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European apparel brands reduce garment offtake from Tirupur, Noida, Retail News, ET Retail

European apparel brands reduce garment offtake from Tirupur, NoidaEuropean apparel brands have slashed garment offtake from Tirupur and Noida by up to 25 per cent as the they cut discretionary expenses due to the uncertainty in the region about the fallout of the Russia-Ukraine war.

As all the big global brands have closed shutters in Russia, the order flow from Europe has dwindled. Tirupur exporters fear that in FY23 exports may come down by 20%-25% if this trend continues. The garment hub annually exports Rs 35,000 crore worth of goods.

“It is not that the European buyers are not placing orders. But the volumes have come down. Also, yarn prices have gone up by 110 per cent since 2020. The buyers have already absorbed the increase in prices by two to three times,” said Raja Shanmugam, president, Tirupur Exporters Association (TEA).

High yarn price is posing a problem to the garment manufacturing units in Tirupur. “Most of them are MSMEs. Since the yarn prices have gone up, delivering goods on time is becoming difficult. But the foreign buyers rely on India because of the stability in country.” Tirupur houses 2,000 knitwear garment export units and another 18,000 ancillary units that are suppliers to the knitwear units.

TEA president Shanmugam added that the units have given a closure call on 16th and 17th May protesting the rising yarn prices.

Lalit Thukral, president, Noida Apparel Export Cluster said the units at Noida have seen a 15 per cent drop in orders from Europe. “Unlike Tirupur, we sell high value items. Our base price for a garment is $5, which may go up to $10. What we are seeing in Europe is that they are not ready to part with their money for buying clothes. They are saving that money for food and other essential commodities. Till such time the uncertainty continues, the volume of orders will be less.”
“For instance, earlier if a buyer was purchasing 150,000 pieces, he is now buying 1,00,000 pieces,” added Thukral.

The closure of global brands in Russia too has impacted Indian garment exporting units. Spanish fashion retailer Inditex that owns the Zara brand has halted trading in Russia, closing its 502 shops and stopping online sales a fortnight ago. H&M has also suspended operations in Russia following the invasion of Ukraine and imposition of sanctions. Spain’s second-largest fashion retailer Mango has also announced temporarily closing its 120 Russian shops.

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