Mexico wants global fast-fashion retailers to source locally

Mexico wants global fast-fashion retailers to source locally

Global fast-fashion brands such as H&M, Forever 21 and American Eagle Outfitters who are keen to grow their business in Mexico are being urged to start sourcing apparel there instead of in Asia.

"We have requested that 40% of the clothing they [foreign apparel brands] sell in Mexico is made here," said Rosario Mendoza, president of top trade lobby Canaive's Jalisco State branch. "We don't have all the textiles they need for their collections but we have quality manufacturers and laboir."

However, she added: "They have not asked us for samples."

Canaive (Cámara Nacional de la Industria del Vestido, Mexico's National Chamber of the Clothing Industry), made the plea during its 38th annual congress, held in Guadalajara last week.

The Economy Ministry has pledged to consider the request as it moves to launch a new textile and apparel industry aid package by November. Mendoza said Canaive will be happy if foreign labels end up making at least 20% of their garments locally.

"If we could get 20% that would really help reactivate the domestic market," she said, adding that other Mexican flagship industries including automotives have successfully requested such help and obtained it.

During the event, Canaive's president Sergio Lopez de la Cerda said a string of international apparel brands has recently stepped up expansion in Mexico, hurting the market because they refuse to sell clothes made in the country. While they don't yet have a significant presence, "we are worried about their very aggressive expansion plans," he said.

Lopez de la Cerda singled out H&M, Forever 21 and American Eagle Outfitters (AEO) as three top examples of foreign firms with aggressive growth plans in Mexico. However, sources said the sourcing demand is also aimed at other international groups such as Zara-owner Inditex or US apparel firm Gap, who are also taking the market by storm.

According to de la Cerda, the firms are forcing Mexican department stores and other retailers to compete under unfair conditions as they import most of their garments from cheaper suppliers in China and Asia. Amid a weakening economy, Mexico's retailers saw same-store sales drop 1.7% in September.

Forever 21 did not return messages. However, H&M spokeswoman Bea de la Borbolla said the retail giant, which has made Mexico the launch pad for its Latin American expansion, could eventually produce in Mexico where it now operates three stores.

"We are mainly focused on our expansion but this is something we are not ruling out in the future," she said. If the government orders H&M to produce in Mexico, "we will of course work to meet the regulation," de la Borbolla added.

Miguel Flores, vice president and country manager at AEO in Mexico, rejected claims the firm is "malinchista" [meaning it favours foreign products and culture), saying: "We have a long history of sourcing in Mexico over different categories so to say we are 'malinchistas' is incorrect."

Flores said AEO is "not closing the door" on the possibility of hiking production in Mexico as a result of a government order to do so.