Sri Lanka textile exports up 2.8-percent in Nov with Foreign Investments in production

Sri Lanka's exports of apparel grew from a year earlier in November 2019 by 2.8 percent to 459 million US dollars due to an increase in production capacity and a re-routing of supply chains amid the US-China trade war, an industry official said.

"Sri Lanka's exports of apparel increased in the November period because most Sri Lankan manufacturers expanded their internal production capacity in 2019," said Rehan Lakhany, Chairman of the Sri Lankan Apparel Exporters Association (SLAEA).

"To some degree, the US-China trade war helped to redirect orders to Sri Lanka, so it was in our favor" Sri Lanka's total exports of apparel from January to November 2019 increased 5.8 percent to US$ 4.85 billion, the highest ever, SLAEA data showed.

Exports of clothing to the European Union (EU) rose by 10.99 percent to 191.0 million US dollars in November 2019 compared with the same period in 2018. In 2019, total exports to the EU were 5.7 percent, or 2.03 billion US dollars, up from 2018, from January through November.

Lakhany said exports to the EU increased as GSP Plus continued to exploit preferential tariff advantages and market stability came to a close with Brexit. Shipping to the US in November, however, dropped 4.8 percent to 208 million US dollars, but exports to the US reported growth of 3.7 percent or 2.14 billion US dollars for the period January to November 2019.

In the third quarter ending November 02, L Brands Group's subsidiary, Victoria's Secret, posted a 7 percent drop in the same-store sales in the US and Canada. Dragged down by the performance of Victoria's Secret, the parent posted a loss of 0.91 US dollars per share.

The company said it expected a $2 per share profit in the fourth-quarter ending in January, the primary shopping season for Thanksgiving and Christmas holidays, in an earnings release. Because of the evolving customer tastes, Victoria's Secret is losing sales and divesting its brand portfolio, which has embraced body-positive products that put greater emphasis on comfort.

The Secret Fashion Show from the brand's Victoria store canceled in 2019. In an official statement, L Brands said the show was canceled as a result of falling sales and show ratings, and will, therefore, focus on evolving its marketing strategies.

Overall, U.S. clothing sales dropped by 2.65 percent in November when adjusting for seasonality and holiday trade, according to early estimates from the U.S. Census Bureau.

OSL Take: The growth in sales recorded by Sri Lanka’s multinational textile manufacturer shows the business potential in Sri Lanka’s apparel manufacturing and export sector. Sri Lanka enjoys the GSP Plus trade concession of the EU and the US GSP facility, which provides added incentives to local manufacturers and exporters.

Relationships with fresh clients will diversify the export industry that is needed because of U.S. import dependency. This emphasis will also be here to create long-term relationships with global brands that can enhance the apparel sector.

VBS/AT/20200302/Z_TB4