Globally, consumers are pulling back on clothing spend as evidenced this week in second-quarter results from brands including Hugo Boss, adidas, Kontoor Brands and Columbia Sportswear.
And that’s not just down to one reason; it’s a combination of factors from money worries to the growth of second-hand platforms as consumers turn away from fast fashion over concerns about its environmental and ethical impact. Even the weather has a part to play. Clothing brands still selling outfits for summer that just don’t work for the wet and grey days being experienced through July and August have suffered in a big way.
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These events have been enough to see some brands, like Esprit, for example, collapse. Last week it announced it was reestablishing itself as an intellectual property management company and prioritising the expansion of its licensing operations after liquidating several of its subsidiary companies.
Back in 2019, Esprit had been one of the brands at the centre of allegations of supply links to the Uyghur Autonomous Region which has faced major scrutiny in the US in recent years. With the US doubling down on efforts to block any goods suspected of being made under forced labour conditions from the Xinjiang region, this has added an extra layer of complexity to brands with sourcing links to China.
The USFIA’s 2024 Benchmarking Survey revealed that over the past year, US apparel sourcing executives identified managing forced labour risks in the supply chain as their second top business challenge with 64% of survey respondents saying it was one of their top five business concerns.
Most of the surveyed companies have taken a comprehensive approach to mitigating forced labour risks in the supply chain including “asking vendors to provide more detailed social compliance information,” “attending workshops and other educational events to understand related regulations better,” and “intentionally reducing sourcing from high-risk countries.”
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By GlobalDataThat together with the US’s fraught relationship with China means many are turning away from China as a key or primary sourcing base. The USFIA Benchmarking survey revealed US clothing brands are accelerating efforts to bring sourcing closer to home turf where they may also benefit from greater supply chain visibility.
This year, a new record 52% of respondents plan to expand apparel sourcing from members of the Dominican Republic-Central American Free Trade Agreement (CAFTA DR), over the next two years, up from 40% in 2023.
But an added benefit of this strategy is the closer supply links which reduces order processing time. With climate change meaning unpredictable weather such as warmer, shorter winters and much wetter summers, brands are not required to order as far in advance only to end up lumbered with inventory that isn’t selling because it doesn’t fit the season.
Sales of clothing have always been a peak and trough situation, influenced and impacted by several factors. When the pandemic hit in 2020, clothing sales virtually stopped, leaving both brands and suppliers in limbo. But with people spending more time at home and in parks and gardens, those brands that capitalised on the production and sales of athleisure wear at a time when consumers were seeking comfort and prioritised health, benefitted, in a big way.
The key takeaway here is that as long as humans exist, clothing will be needed. And while that is the case there will always be a need for fashion brands and ultimately, the people that make the clothing for those brands. But remaining fluid and agile, and being able to respond quickly to consumers’ changing temperaments will be key to the survival of any fashion brand and supplier going forward.
Top news stories on Just Style this week…
Gildan’s returning CEO, strong Q2 signal ‘stability after turmoil’
Canadian apparel company Gildan Activewear has reported a 3% increase in net sales for Q2 over the prior year period, with an industry expert noting the results were not caused by the return of the company’s former CEO but his taking the top seat after recent management turmoil will “likely usher in a period of stability”.
Hugo Boss in cost-cutting mode as Q2 sales disappoint on consumer softness
German fashion giant Hugo Boss has assured shareholders plans to tighten up costs will help it drive profits in the second half after second-quarter (Q2) sales failed to meet expectations.
Fashion brands fail to tackle climate crisis, shift costs to suppliers
A new report from not-for-profit Fashion Revolution claims the world’s largest fashion brands are not working fast enough to cut their use of fossil fuels and are shifting costs onto the factories they work with.
New US law ‘puts real teeth’ in combatting trade crimes, fraud
The president of the National Council of Textile Organisations (NCTO), Kim Glas, has applauded a new law aimed at combatting international trade crimes and fraud.
Explainer: How to build a profitable, ethical fashion sourcing strategy
Retail100 Consulting co-founders and directors Anna Berry and Sara Allbright emphasise the key to successful global fashion sourcing lies in thorough planning, clear communication and a willingness to adapt to the unique challenges and opportunities presented by each new sourcing relationship.
Explainer: Is GOTS certification vital for fashion sustainability?
The Global Organic Textile Standard (GOTS) certification is transforming the global fashion industry from cotton fields to clothing racks. Just Style explores what it takes to earn this coveted label and whether it is worth the effort.
Africa’s bid to become the next apparel sourcing powerhouse
As fashion brands scramble to diversify their supply chains, an unexpected contender is emerging: Africa. From Tanzania’s sustainable cotton to the continent’s biggest industrial park in Ethiopia, Africa is poised to become a key sourcing destination for the global fashion industry. But can these nations overcome challenges to become the next sourcing powerhouses?
Fashion Revolution: Brands must up climate game, listen to suppliers
Fashion Revolution’s policy and research manager Liv Simpliciano tells Just Style fashion brands must go beyond the bare minimum to tackle climate change, invest in sustainability teams, accept a transfer in decision-making power and listen to the most vulnerable in the fashion supply chain.
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