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WWD Magic Preview: Sourcing in the Americas

The Western Hemisphere is diversifying and becoming a more viable alternative to rising costs in China.

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WASHINGTON — The message has been heard loudly and clearly by the fashion industry — the Western Hemisphere is diversifying and becoming a more viable alternative to rising costs in China, and commodity products are no longer the only game in town.

This story first appeared in the August 9, 2011 issue of WWD.  Subscribe Today.

Business investment, which had been leaving the hemisphere for the better part of two decades, is on a reverse course as inflationary pressure throughout the supply chain is redirecting sourcing for apparel and footwear to Central America, Mexico, Canada, the Caribbean and the Andean region, where speed-to-market and fast-fashion deliveries play a critical role.

Gauging by significant increases in apparel imports from countries and the all-star lineup of apparel and textile executives, and high-level Obama administration officials taking part in the Sourcing in the Americas summit and pavilion at the Sourcing at MAGIC show in Las Vegas, Aug. 21 to 24, the hemisphere is poised to take more market share from the largest apparel supplier, China, which still controls a 40.9 percent share of all U.S. apparel imports. And the hemisphere has diversified outside of commodities and attracted new business in everything from high-end apparel to high-tech performance wear.

The inaugural Americas summit and pavilion represents the culmination of a collaborative effort between MAGIC, the U.S. Commerce Department, U.S. Trade Representative’s Office, and a coalition of U.S. and international apparel and textile trade associations, brands and retailers.

Executives and government officials will participate in two invitation-only events: a summit entitled The New Western Hemisphere Supply Chain — Way Beyond the Basics, on Aug. 21, and a sourcing issues forum on Aug. 22.

“I think there is this misnomer out there that the Western Hemisphere can provide only T-shirts and socks,” said Kim Glas, deputy assistant secretary for textiles and apparel at the Commerce Department. “While that is important for the industry, there is a diversity of products that can be sourced from the Western Hemisphere. We’re talking about not only men’s suits but also high-tech outerwear, fashion jeans and knit woven tops.”

Glas called the summit a “twofold event,” one that showcases the supply chain for retailers and shows them the advantages of sourcing closer to home, while also promoting U.S. yarns and fabric exports to free-trade agreement partners.

Francisco Sánchez, undersecretary of international trade at the Commerce Department, will participate and deliver the keynote speech at the summit, while executives from such well-known companies as J.C. Penney Co. Inc, The Men’s Wearhouse, Unifi Inc. and Abercrombie & Fitch are slated to discuss the importance of sourcing in the hemisphere to their businesses.

Two events will be open to the public, including a seminar on the competitiveness of Nicaragua and the country’s cotton product project on Aug. 21 and a second seminar on the National Export Initiative and sourcing in the Americas on Aug. 22.

The Americas pavilion will feature 8,000 square feet of exhibitor space and nearly 80 companies, including 30 U.S. textile firms and several companies from Central America, Peru, Mexico and South America, according to Karalynn Sprouse, vice president of sales for MAGIC.

“I would say that is about a 100 percent increase, or double what we’ve done in the last few years,” Sprouse said. “This partnership with [Commerce] is an amazing partnership that is getting this off the ground.”

Another key component of the sourcing show at MAGIC will the launch of a database featuring companies up and down the supply chain in Central America and the Dominican Republic.

Gail Strickler, assistant U.S. Trade Representative for textiles, has worked closely with such retailers as Kohl’s Corp. and Gap Inc. to develop the database, with the hope of linking hundreds of companies together to generate new and additional business in the region. The site will be managed and funded by the Inter-American Development Bank.

“We’re very pleased with what is going on in the [DR-CAFTA] region,” Strickler said. “We are pleased with the growth we saw last year and we know there is a renewed interest in sourcing in the Americas. I think the potential is way beyond where we are now, partially due to all the factors leading companies back into the region — increased costs in Asia…speed to market, quick response and mass customization — all of those trends basically mean there is tremendous opportunity for growth in the region.”

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