October 23, 2005

Apparel Manufacturing

Filed under: Business — Dee @ 2:48 pm

Asian countries have the power to shift world trends in manufacturing. However, there are some variables that cannot be altered easily: Fuel and freight cost. Recently, in spite of the price war waged by countries like India, Pakistan, Vietnam etc, (China was obviously out because of the embargo),the countries of choice for cotton knit shirts seem to be Honduras and El Salvador at prices that were about $10 below the world average of $32.57/doz. At the same time, Pakistan was at $37 and Vietnam at $42. The geographical proximity to the US gives these Central American countries an advantage.

What about manufacturing in the USA? Labels like Forever 21, based in LA, source 40% of their merchandise from local LA manufacturers. This is a big plus for companies focusing on fashion speed-to-market, especially when some styles last only a few months.

In my opinion, going forward there will be several factors apart from lower and lower costs that will change strategic sourcing trends.


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