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Global Data's sourcing analyst tells Just Style exclusively that now is the time for the country to lean on its most successful export industries, such as apparel, following reports that Sri Lanka is facing bankruptcy.
Sri Lanka’s prime minister Ranil Wickremesinghe said the country is ‘bankrupt’ according to a report by news publication CNN, following the country’s financial crisis that has led to fuel shortages and extortionate prices for food and medicine.
The country is said to be battling its worst economic crisis in 70 years, however, Yohan Lawrence, secretary-general of the Joint Apparel Association Sri Lanka tells Just Style:
“Despite unprecedented domestic volatility, unstable global market conditions, and escalating raw material and logistics costs, Sri Lankan apparel exports generated US$446m in May 2022, which is almost a 30% year-on-year increase from May 2021. The industry is also hopeful of achieving its US$6bn target by the end of 2022.”
An H&M spokesperson tells Just Style its intention is to disclose all available transparent information - good or bad - for its apparel following claims of 'misleading' and 'deceptive' environmental scorecards.
The investigation into the H&M Group’s environmental scorecards, which was carried out by online news publication, Quartz, follows on from the Sustainable Apparel Coalition (SAC) pausing its consumer-facing transparency program.
The program, which includes H&M as a member and features data from the HIGG MSI tool, has come to a halt due to Norway’s advertising watchdog suggesting there have been misleading environmental claims from brands.
Quartz claims that over half of the scorecards on H&M’s website listed clothing as being better for the environment than they were in reality and suggests the items were no more sustainable than comparable garments made by the company and its competitors. In fact, Quartz goes as far as to say ‘in the most egregious cases, H&M showed data that were the exact opposite of reality.
The H&M spokesperson defends its aim to give customers transparency when it comes to shopping for fast fashion items by stating: “We would like to underline that the customer-facing transparency program does not indicate that a product has lower environmental impact compared to those without the HIGG index.”
The European Commission tells the Just Style withdrawal of Myanmar's Everything But Arms (EBA) preferences would only add to the economic difficulties its people have faced since the military coup.
The European Commission says withdrawing trade preference for Myanmar under the EBA arrangement would impact “hundreds of thousands” of garment workers.
In response to a call this week from IndustriAll Global Union for the European Union (EU) to suspend the Everything But Arms (EBA) agreement with Myanmar, EU spokesperson Peter Stano says: “In the current circumstances, withdrawing trade preferences under the Everything But Arms arrangement would harm the wrong people and hardly affect military interests.”
Unions have said the garment industry remains “a vital source of foreign exchange” for the regime. Suspension of the agreement, they said this week, would “cut off vital funds to the terrible military junta. We expect the EU to act responsibly and to act now.’’
In the last few months, unions have reported that the environment in Myanmar has become increasingly dangerous for them to operate in, have safe communications with their members, and negotiate with employers and brand companies to settle workplace labor disputes.
As of the end of May, 54 trade unionists and worker activists have been killed by the military and at least 279 trade union leaders and worker activists have been arrested, according to the International Labour Organization (ILO).
Inditex pulling three brands from China is a good move says a Global Data apparel analyst which could create more potential for growth.
Inditex, the parent company of Zara is closing the remaining stores for three of its smaller fashion brands, Bershka, Pull & Bear, and Stradivarius, in China this summer as part of an exit plan that started during the pandemic.
The remaining stores preparing for closure are based in China’s Tmall and a customer service hotline will be available for Chinese shoppers until 31 August, according to each brand’s website, though Inditex declined to supply an official comment when approached by Just Style.
On the Pull & Bear website, for example, the message reads: “Dear customer, we must inform you that our brand collections will not be available at Pull & Bear online store from July 31, 2022. Pull & Bear online chat and our customer service hotline 4008218020 will be at your disposal for any query until August 31.”
Global Data associate apparel analyst Pippa Stephens tells Just Style that despite China being the second-largest apparel market globally, the exit of those particular brands from the country (Pull & Bear, Bershka, and Stradivarius), is unlikely to have a significant impact on Inditex’s total sales.
As Sri Lanka battles its worst economic crisis for 70 years, Just Style looks at how it has impacted the country's apparel sector so far.
As most of the world focuses on overcoming the Covid pandemic that has raged on for the last two years amid a backdrop of a war in Ukraine and rising inflation rates, Sri Lanka is in the midst of a huge battle of its own due to what is being described as its worst economic crisis in decades.
Dr. Sheng Lu, associate professor of fashion and apparel studies at the University of Delaware tells Just Style exclusively that like many developing countries, the export-oriented apparel sector plays a crucial role in Sri Lanka’s economy.
He notes Sri Lanka’s apparel sector accounts for more than 40% of the country’s total exports, and Western fashion brands such as Patagonia, Calvin Klein, Nike, and Ralph Lauren typically source tops, bottoms, and jeans from the region, especially for medium-priced items.
However, Dr. Lu suggests the country’s recent economic turmoil and political instability could negatively affect Sri Lanka’s apparel exports.
