PARIS — As Europe’s apparel firms count down to the end of the quota regime, they are still debating what the effects will be — and how fast they will come.
They’re not expecting a Big Bang event. Though few sourcing executives contest the inevitability of major production consolidation to facilities in Asia, particularly in China, many question the judiciousness of committing to big strategic shifts now.
“No one is sure what will happen,” said Reiner Seiz, general manager of global sourcing at Puma.
Keith Jacobson, head of strategic sourcing projects at Adidas-Salomon AG, said, “It is difficult to know how fast to go and how fast things will change. The single biggest risk over the next year is that the U.S. decides to use its safeguard provision.”
While apparel and textile quotas will be lifted next year among World Trade Organization members, China will be handled differently. That nation joined the WTO in 2001, after the quota phaseout had been agreed to. As part of its accession agreement, China accepted a measure called safeguard quotas, which importing nations can use to limit Chinese shipments. The safeguard quotas can be imposed for up to three years in categories where Chinese shipments cause “market disruption.”
Executives said there is reason to expect that disruption standard to be met.
Experts expect China’s apparel exports to soar 150 percent in 2005, making it by far the world’s leading apparel exporter, with 47 percent of the market, according to a World Bank study. In Europe, a study from Paris’ Institute Française de la Mode projected that 40 percent of the trading zone’s apparel imports will be from China by 2010. That compares with 17 percent of all EU apparel imports coming from China in 2002.
Hennes & Mauritz, the Swedish fast-fashion giant, isn’t taking lightly the possibility of the EU imposing safeguards on China.
“It’s still too early to tell,” said a spokeswoman. “We could see EU action. We can’t be sure how sourcing will change for the moment.”
Even if questions linger about exactly when the last vestiges of the quota system will end, European companies anticipate 2005 to be the beginning of significant consolidation. Most said they have been preparing for years for this event, building their presence in China with new sourcing offices.
“I see things on the hanger and I’m, like, ‘I never knew that color worked on me.’ It’s things you necessarily wouldn’t choose to wear, but once you put them on, you see why Janie is who Janie is." — Lily Collins on working with former "Mad Men" costume designer, Janie Bryant on creating looks for her role as Celia Brady's in Amazon series, "The Last Tycoon." 📸@jilliansollazzo #wwdeye
EXCLUSIVE: Sarah Rutson has been tapped to Build New American Fashion Group. The parent of Joie, Equipment and Current/Elliott hired the merchant to rev up its brands and expand its portfolio into designer, beauty and lifestyle categories. Read more on WWD.com, link in bio. #wwdfashion
Michael Kors' $1.3B Jimmy Choo deal has the company squaring off with Coach Inc. as both seek to build American powerhouses. Coach bought Stuart Weitzman in 2015 and Kate Spade just two weeks ago, but Michael Kors' acquisition may be putting pressure on its rival in the new push for scale. #wwdnews (📷: George Chinsee)
Meet actress Lucy Boynton, who plays opposite Naomi Watts in the recently released Netflix series "Gypsy." Boynton stopped by WWD to talk about her upcoming projects and her nomadic lifestyle. Get all the details on WWD.com. #wwdeye (📷: @dandoperalski)