ANALYSIS: Proximity rates highly in sourcing choice
The near-shoring of apparel and footwear goods is increasingly important to fashion businesses, according to a survey by just-style.
While cost and quality are important factors when choosing sourcing destinations, 66% of respondents said there was a need for factories in the near vicinity.
The just-style Apparel Industry in 2010 report also established Bangladesh as the number one upcoming sourcing hot-spot for clothing and footwear goods.
Bangladesh and Vietnam were considered the most popular sourcing destinations, according to 37.6% and 31.1% of respondents respectively.
Recent wage protests in Bangladesh have threatened to derail the country's momentum, but the unrest seems to have since settled down.
However, factory strikes were voted as the greatest concern for manufacturers by just 1.2% of just-style's audience.
More significant concerns for manufacturers were raw material prices and lack of demand, according to 32.9% and 34.7% of respondents respectively.
Currency fluctuations were seen as the biggest challenge to producers by 12.9% of people, with other challenges taking up 15.7% of the vote.
The emerging sourcing market of Indonesia also rated highly in the survey, with respondents also identifying the high potential growth of Egypt, Cambodia, Tunisia, Korea, El Salvador, Mauritius and Malaysia.
A total of 837 respondents were asked questions on manufacturing, retailing, global demand and sourcing during the survey, conducted in January 2010.
The biggest challenge for fashion retailers this year is expected to be controlling inventories, the survey found. Currency fluctuation and paying rent were also identified as significant challenges for store operators.
Meanwhile, rental agreements will require continued flexibilities while chains return to a sound financial footing. Last year retailers including Blacks Leisure Group, The Flannels Group and JJB Sports passed through Company Voluntary Arrangements (CVAs) with creditors, so they could pay off landlords of closed stores with one-off payments instead of ongoing rent.
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