By  on April 4, 2007

HONG KONG — The apparel and textile industry is wrought with complexities and evolving rapidly, and firms that are flexible and capable of adapting will survive and thrive.

Bob Zane, chairman of the U.S. Association of Im­porters of Textiles & Apparel and former Liz Claiborne senior vice president, speaking at the second Prime Source Forum here, said he had seen more changes in the past 18 months than in the previous five years, and added those changes were coming at a "fast and furious" pace.

Prime Source, which ran March 29 and 30 at the Hong Kong Convention & Exhibition Centre, had sessions ranging from the sourcing environment to green issues, education and technology.

Zane said Liz Claiborne in the early Nineties began to feel the need to be more versatile and able to adjust to new environments, particularly with the uncertainty of quotas and antidumping measures.

"The world had changed and, regrettably, Liz was not changing with it," said Paul Charron, chairman emeritus of Liz Claiborne, who gave the opening keynote address about an industry in transition. "Change was not only desired, it was required."

Claiborne set out a set of seven principles more than 10 years ago, many of which are relevant in the current business environment. They include investing in technology, staying focused on the aspects of the business you can control, keeping product first and understanding the consumer, Charron said.

With demands increasing on suppliers and shoppers becoming less brand-loyal, the business is more challenging for retailers, who face shorter trend cycles and environmental issues, as well.

"Competition will continue to be very stiff," which makes it more important to be adaptive, said Jürgen Mass, senior vice president of international affairs for Germany's Metro AG.

The apparel market in Germany has dropped more than 22 percent in the past 10 years, Mass noted.

Simon Shepheard-Walwyn, director of strategic planning for Mexx, based in Amsterdam, added that "being on time isn't enough." Suppliers also have to meet buyers' requirements on compliance with human rights and ethics, and country of origin rules; maintain a secure product through the supply chain; have strong operations and stable management; show product development ability; manage inventory, and be able to manufacture small runs at high speed. And the vendors must do all of these better, faster and cheaper than before — a mantra that was repeated throughout the forum.Zane said for the merchant-vendor relationship to improve, buyers "need to listen more to the suppliers and demand a little less."

For many years, "it was them versus us," said Thomas Glaser, president of supply chain for Europe and Asia for VF International. Now, it's moving toward "them is us," he said, adding that buyers can only be successful if the factories are successful.

There's also a turnover problem in some offices in Asia, said Glaser, who added that a current 30 percent turnover at his offices was actually an improvement.

Some of this could be improved with education, which should address retention and succession, said Angela Peers, principal lecturer at the International Fashion Business & Technology Centre at Manchester Metropolitan University in the U.K.

Students from South Korea have dominated the international student base for the past couple of decades, said Marsha Dickson, chairwoman at the Department of Fashion & Apparel Studies at the University of Delaware. The numbers from China haven't compared with the numbers from Korea because the Chinese have financial limitations and are unable to get information about American universities because of blocked Web sites in the country, Dickson added.

As the industry shifts, so does the educational offering. That was the case in Hong Kong when the Special Administrative Region of China switched to a service base from manufacturing. In the last 10 years, the Clothing Industry Training Authority of Hong Kong has moved away from training people in technical skills such as sewing, said Philip Yeung, executive director of the authority.

China also faces a labor shortage. The challenge of China is its aging population, which will affect an already dwindling workforce, said Dong Tao, managing director of non-Japan Asia Economics with Credit Suisse (Hong Kong). He added that 30 of every 100 new laborers worldwide 35 years ago were Chinese; today, the figure is 13. In 30 years, it will sink to a mere three.

Although China is still a good bet in the short term, India has its attractions: rule of law, English proficiency, service outsourcing and a strong banking sector, he added. India also has better demographics, and this "will make a difference."Nguyen Duc Thanh, chief of Textile & Clothing Quota Administration for Vietnam's Ministry of Trade, noted that textiles and apparel were the country's second-biggest export after crude oil, accounting for $5.85 billion in 2006 and expected to hit $7 billion in 2007, he said. While the country imports 70 percent of its fabric and accessories, the investment environment has improved and the industry has opened up more incentives for businesses, Nguyen added.

However, the government in Vietnam is still protesting a new monitoring system for imports to the U.S. as discriminatory under World Trade Organization rules.

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