Blog: Leonie BarrieUS retailers under pressure to grow sales as mall traffic slows

Leonie Barrie | 7 August 2017

Under Armour is to close stores and cut jobs – around 2% of the company's global workforce – as part of new plans to build a stronger and smarter company with faster go-to-market speed and greater digital capabilities. The changes come as the US-based athletic wear maker's rapid growth trajectory starts to ease up, especially in North America, previously the company's main engine of growth.

The CEO of US footwear and apparel giant VF Corp, however, has praised the company's early progress in its five-year plan to revamp its supply chain – a move aimed at accelerating speed-to-market and getting closer to its consumers.

And Japanese casual clothing retailer Uniqlo is attempting to raise the profile of its brand in the US by installing a vending machine dispensing clothing at Oakland Airport in California – and says it plans to roll out the concept at select airports and malls nationwide.

The moves are indicative of the fact that almost the entire US garment retail sector is under pressure to grow sales as mall traffic slows and more and more consumers take their spending online. Yet companies such as Amazon are moving ahead. Brick-and-mortar stores cannot compete with Amazon. Instead, in order to succeed they must out-Amazon, Amazon.

Bangladesh's apparel makers have heaved a sigh of relief after the government said it has received new explosives-detecting equipment for Dhaka airport, which the industry hopes will persuade the European Union (EU) to lift a ban on direct flight air cargo.

And Haiti's garment industry has struck back at demands by workers' unions for additional salary increases after the government approved a 16% rise in the minimum wage.

Brands and retailers including Lululemon and REI are also being urged to press one of their supplier factories in El Salvador to remedy violations of workers' associational rights after union members were reportedly laid off under false pretences.

The US textile industry has welcomed an executive order by President Donald Trump directing the federal government to investigate violations and abuses of US trade agreements.

But our monthly look at the latest trade announcements suggests changes proposed in July by the EU, Japan, the US and the UK are unlikely to impact apparel importers or exporters for years.

Increased transparency across its supply chain and a higher greenhouse gas reduction target are just two of the features that have appeared in PVH Corp's corporate responsibility report for 2017, as the apparel giant doubles down on efforts to become more sustainable.

Macroeconomic and social trends, as well as politics, loom ominously large these days – in many ways glowering at our industry at a time of vulnerability. But by embracing sustainability, the sector has taken steps to structure its future.

After months of forecasts suggesting 2017/18 is set to see a fall in cotton prices, a revised assessment now points to uncertainty in the year ahead.

And first findings from research into how the purchasing practices of fashion buyers can have a knock-on impact on their suppliers suggests that while most buyers are paying their bills on time, some suppliers are incurring big costs on their orders.

Retail giant Walmart has also set out a roadmap to help tackle barriers to US manufacturing growth that it hopes will allow it – and others – to source more products domestically.

In other news, July was another difficult month for the few US apparel retailers reporting their monthly comparable sales figures; more than 80 Bangladesh garment workers have taken part in a hunger strike claiming compensation after being fired in 2015; Taiwan’s Roo Hsing Co believes it will be the world's largest jeans maker following its merger with Chinese jeans manufacturer JD United; and an Israeli fashion designer has launched a commercially available 3D garment.

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