August 2010 management briefing: Distance to market
In troubled economic times it is safer to order small, often and close to home. Conversely, will the return of relative stability see textile and clothing firms ramp up their sourcing from manufacturers with low labour costs in Asia, no matter the distance to market? just-style's latest management briefing takes a look.
Recessions always shake-up markets, exposing weaknesses and vulnerabilities: the slack go to the wall, and the robust survive. It has always been that way. And so it has been with this most recent deep and traumatic recession. Simply, in troubled times, it is safer to order small, often and close to home.
Looking at performance on a global market positioning basis, rather than geography, the last two years have been challenging for all global textile and clothing producers, as demand waned and customers put off purchasing decisions.
The complex relationship between distance to market issues and other sales boosting factors is also illustrated by the experience of Turkey in the recession.
If any country was likely to be vulnerable to a collapse in sales from a global recession it was export-oriented China. The fact remains, however, that China's textile and clothing industry is still in reasonable shape.
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