Blog: Leonie BarrieRetail challenges and opportunities

Leonie Barrie | 4 October 2011

The world's leading retailers headed to the World Retail Congress in Berlin last week to discuss the challenges and opportunities facing the sector. A stagnant economy, low consumer confidence across the US and Europe, multi-channel strategies, emerging markets and rising costs were among the issues on the agenda - as reported by just-style.

One particular session resonated especially well with readers: the president ofsourcing giant Li & Fung US believes apparel prices will continue to rise over the next 10-20 years, even though cotton costs are falling. Rick Darling said that while unlikely to be at the same level as witnessed this year and last, the inflationary environment is here to stay.

Two events in the US and Bangladesh in early September may signal a complete reversal of how apparel sourcing works. On the one hand, a decision by the US House of Representatives to continue America's Generalised System ofPreferences (GSP) paves the way to easing the backlog of American trade agreements. On the other, India is to remove restrictions and import duty on clothes made in Bangladesh. Both moves suggest the underlying principles of apparel sourcing are undergoing a major change.

US retailer Macy's Inc, meanwhile, is stepping up the nationwide roll-out of RFID (radio frequency identification) technology after extensive testing proved its ability to manage item-level merchandise inventories in its Macy's and Bloomingdale's department stores. The accelerated move will make the firm one of the first retailers to implement RFID on a broad national scale - with the initial launch involving intimate apparel, men's slacks, denim and women's shoes.

But sportswear maker Reebok International Ltd has landed in hot water after making unsupported claims that its toning footwear would help wearers improve their fitness. The firm has agreed to pay $25m in customer refunds after the US Federal Trade Commission ruled it "deceptively advertised" its EasyTone and RunTone shoes as providing extra tone and strength to leg muscles.

And dyes and chemicals maker Huntsman Textile Effects is to cut up to 500 jobs and possibly close its facilities in Switzerland as part of a restructuring move to increase its global competitiveness. Up to 600 jobs in Basel, where it has production facilities and business support offices, could be affected, with 100 workers moving to other sites across the company on top of the job losses. But the firm says it also intends to add 100 new workers in key markets and at its Basel-based R&D department.


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