Blog: Industry issues kick-starting 2016

Leonie Barrie | 11 January 2016

What are likely to be the key apparel industry issues to watch in the upcoming year? To kick-start 2016, just-style has again asked leading executives for their thoughts on potential challenges and opportunities, shifts in the sourcing landscape, and strategies to help apparel firms and their suppliers stay ahead.

Expect a continuing focus on compliance and factory safety, the need for more agile supply chains to meet the ongoing demands of omnichannel, a focus on total or end-to-end costs – and much more besides.

One of the key points raised in our briefing is that retail is being rocked by the internet and the individual – as opposed to the mass-market – consumer, with new needs, ethics and expectations. Are you ready for the new Garment Industry 2.0?

Upward pressure on sourcing costs is also one of the new challenges set to face apparel retailers in 2016 as a "fair, living wage" and "decent work conditions" become an integral part of product sourcing and marketing.

We also ask whether efforts to lift productivity via ambitious training programmes will help garment manufacturers in Southeast Asia to offset minimum wage hikes in 2016.

Apparel imports into the US jumped year-on-year in November as retailers stocked up on merchandise ahead of the holiday season, with five of the top ten suppliers, including Vietnam and Bangladesh, booking double-digit gains. But compared with October's numbers,apparel importsinto the US during the monthdropped by a whopping19.8%, new figures show.

US apparel retailers also saw generally positive holiday sales results in December, despite grappling a rapidly changing omnichannel landscape, low and middle income consumers with limited discretionary spending, and a mild autumn that depressed clothing sales.

But US retail giant Macy's is to lay off thousands of workers in a round of cost reductions designed to save the department store operator around US$400m a year after a "disappointing" holiday performance.

For US fashion retailer American Apparel, the New Year marked an extension to its period for filing a reorganisation plan. While now on a cautious road to recovery, it needs to consider a number of questions if it is to be taken seriously again.

New research also suggests faltering consumer confidence and macro uncertainties are likely to affect UK retail sales growth this year as consumers look to other sectors to spend their cash. Retailers will need to stay on their toes and think smart, one think tank suggests, if they are to reap success in 2016.

Some of the challenges are exemplified by Marks & Spencer, where chief executive Marc Bolland is to step down after the UK retailer revealed its most "disappointing" clothing sales for the Christmas period yet.

Meanwhile in other news, Under Armour has launched its first smart footwear; and New Balance has unveiled a 'digital sport' division dedicated to developing wearable technologies.

The Alliance for Bangladesh Worker Safety is pushing for the suspension of more than 20 facilities; an agreement initiated by H&M and the IndustriAll union has helped reinstate sacked workers in Myanmar and Pakistan just months after coming into force; and Primark has formed a new partnership to improve working conditions for garment workers in its supplier countries.