Blog: Prime Source Forum: Day I
Joe Ayling | 1 April 2009
As the opening day of Prime Source Forum draws to a close, delegates here in Hong Kong are left with mixed messages.
The day started with a sobering keynote address by Standard Chartered Bank Asia economist Nicholas Kwan. His speech, entitled Surviving the Perfect Storm, forecast a "U" shaped global recession rather than an "arrow", but with recovery only expected by 2011.
He said the economic storm is a perfect one because it's more synchronised, securitised and structural than previous downturns.
Kwan was followed by a panel discussion involving Janet Fox, JC Penney's VP and director of sourcing, to discuss the political and financial aspects of sourcing.
Although Fox hoped the earlier projected recovery might be fast tracked a few months, she also detailed the sliding retail landscape in the US, with 200,000 total retail doors expected to shutter this year alone.
Retail is the second biggest employer behind the US government itself, and Fox believes federal bailouts afforded to the auto industry have been somewhat overlooked for apparel businesses.
The panel also called for tarriff cuts for sourcing hubs - citing thousands of factory closures in China alone due to the US retail fallout.
Also on the panel was David Spooner, a former assistant US secretary of commerce for import administration under the Bush administration, who gave a realistic account of how President Barrack Obama's new team might influence global trade.
Spooner is encouraged by Obama's early trade appointments, but cautioned that the new president's high regard for the environment could mean that cap and trade legislation - to control each US factory's CO2 output - could feasibly diffuse through to overseas manufacturers too.
Industry woes were then partly erased by an invigorating panel discussion about the industry shift in sourcing forced by factory closures. Sourcing execs from Dick's Sporting Goods, VF Asia and Guess were enthused by the challenges of the subject, and not just because it followed the coffee break.
All agreed that working closer and more efficiently with manufacturers to help them stay compliant is in the interests of the entire industry and would create a more disciplined and responsive supply chain.
The final session had a final twist though, with Thorsten Allenstein, MD of Triumph International (India) Pvt Ltd, saying although the emerging markets of China and India are "big winners" for retailers, they alone cannot fill the gap left by these uncertain times.
By Joe Ayling, news editor.
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