of the group's sales. 
In its forecast for the forthcoming year, Wacoal said that its mid-term plan is to expand sales and profits by renovating its brand image, strengthening existing businesses and building a higher-profit structure. 


        India's Manufacturing
       Continues to Rise
Factories in India continued to maintain high growth momentum last year while exports dipped in the final quarter, local reports say. 
India's manufacturing sector has grown 11.3% during 2006/07, compared with 9.1% in the previous year, and double-digit growth is expected to continue. 


Hanesbrands to Cut 1400 
Underwear and apparel maker Hanesbrands Inc is to stop production at three sewing and assembly operations in the Dominican Republic - a move that will lead to the loss of 1,400 jobs. 
The Winston-Salem, North Carolina based company, whose brands include Hanes, Champion, Playtex, Bali, Just My Size, barely there and Wonderbra, said the closures are a part to reduce costs by consolidating into fewer, more efficient facilities.
Production in Itabo will end by September 2007, and Hanesbrands said it expects the restructuring to cost around $3m dollars. 
Gerald Evans, Hanesbrands executive vice president and chief global supply chain officer, said: "This was a difficult decision driven by competitive business needs and a compelling opportunity to take advantage of cost reduction.
"We continually review how to remain most competitive in every country and region around the world in which we operate, particularly as we begin to add operations in Asia to balance our supply chain in the western hemisphere. 
"A key opportunity for us is to operate fewer facilities that are larger in order to most effectively utilize our assets." 
Since its spin-off from consumer goods giant Sara Lee as an independent company in September 2006, Hanesbrands has closed 10 manufacturing facilities in the Dominican Republic, Mexico, Puerto Rico, and the US, with the loss of more than 3,200 jobs.
At the end of April the company reported an 83.9% drop in first-quarter profits to US$12m, blaming large increases in restructuring costs - $16.2m versus $1.3m a year ago - for the fall. 
The business also continues to deal with a large amount of long-term debt, which fell only a fraction, to $2.475bn from $2.484bn as of December 30.
In the past two years, Hanesbrands has added newer, lower-cost textile production in the Dominican Republic and Central America and is aligning its sewing operations around those fabric production centers. In October the company also bought its first Asian sewing plant near Bangkok in Thailand, where around 1,600 workers make bras. 
In addition to the sewing operations in Itabo and the new Dos Rios textile manufacturing plant in Bonao, Hanesbrands has six other sewing and intimate apparel assembly operations in the Dominican Republic.

Maidenform's Profit 
       Increases in Q1
Expansive growth in the mass market helped Maidenform Brands to gains in profits and sales in the first quarter.
In the three months ended March 31, the Bayonne, New Jersey-based intimate apparel maker registered net income of US$10.6m, or $0.44 a diluted share, 69.6% above the $6.2m, or $0.26, reported for the prior-year quarter. 
Excluding an after-tax curtailment gain of $3.6m, net income in the quarter was $7m, or $0.29, slightly above the $0.28 expected by analysts and 11.5% above last year's period.
Net sales were up 6.3% to $107.2m from $100.8m in the 2006 quarter despite a 9.8% decline in sales to department and national chain stores, to $53.5m. 
The decline was more than offset by a 49.7% increase in sales to mass merchants, which finished the quarter at $28.6m. Sales at Maidenform's own stores declined 1.9% to $10.2m and same-store sales were down 4% due to reduced customer traffic. 
The increase in sales to mass merchants contributed to a decline in gross margins to 36.3% of sales from 37.7% a year ago.
"We are pleased that the strong foundation we have built continued to deliver solid performance in the first quarter of 2007," said Thomas Ward, CEO. "Our momentum in the mass merchant branded business drove our 6.3% net sales increase."
He indicated that the firm's latest product line, The Smooth Bra, "has performed extremely well since its roll-out. We fully expect this collection to be a strong performance driver for the department stores and national chain stores channel this year."
Maidenform reiterated previous guidance of 15% to 18% growth in EPS for the year, along with net sales growth of 6% to 7% and low double-digit net sales growth in the branded wholesale business.
In addition to Maidenform, the company's brand line-up includes Flexees, Sweet Nothings and Self Expressions.

Sri Lanka Reassures Terrorist
 Situation Not Disrupting
      Garment Industry
Sri Lanka's garment industry is playing down the spate of recent terrorist attacks and has reassured overseas buyers that the country's national security situation is not disrupting garment production and exports.
According to the industry's representative body, the Joint Apparel Association Forum (JAAF): "The security situation is under control and there is no need for undue apprehension." 
JAAF issued its statement on May 8, following a fourth air raid by the Liberation Tigers of Tamil Eelam (LTTE) on April 29.
The apparel industry body says that many of the garment production sites are located in rural parts of the island and are out of the way from terrorist activity.
The industry body also points out that airlines are operating regularly with adjustments to flight schedules to allow daytime flights and that the port of Colombo is fully functional. 
Therefore, says the JAAF, it is business as usual at garment factories in Sri Lanka. 
The garment body says that despite two decades of conflict and even following Tsunami disruptions, the industry has always fully served the needs of its customers. 
Sunday's air attacks by the LTTE targeted the Kolonnawa oil facility and the Muthurajawela Shell gas facility located not far from the commercial capital, Colombo. 
Following the attacks the Ministry of Defense announced that the Bandaranaike Airport, the island's only international airport, will not have night flights from as of May 10. Security has also been heightened in Colombo city.

Recovering From Surgery
A man was just waking up from anesthesia after surgery, and his wife was sitting by his side. His eyes fluttered open and he said, "You're beautiful."
Then he fell asleep again.
His wife had never heard him say that before, so she stayed by his side.
A few minutes later his eyes fluttered open and he said, "You're cute."
The wife was disappointed because instead of "beautiful," it was now "cute."
She asked, "What happened to beautiful?"
The man replied, "The drugs are wearing off."

Parliament to Back Dog
       and Cat Fur Ban
The European Parliament is preparing for a vote at the end of May on banning all products containing cat or dog fur throughout the 27 member countries of the European Union (EU), scrapping a large loophole backed by the European Commission. 
This follows three years of protests over evidence that cat and dog fur products were still entering the EU, despite a voluntary code of conduct for European fur traders. 
The parliament's internal market committee has already backed a new proposed ban tabled by the Commission, acting after a million-signature petition was sent to the parliament. 
However, a full plenary meeting of MEPs this month (May) will vote on scrapping exceptions written into this draft law, allowing cat and dog fur sales in the EU market provided that the fur (or products containing it) is "labeled as originating from cats or dogs that have not been bred or killed for fur production", or constitute "personal or household effects". 
Proposing an amendment, Swedish MEP Eva-Britt Svensson has said this "would provide a gaping loophole, which would be ruthlessly exploited by traders of all future consignments of cat and dog fur, thus rendering the entire regulation useless". 
The EU Council of Ministers would then have its vote on the loophole.

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