Blog: Wool prices pile on more pressure
Leonie Barrie | 2 August 2011
Much has been written about the volatility affecting cotton prices, but there's another raw material whose cost is also climbing ever higher: wool.
Falling supply and rising demand have left apparel firms scrabbling around for scarce wool stocks, with costs rising fast as a result. Add this to other factors currently impacting the supply chain, and wool pricing is piling yet more pressure on their already stressed operations.
Companies with a broad international footprint will be best able to offset tough conditions by taking advantage of booming demand for items like expensive wool suits in countries such as China and India. But for those operating purely in traditional markets, business will continue to be difficult.
The impact of rising prices across the supply chain, coupled with the ongoing debt crisis in Europe, are thought to be behind Li & Fung's decision to cut 40 jobs at its Hong Kong office. While the layoffs represent less than 1% of its Hong Kong workforce, they are thought to be a sign that firms are buying less, negotiating harder and probably taking the decision to source direct in the hope of a better deal.
In contrast, expansion is underway at Sri Lankan apparel giant Brandix, which is growing its presence in Bangladesh with a US$14m investment that offers new capacity for woven bottoms and new sourcing options to customers. The facility is at the Comilla Export Processing Zone, where Brandix eventually plans to acquire nine more plots.
But violent labour unrest has forced Bangladesh's Grameen Knitwear to close its factory in the Dhaka Export Processing Zone. Protesting workers vandalised Grameen's factory and demanded better wages and allowances - even though the plant was launched by Bangladesh's Nobel prize winning micro-finance innovator Muhammad Yunus, and had a reputation for better-than-average pay and conditions.
For TAL Apparel, one of the world's leading garment suppliers, the threat of inflation across the supply chain has been turned into an opportunity to do things differently. CEO Dr Harry Lee tells just-style how the Hong Kong based firm's long-time focus on efficiency, sustainable development, and added value is helping to combat rising costs and set it apart from the competition.
But Danish clothing firm IC Companys has admitted that garments sold under its Cottonfield, InWear and Part Two brands contained excessive "chemical residues" and that it failed to tell authorities and customers. Even though it recalled the items, it did not fully comply with statutory regulations on the breaches.
Over the past month, Donald Trump and his team failed to offer any clear plan to ensure Americans would "Buy American, Hire American" - while the British government's attempts to clarify the specifics...
The Bangladesh government was forced to respond late last week to pressure over its crackdown on labour activists after a number of global brands and retailers, including H&M and Inditex announced pla...
Fresh from their disappointment at seeing the Trans-Pacific Partnership (TPP) free trade deal abandoned last month with an executive order by President Donald Trump, the US apparel and footwear sector...
With the ultimate aim of ensuring all the cotton in its products is sourced sustainably, value clothing retailer Primark is adamant that having a business model focused on offering the lowest prices o...
- What TTIP might mean for US, EU textiles & apparel
- Unlocks for the future fashion sourcing landscape
- EU eyes mandatory due diligence for apparel supply
- Geo-political uncertainty and how to survive it
- Four steps to reduce product defects
- US Q4 in brief – Finish Line, Oxford Industries
- Li & Fung forms supply chain partnership with PVH
- Sears has "substantial doubt" of future
- Vietnam limits hazardous chemicals in apparel
- Walmart snaps up online fashion firm ModCloth
- Central and East Europe Report Package
- Central America strategic sourcing review - a focus on Guatemala, El Salvador and Honduras
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- When Things Go Wrong - A Practical Guide to Managing Common Problems in Apparel Sourcing
- Outdoor performance apparel 2016: A broader perspective