Despite the challenging global economic climate, demand in the luxury sector continues to remain unscathed, with high-end apparel consumers not willing to compromise on quality.

Textile and fibre suppliers have taken note, and have been increasing the share that luxury clients have in their customer base.

According to Chris Stewart, fibre supply manager at New Zealand's Escorial Company Limited, which supplies the luxury fibre from rare Escorial sheep - fabric and fibre suppliers have increasingly moved towards serving luxury segments.

He said current economic constraints "are giving people pause for thought - the opportunity to challenge and be more discerning as to a product's true provenance and its integrity of performance beyond the 'first touch'...which can be so cleverly enhanced with modern additives at the time of manufacture, but prove disappointing within a short space of time after purchase."

Bespoke demand
Ann Thomson-Krol, a textiles consultant at the UK Fashion and Textile Association (UKFT) said that approximately 25-30% of UK textile manufacturing mills, for instance, are currently servicing the top end of the luxury fabric market such as Savile Row, French haute-couture houses and more, where demand is on a much more 'bespoke' basis.

She added that another 10-15% of UK textile manufacturers are gradually moving production towards the luxury end of the market, through the introduction of more luxury fibres into their blends.

Thomson-Krol said that wool, in its finest-micron forms, remains the most constantly sought after luxury fibre, followed by cashmere, silk, mohair, alpaca or blends of these fibres with fine count wool.

"International buyers are increasingly turning to the a known source of luxury textiles, and the UK industry is responding by moving production to even higher specification levels and producing a broader range of luxury textiles for the international marketplace," said Thomson-Krol.

Sourcing shift
Despite steady demand for luxury apparel and textiles, however, Stewart said the sourcing of luxury fibres has been affected by the global economic downturn: "There is a continuum of decline in real price returns to growers, and as a result is declining production - this has a huge ramification for our environment."

So, while the end retail price of luxury apparel does not appear to be budging, there has been a shift in terms of where in the world fibres and textiles are being sourced from.

"The commodity market only cares about the cheapest cost first - thus, wherever [the source is] it matters not - they have no ownership or responsibility," he said, adding that China currently has a burgeoning sheep population, while the "best" producers in the world - Australasia - have seen their production drop by two-thirds in the past decade.

With this trend, there also appear to be some notable difficulties with sourcing particular luxury fibres, said Stewart, mentioning cashmere as one example. "[With] cashmere - as China's population becomes more affluent and wants to emulate the West - they no longer want to be the cheap manufacturers, desecrating their own environment for the benefit of others," he said. "They are learning that selling raw product is madness when the added value can be done locally for their own benefit."

China's cashmere trade
David Mallin, co-director at UK-based Cashmere Fibres International Limited - a major supplier of cashmere, camel hair, angora, silk, yak, mohair and alpaca - agreed that in the last few years, Chinese manufacturers and suppliers have dominated the cashmere trade. He noted that cashmere has been especially strong in demand for the past three years.

According to Mallin, cashmere comes from four basic origins: China, Mongolia, Iran and Afghanistan. Equal sourcing supply is difficult however, he said, due to the political situation in Afghanistan and Iran, as well as the strength of demand from Chinese processors who buy from all origins.

"They have the advantage of cheap government loans - some, if not all, interest-free - which enables them to buy heavily, and influence the market price to move up or down as they wish." The wool market has seen a similar problem in the last two to three years, he added.

China continues to gain increasing prominence in terms of being a destination from which luxury brands can source their fabrics and fibres, said Mallin, adding that when China joined the World Trade Organization (WTO) a few years ago, it "seemed to be able to flout its rules."

Chinese manufacturers are able to claim an export rebate (at the moment, it stands between 11% and 15%) from the government if they export yarn or finished goods, explained Mallin.

"This enables Chinese manufacturers to sell at a price which is much lower than that of Western manufacturers," he said, adding that the fibre price paid by Western manufacturers is therefore relatively expensive.

On the other hand, said Mallin, "the only thing that has maintained Western luxury cashmere production and demand over the last few years has been the demand from China for luxury brands [non-Chinese]."

Overall, said Stewart, the process for sourcing any luxury fibre is quite different - and relatively more complicated - than sourcing regular, more mass-market fibres.

Cotton, for example, is sourced on a mammoth scale by large corporations - often from outside the country of origin, with a focus on cost-effectiveness. "As a result, products from cotton are mainly generic and compete on price first," he said.

Fine wool processing on the other hand, said Stewart, is complex, "and often has to span the world from the countries of production that no longer have any investment in value-adding infrastructures, to the few remaining countries that have the necessary mills."