Month: August 2018

Claudio Belotti knows he cut the denim that became the jeans Meghan Markle wore on one of her first outings as the fiancee of Britain’s Prince Harry.

 

That’s because he cuts all of the fabric for Hiut Denim Co., a 7-year-old company that makes jeans in Cardigan, Wales. Belotti is a craftsman with 50 years of experience that gives his work a personal touch — something that’s not quite couture but not exactly mass-produced either.

 

“There’s a story behind each one,” Belotti said. “You’re paying for the skill.”

 

Customer demand for something unique is helping small companies like Hiut buck the globalization trend and set up shop in developed countries that had long seen such work disappear. While international brands like H&M and Zara still dominate the clothing market, small manufacturers are finding a niche by using technology and skill to bring down costs and targeting well-heeled customers who are willing to pay a little more for clothes that aren’t churned out by the thousands half a world away.

 

Profits at smaller national clothing firms grew 2 percent over the last five years, compared with a 25 percent decline at the top 700 traditional multinationals, according to research by Kantar Consulting.

 

Their success comes from promoting their small size and individuality, said Jaideep Prabhu, a professor of enterprise at Cambridge University’s Judge Business School.

 

“It’s a different kind of manufacturing,” he said. “They are not the Satanic mills. These are very cool little boutiques.”

 

Hiut, which makes nothing but jeans, employs 16 people in Cardigan and makes 160 pairs a week. Women’s styles range from 145 pounds ($192) to 185 pounds ($244), men’s go for 150 pounds to 235 pounds. Each is signed by the person who sewed it, known in the company as a “Grand Master.” By contrast, Primark says it sources products from 1,071 factories in 31 countries and keeps costs down by “buying in vast quantities.” The most expensive pair of jeans on the company’s website sells for 20 pounds.

 

Many of these small manufacturers also try to stand out by embracing social issues, from reducing waste to paying a living wage.

 

Hiut, for example, highlights its efforts to put people back to work in a small town that was devastated when a factory that employed 400 people and made 35,000 pairs of jeans a week shut down. Underscoring the years of craftsmanship that go into each pair of jeans, the company offers “free repairs for life.”

 

This kind of customer service helps form a “personal relationship” between a brand and the shopper that is valuable, says Anusha Couttigane of Kantar Consulting.

 

Customers notice. Laura Lewis-Davies, a museum worker who from Wales, says she wants to support independent businesses when she can and bought a pair of Hiut jeans after seeing a story about Markle wearing the brand.

 

“Well-crafted things bring more joy,” she said. “I’d rather buy fewer things but know they’re good quality [and] made by people who are working in good conditions for a fair salary.”

 

The rise of small clothing makers reflects a broader shift in consumer preferences away from big brands — as evident, say, in the boom in craft beers. In fashion, technology is fueling the trend.

 

The internet provides a cheap way to reach customers, while off-the-shelf artificial intelligence programs allow companies to accurately forecast demand and order materials so they can make small batches and avoid unwanted stock. That makes it possible to produce clothes that are more customized.

 

“Data is the backbone for this and the trigger,” said Achim Berg, a senior partner at McKinsey & Co. in Frankfurt who advises fashion and luxury goods companies.  “It’s not custom-made, but it gives the consumer the opportunity to be more individual.”

 

A survey of 500 companies by McKinsey and The Business of Fashion, an influential industry news website, identified personalization as this year’s No. 1 trend. Consumers are willing to hand over personal information to get more customized products and services, according to a 2016 survey by Salesforce.com, which provides online sales and marketing tools for businesses.

 

Established brands have recognized the trend and offering to customize products, too. Adidas, for example, offers the chance to mix and match colors and materials on things like the sole and laces on some of its shoes.

 

But making clothes on a smaller scale has also gained a moral tinge after scandals about sweatshops, child labor and unsafe working practices hit global brands in recent years. The 2013 collapse of the Rana Plaza building in Bangladesh, which killed 1,100 and injured 2,500 others, highlighted the grim conditions in factories that export to the United States and Europe.

 

Jenny Holloway, who employs 100 people at Fashion Enter in London, said she’s not interested in making as many garments as possible and selling them as fast as she can.

 

“I’d like to say we’ve done a massive business plan and we refer to it. We don’t,” Holloway said. “We sit down and have a cup of tea and we have a chat and we evaluate how things sit with us. How does that client fit our ethics? … It isn’t about money and making that big buck. It’s about sustainability.”

 

Prabhu sees this as part of a bigger shift away from the model of outsourcing production to low-cost countries like China. “You’re trying to constantly keep up with your customers. Your competitive advantage is to give them something closer to their needs.”

 

Hiut Denim is an example of this backlash.

 

The company is based in a town of some 4,000 people where 10 percent of the population once made jeans. Then, a decade ago, the factory shut down as the owners moved production to Morocco and later to China.

 

When David and Clare Hieatt decided to start making jeans again, they were determined to take advantage of the years of professional experience going to waste. They hoped that would give their products a “story” to market.

 

Markle’s decision to wear Hiut jeans in Wales boosted that effort. The company now has a waiting list of three months.

 

“For the town it’s been incredible because it gives people a confidence to go, ‘Wow. This town makes a world-class product,'” David Hieatt said. “We lost our mojo when we lost 400 jobs, but now we’re getting it back. That’s a very cool story.”
…

Claudio Belotti knows he cut the denim that became the jeans Meghan Markle wore on one of her first outings as the fiancee of Britain’s Prince Harry.

 

That’s because he cuts all of the fabric for Hiut Denim Co., a 7-year-old company that makes jeans in Cardigan, Wales. Belotti is a craftsman with 50 years of experience that gives his work a personal touch — something that’s not quite couture but not exactly mass-produced either.

 

“There’s a story behind each one,” Belotti said. “You’re paying for the skill.”

 

Customer demand for something unique is helping small companies like Hiut buck the globalization trend and set up shop in developed countries that had long seen such work disappear. While international brands like H&M and Zara still dominate the clothing market, small manufacturers are finding a niche by using technology and skill to bring down costs and targeting well-heeled customers who are willing to pay a little more for clothes that aren’t churned out by the thousands half a world away.

 

Profits at smaller national clothing firms grew 2 percent over the last five years, compared with a 25 percent decline at the top 700 traditional multinationals, according to research by Kantar Consulting.

 

Their success comes from promoting their small size and individuality, said Jaideep Prabhu, a professor of enterprise at Cambridge University’s Judge Business School.

 

“It’s a different kind of manufacturing,” he said. “They are not the Satanic mills. These are very cool little boutiques.”

 

Hiut, which makes nothing but jeans, employs 16 people in Cardigan and makes 160 pairs a week. Women’s styles range from 145 pounds ($192) to 185 pounds ($244), men’s go for 150 pounds to 235 pounds. Each is signed by the person who sewed it, known in the company as a “Grand Master.” By contrast, Primark says it sources products from 1,071 factories in 31 countries and keeps costs down by “buying in vast quantities.” The most expensive pair of jeans on the company’s website sells for 20 pounds.

 

Many of these small manufacturers also try to stand out by embracing social issues, from reducing waste to paying a living wage.

 

Hiut, for example, highlights its efforts to put people back to work in a small town that was devastated when a factory that employed 400 people and made 35,000 pairs of jeans a week shut down. Underscoring the years of craftsmanship that go into each pair of jeans, the company offers “free repairs for life.”

 

This kind of customer service helps form a “personal relationship” between a brand and the shopper that is valuable, says Anusha Couttigane of Kantar Consulting.

 

Customers notice. Laura Lewis-Davies, a museum worker who from Wales, says she wants to support independent businesses when she can and bought a pair of Hiut jeans after seeing a story about Markle wearing the brand.

 

“Well-crafted things bring more joy,” she said. “I’d rather buy fewer things but know they’re good quality [and] made by people who are working in good conditions for a fair salary.”

 

The rise of small clothing makers reflects a broader shift in consumer preferences away from big brands — as evident, say, in the boom in craft beers. In fashion, technology is fueling the trend.

 

The internet provides a cheap way to reach customers, while off-the-shelf artificial intelligence programs allow companies to accurately forecast demand and order materials so they can make small batches and avoid unwanted stock. That makes it possible to produce clothes that are more customized.

 

“Data is the backbone for this and the trigger,” said Achim Berg, a senior partner at McKinsey & Co. in Frankfurt who advises fashion and luxury goods companies.  “It’s not custom-made, but it gives the consumer the opportunity to be more individual.”

 

A survey of 500 companies by McKinsey and The Business of Fashion, an influential industry news website, identified personalization as this year’s No. 1 trend. Consumers are willing to hand over personal information to get more customized products and services, according to a 2016 survey by Salesforce.com, which provides online sales and marketing tools for businesses.

 

Established brands have recognized the trend and offering to customize products, too. Adidas, for example, offers the chance to mix and match colors and materials on things like the sole and laces on some of its shoes.

 

But making clothes on a smaller scale has also gained a moral tinge after scandals about sweatshops, child labor and unsafe working practices hit global brands in recent years. The 2013 collapse of the Rana Plaza building in Bangladesh, which killed 1,100 and injured 2,500 others, highlighted the grim conditions in factories that export to the United States and Europe.

 

Jenny Holloway, who employs 100 people at Fashion Enter in London, said she’s not interested in making as many garments as possible and selling them as fast as she can.

 

“I’d like to say we’ve done a massive business plan and we refer to it. We don’t,” Holloway said. “We sit down and have a cup of tea and we have a chat and we evaluate how things sit with us. How does that client fit our ethics? … It isn’t about money and making that big buck. It’s about sustainability.”

 

Prabhu sees this as part of a bigger shift away from the model of outsourcing production to low-cost countries like China. “You’re trying to constantly keep up with your customers. Your competitive advantage is to give them something closer to their needs.”

 

Hiut Denim is an example of this backlash.

 

The company is based in a town of some 4,000 people where 10 percent of the population once made jeans. Then, a decade ago, the factory shut down as the owners moved production to Morocco and later to China.

 

When David and Clare Hieatt decided to start making jeans again, they were determined to take advantage of the years of professional experience going to waste. They hoped that would give their products a “story” to market.

 

Markle’s decision to wear Hiut jeans in Wales boosted that effort. The company now has a waiting list of three months.

 

“For the town it’s been incredible because it gives people a confidence to go, ‘Wow. This town makes a world-class product,'” David Hieatt said. “We lost our mojo when we lost 400 jobs, but now we’re getting it back. That’s a very cool story.”
…

U.S. President Donald Trump said on Monday he was “not thrilled” with the Federal Reserve under Chairman Jerome Powell for raising interest rates and said the U.S. central bank should do more to help him to boost the economy.

In the middle of international trade disputes, Trump in an interview with Reuters also accused China and Europe of manipulating their respective currencies.

American presidents have rarely criticized the Fed in recent decades because its independence has been seen as important for economic stability. Trump has departed from this past practice.

The president spooked investors in July when he criticized the U.S. central bank’s over tightening monetary policy. On Monday he said the Fed should be more accommodating on interest rates.

“I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” Trump said, referring to Powell. Trump nominated Powell last year to replace former Fed Chair Janet Yellen.

U.S. stock prices dipped after Trump’s comments to Reuters and the U.S. dollar edged down against a basket of currencies.

Trump, who criticized the Fed when he was a candidate, said other countries benefited from their central banks’ moves during tough trade talks, but the United States was not getting support from the Fed.

“We’re negotiating very powerfully and strongly with other nations. We’re going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated,” Trump said.

The Fed has raised interest rates twice this year and is expected to do so again next month with consumer price inflation rising to 2.9 percent in July, its highest level in six years, and unemployment at 3.9 percent, the lowest level in about 20 years.

After leaving its policy interest rates at historic lows for about six years after the 2008 global financial crisis, the Fed began slowly raising rates again in late 2015.

Trump said China was manipulating its yuan currency to make up for having to pay tariffs on imports imposed by Washington.

“I think China’s manipulating their currency, absolutely. And I think the euro is being manipulated also,” Trump said.

“What they’re doing is making up for the fact that they’re now paying … hundreds of millions of dollars and in some cases billions of dollars into the United States Treasury. And so they’re being accommodated and I’m not. And I’ll still win.”

Trump has frequently accused China of manipulating its currency, but his administration has so far declined to name China formally as a currency manipulator in a semi-annual report from the U.S. Treasury Department.

The U.S. dollar has strengthened this year by 5.35 percent against the yuan, reversing most of its large drop against the Chinese currency in 2017.

The euro is off by about 4.3 percent against the greenback this year, beset by concerns over the pace of economic growth in the EU trading bloc and over U.S.-European trade tensions.

Trump has made reducing U.S. trade deficits a priority and the combination of rising interest rates and a strengthening dollar pose risks for export growth.

A Fed spokesman declined to comment on Trump’s remarks on Monday.

Powell last month said in an interview that the Fed has a “long tradition” of independence from political concerns, and that no one in the Trump administration had said anything to him that gave him concerns on that front.

“We’re going to do our business in a way that’s strictly nonpolitical, without taking political issues into consideration, and that carries out the mandate Congress has given us,” he said.

Asked if he believed in the Fed’s independence, Trump said: “I believe in the Fed doing what’s good for the country.”

Powell took over as Fed chief earlier this year.

“Am I happy with my choice?” Trump said to Reuters about Powell. “I’ll let you know in seven years.”
…

U.S. President Donald Trump said on Monday he was “not thrilled” with the Federal Reserve under Chairman Jerome Powell for raising interest rates and said the U.S. central bank should do more to help him to boost the economy.

In the middle of international trade disputes, Trump in an interview with Reuters also accused China and Europe of manipulating their respective currencies.

American presidents have rarely criticized the Fed in recent decades because its independence has been seen as important for economic stability. Trump has departed from this past practice.

The president spooked investors in July when he criticized the U.S. central bank’s over tightening monetary policy. On Monday he said the Fed should be more accommodating on interest rates.

“I’m not thrilled with his raising of interest rates, no. I’m not thrilled,” Trump said, referring to Powell. Trump nominated Powell last year to replace former Fed Chair Janet Yellen.

U.S. stock prices dipped after Trump’s comments to Reuters and the U.S. dollar edged down against a basket of currencies.

Trump, who criticized the Fed when he was a candidate, said other countries benefited from their central banks’ moves during tough trade talks, but the United States was not getting support from the Fed.

“We’re negotiating very powerfully and strongly with other nations. We’re going to win. But during this period of time I should be given some help by the Fed. The other countries are accommodated,” Trump said.

The Fed has raised interest rates twice this year and is expected to do so again next month with consumer price inflation rising to 2.9 percent in July, its highest level in six years, and unemployment at 3.9 percent, the lowest level in about 20 years.

After leaving its policy interest rates at historic lows for about six years after the 2008 global financial crisis, the Fed began slowly raising rates again in late 2015.

Trump said China was manipulating its yuan currency to make up for having to pay tariffs on imports imposed by Washington.

“I think China’s manipulating their currency, absolutely. And I think the euro is being manipulated also,” Trump said.

“What they’re doing is making up for the fact that they’re now paying … hundreds of millions of dollars and in some cases billions of dollars into the United States Treasury. And so they’re being accommodated and I’m not. And I’ll still win.”

Trump has frequently accused China of manipulating its currency, but his administration has so far declined to name China formally as a currency manipulator in a semi-annual report from the U.S. Treasury Department.

The U.S. dollar has strengthened this year by 5.35 percent against the yuan, reversing most of its large drop against the Chinese currency in 2017.

The euro is off by about 4.3 percent against the greenback this year, beset by concerns over the pace of economic growth in the EU trading bloc and over U.S.-European trade tensions.

Trump has made reducing U.S. trade deficits a priority and the combination of rising interest rates and a strengthening dollar pose risks for export growth.

A Fed spokesman declined to comment on Trump’s remarks on Monday.

Powell last month said in an interview that the Fed has a “long tradition” of independence from political concerns, and that no one in the Trump administration had said anything to him that gave him concerns on that front.

“We’re going to do our business in a way that’s strictly nonpolitical, without taking political issues into consideration, and that carries out the mandate Congress has given us,” he said.

Asked if he believed in the Fed’s independence, Trump said: “I believe in the Fed doing what’s good for the country.”

Powell took over as Fed chief earlier this year.

“Am I happy with my choice?” Trump said to Reuters about Powell. “I’ll let you know in seven years.”
…

China will continue to provide aid to Tonga and other countries in the Pacific to help them achieve sustainable development, China’s Foreign Ministry said on Monday, amid a mounting debt problem in the region.

Tonga’s prime minister on Friday backed down on calls for Pacific island nations to collectively lobby China to forgive their debts, after a source said China had complained about the plan.

Tonga is one of eight island nations in the South Pacific carrying significant debt to China, and had started building support to press China to cancel repayments.

Pacific nations were due to discuss the plan at a forum of regional leaders scheduled to be held in the tiny island nation of Nauru early next month, Tongan Prime Minister ‘Akilisi Pōhiva told Reuters on Thursday.

Pōhiva said in a statement on Friday that “after further reflection” he believed the forum was not the proper platform to discuss Chinese debt, and that Pacific nations should each find their own solutions.

Chinese Foreign Ministry spokesman Lu Kang said he noted Pōhiva’s statement of “clarification” and his positive appraisal of ties with China.

“I would like to stress that China and Tonga are strategic partners of mutual respect and common development,” Lu told a daily news briefing in Beijing.

“China will continue to provide support and assistance to Tonga and other Pacific island countries in achieving sustainable development to the best of its ability,” he added, without elaborating.

A recent Reuters analysis of the financial books of South Pacific island nations showed China’s lending programs had gone from almost zero to more than $1.3 billion outstanding in a decade.

The debt burden of small economies with little earning power has stoked fears the region could fall into financial distress and become more susceptible to diplomatic pressure from China.
…

China will continue to provide aid to Tonga and other countries in the Pacific to help them achieve sustainable development, China’s Foreign Ministry said on Monday, amid a mounting debt problem in the region.

Tonga’s prime minister on Friday backed down on calls for Pacific island nations to collectively lobby China to forgive their debts, after a source said China had complained about the plan.

Tonga is one of eight island nations in the South Pacific carrying significant debt to China, and had started building support to press China to cancel repayments.

Pacific nations were due to discuss the plan at a forum of regional leaders scheduled to be held in the tiny island nation of Nauru early next month, Tongan Prime Minister ‘Akilisi Pōhiva told Reuters on Thursday.

Pōhiva said in a statement on Friday that “after further reflection” he believed the forum was not the proper platform to discuss Chinese debt, and that Pacific nations should each find their own solutions.

Chinese Foreign Ministry spokesman Lu Kang said he noted Pōhiva’s statement of “clarification” and his positive appraisal of ties with China.

“I would like to stress that China and Tonga are strategic partners of mutual respect and common development,” Lu told a daily news briefing in Beijing.

“China will continue to provide support and assistance to Tonga and other Pacific island countries in achieving sustainable development to the best of its ability,” he added, without elaborating.

A recent Reuters analysis of the financial books of South Pacific island nations showed China’s lending programs had gone from almost zero to more than $1.3 billion outstanding in a decade.

The debt burden of small economies with little earning power has stoked fears the region could fall into financial distress and become more susceptible to diplomatic pressure from China.
…

Venezuela on Monday slashed five zeros from prices as part of a broad economic plan that President Nicolas Maduro says will tame hyperinflation but critics call another raft of failed socialist policies that will push the chaotic country deeper into crisis.

Streets were quiet and shops were closed due to a national holiday that Maduro decreed for the first day of the new pricing plan for the stricken economy, which the International Monetary Fund has estimated will have 1 million percent inflation by year end.

The price change comes with a 3,000 percent minimum wage hike, tax increases meant to shore up state coffers and a plan to peg salaries, prices and the country’s exchange rate to the petro, an elusive state-backed cryptocurrency.

Economists say the plan, which was announced last Friday, is likely to escalate the crisis facing the once-prosperous nation that is now suffering from Soviet-style product shortages and a mass exodus of citizens fleeing for other South American countries.

Venezuelans were skeptical the plan will turn the economy around.

“I can’t find a cash machine because all the banks are closed today,” said Jose Moreno, 71, a retired engineer in the central city of Valencia, complaining of chronically dysfunctional public services. “There’s no money, there’s no water, there’s no electricity

• there’s nothing.”

After a decade-long oil bonanza that spawned a consumption boom in the OPEC member, many citizens are now reduced to scouring through garbage to find food as monthly salaries currently amount to a few U.S. dollars a month.

The new measures have worried shopkeepers already struggling to stay afloat due to hyperinflation, government-set prices for goods ranging from flour to diapers, and strict currency controls that crimp imports.

‘The Plan is Incoherent’

Venezuela’s main business organization, Fedecamaras, on Monday slammed Maduro’s economic plan as “improvised” and said it will cause confusion and put the country’s economic activity at “severe risk.”

“Pegging the bolivar to the petro to us seems to be a serious mistake,” said Fedecamaras President Carlos Larrazabal at a news conference. “The plan is incoherent.”

The bolivar traded on the opaque black market on Monday at around 96 bolivars to the dollar, a rate reflecting the monetary overhaul and which implies a depreciation in real terms of nearly 30 percent since last week. The rate may not be representative of the overall market because trading volumes were thin due to the public holiday, industry experts said.

Growing discontent with Maduro has spread to the military as soldiers struggle to get enough food and many desert by leaving the country, along with thousands of civilians.

Two high-ranking military officers were arrested this month for their alleged involvement in drone explosions during a speech by Maduro, who has described it as an assassination attempt.

The chaos has become an increasing concern for the region.

In recent days, Ecuador and Peru have tightened visa requirements for Venezuelans, and violence drove hundreds of Venezuelan migrants back across the border with Brazil on Saturday.

Maduro, re-elected to a second term in May in a vote widely condemned as rigged, says his government is the victim of an “economic war” led by political adversaries with the help of Washington, and accuses the United States of seeking to overthrow him.

The United States has denied the accusations. But it has described the former bus driver and union leader as a dictator and levied several rounds of financial sanctions against his government and top officials.
…

“For the first time since early 2010, Greece can stand on its own feet,” the European Stability Mechanism (ESM) rescue fund said as Athens exited its final, three-year international bailout program on Monday.

The ESM allocated about $71 billion over the past three years, after an agreement was reached in August 2015 to help the country cope with fallout from an ongoing debt crisis.

“Today we can safely conclude the ESM program with no more follow-up rescue programs,” Mario Centeno, the chairman of the ESM’s board of governors, said in a statement. “This was possible thanks to the extraordinary effort of the Greek people, the good cooperation with the current Greek government and the support of European partners through loans and debt relief.”

In 2010, Greece was declared at risk of default after struggling with massive debt, loss of investment and huge unemployment. Overall, nearly $300 billion in emergency loans were provided in three consecutive bailout packages from a European Union bailout fund and the International Monetary Fund (IMF). In exchange, Athens was required to put in place severe austerity-based measures and reforms.

The completion of the loan program is a major accomplishment for Greece, but the country still faces an uphill battle to regain its economic stability.

 

The office of Prime Minister Alexis Tsipras described the final bailout loan last week as the “last act in the drama. Now a new page of progress, justice and growth can be turned.”

“Greece has managed to stand on her feet again,” his office said.

 

Economic growth in Greece is slowly growing again, tourism is up nearly 17 percent in Athens this year, and once-record levels of joblessness are finally receding.

 

However, the country still faces massive challenges, including weak banks, the highest debt load in the European Union at 180 percent of GDP, and the loss of about a half-million mostly younger Greeks to Europe’s wealthier neighbors. Greece will also need to continue to repay its international loans until 2060.

The country’s three international bailouts took Europe to the brink of crisis.

 

The financial troubles exposed dangers in the European Union’s common currency and threatened to break the bloc apart. The large debt that remains in Greece and an even larger debt in Italy continue to be a financial danger to the EU.

The bailouts also led to regular and sometimes violent demonstrations in Athens by citizens angry at the government’s budget measures required by international lenders in return for the bailouts.

 

While Greece has begun to make economic progress, economics say the bulk of the austerity measures will likely need to remain in place for many years for the country to tackle its massive debt.

Some international economists have called for part of Greece’s loans to be written off in order for Greece to keep its ballooning debt payments in check. However, any kind of loan forgiveness would be a tough sell in Germany where the initially bailouts were unpopular.

The austerity measures included massive tax hikes as high as 70 percent of earned income and pension cuts that pushed nearly half of Greece’s elderly population below the poverty line.

Pensioner Yorgos Vagelakos, 81, told Reuters that five years ago he would go to his local market with 20 euros in his pocket, while today, he has just 2 euros. He says for him, the bailout will never end.

“It’s very often that just like today, I struggle, because I see all the produce on display at the market and I want to buy things, but when I don’t have even a cent in my pocket, I get really sad,” Vagelakos said.
…