Blog: Leonie BarrieTaking control of costs

Leonie Barrie | 15 November 2010

Coinciding with an analysis on just-style that advised retailers and buyers they can continue to offer cheap clothing prices by introducing creative new sourcing practices, two of the world's leading clothing companies revealed they are doing just that.

Apparel maker Liz Claiborne is working to offset the impact of rising costs and believes changes being made on its sourcing front mean the company won't be faced with steep increases in its prices. An ongoing revaluation of its country of origin strategy, helped by a deal agreed early last year to offload its sourcing operations to Hong Kong-based giant Li & Fung, is helping to offset higher cotton and labour rates, as well as factory relocations and closings in southern and eastern china.

And discount fashion chain Primark has pledged to absorb soaring cotton costs to keep prices low and remain "the best value on the high street."

The focus at Marks and Spencer, meanwhile, has been on the long-awaited business strategy from new chief executive Marc Bolland, who last week revealed he intends to expand its clothing stores in the UK and overhaul its fashion brands to make it easier for customers to shop.

Bolland wants more focus on the M&S brand, will axe the Portfolio label, hire brand managers, and commit to the new marketing mantra 'A world of fashion, fashion of the world'. His plans were unveiled as the company booked a 13.7% rise in first-half pre-tax profit to GBP348.6m (US$562.1m).

Children's wear has proved to be a "star performer" at UK retailer J Sainsbury, which has booked a 38% jump in first-half profit. Britain's third-biggest supermarket group also said the addition of new stores and the expansion of its non-food ranges - which include clothing and footwear - would help it tackle a challenging economic environment.

But an ongoing two-horse race between Nike and Adidas looks set to continue well into the next decade, after Adidas unveiled a five-year strategy aimed at ousting Nike as the world's leading sporting goods company. The German sportswear firm told investors that it plans to grow sales by 50% to EUR17bn by 2015, with compound earnings growth of 15% a year over the same period. Adidas' strategic plan, called Route 2015, is designed "to lay the foundation for leadership in the sporting goods industry by outgrowing its major competitor in the next five years."

And just-style's news editor Joe Ayling has been filing stories from Sri Lanka, where he is taking part in the Sri Lanka Design Festival 2010. It's the second time the country has held the event, which puts a spotlight on the apparel industry as a leader in ethical design and fashion manufacturing practices. Activities include an ethical fashion forum, factory visits and catwalk shows.


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