The fashion industry goes up and down like hemlines

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Textiles Sector Risk Report

Overview

Growing global demand for textiles is increasingly being fed by the dynamic south east Asian economies, especially Bangladesh, Vietnam and Sri Lanka. Meanwhile, the market share of cotton has been declining, as synthetic alternatives take over. Producers prefer them because they cost less, mix better with other fibres and are less harmful to the environment.

 

Coface Regional Sector Risk Assessment

Strengths and weaknesses

Despite the fall in cotton’s overall market share, worldwide consumption is predicted to rise by 4% in 2017/18. Even in China, which has large stocks of low grade cotton, the appetite for higher quality cotton will be met by imports. One of the strongest drivers for the growth in textile demand around the world is the growth of “fast fashion” brands such as Uniqlo, H&M and Zara. This increase in demand is enabling fashion companies to recover from some difficult recent years, and look forward to a much better 2018 and beyond.

Fashion is fickle almost by definition. Without the protection of Coface credit insurance and the constant flow of market intelligence that accompanies it, business can be very risky indeed.

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