MONTREAL — Canadian apparel manufacturers are being encouraged to look at new opportunities overseas because of the volatility of the U.S. economy.

This story first appeared in the December 22, 2009 issue of WWD. Subscribe Today.

The U.S. accounted for 85 percent of all Canadian clothing exports last year, or $1.1 billion, but that figure is down from 96 percent, or $2.8 billion, in 2001.

“Canadian companies never had to look outside North America, but now’s the time to diversify because of the major downturn in the U.S. market,” said Marc Lugert, the Canadian Apparel Federation’s European consultant.

In remarks this month at the annual meeting of Apparel Quebec, the provincial arm of the CAF, Lugert said Canadian manufacturers should meet the challenges of dealing with different languages and labeling requirements. The global recession has forced many suppliers to exit the European market, creating opportunity for new entrants, Lugert noted. He added Europe is home to some of the world’s most successful retailers and mass merchandisers, and also cited its high standard of living.

“But to be successful, you should single out a regional market or segment of a country, just like you would target a region of the U.S. and not the entire country,” he said.

Other suggestions for Canadian manufacturers included adjusting clothing lines to fit local tastes, offering prices in local currencies, clearly defining shipping dates and staying in contact with customers.

Russia represents another opening for apparel manufacturers that want to grow their customer base, said Elena Salova, president of Delo of Drummondville, Quebec, which specializes in the development of the Canada-Russia business.

“Russians put their money in their wardrobe and shop to prove they belong to a certain social class,” Salova said. “The concept of saving is absent due to a lack of trust in the banking system, and the average Russian spends more of their income on luxury items than Westerners.”

The average yearly growth of the apparel market in Russia is 10.6 percent, compared with 5 percent in Europe, Salova said. The most promising segments of the market are sportswear and activewear, maternitywear and jeans.

“There is also high demand for men’s business suits because there are not enough on the market,” she added. “The least growth is for lingerie because the market is saturated.”

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