Jeff Streader, senior vice president of global sourcing for Guess Inc., said despite success stories in other countries in Asia that have been able to grow their market share, China is still the leader of the pack when it comes to apparel manufacturing.
The country continues to grow its market share at a rapid rate, Streader noted.
“If you want to call it emerging, they continue to emerge as the de facto leader,” he said.
With that in mind, however, Streader’s main concern as he makes sourcing decisions for Guess is to keep the fashion firm from placing too much of its production in China.
“I am very concerned about being oversubscribed in China, as all of my counterparts are,” he said. “The quagmire here is how to make a business decision to go to a different geography or market knowing that you’re going to lose either speed or cost or execution.”
The countries that have emerged as popular production spots for apparel are primarily in Asia, Streader pointed out, citing Vietnam, Cambodia and Bangladesh, noting they still rely on China for raw materials such as fabric and trim. Because of heavy reliance on China’s supply chain, smaller countries producing apparel can be seen more as extensions or outsourced locations of the larger supplier than as real threats, he said.
Streader’s sense of the industry was honed in more than a quarter century spent with apparel companies. Prior to joining Guess, he was the president of Kellwood Global, the company’s global sourcing arm, as well as serving as vice president of sourcing for VF Corp. He spent the first 18 years of his career in a variety of positions with Oxford Industries.
When he started, Streader said, the apparel industry was focused in the Western Hemisphere with a portion of production still occurring in the U.S. Early sourcing trends moved production out of the U.S. to Central and South America, he said. The production shift to China started in earnest during the Eighties, he said.
To balance out Guess’ sourcing strategy, Streader said his goal is to shift a portion of production away from China. As of now, more than half of the company’s production, like many large apparel firms, is in China. Ideally, Streader said the company would have 35 percent of its production in China with the remaining 65 percent split between other countries in Asia and factories in the Western Hemisphere.
Beginning in 2010 and continuing for the next couple of years, Streader said he would expect to see increasing numbers of companies looking to diversify their sourcing strategies.
“I think you’ll see executives like myself, in companies that import products from Asia, taking a harder look at their China dependency and coming up with affirmative, alternative sourcing strategies to develop that China alternative,” Streader said.