Blog: Hannah AbdullaBrexit deal rejection worries apparel industry

Hannah Abdulla | 21 January 2019

Last week's rejection of Theresa May's proposed UK-EU Brexit deal by MPs saw chatter spike among industry execs who say a No-Deal Brexit could be problematic for the sector given its heavy reliance on overseas talent and imported materials.

But Brexit is just one of the issues keeping industry execs awake at night. In one of just-style's forward-looking features Outlook 2019 – What else can the apparel industry expect?, respondents from  Li & Fung, the American Apparel & Footwear Association and Coats among others, said trade wars – in particular the one between two global powerhouses the US and China – the future of cotton in an era where demand for alternative fibres is growing, and rapidly changing consumption habits, are just a couple of the things players in the industry need to be thinking about navigating over the next year.

On trade relationships, the US is revisiting several of them under Trump's leadership. The Office of the US Trade Representative (USTR) has released negotiating objectives in 24 areas for a potential trade deal with the European Union, including plans to secure duty-free access for US textile and apparel products and improve competitive opportunities for the sector's exports.

The US is also mulling cutting off Cambodia's access to its General System of Preferences after the EU began the formal process of withdrawing the country's access to the duty-free Everything But Arms (EBA) initiative over the Southeast Asian nation's human rights record. Last week, Prime Minister Hun Sen responded to threats, announcing a 'National Independence Policy' aimed at making economic growth less reliant on the European and US markets by facilitating trade through the country's land border crossings.

Such volatility in global environments means brands and retailers need to be one step ahead of the newest sourcing opportunities. Ethiopia is one market proving popular among buyers. Under plans from the country's central government to boost economic growth and investment, a number of apparel textile parks are quickly taking shape. Apparel label business ITL Intelligent Label Solutions has become the latest firm to set up premises in Ethiopia's Hawassa Industrial Park.

Similarly, Vietnam's apparel manufacturing backdrop is proving lucrative to overseas buyers. The EU is one overseas player hoping to capitalise on the opportunity through the EU-Vietnam Free Trade Agreement which is expected to boost economic growth and promote job creation both in the EU and Vietnam.

Beyond looking at new sourcing markets, the Outlook 2019 – Top apparel supply chain tactics in the year ahead, takes a look at what apparel firms should be doing if they want to remain competitive in future. When asked, industry experts were almost unanimous in their belief that speed, innovation and adopting new technologies fit for the digital age are the key ingredients to help transform operations and the overall supply chain.

Technological innovations continue to be a factor setting brands apart from their competition. The North Face has unveiled FutureLight – what it claims is the world's most advanced breathable and waterproof outwear technology that has the potential to be applied to any garments. It also makes sustainability a central theme, using recycled fabrics and production that cuts chemical consumption – as well as being produced in a cleaner, solar-powered factory.

Sustainability continues to be a buzzword heard by brands and retailers across the industry from week-to-week. According to a new survey from software provider CGS, more than two-thirds of respondents say they consider sustainability when making a purchase and are willing to pay extra for more eco-friendly products.

Sustainability includes brands ensuring workers across their supply chain are treated correctly and compensated fairly. Following eight days of widespread unrest in Bangladesh over wages, the Bangladesh government announced it is to revisit the minimum wages for some ready-made garment workers.

But sustainability is a term loosely used, according to some consumers anyway, who say they struggle to trust every sustainability claim made. A new survey has revealed that most shoppers hold apparel brands accountable for what happens in their supply chains – but do not trust them to self-police or communicate accurately what is really going on. 

In order to "close the loop" when it comes to sustainability, it really is a team effort. As well as government policy, and brands doing their bit on ensuring their production chains are up to scratch, consumers too need to be educated on their part in the whole process. This includes advocating buying only what is really needed and paying a higher price for a better quality longer lasting product to tackle the buy-and-bin attitude allegedly promoted by the fast-fashion industry.

The apparel industry as a whole really needs to get-it-together when it comes to sustainability according to just-style's Outlook 2019 – Apparel industry challenges and opportunities. With 2020 looming, all those promises the industry has made about improving sustainability practices, transparency, and working conditions need to move from vague commitments to action and change. There are lots of companies who are woefully unprepared and, as result, risk losing credibility and consumer confidence.

In other news, it was a mixed bag of results for US apparel retailers; footwear retailer Clarks announced it is to close a new UK production facility after failing to meet production and cost targets; and Vietnamese apparel manufacturer Vinatex is eyeing a 6-8% rise in exports over 2019.

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