When it comes to other issues the apparel industry should be keeping a close eye on in the year ahead, compliance and factory safety, macroeconomic headwinds, trade legislation, and consumer confidence are all cited as likely to have a bearing on whether or not 2015 turns out to be better than 2014.

Tom Nelson, VP global product procurement, VF Corporation:
Compliance and factory safety have taken more than 90% of my time over the past 18 months. It is the one thing that needs a lot of attention going forward. The factories that are able to see what needs to be done will survive, and the ones that don't will be eliminated.

Marc Compagnon, executive director of Li & Fung Limited and president of LF Sourcing:
We're cautiously optimistic about 2015 but the reality is that it could be just as challenging as 2014 given the number of macroeconomic factors affecting the apparel and general merchandising industry.

While the US economy appears to be going through a turnaround, which is good news, a lot of consumer spend is still on big ticket items such as appliances and electronic gadgets, but we do see consumers starting to spend more on apparel, accessories and general merchandise.

You have other major growth markets like China heading into a slowdown, continued challenges in Russia, Brazil's stifled growth, and Western Europe doesn't appear to be picking up - so these kinds of macroeconomic headwinds are going to continue and I think we're still waiting to see how this will play out and what the new normal is for our industry.

Having said all of that, as I shared earlier there are a number of great opportunities on the horizon for retailers and brands that we are excited about, including e-commerce, trends in retail technology, tapping into the millennial demographic, and speed to market as a competitive advantage, just to name a few. Despite what looks to be a challenging economic outlook ahead, we are focused on helping our customers find the right opportunities with the right products to grow their business.

Roger Lee, CEO at TAL Apparel Limited:
I expect 2015 to be roughly the same as 2014. Overall, the apparel retail sector continues to move along with some winners and some losers but no major shift in consumption. With the drop in oil prices, the apparel industry needs to see gas prices at the pumps fall to between $2-$2.50 before consumers will start feeling a difference. When the gas prices actually drop will be the chance for the apparel sector to capture a bigger consumer spend in apparel.

Paul Forman, group chief executive, Coats Plc:
The dramatic social and consumer changes in Asia are likely to lead to the rise of new global brands originating in Asia as demand for apparel and footwear increases, which will be an interesting development to watch and be part of.

The aim of agreeing the Trans-Pacific Partnership (TPP) during 2015 is an area to monitor as the combined size of the markets in the free trade area it proposes is unprecedented. It has the potential to shift the landscape of trading in the Pacific region and beyond. Vietnam's unique position in relation to that and other free trade agreements means 2015 could be a pivotal point for the South East Asia apparel industry.

As an industry we are in an enviable position because, most years, people across the world buy more clothes and shoes. However that does not make the sector any less competitive and certainly does not allow anybody to rest easy in their beds at night. To use weather forecast terminology, 2015 looks like more of the same as 2014. There will inevitably still be some clouds but with sunny spells providing brightness in some areas.

Edwin Keh, CEO of the Hong Kong Research Institute of Textiles and Apparel (HKRITA) and lecturer at the Wharton School at the University of Pennsylvania:
2015 will be different from 2014.

  • Apparel sourcing since 2005 has seen a deconstruction of 30-plus years under quota;
  • The apparel global marketplace post the 2008 financial crisis has seen a shift from the West to the East.
  • Apparel production post Rana Plaza is all about transparency and responsibility and no longer a ruthless chase of the lowest CMT;
  • Online consumption of apparel is growing faster than solutions.

Given all of the above, what concerns me is a lot of corporate behaviour that has not changed when the world around us has. The big winners will probably be the manufacturers, retailers, and operators that have achieved some level of scale, a degree of efficiency, and have a healthy pipeline of innovations. The undifferentiated will probably not fare well.

Rick Helfenbein, president of Luen Thai (USA), and chairman of the American Apparel & Footwear Association (AAFA):
Expect 2015 to be an improved year for the apparel industry due to a myriad of developments:

  • In the US we will have a new 'trade friendly' Congress and trade legislation will again move forward. This eventually will lead to passage of Trade Promotion Authority (TPA) which is needed for passage of TPP (Trans Pacific Partnership);
  • The US West Coast ports slowdown will (somehow) resolve itself;
  • Wage issues in developing countries will stabilise;
  • American consumers, who had deferred purchases of big-ticket items in the wake of 2008/2009, reached out in 2014 and finally replaced the family car along with other 'high value items'. Now that the big expense is behind them and gasoline prices have dropped to a low, US unemployment has declined, consumer confidence is up, and people will begin to open their wallets for spending on discretionary items like apparel and footwear.

Tim Armstrong, apparel origin and value chain consultant:

  • Cotton: Cotton prices have effectively fallen in half in the last 20 years - at around 80 cents per lb for lint which is the same in nominal terms as 20 years ago (despite the 2011 hikes). Now with a believed China stockpile of 60% of world demand, the prospects are not good for marginal producers. Since this is the world's most polluting crop, possibly accounting for 30% of world pesticide use, it's quite likely that a lot of farmers around the world will move out of cotton for good. Eventually this could lead to a big price increase within 2-3 years as output drops dramatically depending on what happens to the Chinese stockpile.
  • The Trans-Pacific Partnership (TPP): The crucial issue with TPP lies with the origin rules (although it is to be hoped that apparel has a special opt-out). One also hopes there will be at least a 50% local value added content, which would amount to a yarn forward definition for most garments. This should make Vietnam spinners sit up with glee. But giving Vietnam duty-free access means the prospects for marginal producers are not good.
  • Trade preference and the WTO: Clearly EBA (Everything But Arms), AGOA (the African Growth and Opportunity Act), bilateral free trade agreements. Haiti's HELP/HOPE are against the spirit of the "level playing field" and if they work will breed resentment. One can expect some legal cases on this.

Julia Hughes, president, United States Fashion Industry Association (USFIA):
Last year, I was most concerned about the industry's need to protect our reputation, as a whole and, of course, as individual companies. This still concerns me. Every time there is a disaster in a far-away land, we hear rhetoric about how fashion brands and retailers only care about finding the lowest-price products, no matter the human cost. We know these attacks are simply not accurate - and if anything, the opposite is true. Companies spend substantial amounts of time and money to develop and implement programs to improve working conditions and the rights of workers in factories around the world. Last year, I said it was hard to change the world - and it still is! Change takes time. We, and especially our members, are working hard to spread the highest-level working conditions possible to all apparel factories in all countries, but this can't happen in just one year. We will get there eventually - but until then, we have the constant challenge, and fear, that another disaster may strike.

And while I'm generally optimistic about the outlook for trade in the Congress, the outlook for the African Growth & Opportunity Act (AGOA) is another major concern. We need Congress to extend AGOA early. In fact, it should have already been extended. Most brands and retailers are making their sourcing plans at least nine months to two years in advance, which is well past the AGOA expiration date, and I've heard from a few small and medium-sized companies that they have already started to pull out of AGOA factories. This is incredibly unfortunate, because many of those factories were just getting back on their feet after we went through the last-minute AGOA renewal in 2012. The same is true of programmes like the Nicaragua TPL, which expired on December 31st, and the Generalized System of Preferences (GSP), which expired in July 2013. These were some of the few trade preference programmes utilised by a significant number of companies, but unfortunately, they, too, are stuck in the political gridlock.

Mike Flanagan, CEO of apparel industry consultancy Clothesource:
I suffer from chronic insomnia, and the recurrent feature of 2015 is that none of the things that kept me awake during 2014 actually materialised:

  • During 2014:
    - Predicted fights between China and its neighbours, or seizing up of trade lanes between Asia and the West didn't happen;
    - Vietnamese anti-Chinese riots simply died down;
    - After proper independent inspection of about 2,500 Bangladesh factories, just 2% were so unsafe they had to be closed down;
    - In Cambodia, days lost through strikes in 2014 are way down on 2012 and 2013. Workers rejected union calls for a mid-year strike, and accepted a 'mere' 28% rise in wages at year-end. The ILO now estimates average wages in 2014 at $217 a month - a far cry from 2012's minimum of $61.
    - Though elections often mean violence and supply disruption, 'Big Politics' scarcely touched the global garment industry. In Thailand and Egypt, effective coups were irrelevant to garment making. In India, Brazil, Indonesia and South Africa, elections failed to set off violence;
    - China's financial crisis hasn't created widespread chaos, minimum wages have risen at the lowest rate since 2008, and 2014 saw the largest number of provinces (including Guangzhou) since 2009 not increase minimum wages.
  • But none of the underlying reasons for these neuroses have gone away.
    - All of the worries expressed above could resurface. I personally think they won't, and that developing countries are more concerned about keeping the development they've received from the garment industry. But I won't be surprised to find at least one of Bangladesh, Cambodia, China, Haiti, Indonesia or Central America doing something to destroy their competitiveness - or undermine the trade routes leading to them.
    - My new worry for 2015 is 'extra-territoriality'. Growing pressure from activists and Western governments might trigger a law somewhere in which directors get fined (or jailed) for non-compliant supply chains. Which means entire countries will be blue-circled by buyers, as Disney has done with Pakistan. While it's unlikely in 2015, activists will still push - and there's a real possibility someone in Europe or North America will draft a law in 2015 which ultimately leads to an individual director being taken to court for alleged malfeasance.
    - Otherwise, 2015 isn't a year for 'sleepless night' scenarios; it's a year for cautious restructuring plans.

Rick Horwitch, vice president, Strategy and Solutions Business Development for Bureau Veritas, and chairman of the Americas Apparel Producers Network (AAPN):
The two things that keep me awake at night are both are related to the next generation of industry leaders.

  • Clear and effective communications skills. In a world that is wired and "connected" 24/7, it's the lack of interpersonal communications that generally is at the root cause of most problems. We all live on email (and in many cases texting). When business runs 24/7 and is global this is usually the quickest and easiest form of communication. However, verbal communication is invaluable. My concern is that current, and future, generations of students are not learning the importance, or value, of verbal communication.
  • Technical training in areas like manufacturing, product engineering and quality management is rapidly becoming a lost art. Students are far more interested in design, merchandising, marketing and social media (all of which are very important) than the technical aspects of the business.

I expect several things to be better in 2015:

  • I believe the US Congress will get some things accomplished in 2015. Considering 2014 was a complete wash-out, the bar has been set very low. I believe the Republican controlled Congress will want to demonstrate some ability to lead, and govern, as they head into the 2016 election year. This should provide some glimmer of hope in the areas of trade and regulatory activism.
  • In India, the euphoria, and honeymoon period, of the Modi election this past May will evolve into tangible economic and bureaucratic reforms making India a "business friendly" country.
  • The US and Central America will continue to see resurgence, and reshoring, of production led by companies that are willing to be innovative in technologies, systems, materials and new ways of looking at old problems.

Josh Green, co-founder and CEO of Panjiva, which provides data to the global trade community:
2014 was a solid year, but I'm betting that 2015 will be even better. I keep a close eye on US imports as a barometer of how optimistic retailers are feeling, and US imports were up 5% in 2014 versus 2013. This is good news, but the better news is that strong macroeconomic indicators at the end of 2014 made executives who bet on growth look good. This gives us a lot of momentum going into 2015.

Of course, there are always geopolitical wild cards. Russia could imitate the Soviet Union, or the Middle East could imitate Homeland Season 4. Economically, I'm keeping an eye on China. So far, authorities have done a masterful job of managing the transition to an era of slower growth, but that's a hard transition to get right.

Matthijs Crietee, secretary general at the International Apparel Federation (IAF):
I expect 2015 will be a better year than 2014. The industry has passed a tipping point and retailing is evolving towards a more normal model based on true demand. A more effective industry and the resulting reduction of 'waste' will also free resources for necessary investments in manufacturing chains, benefiting factory owners, workers and the environment. As a result, the image of the industry will improve. Of course, with all its sheer complexity, this change will be bumpy. But in 2015 the industry can show its positive side to consumers, to policy makers and to financiers - namely that of one of the largest employers, a great opportunity for creative talent to find a global stage and its retail end forming the heart of vibrant cities.

What keeps me awake at night is the thought that it could tip the other way, by tragic events but also by failure to convey to all stakeholders the positive changes that are taking place.

So we should keep a close eye on communicating what is going right. And, I strongly believe in raising the knowledge level in the industry as the best way to ensure this positive change. Watch out for training courses where buyers and suppliers literally learn together.

Dr Achim Berg, a partner at McKinsey & Company and co-leader of McKinsey's Apparel, Fashion & Luxury Group:
One of the things I think about constantly is how tiring brands and retail formats can re-invent themselves in new customer environments. There is such a huge offering out there and the customer has so many options on how to spend their money. Related to that, another thing I wonder about is how successful incumbents will be able to ensure staying relevant in an increasingly multichannel world. This is going to require companies to make some very important decisions in the next several years.

Judy Blackburn, director at Kurt Salmon:
Apparel retailers must understand their customer - not only what they want to wear from a design point of view, but how they will buy it and want to collect it, or when and where it should be delivered. If the customer journey isn't clear, then the supply chain, organisation and systems cannot be adjusted to meet the changing requirements.

The customer is also becoming more aware of how products are sourced and the potential impacts of unethical sourcing decisions (Rana Plaza): the apparel retailer needs to build a sustainable sourcing model.

Magdalena Kondej, head of apparel and footwear at Euromonitor International:
In terms of value sales, we are expecting 2015 to be marginally better compared to 2014. The US will continue to be the strongest performer among major advanced economies and drive overall global growth. China's consumer spending growth is set to slow in 2015, despite the government's efforts to promote a consumer-led economy, although it will still remain the single largest contributor to 2015 growth. Consumers in China are now reaching new levels of sophistication and maturity rather than simply choosing to "keep up with the Wangs," which creates further opportunities for niche and specialised fashion brands. India will become one of the fastest growth markets in percentage terms spurred on by rising prosperity in the major cities and a power shift from the black market to the formal market. Looking at other industry trends, there will be strong new investment in high-end "smart fashion" as innovative wearable technology is a good way to get people talking about a brand.