Blog: Leonie BarrieProduction moving closer to home?

Leonie Barrie | 19 March 2012

Rising costs and pressure on margins are likely to force increasing numbers of retailers to rethink their pricing and sourcing strategies this year - with several hinting that British manufacturing could be poised for a comeback.

A new report says a combination of inflation, a fall in sales volume and discounting to clear stocks will continue to pressure UK women's wear retailers in the year ahead, and that many will rethink cost saving strategies as a result.

Fast fashion players, in particular, are set to explore UK manufacturing opportunities to offset rising international sourcing costs, including higher labour rates in China and India, as well as high freight charges and import duties.

In this same vein, supermarket retailer Asda has signed deals with seven factories in the UK as part of moves to bring production of its George brand closer to home and meet the needs of shoppers seeking up-to-the-minute fashions.

And department store operator John Lewis expects to see a "resurgence" in UK sourcing as retailers look to differentiate themselves and offer unique products as more and more customers shop online.

The UK retail sector is "under siege," delegates were told at an industry seminar last week on fashion's supply chain challenges. As well as pressure from continuing weak consumer confidence and rising costs, many of the factors at play are largely out of retailers' control - so having a strong supply chain is key.

Another challenge facing several clothing retailers in Europe, Australia and Canada is the accusation that they are selling knitwear made in "prison-like conditions" by workers in Bangladesh. The allegations of worker violations are levelled at the Chinese-owned Rosita Knitwears and Megha Textile (Megatex) factories in North Bengal.

Meanwhile, brands and retailers including Puma, H&M, Gap Inc, Columbia Sportswear and American Eagle Outfitters have joined a coalition of industry groups calling for an end to the violent unrest that continues to plague Cambodia's garment sector. A letter to the government urges a "full and transparent investigation" into recent events that have included the shooting of three workers at Puma supplier Kaoway Sports Ltd.

And much-publicised efforts by retail giant Walmart to boost its sustainability - including plans announced in 2009 to set up a global sustainability database within five years - have been criticised for "falling short" of original pledges. A new report says the retailer is failing to deliver on the initiatives.


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