Blog: Leonie BarrieWhat's in store following Trump's election?

Leonie Barrie | 15 November 2016

One event dominated the international airwaves last week, and on just-style too we took a closer look at the surprise election of Donald Trump as the 45th president of the United States.

The decision is the second major upset to the Western political establishment in five months, since the summer's Brexit referendum vote in the UK. What, we asked, might it mean for the apparel industry?

One thing is for sure: Trump will stay true to his word to impose restrictions or higher tariffs on imports – leading to massive long-term uncertainty for the apparel industry.

Indeed, this sentiment was echoed by participants at the annual Apparel Importers Trade & Transportation Conference in New York, who agreed international trade deals – particularly the Trans-Pacific Partnership (TPP) and the Transatlantic Trade & Investment Partnership (TTIP) – may now fall by the wayside.

Speakers at the event also warned that the bankruptcy of South Korea's Hanjin Shipping Company has exposed weaknesses in the global shipping industry – and could signal future higher shipping prices for importers of goods from the Far East.

The Hanjin Shipping crisis also appeared to weigh on US apparel imports in September, as supply chains were disrupted and goods temporarily stranded in the wake of the collapse. The volume of US apparel imports also saw a sharp downturn month-on-month as the back-to-school season came to an end.

Elsewhere, European Union lawmakers have backed a trade pact with Uzbekistan that could lead to increased textile imports from the country – despite ongoing concerns over the use of forced labour in the cotton harvest.

A lawsuit has also been filed against retail giant Wal-Mart over the sale of products from Indian textile company Welspun that were falsely labelled as 100% Egyptian Cotton.

And British retailer Marks & Spencer has announced its biggest shake-up in years, with plans to remove its clothing ranges from 60 stores over the next five years and axe under-performing brands, as first-half pre-tax profit tumbled 88%.

But new store openings and a 9% increase in selling space lifted sales for value fashion giant Primark in its last year, with a particularly strong performance in Ireland and a growing awareness of the brand in the US.

Separately, the retailer told just-style it has no plans to increase prices next year as the industry considers the potential impact of inflation, the falling value of sterling, and a "hard Brexit" on business and the consumer.

Coverage of the third-quarter filings from US apparel and footwear brands and retailers continues, with Crocs narrowing its losses, Nordstrom swinging to a net loss, and Macy's reporting a drop in both earnings and sales.

But monthly same store sales for the handful of US apparel retailers still reporting their figures mostly exceeded analyst expectations in October thanks to an uptick in consumer confidence and improving unemployment rates.

Meanwhile in other news, Target is strengthening its supply chain team with a new network planning and operational design post; Teijin has developed a highly water-repellent outerwear material; and Ralph Lauren Corp has seen its second-quarter profit plunge by more than two-thirds.

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