Fashion Retailers See Diversification of Wholesale Supply Chain as Key to Success

As China remains the No. 1 destination for apparel sourcing – thanks in large part to the country’s tried-and-tested supply chain, its cost-effective labor force, and growth in domestic consumption – interests in sourcing to other countries continue to dominate industry forum and discussions such as the recently concluded Prime Source Forum 2014 held in Hong Kong.

Richard Thomas, head of Far East region sourcing at Marks and Spencer, said that while China accounts for 25 percent of M&S production, it has slowly lost its lion’s share from 40 percent just a few years ago. But, he added, the country still remains “the most important location for M&S for a long time to come.”

“Our focus now at M&S is making what we have more efficient and you only get this by working with a factory and a country for a long period of time, making sure at the same time that there’s healthy competition in your supply chain.”

M&S, which until two decades ago gets 80 percent of its products from the UK, is now sourcing to North Africa, Eastern Europe and India, as well as the new frontiers in apparel sourcing such as Bangladesh, Burma, parts of sub-Saharan Africa, among others.

However, he warned, “too much migration can mean you miss out on efficiencies. [Sourcing] needs to be focused and managed, so if you put in all that effort and cost you later go on and reap the benefits.”

Bob McKee, a global fashion industry directory at Infor and one of the resource persons at the PSF 2014, explained that “the reality is that the world will continue to change, and China will continue to change. Cost will continue to rise. The needle will continue to migrate.”

“Watch what happens with textile; that’s the capital-intensive element of our industry. That will signal the next big paradigm, the next big shift. If we see the textile industry moving to Africa then the deal is sealed, and that’s where we’re going next for all of our value chain activity.”

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