DAVOS, SWITZERLAND — Reducing supply chain barriers to trade, such as border administration and transportation and communications infrastructure, could sharply boost global production and trade, a report by the World Economic Forum said.
Lowering such impediments to global commerce would also help lower costs to companies, including in the textiles and apparel sector, and ultimately lower consumer prices, said the study, released here Wednesday at the WEF annual summit.
The report, “Enabling Trade: Valuing Growth Opportunities,” compiled in collaboration with Bain & Co. and the World Bank, estimates that reducing supply barriers even 50 percent to the world’s best practices could increase world gross domestic product 4.7 percent, or $2.6 trillion, and exports 14.5 percent, or $1.6 trillion.
It also highlights, through 18 case studies, that removing barriers that companies face can enhance competitiveness.
“Eliminating supply chain barriers eliminates waste for companies,” said Mark Gottfredson, a partner at Bain & Co.
Gottfredson said red tape is one barrier that can be tackled at a low cost, and noted when shipping low value goods such as apparel, supply chain barriers can be expensive.
In Madagascar, the report shows, barriers can account for up to 4 percent of total revenues of an apparel producer through higher freight costs and increased inventories, “eroding the benefits of duty-free access to export markets,” and its competitive status due to lower labor costs — the country’s minimum wage is $35 a month, compared to $53 in India and $155 in China.
“Madagascar’s border administration procedures present operational problems that result in significant delays,” the report notes.
Such supply barriers, it adds, limit Madagascar’s apparel companies’ access to some of the apparel industry’s most lucrative markets, such as the fast-fashion segment, which has an annual growth rate of 14 percent and now accounts for almost 20 percent of the apparel market.
“With inventory turns every two to eight weeks, fast fashion companies like Zara and H&M depend critically on reliable deliveries,” it said.
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
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“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia