WWD.com/business-news/government-trade/mexican-apparel-industry-seeks-support-7075320/
government-trade
government-trade

Mexican Apparel Industry Seeks Support

The country must invest at least $500 million by 2017 to bankroll emerging designers according to the president of top industry chamber Canaive.

GUADALAJARA, Mexico — Mexico must invest at least $500 million by 2017 to bankroll emerging designers and help create a stronger and more modern fashion identity, according to Sergio Lopez de la Cerda, president of top apparel industry chamber Canaive.

This story first appeared in the August 6, 2013 issue of WWD.  Subscribe Today.

Speaking on the sidelines of the four-day Intermoda IM sourcing fair here last month, he said the government must bolster investment in the industry to help up-and-coming designers and small and midsize brands access funding to expand and export their products abroad.

“We need at least $500 million in three years to achieve this project,” Lopez said, adding that the figure is conservative.

By “project,” Lopez was referring to the sector’s plan to transform itself into a supplier of more value-added and fashionable apparel and build a more robust “made in Mexico” fashion brand and identity. This effort should help the country lift domestic apparel sales and exports to survive an increasingly competitive global market.

Canaive recently set up a fashion council to oversee the initiative and a leading technical committee expected to begin meetings by yearend. To build a stronger “Made in Mexico” brand, Canaive has joined forces with the textile, footwear, leather goods and accessories sectors to come up with an edgier product portfolio for the local and international markets.

Lopez said Canaive is pressuring the government of President Enrique Peña Nieto to lift next year’s budget for aid to the apparel industry to at least $150 million, up from “a much smaller amount” currently.

Lopez said 70 percent of those funds should be directed to help small suppliers step up sales to Mexico’s growing department store network.

“They don’t have enough working capital to increase production,” Lopez said.

Observers at the biannual Guadalajara fair, the country’s largest sourcing event, said the financing squeeze is giving foreign importers, notably Chinese, an edge against Mexican brands scrambling to grow in the domestic apparel market, worth some $20 billion.

The other 30 percent of the government’s money should be handed to emerging designer labels, most of which are struggling to grow inside and outside Mexico, Lopez added.

Canaive is helping flesh out these brands by fostering ventures between them and larger apparel manufacturers that can fund their expansion by helping them develop new collections.

“This is one way the designers can obtain financing,” Lopez said, adding that they can also go to Mexico’s entrepreneur support institute Inadem, but that new eligibility requirements have made it harder to procure funding from it.

Mexico’s export promotion agency ProMéxico must also be overhauled to better meet the industry’s needs.

“ProMéxico needs a real shake-up,” Lopez said. “They don’t understand our unique needs or how to promote our sector abroad.”

According to Lopez, for every $100 spent to promote the industry, troubled ProMéxico gets just $20 in return.

Lopez said it has become crucial for the sector and ProMéxico to meet to hammer out an export promotion strategy that’s more aligned with the industry’s requirements. Such an effort should also include the creation of a bigger export fund, the size of which Lopez declined to specify.