Blog: Leonie BarrieNew light on sourcing trends

Leonie Barrie | 26 September 2011

Two recent reports have shed new light on sourcing trends in the apparel, textile and footwear industries, with one suggesting the sector may currently be at a turning point that requires dramatic changes to strategies and business models.

Faced with rising labour costs and an ageing workforce in China, apparel and footwear companies are reassessing their sourcing strategies across the Asia Pacific region, according to KPMG International. Countries like Bangladesh, India, Indonesia and Vietnam are among the main beneficiaries of this shift, especially as regional integration and preferential trade terms take hold.

Another forecast from UNIDO suggests growth in world factory production is expected to slow this year as private consumption and international trade continue to fall - with apparel output in developing economies among the few sectors to have contracted in the past six months.

Fast fashion retailer H&M, meanwhile, has become the latest company to win praise from environmental pressure group Greenpeace for pledging to eliminate the use of hazardous chemicals throughout its supply chain. The world's second biggest clothing retailer now joins Nike, Adidas and Puma as major international brands that have promised to commit to a toxic-free future in response to pressure from activists.

And Spanish retailer Inditex, owner of the Zara fashion stores, has outlined a number of steps intended to stamp out exploitation in its Brazilian supply chain following last month's discovery that some of its clothing production was subcontracted to illegal sweatshops. Working with unions, NGOs, academic institutions and business associations, Inditex says it will implement "pioneering procedures" designed to ensure collective responsibility for the various stakeholders involved in the textile supply chain.

Following the announcement that Fast Retailing, operator of the Uniqlo casual clothing chain, is aiming to become the biggest clothing retailer in the world within the next decade, just-style has spoken to analysts about its goals. While it will clearly face a series of obstacles on its way to that title, the feeling is that the firm's plans to ramp up production to 5bn items a year and reach record sales of JPY5 trillion (USD65bn) a year by 2020 show that it means business.

And the US is also "well on its way" to expanding textile and apparel exports by 15% a year by 2014, particularly to Western trading partners in the Americas, according to Kim Glas, deputy assistant secretary for textiles and apparel at the US Department of Commerce. She tells just-style that shipments could rise to nearly $30bn in the next three years.


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