Mills may be steeling themselves for tough times but the exhibitors at Premiere Vision and Texworld in Paris are finding the silver lining
A tour of the parallel Parisian textiles shows Premiere Vision and Texworld reveals a snapshot of the global textile economy. In one corner there is the European company still berating the rise in cheap imports from China. Elsewhere a Chinese mill bemoans the hike in labour costs, an Indian company frets over the slump in Western demand and a Turkish denim mill that feels its investment in organic cotton is now ill-timed.
Times are tough and everyone has something to complain about but with the future looking challenging most of the exhibitors at both shows were gritting their teeth and searching for the silver lining.
The British though are buscking the trend in general. Whisper it but a chirpy susurrus bubbled up from the UK mills on show at Premiere Vision, thanks of course to the weakening pound.
But while the exchange rate was a hot topic in Paris the wider issue of global economic turbulence animated every exhibitor. “This whole credit crunch has shaken up everyone. In this situation confidence is down. All of the retailers want to see what the others are doing before they commit themselves.” So says Mukesh Mishra, the head of European operations for Raymond, the massive Indian suiting manufacturer, which has 600 retail outlets in its domestic market, which creates 42million metres of suiting fabric per year, which employs 25,000 staff and which sells to the likes of Marks and Spencer, Next and TM Lewin.
But Mishra refuses to be shaken up by the piecemeal approach to ordering. “Actually it means that we have some time not allocated in the mills so when we go for new business we can offer quick turnaround.” He added that in the current economic situation, that search for new business had become all the more urgent.
What does concern him about buyers’ cautious approaches is their newly found myopia when it comes to design: “One buyer came on here – from the UK – and though he usually looks through everything and wants to find out what we have that is new, this time around he wasn’t interested. He just wanted to focus on the plains, the wools, no silks or mohairs.”
Mishra is betting that it is simply prudence as opposed to fear: “Later in the season when buyers have seen everything and have a better idea of what is going to sell, then the orders for fancier items will come.” Let’s just hope Raymond has time left on the mill to turn it around otherwise we could be in for some boring looking suit collections next summer.
And it’s not just menswear where that particular fear strikes a chord. In the grip of a lean economy, fashion designers tend to react in one of two ways. Either they go for a reserved palette, with businesslike designs, a versatile appeal and timeless value or else they will try to inspire relief from financial gloom with an escapist collection. Anyone following the catwalks this season will have already seen this effect. In New York, while most collections went for classic sobriety a la DKNY’s twin sets and Carolina Herrera’s slinky separates, there were spikes of bright colour from Marc Jacobs. Casting ahead to spring 10, at the Paris textile shows and that blueprint looks set to remain the default for designers as buyers stave off committing their budgets. “Customers are afraid. They don’t want to invest, their big concern is with the cost,” says Pierro Giachi, the eternally smiling owner of Italian mill Jackytex, which specialises in womenswear knits. He says the entire design chain has been impacted: “The slowdown in orders at the start of 09 has been a shock. We need to be able to feed information down our supply chain to spinners and dyers. We don’t know what the orders will be like so we can’t tell them.”
But he says it’s crucial that designers and buyers overcome their fear. ”The only way for fashion to work is to amaze the customer. This is how the European mills will thrive.”
It is with a sense of irony that he mentions Chinese mills. “The crisis in the Far East is that the mills have to keep producing such high volumes because their margins are so low but now that their end customers in the West are buying less, the orders coming through to them are now lower and they cannot survive. They cannot survive without a confident West.” And, as another exhibitor at Premiere Vision pointed out, Chinese factories are closing, “in their thousands. It started with the toy market but now it has spread and it includes mills.”
Somewhere that fact has more resonance is a couple of stops up the RER trainline from Premiere Vision at Le Bourget, which hosts Texworld. When Drapers arrived exhibitors were relatively downbeat, due mostly to the previous day’s airport closures, which had precluded the arrival of many visitors.
But as the footfall began to pick up over the course of the show, more exhibitors grew bullish and many confessed to scenting opportunity in the current economic situation. The stimulus for this was the disappearance of 120 Chinese exhibitors from this edition of the show since the previous one, leaving Texworld with 660 exhibitors, down from nearly 800 at the last edition. (This actually means that Premiere Vision hosts marginally more exhibitors, with 670CHK)
The view was that the Chinese companies had grown too quickly. They had become reliant on large volumes being constantly delivered from Western customers and their margins were too low to sustain the dip in output, which had been inevitable given the West’s slump in consumer spending.
Certainly the Chinese government’s own figures underline that. In a talk given before Texworld by Xu Yingxin, the deputy secretary general of China Textile and Apparel Council (CNTAC) said that
The new labour contract laws that came into effect in 2008, which have ramped up basic salaries, overtime payments and insurance, have added up to a labour cost hike between 20% and 30%. Add to this the 15% appreciation of the Chinese currency against the dollar from 2007 to 2008 and there is a challenging environment in place. According to CNTAC’s estimate, this rise caused a $9bn loss to the Chinese textile industry
“China is dead!” proclaimed Fatima Nur-e-Yasmin, the Bangladeshi owner of six spinning plants, seven mills and four finishing factories. Why? Drapers asked. “Because my government will help me. We have bonded factories for imports of yarn so we don’t have to pay duty, we have subsidised energy and we have very cheap workers.” Her company sells to H&M, Zara, C&A, Turkish group Tema among others.
Brimming with confidence she added that Bangladesh would only soar in productivity over the next ten years. “We are cheap but we are also good quality and most importantly, we are stable, it is a secure place. If I go out alone at three am it’s fine. There’s no…” at this point she mimed – and made the sound effect of – a gun and laughed. Who are her competitors, Drapers asked? “We have no competitors,” she laughed again.
Her good cheer seems well founded. An expert at Texworld told Drapers that Bangladesh and Vietnam are best placed to be the strongest players in the textiles market over the coming season. With buyers after cheaper raw materials the only challenge facing them is delivering.
In India, there is a different set of concerns. According to Aloke Kumar Jaipura, who owns Gyan Silk Mills, the credit crunch has bitten into subcontinental sales too. “People do not have enough spending power. But what astonishes me,” he said, “is that it’s not just silk. It’s also the producers of polyester and acetate that are being hit.”