Styles & Trends

Group Members:
Amna Fayyaz
Sara Khan
Neha Javaid

Purpose
Expand Operation
Overseas
Develop Integrated
Manufacturing Unit
Strategic Choices
Analysed

Styles and Trends

Company
Backgroun
d
Entrepreneur
ship Project

Customers

Shahzad Elahi, Nadira

Sabahuddin, Muhammad Ali
Tariq
Developed Small Stitching Unit
Mushrooms
Integrated Knitwear Unit
Production for export market

UK, Middle East, USA, Europe

Pakistani knitwear
industry
Didnt compete in high value product categories

Catered low end European market

Low margin for Pakistani producers

Cost Structure of a typical knitted Garment

28%

34%

9%

7%

22%

Fixed Cost
Net Profit
Sewing
Dyes and Chemicals
Yarn

Markets
US Market

European
market

Middle eastern
market

Around
$15 billion
Dominated
by Levis,
Gap,
different
buying
houses

Blank
white T
shirt was a
large
product
category
20% low
Price

Offered
good profit
margins
No trade
barriers

Far Eastern
market

Apparel
center
Only one
Pakistani
producer

U.S Market

Desi
gner
Bou
tiqu
es

Top End
Dept
Stores
Department
Stores

Department Stores
National Mass Merchandizer
Chain
Big 10 & Other Discounters

Sources of USA Knitted Garment Import

31%

2% 11%

3%
8%

37%
2% 5% 2% 1%

Pakistan
China
Hong Kong
India
Indonesia
Korea
Malaysia
Taiwan
Thailand
Others

PROBLEMS
lead times

Employee
Retention

higher wages
Specially dyeing masters
Increased turnover costs, low productivity

Subsidiary
industry

Subsidiary
industry
weren't
progressing
simultaneously.
supply of raw materials either delayed or quality
was not up to the mark.

sourcing from Pakistan were too long

Apparel industry - fashion oriented
Delayed inventory- chances of merchandise being
damaged

Quality
standards

Quota
management

International companies would reject or purchase

it at cheaper prices
Hiring uneducated employees Volumes not
Quality
High Wastages than international average for
similar units
Ammar Textiles hired 25 MBAs

Quotas were unavailable when the

shipment was ready to be sent.
Increased sunk costs plus damaged the
long term relationship with the buyers

Exhibit 1

ROE
Inventory Turnover
Return on TA
Net Profit Margin
Total Debt to Total Assets
Current Ratio
Quick Ratio

1989-90 91-92
0.29% to 3.55%
2.34 - 15.79%
2.68% - 6.47%
0.63% - 6%
37.08% - 4.81%
0.29% - 3.55%
1.26 - 48.36

Exhibit 3

Exhibit 4

Labor Cost Comparison

US $ per hour
Pakistan lowest $1
Followed by India $2
Highest Sweden $20

Cotton Costs
US $ per Kg
Pakistan $3
Zimb $2.5
Switzerland $4

Sources of US Knitted Garment imports 1992

Total market US $9,535 million
Pakistan accounts for US$ 182
2% by value
Pak contributes to 21% of imports of US

Exhibit 9

Scenarios
Scenario 1
Senerio2

Scenario 3

100% US sales
50% US sales
50% Europe & ME
100% sales other than US market
60% sales to Europe
40% sales to Middle East