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A New Era for Global Textile and Clothing Supply Chains

The global textile and clothing sector is at a crossroads. The end of quotas in 2004 will have a major impact on how and where textiles and clothing are made, and how the supply chain is managed.

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PRLog (Press Release) - Feb 13, 2007 -
The global textile and clothing sector is at a crossroads. The end of quotas in 2004 will have a major impact on how and where textiles and clothing are made, and how the supply chain is managed.
Producers are already affected by changes in retailing. Big retailers are buying up independent brands to give consumers more value and enhance their shopping experience. Target has tied up with Mossimo, Wal-Mart is offering Asda’s “George” brand in the USA, K-Mart is enticing female shoppers with Jaclyn Smith and Kathy Ireland signature collections, and Levi’s Signature line is being sold through Target and Wal-Mart. The expanding global reach of mega-retailers and mega-brands is putting pressure on local supply channels. Many retailers retain existing suppliers when moving into new geographical markets, which puts pressure on local producers. Clothing makers are also fighting for a share of total consumer expenditure as spending rises in electronics, leisure, and healthcare. Consumers want more fashion and performance. They are also more value driven—as shown by a shift from department stores to hypermarkets and discount stores.

Quota elimination will force down clothing prices further. It will also enable retail buyers to focus on the most competitive suppliers in terms of cost, quality and productivity, rather than being confined to those who possess quotas. Retailers will consolidate by buying from fewer firms and countries. Winning suppliers will be those offering shorter lead times through market proximity or “perceived” market proximity. Winners will also include firms which can deliver big volumes from vertically integrated operations—although suppliers unable to verticalise could form “virtual” vertically integrated structures through partnerships.

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