This Christmas, garment exports may miss Santa
The global meltdown has dampened spirits in the domestic garment industry ahead of the most bullish period of the year the Christmas, reports Sumant Banerji.business Updated: Nov 30, 2008 20:55 IST
The global meltdown has dampened spirits in the domestic garment industry ahead of the most bullish period of the year — the Christmas. Traditionally there is a 25 per cent jump in orders from Europe and United States during August-November when orders are placed but this year they have been hard to come by.
“There is nothing for garment exporters this Christmas,” said DK Nair, secretary general, Confederation of Indian Textile Industries. “Between January and August, there has been a 1 per cent decline in exports to US and this figure is expected to go down to 3 per cent by the end of the year. It’s a similar situation in other markets like Europe and Japan as well.”
Overall production in the textile industry has dipped by 2 per cent in April-November and it is tipped to fall by another 2 per cent by the end of this fiscal. An estimated seven lakh jobs have been lost and a further five lakh may be lost by March 2009. The sector employs 33 million people, second only to the agriculture sector. Another 55 million are associated indirectly by the sector.
“Exports of readymade garments in the current fiscal year are likely to fall 24 per cent, short of the $11.6 billion target and may total up to only $ 8.8 billion,” said Rakesh Vaid, chairman, Apparel Export Promotion Council. “It will be just 91 per cent of the actual achievement in 2007-08. Winter business has fallen by around 25 per cent as many importers have either cancelled orders or postponed their delivery schedules.”
In 2007-08, India exported garments worth $9.7 billion with a growth of over nine per cent over the previous year.
Buyers like Steeve and Barry's, alongwith Mervyns, have filed for bankruptcy while Pacific Sunwear, Lane Bryant, Fashion Bug and Catherines are closing 150 outlets. Foot Locker is winding up 140 stores and Ann Taylor is closing 117 outlets. Others like Eddie Bauer, Cache, Talbots, J Jill, Gap Inc, Goodbye Levitz, Home Depot, Macy's, Pep Boys, JC Penney, Lowe and Office Depot are also scaling down operations due to falling sales.