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November 15, 2009
The McPete Sez Lingerie Newsletter & Women's
Tensions Between US &
China Increase Over
US-Sino trade tensions over unfair support measures - including textiles and apparel - are not going
away any time soon, judging by the latest spat between the trans-Pacific powers in a World Trade
Organization (WTO) session on October 30.
To boot, the latest tiff in the WTO came just a day after US Trade Representative Ron Kirk met with
China's Commerce minister, Chen Deming, in Hangzhou to ease tensions on a host of bilateral commerce
During a closed door session of the agency's trade in goods council, the US
leveled the charge China was providing subsidies to its textiles and apparel
sector via provincial and local authorities.
The US backed up its claims with a detailed document, which includes the allegation a Hangzhou
City plan outlines the government will "optimize fiscal and financial credit support" to the textile
and apparel industry.
Similar complaints are made against Jiangsu Province.
The US also singled out plans by Wuxi City that envisage foreign exchange from
fiber per ton "shall be increased by 20% compared with 2008," and that the ratio of domestic fabric in apparel exports
"shall reach 90% and above."
The US also documented grievances over a plan by Hunan Province which stipulates: "It will offer
certain subsidies and rewards for products exported by ramie processing companies."
Trade diplomats said the Chinese delegation "largely ignored" the US concerns in a brief
Lux Kassidy - Penthouse Pet, poses with a new Penthouse show design from the Ellie Collection
by Ellie Shoes at the International Lingerie Show
Photo by Jerome Hamilton
Indian Textile Group Calls
for Cotton Export Ban
An Indian textile mills federation is demanding an immediate ban on cotton exports as weak production
in the country is leading to a "grave situation" for industry supplies.
The Southern India Mill Association said a delayed monsoon and heavy floods in many cotton growing
areas may lead to a 10% lower output in the world's second largest producer of cotton.
Although the annual requirement of the Indian industry is only 24m bales (170 kg each) against
the expected production of 26m bales, much of the 15m bales of the good quality cotton gets exported
to China, Indonesia, Thailand and Bangladesh, while the local industry has to use the leftovers or buy
In neighboring Pakistan too, the government is considering banning cotton exports as the crop has
been reduced by a virus - cutting production 25% to 30%: it is now expected to be only 12m bales.
The move is, however, fiercely opposed by local farmers.
Tia Lyn's NY Fashion Show with beautiful models of ALL SIZES!
Politics Hurts Colombian
Colombia's textiles industry is suffering from the country's poor diplomatic relations with
neighbor Venezuela, with trade falling sharply and 50,000 job losses this year.
"We can't hide the fact that many jobs are being lost in the labor-intensive textiles sector while
exports fall and factories continue to close," Gillermo Valencia Jaramillo, boss at leading
industry lobby Inexmoda, said in a statement.
Valencia said more job losses are expected as exports continue to falter amid the political
The row has been triggered by Venezuela's president Hugo Chavez's protest against a recent high-stakes
Colombian military cooperation agreement with the US, which has resulted in him freezing trade ties
with the country.
Venezuela and Ecuador buy roughly 40% of Colombia's textiles output.
Valencia said the Venezuelan quarrel is dealing the sector a heavy blow at a time when it is already
struggling from weaker US exports and a rising peso.
The political impasse is hurting both small and large players.
In recent days, top textiles firm Tejicondor was reported to be seeking 150 layoffs to survive the
crisis while many others are mulling redundancies.
Victoria's Secret Looks to
US lingerie giant Victoria's Secret is mulling expansion in the UK and Japan to
capitalize on the brand's world-wide appeal, but has declined to put a time-frame on the plan after admitting it needs
to find the right location first.
In a strategy outlined at its recent US investor update, Martin Waters, executive vice-president of
international business at the chain's parent company Limited Brands, said the initiatives were
likely within the next few years.
He said the expansion plans would focus on flagship stores in strategic markets, including the UK, "the
fashion capital of Europe," and Japan, "the biggest market on the planet outside the USA."
He told investors: "We're tremendously excited about the notion of having flagship stores in those
markets, and the success we've had [with the flagship] in Hawaii is unbelievable."
But there is also the challenge of fine-tuning its products to new markets, the company said,
including different sizing and colors for different consumers, and variations in requirements
between northern and southern hemispheres.
"We have some great partners in Japan but I don't think we'll go there before 2012 at the earliest,"
Waters said, noting: "The UK would be easier; we're just got to find the right site."
Other plans in the pipeline include a European online retail site offering sales in euros and
next-day delivery to build "on the $100m we already have from Victoria's Secret Direct."
"Of course it would work," Waters said, before cautioning that it "will be there for us in the
Leslie Wexner, Limited Brands' chairman and CEO, also pointed out: "We recognize
we have to harvest this international opportunity in a sustained way so that it doesn't impact our domestic business."
While it's evaluating these new opportunities Limited Brands said it still expects to double the
size of its international business over the next three years, although this will also include other
retail chains such as the Bath & Body Works beauty business.
Among its more pressing priorities are re-building the La Senza business in Canada, which operates
more than 326 La Senza Lingerie, La Senza Express, La Senza Spirit and La Senza Girl stores in the
Plans include providing clear differentiation between this lingerie chain and Victoria's Secret,
which it also operates in the same market.
Waters described Victoria's Secret as the "sexy, sophisticated big sister" against "little sister La
Senza which is interested in good prices and fashion."
He said both will benefit from the sourcing expertise of Mast Industries, "the number one
source of intimate apparel in the world."
Limited Brands, which has been hit by the slowdown in consumer spending, most recently posted a 27%
drop in second quarter profit to US$74.3m, thanks to a 9% decline in comparable store sales.
It has also been forced to cut 400 jobs and slash inventory, expenses, and capital expenditures to
weather the downturn.
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