Economic Integration

The U.S.-China Economic and Security Review Commission met last week in Ames, Iowa, to review China’s agriculture policy and US access to the country’s domestic markets.  Individuals testifying before the commission covered a broad range of topics covering crops and livestock, bilateral trade (including barriers), intellectual property and value-added production.

Dr, Mark Lange, president and chief executive officer of the National Cotton Council of America, reviewed the current situation regarding cotton trade with China and the impact of China’s cotton policies.

The importance to US cotton of open and transparent market access was stressed, and the cotton executive noted that China stands in “stark contrast” to other cotton-importing countries by closely controlling its imports. 

“Export markets represent the primary outlet for US cotton production with approximately 75 percent moving into international trade channels,” he said. “In most key importing countries, raw cotton faces little if any applied tariff and no quota restrictions. However, an important exception to the relatively open trading situation is the tightly monitored access allowed by China.”

His testimony described China’s current policies for supporting prices and building government reserves. In calendar years 2010 and 2011, world cotton prices experienced a period of extended strengthening and increased volatility. Consequently: 

“Mills in many countries became highly concerned with cotton availability,” said Dr. Lange. “India went so far as to impose a ban on cotton and cotton yarn exports. China saw their total year-end cotton stocks fall to the lowest level in 20 years, just over 10 million bales.”

In September, 2011, reacting to concerns about reserves and prices for growers, China initiated a policy of purchasing cotton and putting it into the national reserve at a level of 19,800 yuan per ton, or US$1.40 per pound at current exchange rates, he said. Moreover, China continues to operate the same reserve policy for the 2012 crop at a procurement price of 20,400 yuan per ton, a 3 percent increase from the 2011 level, and by the end of the current marketing year, the country could have more than 33 million bales in the government stockpile.

Meantime, the world cotton price, reflected by the Cotlook “A” Index, has averaged 86 cents per pound in the most recent 12-month period, Dr. Lange noted. By purchasing domestic production at prices 40 to 50 cents above world prices, China insures that internal prices are well above world prices, causing domestically-produced yarn to be uncompetitive. 

“China’s current policy, while supporting prices received by farmers, acts as a tax on textile mills and has furthered the shift to manmade fiber,” he contended.  “While China’s policy is providing short-term support to the cotton market, there is increasing evidence that the policy will provide a longer-term drag on cotton demand in China.”

Dr. Lange insisted that by supporting cotton prices at levels well above manmade fiber, China’s policies are having a detrimental effect on demand, and cotton is losing market share to polyester and other synthetic fibers. 

“The US cotton industry remains very concerned with the lack of transparency in Chinese cotton policy. What government reserve level constitutes sufficient stocks? Do Chinese officials monitor and report cotton stocks not held in the government reserves? Are Chinese mills bound to any set purchase pattern between domestic cotton and imported cotton? How are decisions on the quantity of import licenses beyond the TRQ to be made?” he asked. 

“Uncertainty with Chinese policy has the entire cotton world on edge,” he cautioned the Commission.

The U.S.-China Economic and Security Review Commission was created by the US Congress in 2000 with a legislative mandate to monitor, investigate, and submit to Congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action.

Dr. Lange’s entire testimony may be found here.

Other testimony man be found here at the Commission’s website.

Questions:  Are China’s longer term cotton interests being best served by its current procurement policy?

What is the potential impact on other cotton producing and consuming countries?

A report issued by a Seattle, Washington-based international consulting firm reveals that supply chain contributions added almost three-fourths to the value of a group of apparel categories imported by US retailers, which supports the case for expanding importation of finished goods.  

The study was commissioned by the TPP (Trans-Pacific Partnership) Apparel Coalition, which is made up of five organizations, representing US retailers, apparel brands, apparel manufacturers, and importers.

“American consumers and policymakers tend to look at clothes and finished products and put them into one of two categories, either imported or Made in America,” said Moongate Associates Managing Partner Susan Hester, Ph.D., the report’s lead author.

“This approach is outdated and inaccurate,” she contended. “The study we published indicates US workers are extremely valuable in delivering affordable clothes to American families.”

Data were gathered on five specific products: men’s and women’s cotton knit shirts, men’s and women’s woven cotton trousers (included denim and non-denim), and women’s man- made fiber outerwear (including water-resistant and non-water-resistant).  These products were then sub-divided into 20 company-product combinations.

Study participants included seven US-headquartered apparel and retail companies that employ more than 500,000 people globally and 350,000 in the United States. Combined retail sales in 2011 totaled more than $92 billion. US apparel retail sales totaled more than $270 billion in 2011.

Principal Findings:

-- Today’s global value chains utilized by US apparel brands, manufacturers, and retailers include a full range of activities that firms and workers contribute to bring a product from its conception to the consumer. The study found that the US value-added, as a percentage of the final retail price for a variety of product categories – from shirts to pants in a variety of price points– averaged 70.3 percent, meaning 70.3 percent of the retail value of a garment is directly related to business activities executed by US workers.

-- US value-added specifically is from both blue collar and white collar workers in product design, research and development, transportation, logistics, distribution, product safety compliance, customs compliance, quality assurance, social compliance, environmental monitoring, labor compliance, legal support, marketing, merchandising, and sales.

-- An analysis of publicly available data for the respondent companies revealed single digit profit margins for all companies and a group average of four percent in 2011. 

-- US-based activities related to selling products supported 2.6 million US workers in 2011 and total US apparel employment from the beginning of the value chain through sales to the consumer totaled 2.9 million US workers during the same year.

General Conclusions:

-- The positive ratio of US-value-added to foreign-value-added translates directly into US jobs. These jobs are primarily medium- to high-skilled positions, and many are professional and managerial. 

-- Removing tariffs under trade agreements would lower prices to consumers, increase demand, and create jobs and profits all along the apparel global value chain, especially in the United States.

-- Efforts to support these global strategies by American apparel companies will contribute to their success and growth, and these will in turn lead to a more competitive marketplace that will not only benefit the US labor force, but also create new high-quality jobs for workers throughout the global value chain.

The entire report may be found here.

With the latest round of Trans Pacific Partnership (TPP) trade negotiations scheduled to begin on May 15 in Lima, Peru, the National Cotton Council (NCC) and the National Council of Textile Organizations are pressing members of the US House of Representatives to cosign a letter to Acting US Trade Representative Demetrios Marantis that provides specific guidance to US negotiators on key provisions the two groups say must be included in any TPP agreement sent to Congress for approval.

The House letter to the acting US trade representative details reservations about the Vietnamese government’s position regarding the textile negotiations and the impact it could have on the US textile industry’s suppliers and its export partners, and puts textiles and apparel among the three most difficult negotiating chapters in the TPP deliberations.

“After 16 rounds of negotiations, Vietnam is seeking to replace long standing textile rules that have been included in previous free trade agreements with a new rule that would allow Vietnam to source textiles from China and export garments and finished goods to the United States duty free,” says the letter.  “A recent study concluded that if adopted as part of the TPP, this rule would cost more than 500,000 US textile and related jobs and put more than 1.5 million jobs in the textile and apparel supply chains in the Western Hemisphere and Africa in jeopardy.

“We strongly urge the United States Trade Representative (USTR) to maintain its current position for strong textile rules which include the “yarn forward” rule-of-origin,” which would require all the materials in an item to originate and be assembled in a TPP country in order to receive the preferential treatment. 

“From NAFTA to the recently implemented Korean free trade pact, the yarn-forward rule has been an essential component of every US free trade agreement over the past 25 years. This rule has a proven track record of job creation in the US and our free trade areas, and it is responsible for hundreds of thousands of US manufacturing workers and millions of direct and indirect jobs in countries south of our border and in Africa. Specifically, the yarn-forward rule is responsible for $25 billion of United States two-way trade with Mexico, Haiti, the CAFTA-DR countries and the Andean region.”

The letter to the USTR, along with one to House colleagues enlisting their support, may be found on the NCC’s website at www.cotton.org/issues/2013/nctotpp.cfm. 

Meantime, Japan is the 12th country set to join in the talks.  Governments of the other 11, the United States, Canada, Mexico, Peru, Chile, Vietnam, Malaysia, Singapore, Brunei, Australia and New Zealand, have finished bilateral discussions with Japan, and once various domestic measures have been satisfied in each member country, Japan will take a seat in the negotiations.

Through the TPP, the United States and other Asia-Pacific countries are working to negotiate a comprehensive regional trade agreement.  With Japan, the world's third-largest economy, the final TPP pact would cover nearly 40 percent of global economic output and one-third of all world trade.  

Trade ministers have set an ambitious goal of reaching a final agreement by the end of the year, but a number of issues remain outstanding, including intellectual property, competition/State-owned enterprises, and environment, as well as on the market access packages for goods, services/investment, and government procurement, according to the US Trade Representative’s office.

Internal raw cotton price supports, along with the inability for small and medium size spinners to access annual import quotas for foreign cotton, continue to put the financial squeeze on Chinese textile mills.  Profit margins further narrowed last year, and outright losses have risen sharply.

Indeed, comment persists from observers in the global textile market that Chinese cotton consumption has peaked because of rising labor and energy costs and is destined to continue to fall over the longer term.

A report by the World Textile Information Network details monetary losses during the first 10 months of 2012, revealed in a survey by Henan provence’s statistical bureau, which also disclosed that the rate of loss accelerated.

“Similar reports have been forthcoming from a number of provinces in eastern China and cotton consumption has fallen from over 10.8 million tonnes during the 2009/10 international season (according to USDA figures), to a predicted level below 8.0 million tonnes during the current season,” said the WTIN report. “Many local cotton textile companies are understood to be shifting into alternative fibres such as polyester or moving their production bases overseas, attracted by unfettered access to raw cotton and lower labour costs.”

The entire report may be found here.

Questions:  What are the chances China may realistically experience a turnaround in the annual level of cotton consumption?

Other than domestic price support levels, labor and energy expenses, what other factors are adversely impacting the spinning sector?

Dramatic weather events, such as Hurricane Katrina hitting the south and the more-recent Hurricane Sandy striking the northeastern seaboard, coupled with volatile petroleum prices and other unforeseen events, have prompted supply chain managers across a wide range of industries to reexamine their strategies for ensuring a ready supply of production inputs, as well as the finished product.

Consequently, an old-line supply management technique, known as ‘just in case’, has begun to receive more attention.  Investopedia.com provides the following definition of just in case (JIC):

“An inventory strategy in which companies keep large inventories on hand. This type of inventory management strategy aims to minimize the probability that a product will sell out of stock. A company practicing this strategy essentially incurs higher inventory holding costs in return for a reduction in the number of sales lost due to sold out inventory.”

Investopedia says the JIC inventory strategy “is much different than the newer 'just in time' (JIT) strategy where companies try to minimize inventory costs by producing the goods after the orders have come in.  The older 'just in case' strategy is used by companies that have trouble forecasting demand. With this strategy, the companies have enough production material on hand to meet unexpected spikes in demand. Higher storage costs are the main disadvantage of this strategy.”

An inventory management blog post from Symbiant Technologies, a provider of enterprise resource planning and inventory management software and services to US distribution businesses, has noted that companies have begun to add additional distribution points to their supply chain strategy to afford themselves a better chance to handle distruptions.

The post points to a February New York Times article, which makes the point that although just in time inventory management is more cost efficient, it is vulnerable to supply chain disruptions.  Consequently, companies are trying to strike a balance between the two strategies in order to limit costs but still have enough inventory on hand to meet demand.

“With just-in-case distribution, the major change is that distributors have more distribution points, as opposed to just a single location,” the Symbiant blog post said. “It’s not so much about holding excess inventory, although they have more inventory on hand because it’s spread across multiple warehouses. They’re more diversified with that inventory so that if there’s a chaotic situation — say, gas prices go astronomically up or there’s a major power loss in a specific city — they can at least potentially rely on other sites to get the product out. In the older model, when one site went down, the whole product went down with it. Businesses are applying these disaster recovery principles not just toward computers and software, but also distribution concepts.”

Questions:  Where along the cotton/textile supply chain could a combination of JIC and JIT be helpful?

What factors, if any, along the chain would preclude the incorporation of both techniques?

Are there areas of the chain where one or the other tools simply better than the other?

The Harvard Business Review Blog Network has posted a three-part series based on a global survey of 7,000 consumers, focusing on the relationship between branded merchandise and those who buy the product.  The first addressed what consumers really want, and the second dealt with the response to customers who say they want a wider choice of products.

The third debunked three specific myths about what consumers want, namely:

•  How much of a relationship do consumers want to have with a brand,
•  Insight into what really builds a consumer/brand relationship, and
•  How much interaction between brands and customers works best.

 In short, the survey revealed that customers are not really interested in a close relationship with branded merchandise.  Consequently, brand manufacturers more often waste time and risk alienating their customers by trying to encourage a relationship.

The survey pointed to shared values as a principle force behind the establishment of a relationship between brands and their customers.  Little more than 10 percent of respondents agreed that frequent interaction produced a lasting relationship.

Meantime, there seems to be no direct correlation between the number of times consumers are contacted by brands and a guarantee that the buyer will make the purchase and then prove to be a steady customer in the future.  Indeed, the survey revealed that too much contact can have the opposite effect.

Here are links to the three different parts of the series:

What Do Consumers Really Want? Simplicity 

If Consumers Ask for More Choice, Don’t Listen

Three Myths about What Consumers Want

Free registration may be required.

Questions:  Have academic surveys proven helpful for devising long-term business plans?

What are their strengths and weaknesses?

A proposal by The Hosiery Association (THA) to exclude knit-to-shape, assembly-only socks and hosiery from current yarn-forward rules of origin found in current Trans-Pacific Partnership (TPP) draft language has drawn stiff opposition from a trio of US manufacturing and textile trade associations.

In a letter to US Trade Representative Ron Kirk, immediately following the conclusion of the 14th Round of talks in Leesburg, Virginia, earlier this month, the American Manufacturing Trade Action Coalition (AMTAC), the National Council of Textile Organizations (NCTO) and the American Fiber Manufacturers Association (AMFA), said the idea is counter to the US textile industry’s long-held support for the current yarn-forward rule of origin in free trade agreements (FTA) for textile and apparel, which includes socks and hosiery, and “would be a massive blow to US and other TPP producers.”

“Yarn forward is the long-established rule of origin for our industry, incorporated into US trade and preference agreements dating back to NAFTA (North American Free Trade Agreement),” the associations said. “It encompasses all stages of production from yarn spinning to fabric formation and final garment assembly, all of which must be done either in the United States or in a FTA partner country to qualify for duty-free treatment.”

They insisted that “the rule is logical because the vast majority of the value of a finished textile or apparel product comes from its components, rather than from its final assembly. Allowing the highest value-added elements of the production chain to originate outside the contracting FTA countries transfers its benefits to third countries not party to the agreement and not obligated to contribute market-opening concessions in return.”

Contending that current rules of origin are too restrictive, limiting trade and investment, The Hosiery Association has proposed that hosiery manufacturers be allowed to source their man-made fiber yarns for socks and hosiery from non-TTP countries, except for 100 percent cotton and polyester products.  The Charlotte, North Carolina, trade group also maintains that under the current rules, most trade does not qualify for preferential tariff rates.

That assertion is disputed by AMTAC, NCTO and, AFMA, however, with the explanation that 2011‘s trade value of US imports amounted to US$578 million under the Harmonized Tariff System subheading for Panty Hose, Tights, Stockings, Socks and Other Hosiery from the NAFTA and CAFTA-DR (Central American and Dominican Republic free trade agreement) zones. Both regional trade agreements are yarn forward, therefore the qualifying imports incorporate yarns sourced within the FTA region and accounted for almost 98 percent of US imports of these products, said the groups. 

“In short, the THA proposal allows yarns currently made in large quantities in the United States to be sourced from third parties, notably China,” said the letter.  Consequently: “This proposal would be a massive blow to US and other TPP producers who manufacture acrylic, nylon and various other types of man-made fiber yarns. Producers of cotton, wool and blended fiber yarns used in these socks and hosiery would also be hurt.”

The entire letter may be read here.

Negotiators from nine Pacific Rim nations concluded their 14th round of Trans-Pacific Partnership (TPP) talks in Leesburg, Virginia, earlier this month, and although specifics on the deliberations remain scant, the teams dealing with individual chapters ranging from market access, customs and rules of origin, among others, noted continued progress toward a final agreement.

During the 10-day session negotiators from the United States and the other eight TPP countries – Australia, Brunei Darussalam, Chile, Malaysia, New Zealand, Peru, Singapore and Vietnam – worked toward agreement on the texts of the 29 chapters of the agreement.

The US Trade Representative’s (USTR) office reported delegates “continued to move forward in constructing the tariff and other specific market-opening commitments that each country is making on industrial goods, agriculture, textiles, services and investment, and government procurement. Along with this progress, the nine countries also reported a continued focus on other important issues from intellectual property rights to labor and environment and other topics that address core issues faced by manufacturers, service providers, farmers, ranchers, and workers in the 21st century.”

In the midst of the negotiations, ministers representing TPP member countries issued the following statement to their national leadership:

In the ten months since the nine TPP Leaders met in Honolulu, Hawaii and directed us to dedicate the resources necessary to conclude this landmark agreement as rapidly as possible, we have made encouraging headway toward completion of the agreement based on the broad outlines you approved last November. We have held four negotiating rounds since then and many plurilateral meetings of individual negotiating groups between formal negotiating sessions, as well as numerous bilateral meetings to find paths forward on specific issues. These meetings, extensive preparatory work intersessionally by each of our teams, and the active consultations with our stakeholders that we have conducted domestically to obtain input as we further developed our negotiating positions, have significantly narrowed the gaps between us in a wide range of areas, while continuing work on other issues where progress has been slower.

Your joint commitment to this milestone agreement served to focus our work and we have made significant progress on many of the 29 chapters under negotiation, including customs, cross-border services, government procurement, telecommunications, competition policy, small- and medium-sized enterprises, competitiveness and business facilitation, and cooperation and capacity building. The negotiating groups moved their work ahead substantially on other issues, including rules of origin, investment, financial services, and temporary entry. In addition, we continue to make progress in working through our differences on the other chapters. We are determined to build on the momentum we have achieved to close as many of these chapters as possible this year, recognizing that the agreement is a single undertaking and must result in a balanced package that all TPP countries can embrace.

We are pleased with our progress toward realizing each of the five defining features of this historic agreement, which we expect will set the standard for future trade agreements.

Comprehensive Market Access

We have continued to work to construct a high-standard market access package that provides comprehensive duty-free access to each other’s goods markets and simultaneously lifts restrictions on services, investment, and government procurement. The nine teams continued efforts to develop tariff packages that will open our industrial goods, agricultural, and textiles markets to one another. This work is progressing at varying paces for different countries. At the same time, we are developing packages that will provide access to each other’s services, investment, and government procurement markets. On services and investment, we are negotiating access to each other’s services and investment markets on a “negative list” basis, which assumes access unless countries take an exception. Although we have made sound progress since you met in December, this approach is new to some TPP countries, and we have additional work to do to achieve an ambitious outcome on services and investment consistent with our approach on goods. Some positive steps have been taken on government procurement, another issue that some TPP countries are including in a trade agreement for the first time. It is clear, however, that further work is needed across the market access negotiations to develop high-standard, balanced packages for each country, consistent with your clear vision guiding our negotiations. We now are focused on developing creative solutions so areas of sensitivity will not compromise the ambition set for this agreement, recognizing that only by doing so will we achieve our key goals of maximizing trade and investment among us and supporting the creation and retention of jobs for our citizens.

Regional Agreement

The nine TPP teams have had discussions on steps toward the construction of a single tariff schedule and have made considerable progress in the last ten months on agreeing on common rules of origin, which are among the most important features of this agreement to promote trade among our countries. We are working to develop simple and enforceable rules of origin that will encourage cumulation across the region, which promote production in TPP countries and make it much easier for our businesses, both large and small, to take advantage of the agreement. We also have made solid progress on other commitments throughout the agreement that will support the development of production and supply chains among TPP members, including on such issues as connectivity, services, customs cooperation, and standards. While our nine countries have different approaches to some of these issues, we are working closely and constructively to find compromises so that we can ensure this agreement will promote synergies between our economies and raise living standards for our people.

Cross-Cutting Trade Issues

We are moving toward conclusion of each of the four dynamic cross-cutting issues we are including in the TPP, and our efforts have been greatly facilitated by the significant APEC work already done in these areas. In the past ten months, we have made promising movement forward toward agreement on the chapters that address: (1) regulatory and other non-tariffs barriers, including related to goods, industrial and agricultural standards that increasingly are the major barriers that companies face in gaining access to foreign markets, and we have significantly narrowed the gaps between us on new ways to improve regulatory practices, eliminate unnecessary barriers, reduce regional divergence in standards, promote transparency, and conduct our regulatory processes in a more trade-facilitative manner, as well as to cooperate on specific regulatory issues covering certain sectors of interest to the nine countries; (2) competitiveness and business facilitation, including focusing holistically on ensuring that we are developing the production and supply chains that will enhance our competitiveness and maintain jobs in our markets; (3) ways to expand the participation of small- and medium-sized enterprises in regional trade, including through enhancing their access to specific relevant and user-friendly information and resources about the TPP; and (4) capacity building and cooperation to help those TPP countries that need it to implement the high ambition of the agreement and thus fully realize its benefits, as well as additional commitments on development that would contribute to each of our economic development priorities, building on development work in other fora, input from stakeholders, and new proposals from TPP members.

New Trade Issues

Since you last met in November, we have continued to consider carefully how best to address new issues that have emerged in global trade. We have spent considerable time discussing, for example, developments in information technology, and commitments that can help harness the new digital economy to enhance our competitiveness, promote trade, and support our small- and medium-sized businesses link to the global economy. We also have been considering ways to advance our common interests in capturing the benefits of green growth and new technologies. In addition, we continue to weigh appropriate approaches to ensuring a transparent and pro-competitive business environment. These, and other issues under discussion, are new and complex issues, but we are pleased by the commitment of the nine countries to engage seriously and seek outcomes that will promote trade and investment in these areas, and benefit all of our businesses and peoples.

Living Agreement

We are pleased by the interest of Mexico and Canada to join the TPP negotiations and warmly welcome their participation, which will add to the strength of our initiative and help us to advance our goal of enabling the TPP to serve as a possible platform for economic integration throughout the Asia Pacific. We continue to discuss with other countries their interest in potentially joining the negotiations in the future. At the same time, we have made significant progress in reaching agreement on establishing a structure, institutions, and processes that will make the TPP a living agreement, and allow it to evolve as appropriate in response to future developments in trade, technology or other emerging issues and challenges. We also are considering the most productive and efficient approach for future joint work in areas of common interest.

Next Steps

We recognize the priority that the Leaders of our nine countries accord to concluding this agreement. Having made significant progress across the agreement, we are now working to address the remaining issues, which include many complex, new, and sensitive areas on which careful consideration and thorough consultation is needed. We will continue to commit the resources necessary to do so, as you have directed us, and also to integrate Mexico and Canada into the negotiations efficiently so that we can bring this negotiation to a successful conclusion as soon as possible.

The 15th round of TPP negotiations will be held in Auckland, New Zealand, December 3-12.

Mexico and Canada will join the TPP negotiations in early October when the nine current members are expected to conclude their domestic procedures.

Following an almost nine-month delay, the Indian government has approved foreign direct investment (FDI) of as much as 51 percent for multi-brand retailers, such as Walmart, Tesco and Carrefour. New rules also will be implemented in the aviation sector, which will allow international airlines to invest in domestic carriers.

In an effort to counter the still strong opposition, which prompted New Delhi postpone implementation in December last year, state governments will be allowed to opt out of the FDI scheme in the retail sector.  Concern has been expressed that small local retailers will be overwhelmed by the large, multi-national corporations, a point that has been countered by supporters who maintain that local enterprises will far out number the multi-nationals and also offer more specialized services.

Indeed, in a statement to a textile-oriented website, Mr. S.V. Arumugam, Chairman of the Confederation of Indian Textile Industry expressed gratitude to Mr. Anand Sharma, Minister of Commerce, Industry and Textiles “for his tireless efforts to get this important economic reform through, in spite of uninformed opposition from several quarters.”  He said that” the decision would encourage organized retailing, which in turn would result in more centralized procurement operations, improved supply chain management and reduced involvement of middlemen between producers and retailers.”

Foreign retailers must meet certain conditions, however, in order to participate in the FDI program, among which are:

•  A minimum investment of US$100 million,
•  Half of the investment must be for infrastructure, such as cold storage and  warehouses, and
• At least 30 percent of goods sold must be sourced from local producers.

A 51 percent FDI for single-brand retailers already is in place, and the 30 percent local sourcing requirement also will be applicable.  However, the government will grant a waiver, so long as a manufacturing plant is built to ensure jobs will remain in the country.

Just-style.com this spring and summer has offered a pair of reports written by Euromonitor International detailing the current challenges of getting clothing and footwear to market.  Growth sectors are identified, and factors driving change along the supply chain also are identified.

The first report: Apparel Routes To Market: Part One - Global Distribution Overview is previewed as follows:

“Historically, apparel brands looked to retail specialists to distribute their products; however, the boundaries are now blurring, as many brands move across into retailing and retailers become known as fashion brands. In the middle are those brands which have tried to embrace both perspectives from the outset. It appears that retailers dependent on others’ apparel brands are losing ground, so as the retail landscape evolves, the battle to follow the right distribution strategy is intensifying.”

In Part Two - Brands Squeezed by Changing Retail Environment:

“The volatile economic environment and rising pricing pressures make apparel retail a difficult environment to operate in. With independent specialists struggling, the power is shifting from wholesale to own stores and online operations. Key distribution strategies are already being put in place by successful companies, and represent an outward-looking vision, while at the same time keeping on top of the detail of the business and keeping a balance while embracing different routes to market.”

The reports are designed as a global briefing to provide an insight into to the size and shape of the apparel market, highlight topics currently being discussed and emerging trends, as well as important industry issues. They identify leading companies and brands, offer strategic analysis of key factors influencing the clothing and footwear market, such as changes on the supply side, economic/ lifestyle /demographic influences and pricing issues. Forecasts illustrate how the market is set to change and criteria for success.

The reports provide data coverage on market sizes (historic and forecasts), company shares, brand shares and distribution data.  The also help to understand the competitive environment and the market’s major companies and leading brands.  

For more than 40 years, Euromonitor International has published market research reports, business reference books and online information systems. It has offices in London, Chicago, Singapore, Shanghai, Vilnius, Dubai, Cape Town, Santiago, Sydney, Tokyo and Bangalore.  With more than 800 analysts worldwide, Euromonitor International maintains it “has a unique capability to develop reliable information resources to help drive informed strategic planning.”

Information about purchasing the two reports may be found here and here.