Blog: Leonie BarrieSourcing shifts boost local industries

Leonie Barrie | 4 May 2010

A new bill introduced by US lawmakers last week proposes to extend duty-free benefits for some knit and woven apparel products imported into the US from Haiti, in an effort to aid reconstruction in the earthquake-torn country.

The Haiti Economic Lift Program (HELP) Act would extend two soon-to-expire trade preference deals, and nearly triple the volume of Haitian knit and woven clothing products that would qualify for US duty-free treatment.

US retailers and importers see the proposed legislation as a "positive step" for Haiti's economic recovery, as well as helping to create a predictable sourcing environment for the US apparel and textile industry.

As well as helping out garment makers in Haiti, JC Penney sourcing boss Janet Fox puts the setting up of reconstruction opportunity zones (ROZs) in Pakistan as one of the best ways to boost that country's textile and apparel sector.

Speaking to just-style, she also lists Bangladesh and Indonesia among the manufacturing hot-spots to watch, and says importers have their eggs in enough baskets to withstand a revaluation of the Chinese currency and its resulting price hike.

A new study agrees that traders are increasingly reducing their dependence on China by shifting some sourcing to other countries. The move comes after the average price of US clothing imports dropped to its lowest level in over 20 years - and has been prompted by rising costs and labour shortages in China, as well as fears of currency revaluation and growing protectionist sentiment.

Buyers are most likely to shift their purchases to countries such as Vietnam and Bangladesh which can supply large volumes at rock bottom prices.

Despite getting off to "a solid start to 2010" with a 62% hike in first-quarter profit, outdoor footwear and clothing firm The Timberland Company has also expressed concerns about rising material prices and labour costs in China. These are likely to impact its margins in the second half of the year, it said last week.

The comments came as the company booked a quarterly profit of $25.7m, helped by lower markdowns, a mix of higher margin products and a 7% rise in sales.

And finally, German fashion group Hugo Boss has decided not to close its last remaining manufacturing plant in the US, after caving in to widespread opposition to the plans. The plant in Cleveland, Ohio will stay open after an agreement was reached with the Labor Union, although an unspecified number of workers will still lose their jobs. Back in February, Hugo Boss insisted there was no alternative to closing the facility, but earlier this month agreed to return the negotiating table with union representatives.


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