In a post-pandemic retail world, de-mand for goods is solid — but get- ting them into stores is more difficult than ever as supply chains from Asia remain backlogged, noted panel at- tendees at the MAGIC/Project/Sourc- ing conference in Las Vegas that took place this past February.
Asia dominates apparel imports, with China representing 27.74% of the total, followed by Vietnam responsible for 13.56% — but Viet- nam gets many of its materials from China, ob- served Ilse Metchek, president of the California Fashion Association (CFA) and the moderator of a panel on global sourcing. She added that 83% of footwear comes from Asia as well.
But the pandemic upset the normal distribu- tion channels when countries shut down, and consumers started shopping, a lot, from home. Though the idea that online has destroyed
brick-and-mortar retail “is a myth,” she said, “Pure online operations are only one-quarter of the industry,” Metchek added.
Additional problems for retailers are also add- ed with ocean carrier policies, including labor issues, equipment and more, observed Vincent Iacopella, executive VP of growth and strategy at Alba Wheels Up, a logistics consultant.
“I get tired of talking about it,” he said. Iacopella added later, “People wanted it to be fixed.”
It’s unlikely to be fixed, he noted, until consum- er demand declines.
Other problems with Chinese materials are political in nature, as countries and individual retailers are declining to accept cotton from regions that are home to the Uighur people because of accused human rights violations against them. The problem is that because the
cotton is then distributed throughout Asia, Ui- ghur cotton becomes difficult to pinpoint.
“You must ask where that cotton came from,” Metchek said. Essentially, not asking will indi- cate guilt. “Ignorance in this case is absolutely no excuse. Impact is that we’re rethinking our risk appetite from China as an industry.”
The result is that some retailers and brands are beginning to look closer to home to ensure a steady supply of merchandise.
“One trend that started before the pandemic is crossing from Mexico into the United States,” Iacopella observed. “We have a brand that’s an Alba customer that brought in Black Friday [goods] in June. We put it in our warehouse in Mexico — it was two hours from Los Angeles.”
Another option is to source goods from Colom- bia, among other Latin American nations. Only
9.3% of textiles are imported from South Cen- tral America, said Sebastian Echavarria, West Coast trade representative of Procolombia, the trade bureau promoting tourism, foreign direct investment and the brand for the nation. And most goods enter the United States free of duty fees thanks to the 2012 Colombia Trade Promo- tion Agreement (COTPA).
Among the garments produced in Columbia are activewear, sportswear, uniforms and more, Echavarria noted. “We do have all kinds of com- panies that are flexible in terms of quantity of production,” Echavarria said. “The window of opportunity is right there.”
Even more importantly, he observed, Colombia is the only country in South America that has access to both the Atlantic and Pacific Oceans. Container ships can arrive in Miami in one week and to Los Angeles in 10 days. Air freight is three hours to Miami, five hours to New York
and nine hours to Los Angeles.
Egypt provides another possible opportunity, the panel said. The country has a vertically in- tegrated supply chain with 1,500 factories and 1.5 million workers, said Sherin Hosni, execu- tive director of the Apparel Export Council of Egypt. The country is home to 14 qualified in- dustrial zones and is working with Better Work — a collaboration between the United Nations International Labour Organization (ILO) and the International Finance Corporation (IFC), a member of the World Bank Group — to ensure good labor conditions.
“There is an opportunity here, as we highlight our capability,” Hosni said.
The nation is the sixth supplier of blue denim to the United States, and apparel imports are rising, up 50% in 2021 over 2020. The factories have been investing in printing facilities with
advanced technology, solar energy and water treatment, Hosni reported.
Goods are duty free to the United States if they have a 10.5% Israeli component, which could be buttons or tags, Metchek observed. But even with diversification, Iacopella noted, it’s nearly impossible to get out of China.
“Go to Vietnam, Central America, Colombia. If you take all of those countries together, they cannot absorb the production capacity from China,” Iacopella said. “You will never get 100% out, at least in this decade. You have to manage it somehow.”
And that means hitting the road to find more new possibilities.
“You have to get out of your office, go on a plane and go there,” Metchek said. “There are many great opportunities all over the world.”
