Blog: Leonie BarrieInnovating to drive long-term growth

Leonie Barrie | 2 September 2013

Building on plans set out three years ago to generate growth by giving its apparel a competitive edge, VF Corporation is to create three global innovation centres to speed the development of "game-changing" products in technical apparel, footwear and jeans.

With a focus on processes, technology and materials, the centres will be staffed by teams of scientists, engineers and technical designers. The expected outcome: breakthrough products that drive brand equity and long-term growth.

But troubled Australian surfwear brand Billabong is attempting to move beyond recent turbulence and onto its turnaround plans - despite cutting the value of the Billabong brand to zero. The company saw its full-year loss more than triple to AUD859.8m, as sales fell 13.5%.

On the sourcing front, the Walt Disney Company (WDC) is to stop buying Disney-branded products from Bangladesh, Belarus, Ecuador, Pakistan and Venezuela over concerns the countries no longer meet its guidelines on working conditions.

In the case of Pakistan, sourcing will be phased out by March 2014. The company uses the World Bank's worldwide governance index (WGI) as the main tool to assess relative country risk, with Pakistan's score coming in below the threshold.

But while Egypt's economy is reeling from ongoing political instability following the overthrow of the Muslim Brotherhood-led government in July, clothing manufacturers are still operating and completing orders. However, it is not quite business-as-usual, with companies having to operate around a curfew.

Turning the issue of compliance on its head, should responsibility for improving working conditions and raising the garment export industry to a higher level lie with the better factories, both in Bangladesh and elsewhere?

And US negotiators in the Trans-Pacific Partnership (TPP) trade talks say they continue to back the yarn-forward rule of origin in textiles and apparel, despite noting this is one of the "most sensitive" issues in the discussions. As US Trade Representative Michael Froman said after the most recent round, sensitive issues tend to be dealt with closer to the end of negotiations.

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