Blog: Leonie BarrieEconomies of scale

Leonie Barrie | 20 August 2003

For several years now, international clothing industry consultant and contributor David Birnbaum has been prophesying that post-2005 the garment industry will be dominated by a small number of huge trans-national suppliers who will control 70 per cent of world apparel exports. Many of these, he believes, will be based in the Far East, because US and European governments, banks and other institutions do not consider the garment industry to be important or even viable.

Speaking at the World Apparel Markets conference in Brussels in 2001 he explained: “In the (near) future, you have 3 choices – get bought by Li & Fung, get as big as Li & Fung or get subsidised by your government so you don’t have to worry about Li & Fung.” His predictions now seem to be taking shape. This week sourcing giant Li & Fung signed a deal to sell its own Levi's-branded tops directly to US retailers, taking it into value added services such as design, marketing and distribution for the jeans giant.

Levi’s might be the first to outsource parts of its supply chain to specialists with faster and more flexible production…but it certainly won’t be the last. Remember you read it here first!

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