Blog: Currency fluctuation to blame for falling prices
Leonie Barrie | 15 February 2016
With full-year figures now available on apparel imports into the US in 2015, the common thread seems to be that for most of the top-ten supply countries there was real growth in volumes – but prices fell.
Indeed, export growth accelerated in Bangladesh, while the decline in prices was faster too – although the trend during the year was the opposite in China and Vietnam.
So why do so many industry commentators keep saying prices are rising? It all depends on where buyers are based, with currency devaluation is largely to blame, explains Mike Flanagan.
We also take a closer look at US apparel import trends during December and the year as a whole. In 2015, US apparel imports climbed 4.1% to $85.2bn, with strong double-digit gains for Bangladesh and Vietnam and continuing growth for top supplier China.
A survey of US apparel executives suggests China will remain the first choice for sourcing over the next two years – but they expect the country's lead to narrow over the next few years.
Recently released details of the European Union's trade agreement with Vietnam also show how the deal could boost garment sourcing by EU brands in this key emerging south-east Asian player.
One of the world's largest intimate apparel exporters, Bogart Lingerie, is set to open its third plant in Myanmar in June – three years after becoming the first international lingerie manufacturer to set up in the country it describes as "the ultimate frontier".
And Cambodia's garment and footwear exports earned around US$6.3bn in 2015, recording a growth rate of nearly 6.7% when compared with the year before, according to just-released data.
Colombian textile and apparel firms face challenges as they strive to boost their fast-fashion and value-added capabilities, with a soaring dollar fuelling US demand – but competition also intensifying.
As one of the largest buyers of extra-long staple cotton grown in China’s Xinjiang region, Hong Kong-based Esquel Group has good reason to care about its supply. The vertically integrated shirt supplier tells just-style how it is making progress in a research programme to develop a sustainable supply of the raw material.
More sourcing directly from suppliers has helped improve the profitability of Marks & Spencer's general merchandise business and narrow the gap with rival Next Plc, a new report says. However, both companies are exposed to foreign exchange volatility – and may need to negotiate price reductions with suppliers.
Meanwhile, Sears Holdings is to try to improve the performance of its apparel division through changes to sourcing and pricing, as well as accelerating the closure of unprofitable stores and implementing additional cost savings, after forecasting a net loss in its fourth-quarter.
And with activewear now taking a more dominant space in UK consumers' wardrobes, clothing chains are increasingly competing with sports specialists in a bid to drive shopper purchases.
In other news, some 20 companies from Italy's Prato textile district have pledged to eliminate all hazardous chemicals from their supply chains by 2020; Bangladesh apparel manufacturer AKH Group has opened an eco-friendly garment factory; and Nike is accelerating its digital strategy.
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Over the past month, Donald Trump and his team failed to offer any clear plan to ensure Americans would "Buy American, Hire American" - while the British government's attempts to clarify the specifics...
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