Rising apparel costs and the likelihood that 2011 will be “a perfect storm of extreme uncertainty in pricing” have prompted a US apparel supply chain network to base next year’s annual meeting on the challenges ahead.
“It is death by a thousand costs”, says Mike Todaro, managing director of AAPN (the American Apparel Producers’ Network). “So, as only AAPN can do, we’ll pull together leaders from up and down the chain to figure it out, as 120 people from 90 companies did for two days on sustainability earlier this year.”
Many factors are in play right now including declining global cotton production; the switch by countries from exporting cotton to suddenly stockpiling it; shortage of finer grades needed for finer counts; cotton planting giving way to grain and the rising cost of food and wages to buy it; rise in costs of raw materials, including nylon, polyester and spandex; bottlenecks and delays in spinning; increased risks of contracts offshore suddenly being vacated and more.
“This is the classic apparel industry sandwich with those of us in the apparel supply chain once again caught in the middle,” explains AAPN president Carlos Arias, CEO of fashion jean’s producer Denimatrix in Guatemala.
“On the supply side, costs rise, yet on the customer side demand for cheaper continues. Bottom line, garments are going to cost more and this cannot be countered by lowering the quality, speed, flexibility or innovation in this hemisphere.”
“Our customers are frustrated because they see the cost of apparel rising, yet their superiors expect them to keep their costs the same or to reduce them,” another factory owner adds.
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By GlobalData“It is a risk that given an inflationary environment in raw materials and labour, companies might choose to cut corners,” Carlos concludes. “How we all meet as a chain and analyse these issues from our individual company and industry vantages will set each of us who write this action plan apart.”
The AAPN meeting will take place on 1-3 May 2011 at the Loews Miami Beach Hotel.
