Indonesia’s textile industry consistently ranks among the top ten producers worldwide, benefiting from an integrated value chain that spans from raw fibre to finished apparel. This robust ecosystem, supported by an estimated workforce exceeding 3.5 million, has historically positioned Indonesia as a cost-efficient sourcing hub for international buyers. However, this inherent strength is now being tested by escalating competition from regional powerhouses such as China, Bangladesh, and Vietnam.

Beyond competitive pressures, a critical challenge for Indonesia lies in its substantial dependence on a narrow group of export destinations. The United States, by some estimates, accounts for more than half of Indonesian garment exports, making it the single largest market. While this concentration has fueled historical growth, it also renders Indonesia highly susceptible to fluctuations in tariffs, trade restrictions, and policy shifts within the US market. In today’s volatile global trade environment, an over-reliance on any single market can swiftly transform from a strategic advantage into a significant vulnerability.

Strategic Market Diversification Initiatives Underway

In response to these realities, Indonesia is proactively working to strengthen its global trade standing through robust market diversification initiatives and strategic trade agreements. The government keenly recognizes that sustained success will depend not only on manufacturing efficiency but also on securing broader market access and cultivating stronger trade relationships across multiple regions.

Coordinating Minister for Economic Affairs Airlangga Hartarto recently underscored the government’s steadfast commitment to expanding export markets. This commitment forms an integral part of its strategy to maintain economic growth amidst pervasive global uncertainty. Hartarto emphasized that broadening international market access has become a primary governmental response to slowing exports and dynamic global economic shifts, highlighting the critical need for Indonesia export diversification.

A major focus area for Indonesia is the European Union. Reports indicate that the government is actively engaged in discussions with the EU to expedite the ratification of a pivotal trade agreement designed to significantly enhance Indonesia’s export competitiveness. Minister Hartarto stated that this complex process is currently in the technical completion stage, including the translation of essential documents into 22 European languages. If the agreement proceeds as anticipated, Indonesian products could potentially gain entry into European markets with zero tariffs as early as January of next year, providing a substantial boost to Indonesia exports.

Expanding Trade Horizons Beyond Traditional Markets

Beyond its engagement with the EU, Indonesia is also concentrating on maximizing trade cooperation with countries like Canada, where an existing free trade agreement is already in place. Simultaneously, efforts to deepen economic engagement with the United Kingdom, through either a Free Trade Agreement (FTA) or a Comprehensive Economic Partnership Agreement (CEPA), are reportedly gaining momentum. These bilateral efforts are central to Indonesia’s broader strategy of market diversification.

The message for Indonesia is unequivocally clear: in a rapidly evolving global trade landscape, competitiveness will transcend mere production capabilities or labor advantages. The future belongs to those nations that can adeptly combine manufacturing strength with strategic trade diplomacy, a broadened network of diversified markets, and the agility to adapt to shifting global realities. The robust Indonesia export diversification strategy is key to securing its future.

The Clean Clothes Campaign has stepped up pressure on Benetton Group, urging the retailer to ensure compensation is paid to former garment workers in Croatia who lost their jobs after years of producing clothing linked to the brand. Campaigners argue that when Benetton wound down sourcing from Croatia in 2024, long-serving employees at the Leonarda subcontractor facility were left without the full severance required under Croatian law.

The call follows a demonstration held in Milan on 20 May, where activists associated with the campaign travelled from 21 countries to stage a protest outside a flagship Benetton store. The group said the action was intended to spotlight unpaid severance payments that it claims remain outstanding for 28 former Leonarda workers after the factory’s closure.

Protesters gathered in the Corso Vittorio Emanuele shopping area near Milan’s cathedral, an area known for heavy footfall. Two former Leonarda employees, Smiljka Vuk and Fina Vondraček, attended in person after travelling from Croatia, with organisers saying they wanted the workers’ accounts heard directly rather than filtered through intermediaries.

During the protest, campaigners handed store staff a symbolic “bill” that listed the amount they say is owed to each worker. The Clean Clothes Campaign alleges that more than half of the total severance has not been paid, amounting to roughly €50,000 ($58,200) across the group of workers. It also argues that Benetton did not take adequate steps to ensure its subcontractor was financially positioned to meet legal severance obligations at the point Benetton exited the sourcing relationship.

Mario Iveković, president of the Croatian union Novi Sindikat, which represents the Leonarda workers, said the issue has dragged on without resolution. “These workers cannot wait any longer – Benetton should ensure the workers who contributed to its profits receive their full severance as soon as possible. We have repeatedly contacted Benetton about this matter, but have not received any response.”

The campaign also pointed to Benetton Group’s reported 2024 revenue, which it cited at €917 million, arguing that the remaining unpaid severance payments represent a negligible sum for a company of that scale but a meaningful financial lifeline for the individuals involved.

Deborah Lucchetti of FAIR Italy questioned how the situation aligns with Benetton’s public positioning. “Benetton say their brand stands for colour, unity and social values, but we see that the reality has been job losses, unpaid severance and silence. With €917m of revenue in 2024, Benetton can easily make sure this small group of workers gets paid the amount they are owed in compensation. Why not pay this amount — so small for Benetton Group, yet so essential for the workers?”

The Clean Clothes Campaign said it plans to broaden international mobilisation through an online petition directed at Benetton’s leadership, calling for immediate settlement of the outstanding sums and stronger safeguards to prevent similar compensation disputes when brands exit supplier relationships in future.

Performance was strongest in the Americas, where sales rose 3%, and in the Asia-Pacific region, where sales climbed 24%. Those gains more than offset a 10% decline in EMEA revenue, which the company linked to softer demand conditions as the regional conflict intensified, with the impact felt most acutely in its Hollister business.

Profitability metrics were mixed. The company posted an operating margin of 8.0% and delivered diluted earnings per share of $1.47, ahead of its guidance range. Operating income, however, fell to $89 million from $102 million a year earlier, reflecting cost pressures and the impact of regional sales mix.

Chief executive officer Fran Horowitz said the quarter demonstrated consistent execution despite a volatile global backdrop. “We delivered record first-quarter net sales and our 14th consecutive quarter of growth, reflecting our teams’ consistent execution for our customers amid a dynamic global environment. Results were driven by continued growth in the Americas, led by Abercrombie Brands, along with strong growth in APAC,” she said.

She added that the company is taking a more cautious operational stance in EMEA. “In EMEA, demand softened as the Middle East conflict ramped up, particularly impacting Hollister Brands, and we are proactively managing inventory and marketing to support the region.

“Our bottom-line results reflect discipline and consistency, with both operating margin and earnings per diluted share exceeding our outlook. We continued to invest in stores and marketing to strengthen our brands and customer experiences, while also returning $105m to shareholders through share repurchases, supported by our strong balance sheet.”

By brand, the Abercrombie label delivered 3% growth, while Hollister was flat overall, reflecting stronger performance in some regions and a more challenging environment in EMEA. The quarter’s record Q1 net sales highlight the company’s continued momentum in the Americas and APAC, even as it navigates uneven demand and geopolitical disruption in other markets.

Outlook: steady full-year expectations, Q2 growth forecast

For fiscal 2026, Abercrombie reiterated an expectation for net sales growth of 3% to 5%. The company’s second-quarter outlook calls for net sales growth of 2% to 4%, with net income per diluted share projected between $1.80 and $2.00. It also plans at least $150 million in share repurchases over the year.

Horowitz said the company is holding its broader outlook while staying aggressive on product and marketing. “On our first-quarter progress, we are maintaining our full-year sales and operating margin outlook. With our customer at the centre of everything we do and a strong foundation in place, we remain on offence across product and marketing and are confident in our path to deliver full-year net sales growth across brands, double-digit operating margins, strong cash flow and earnings per share growth to create long-term value for shareholders.”

A coalition of major UK general and fashion retailers has written to the Prime Minister and the Chancellor to warn that the government’s timetable for changing how low value imports are treated at the border is far too slow. The group argues that waiting until 2029 to implement the planned change leaves domestic retail exposed for years—particularly now that faster moves in the US and the EU have, in their view, redirected more low-value parcel traffic toward the UK.

The signatories include a broad mix of fashion and mass-market names, alongside industry bodies, signalling a rare alignment across different retail segments. In the letter, the group backs the policy intention set out in the 2025 Budget—closing the “de minimis” threshold that allows low-value parcels to enter with lighter customs treatment—but says the proposed implementation date risks neutralising the benefit.

They wrote that they welcome the decision to close the de minimis threshold, “but we are increasingly concerned about the proposal to implement this by 2029”. The letter adds: “Having taken the decision to do this to support UK retailers and high streets, the Government must accelerate implementation or risk undermining the objective you aim to achieve.”

The plea comes as low value import volumes have continued to rise sharply. The retailers cite dramatic growth in LVI trade, including a jump of more than 50% between 2023/24 and 2024/25. They argue that the de minimis threshold has evolved into a long-term competitive distortion, creating an uneven playing field between UK-based retailers—who employ staff locally, pay UK taxes and incur import duties—and overseas sellers that can ship directly to consumers with fewer border costs.

In their assessment, the UK is now facing heightened exposure because other large markets are tightening sooner. The letter points to the US having acted last year and the EU moving to introduce changes this summer ahead of more comprehensive reforms planned for 2028. With those routes tightening, the group claims the UK has become a more attractive destination for low-value parcel flows, deepening the pressure on domestic retailers.

The retailers argue the shift is already visible rather than hypothetical. They cite a rise in marketing spend targeting UK shoppers, a sharp increase in low-value parcel volumes over the past several years, and more frequent product safety issues. Their warning is that the problem government signalled it wanted to address in late 2025 is now intensifying, making 2029 an inadequate response. In their words: “This is not a future risk, it is already happening… A problem the UK Government recognised and sought to correct in November 2025 is therefore intensifying through 2026, not 2029. There is an urgent need to act now”.

Alongside the competitiveness argument, the group also frames low value imports reform as a revenue opportunity. They suggest a flat fee of £2.60 per parcel aligned to the EU’s proposed €3 charge could generate around £1.7 billion annually. For a government focused on closing fiscal gaps, the retailers present the proposal as a measure that could both rebalance competition and raise funds.

The message from the coalition is that low value imports reform is already time-sensitive. In their view, the longer the UK waits, the more consumer demand, marketing budgets and cross-border logistics will lock in patterns that are harder to unwind—leaving domestic retailers to carry the cost of a loophole that competitors elsewhere are moving to close sooner.

The statement, which includes endorsements from major apparel manufacturers like Decathlon, H&M Group, Lacoste, Primark, and Reformation, alongside leading resale platforms such as ThredUp and Vinted, advocates for a multifaceted approach to policy reform. A central tenet of the proposal is the reduction of value-added tax (VAT) on resold products and repair services across the European Union, coupled with the elimination of sales tax on these activities in the United States and Canada. Furthermore, the group suggests a reduction in labor costs associated with resale and repair operations through lower labor taxes in the EU and the provision of labor tax credits in the U.S. and Canada.

The initiative also champions the implementation of Extended Producer Responsibility (EPR) policies. As detailed in an accompanying Ellen MacArthur Foundation report, these policies would introduce additional costs for primary production, thereby incentivizing resale and repair. The revenue generated from these EPR schemes could be directed towards building essential infrastructure for collection and sorting of used garments, facilitating smoother operations for resale and repair services.

The push for these policy changes comes at a time when the fashion resale and repair markets are demonstrating substantial growth. The global second-hand market experienced a 13% expansion in 2025, capturing 10% of worldwide apparel spending, and is projected to reach $393 billion by 2030. While the repair market is more challenging to quantify, its value in Europe alone was estimated at 2.7 billion euros in 2024, with a forecast of 3.7 billion euros by 2030.

Despite these promising market trajectories, fashion sustainability and circular models face inherent challenges. High labor costs, which account for approximately 35% of the cost of a resold item and 50% of a repaired item, and the inconsistent supply of pre-owned goods are significant hurdles. The Ellen MacArthur Foundation report highlights that while increasing production of new items leads to economies of scale, processing a large volume of individual used items demands disproportionately more effort per unit.

This new report is an extension of the Fashion ReModel project, initiated in mid-2024 by the Ellen MacArthur Foundation. This project collaborates with thirteen brands to increase their revenue from circular business models over three years. Early feedback from participating brands consistently indicated that current economic systems disincentivize these circular economy practices.

The report’s modeling explored the impact of three specific policy interventions on the U.S., Canadian, and EU apparel industries. These interventions included reducing EU VAT on resale and repair to 6%, eliminating U.S. and Canadian sales tax on resale, and adjusting labor taxes to lower associated costs for resale and repair jobs. Additionally, a portion of hypothetical EPR fees was allocated to support circular economy infrastructure, mirroring successful subsidy systems like the French “repair bonus.”

Collectively, these proposed policy levers could significantly boost gross profit margins for resale and repair, potentially increasing them by up to 23% in European markets and 12% in the U.S. and Canada. While policy is a critical driver, the report also acknowledges that other factors such as consumer behavior, access to finance for smaller businesses, and product design standards are vital for the sustained growth of circular business models in the apparel industry. Until comprehensive policies are enacted, enhancing supply chain resilience, reducing emissions, and fostering customer engagement remain crucial for building internal support for circular strategies.

Consumers are increasingly vocal about their preferences, and their engagement with the circular economy is growing, creating an expectation for brands and businesses to offer such services. This collective action by industry leaders underscores the urgent need for supportive government policy to foster a more sustainable and resilient textile innovation landscape.

Bangladesh ships roughly $9–10 billion of garments to the United States each year, serving the world’s largest apparel import market. With its current share estimated at around the high single digits, industry analysts argue there is room for meaningful expansion over the medium term potentially adding several billion dollars in export earnings if access conditions improve and suppliers can move into higher-value categories. The agreement is being read by parts of the industry as a potential route to that outcome.

Three components stand out: a tariff-preference pathway linked to purchases of US cotton and man-made fibres, the prospect of US-backed development finance, and what appears to be deliberate flexibility around how origin requirements may be defined. Together, they could alter Bangladesh’s competitive position at a time when it faces both rising global competition and looming changes in its trade privileges elsewhere.

A tariff mechanism tied to cotton purchases

A central provision, contained in Article 5.3, points to a mechanism under which eligible Bangladeshi textile and apparel products could enter the US market at a zero reciprocal tariff rate. The qualifying export volumes would be linked to Bangladesh’s purchases of US-origin cotton and man-made fibres.

Much of the criticism has focused on the immediate commercial friction: US cotton is often more expensive than regional supply and typically involves longer shipping cycles. But supporters of the provision argue the strategic angle is broader. US cotton is widely viewed as higher quality, capable of producing finer yarns and more durable fabrics—characteristics that can support a shift away from low-margin basics toward higher-grade products with better pricing power.

Notably, the most consequential aspect may be what the agreement does not fully define. Key thresholds and implementation rules are described as “to be specified,” leaving significant space for negotiation. Observers suggest Bangladesh’s model could end up differing from more rigid frameworks that enforce strict, factory-level content requirements. Instead, the structure appears to link eligibility to national-level purchases of US fibre, which—if applied as an aggregate system—could be simpler to administer and more commercially workable than traditional approaches.

That distinction matters because Bangladesh’s growth challenge is not only volume; it is value. Access to higher-grade fibre can improve product mix, but only if mills can finance the switch and manage the longer supply cycle.

The real barrier is liquidity, not preference

For many mills, the practical obstacle is working capital. Regional cotton can often arrive within days, allowing short inventory turns and limited exposure to long letters of credit. US cotton, by contrast, can involve months-long lead times and extended financing, tying up bank limits for longer periods. For mid-sized spinners operating with tight liquidity, the financing burden can outweigh any quality advantage.

Even so, the mathematics of tariff relief can be compelling in a low-margin sector. If the US Bangladesh trade agreement ultimately delivers a predictable zero-tariff window at scale, even a modest tariff differential could become a decisive sourcing incentive for US buyers particularly if competitors continue to face standard duties.

A possible opening for US development finance

Another potentially significant element is contained in Article 5.1, which commits the US to work through the Export-Import Bank and the US International Development Finance Corporation (DFC) to consider investment financing for priority sectors in Bangladesh.

The DFC’s financing instruments—long-tenor loans, guarantees, equity participation and political risk insurance—are precisely the tools that have historically been limited in Bangladesh for large-scale projects involving Western capital. Industry voices argue that opening access to these mechanisms could shift what is feasible in energy, logistics and upstream textiles.

In textiles specifically, DFC- or EXIM-supported capital could help expand spinning and yarn capacity suited to processing imported US cotton at scale. One frequently discussed idea is the creation of a central bonded warehouse for US cotton and man-made fibres inside Bangladesh, designed to reduce the working-capital drag associated with long-cycle imports. If funded and structured effectively, such infrastructure could broaden participation beyond the largest groups and make US fibre sourcing commercially viable for a larger share of the spinning base.

Energy is widely seen as the most immediate pressure point. Gas and electricity constraints continue to limit industrial utilisation rates, and any financing that supports reliability upgrades or renewable capacity could quickly feed into manufacturing competitiveness.

A hedge ahead of LDC graduation

The timing is also strategic. Bangladesh is scheduled to graduate from Least Developed Country status in November 2026. While transitional measures preserve certain benefits in Europe for a limited period, the longer-term outlook implies higher tariffs in a market that currently absorbs a large share of Bangladesh’s apparel exports. That makes diversification more urgent.

Against that backdrop, the US agreement can be interpreted as a hedge—an attempt to build a durable access route into another major consumer market before preference erosion elsewhere becomes fully felt. Commitments reported around large purchases and deeper economic alignment form part of the broader trade-off: Bangladesh accepts policy and strategic obligations in exchange for a pathway to improved market access and investment support.

The agreement does not, by itself, guarantee transformation. Execution will depend on the final shape of tariff rules, the practicality of origin requirements, and whether development finance converts into bankable projects. Still, within the constraints of the deal, Bangladesh may have gained three high-value levers: a potential tariff advantage, access to higher-quality industrial inputs, and an entry point into a development finance ecosystem that has long supported competing economies in the region.

This pivotal partnership is designed to deliver a comprehensive, tailored solution specifically for apparel SMEs. The offering integrates Coats’ high-performance thread, advanced Coats Digital software, and specialized technical support with JACK’s state-of-the-art intelligent sewing equipment and extensive technical expertise. This combined approach is set to empower manufacturers by providing crucial digital solutions for optimizing production processes.

The integrated solution aims to equip SME manufacturers with the tools necessary to identify and rectify shop-floor inefficiencies in real-time. This capability will significantly improve overall manufacturing efficiency, enhance productivity, and allow for more effective inventory management. Such advancements are vital for apparel SMEs seeking to maintain competitiveness in a dynamic global supply chain.

Adrian Elliott, Apparel CEO and Group Commercial Officer at Coats, underscored the importance of this collaboration, stating, “SMEs play a vital role in the global supply chain, yet their unique needs are often underserved. We’re thrilled to partner with JACK, a leader in the SME segment, and combine our capabilities for an industry-leading solution that delivers meaningful value to this important customer group.”

Echoing this sentiment, Moly (Li) Wu, CEO of JACK Technology Co., Ltd., expressed enthusiasm for the alliance: “We’re excited to partner with Coats to support the evolving needs of apparel SMEs and to help improve efficiency, quality and competitiveness across the sector.”

The specialized offering, a direct result of this focus on apparel manufacturing innovation China, is scheduled for rollout to manufacturing apparel SMEs across China starting in June. JACK’s extensive distribution network will facilitate this deployment, ensuring wide accessibility for businesses seeking to boost their manufacturing efficiency and streamline their supply chain operations through advanced textile technology and digital solutions.

As part of the liquidation process, Eterna is offering all products in its German stores at a 50% discount. The closure affects 400 employees at the company’s headquarters in Passau. Additionally, the brand’s 34 retail outlets nationwide will also be shuttered by the end of the month.

Industry analyses suggest that a confluence of factors, including escalating raw material costs, a sustained decline in sales volume, and pervasive global economic uncertainties, rendered Eterna’s operations unsustainable. This decision by Eterna textile follows similar circumstances that led to the closure of the German textile brand Domino.

The textile and apparel sector in Europe has witnessed a notable increase in bankruptcy and insolvency filings over the past two years. Experts caution that without a considerable improvement in economic conditions, further major brands within the industry may face withdrawal from the market in the foreseeable future. The Eterna textile operations cease is a stark reminder of these ongoing pressures.

Matalan currently operates around 270 stores throughout the UK and internationally, a number that has continued to grow since the launch of a 25 million pounds retail expansion and store refurbishment programme last year.

In March, the company announced a further commitment from an investor consortium for 25 million pounds in additional investor funding, with which it intends to accelerate growth in key areas, such as product development and physical stores. The ongoing strategy is being overseen by Henrik Nordvall, who was appointed chief executive officer in October 2025 on the expectation of delivering on strategic shifts by leveraging his UK retail leadership experience.

The Matalan Ireland expansion remains at the site-scoping stage with Savills, with a focus on retail parks. Retail expansion and store refurbishment continue to frame the next phase, supported by investor funding.

Deal valuation and approval

Those sources reported that the agreement places Everlane’s value at about $100m. Those familiar with the talks said Everlane’s board approved the transaction over the weekend.

Shareholder impact and structure

The report noted that holders of Everlane’s common stock are not expected to receive any payout. It remains unclear whether the transaction is structured as a cash deal or whether preferred shareholders will receive compensation in the form of Shein shares.

Debt background and financing efforts

Earlier reports indicated that L Catterton, together with Everlane CEO Alfred Chang, was seeking an investor to help manage about $90m in Everlane debt. L Catterton was prepared to contribute additional funds if a partner could be found, while also remaining open to a full sale of the company. Amid these efforts, the company pursued a turnaround but continued to face growing Everlane debt, a focal point within the fashion industry as Shein acquires Everlane.

Legal notice regarding headquarters rent

Separately, The Gazetteer SF reported that Everlane’s long-term landlord initiated legal action alleging overdue rent tied to the company’s San Francisco headquarters. As of March 18, a notice was served seeking more than $51,000 in unpaid rent for offices on Folsom Street.

If completed, the Shein Everlane acquisition would bring together one of the world’s highest-volume online fashion platforms and a brand that has built its identity around ethical positioning an alignment that will be closely watched by investors, industry observers and consumers as the fast-fashion sector faces intensifying scrutiny over sourcing, labour and sustainability claims.