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Fast fashion forcing US apparel manufacturers to change pace

"Till some years ago, producing clothes in a span of six weeks was a distant dream or rather a challenge. Thanks to fast fashion, this has become a reality today for apparel manufacturers and retailers. And as, Spencer Fung, CEO, Li & Fung, opined in the last couple of years, people started realising they have to speed up. One of the reasons is the consumer has really sped up. And it’s now noticeable if you don’t speed up, you’re dead. It has become possible for the US retailers to match up to the fast-fashion prowess of European competitors such as Inditex SA and H&M. These companies are known for pioneering the fast fashion model by taking flexibility to the extreme, via airlifted merchandise, small order sizes and an accelerated design process."

 

Fast fashion forcing US apparel manufacturers to change pace

 

Till some years ago, producing clothes in a span of six weeks was a distant dream or rather a challenge. Thanks to fast fashion, this has become a reality today for apparel manufacturers and retailers. And as, Spencer Fung, CEO, Li & Fung, opined in the last couple of years, people started realising they have to speed up. One of the reasons is the consumer has really sped up. And it’s now noticeable if you don’t speed up, you’re dead. It has become possible for the US retailers to match up to the fast-fashion prowess of European competitors such as Inditex SA and H&M. These companies are known for pioneering the fast fashion model by taking flexibility to the extreme, via airlifted merchandise, small order sizes and an accelerated design process.

Recent revelations

Fast fashion forcing US apparel manufacturers

 

With consumers moving from one fashion trend to another faster than ever, US retailers are collectively being pushed to get away from traditional model, which values low costs above all else. Gap Inc., for example, uses a technique called fabric platforming, where it holds a large amount of material and designs specifically for those textiles. This has allowed it to slash lead times by about a third to 11 weeks or less. American Eagle Outfitters Inc. has sped delivery times by moving some production into the Western Hemisphere, despite wages that are generally higher than those in Asia. Similarly, Kohl’s uses all of the above and also runs smaller test orders, which can be ramped up quickly if demand is brisk.

Other retailers have invested significant time in cutting costs by moving production to Asia and placing massive orders for merchandise. Now, they aren’t in the best position to enact broad changes to their supply chain as foot traffic at physical stores declines and US consumers spend less of their income on apparel. Given this changing scenario, Kohl’s is being watched closely as companies are contemplating whether the extra investment will actually pay off. Kohl’s says, it has indeed unlocked the secret. Last quarter, brands that are part of the company’s speed initiative outperformed comparable products by about 2.5 percentage points. While fast-turnaround products made up 40 per cent of orders in 2017. Wilson, whose company is located in Syracuse, New York, also makes clothing for retailers like American Eagle and J.C. Penney Co, says the typical Kohl’s order is now for 80,000 shirts, instead of 500,000. This helps prevent buildup of unpopular merchandise and markdowns if a particular product fails to resonate with shoppers.

Market dynamics

Moving towards fast fashion isn’t simple either because most US retailers depend on suppliers, while a company like Zara is vertically integrated, which allows it to have more control from start to finish. Li & Fung, a 20-year partner of Kohl’s, is in the middle of a three-year plan to cut lead times by half and digitise its global supply chain for apparel. Fung says whether its customers want speed or not, they had to move faster as a company because they see the whole world moving faster. The first place Fung has sped things up is in preproduction: With 3-D digital designs replacing physical samples, a process that can take six months is carried out in a few days.

 
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