u.s. sourcing perspective today april 27, 2011. outlook for the global economy outlook for the...
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U.S. Sourcing Perspective Today
April 27, 2011
• Outlook for the Global Economy
• Consumer Confidence
• Rising Costs
• Cotton
Big Issues Today
More recently, however, we have seen increased
evidence that a self-sustaining recovery in
consumer and business spending may be taking
hold.
… a more rapid pace of economic recovery in 2011
than we saw last year.
Ben Bernanke, Chairman of the Board of Governors
of the Federal Reserve System, February 3, 2011
Outlook for U.S. Economy
Report from the NCTO Annual Meeting
U.S. textile executives, operating in a recovery and
expansion mode for the first time in a while, are
looking for ways to consolidate their gains without
losing profit margin to historically high cotton
prices and market share to pending trade
agreements.
WWD April 19, 2011
Outlook for U.S. Textile Industry
Report from the NCTO Annual Meeting
Last year, would anybody have guessed that cotton prices
would have tripled, polyester would have been up by more
than 30 percent and importers would begin to seriously
double China and turn back to the Western Hemisphere and
that we would actually run into capacity issues for some of
our products?
David Hastings, President CEO of Mount Vernon Mills,
outgoing NCTO Chairman, April 19, 2011
Outlook for U.S. Textile Industry
Strong customer service, innovative
marketing and original, differentiated
product are the keys to success, and
department stores, a sector that recently
has shown signs of increased differentiation,
understand that.
Citi Broadlines Analyst, Deb Weinswig
WWD April 7, 2011
U.S. Retail Outlook
Clothing is something that is more price elastic, so
that if your spending power is squeezed by food
and energy prices, and on top of that you see
clothing prices go up, then you…wait on buying
clothing and hope for more reasonable prices in the
future.
WWD April 17, 2011
U.S. Retail Outlook
Consumer Confidence
Seventy-four percent of Americans believe higher prices
could curb their spending in the months ahead, and 53
percent see spring merchandise prices as inflated, according
to a Deloitte survey released Wednesday. It’s currently up
only a few percentage points, but inflation on most apparel is
expected to be up 10 to 15 percent for fall due to higher raw
material and labor costs. Higher energy costs, higher medical
costs, unemployment levels and job concerns — and political
unrest in Africa, the Middle East and Asia — are further
driving down the will to spend.
WWD April 14, 2011
Consumer Confidence
Rising Costs
According to a AlixPartners study,
apparel inflation is averaging 17.4
percent for most retailers, with some
seeing increases as high as 30
percent.
WWD April 18, 2011
Rising Costs
Obama Administration Trade Agenda
• National Export Initiative
• Free Trade Agreements
• Colombia
• Panama
• Korea
• Trans-Pacific Partnership Negotiations
More than $70 Billion
From More Than 100 Countries
U.S. Apparel Imports
Top Apparel SuppliersYear Ending January 31, 2011
Rank Country Million SME Million $ % Share % Growth
1 China 10,462.9 28,387.2 41.80 19.43
2 Vietnam 1,943.7 5,968.7 7.76 19.83
3 Bangladesh 1,655.0 4,068.9 6.61 22.17
4 Honduras 1,283.5 2,441.4 5.13 27.29
5 Indonesia 1,283.3 4,479.8 5.13 20.79
6 India 977.8 3,166.7 3.91 8.26
7 Cambodia 970.1 2,283.6 3.88 30.10
8 Mexico 958.9 3,560.4 3.83 8.92
9 El Salvador 827.6 1,657.5 3.31 27.69
10 Pakistan 709.7 1,527.4 2.83 12.02
11 Thailand 462.2 1,313.9 1.85 15.22
Rank Country Million SME Million $ % Share % Growth
12 Nicaragua 367.6 1,033.4 1.47 19.63
13 Philippines 361.0 1,046.8 1.44 9.05
14 Guatemala 317.7 1,163.9 1.27 10.05
15 Sri Lanka 317.3 1,238.6 1.27 1.16
16 Haiti 265.5 544.1 1.06 15.22
17 Dom. Rep. 233.7 620.2 0.93 -2.03
18 Egypt 233.3 848.9 0.93 8.65
19 Jordan 191.3 813.3 0.76 14.15
20 Taiwan 175.1 480.1 0.70 7.92
24 Peru 74.5 678.9 0.30 16.10
29 Colombia 51.6 262.8 0.21 19.21
Top Apparel SuppliersYear Ending January 31, 2011
Major Apparel Suppliers
China Remains Top Supplier
But Opportunities Remain for Western Hemisphere Producers
Peru
U.S. Imports of $ 679 million
Ranks Twenty-fourth for Apparel
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
0
100
200
300
400
500
600
700
800
900
1,000
U.S. Imports from Peru 1992-2010
Apparel Assem-bled by
U.S. fabric0.83%
Apparel , chief
value of Ilama, Alpaca,
or Vicuna1.48%Short
Supply0.04%
Combina-tions
sewn or assem-bled in one or
more AT-PDEA, or
the United
States, or both
0.005%
Apparel assem-
bled from ATPDEA or U.S. yarn
97.65%
U.S. 2010 Peru Imports, by benefit
HTS No. Product Category YE Feb 2011 Value
6105.10.00.10 Men's Knit Cotton Shirts 338 113,597,869
6110.20.20.79Women's or Girls' Knit
Other Cotton Other Pullovers
339 119,864,498
6109.10.00.12Men's Knit Cotton Other
T-Shirts, except Underwear
338 63,386,533
6110.20.20.69Men's or Boys' Knit Other Cotton Other
Pullovers338 55,768,694
6109.10.00.40Women's Knit Cotton T-
Shirts, except Underwear
339 35,948,607
6106.10.00.10 Women's Knit Cotton Blouses and Shirts
339 32,258,703
6105.20.20.10 Men's Knit Other Man-made Fiber Shirts
638 20,967,545
6110.30.30.59Women's or Girls' Other Man-made Fiber Other Pullovers, etc., Other
639 18,211,588
6105.10.00.30 Boys' Knit Cotton Other Shirts
338 23,477,881
6109.10.00.27
Men's or Boys' Knit Cotton Other Shirts, Not
Underwear, T-shirts, Tanktops & Singlets
338 12,150,811
Top U.S. Imports from PeruYear Ending February 28, 2011
Rank Country Million SME Million $ % Share % Growth
1 Pakistan 4,115,320 169,445 18.65 33.94
2 China 3,231,456 215,003,827 14.65 20.31
3 India 3,062,535 169,554,254 13.88 10.49
4 Vietnam 2,667,030 154,795,244 12.09 34.80
5 Indonesia 2,154,178 107,168,992 9.76 18.93
6 Bangladesh 1,134,524 51,455,962 5.14 29.08
7 Peru 890,488 113,597,869 4.04 47.73
HTS No. 6105.10.00.10Men’s Knit Cotton Shirts
Year Ending February 28, 2011
Rank Country Million SME Million $ % Share % Growth
1 China 29,895,786 1,759,678,174 26.01 18.44
2 Vietnam 19,338,969 746,791,428 16.83 6.68
3 Indonesia 13,770,311 517,507,547 11.98 14.15
4 Guatemala 9,623,132 280,589,959 8.37 -6.76
5 Cambodia 8,665,314 281,712,570 7.54 20.00
6 Nicaragua 5,263,060 177,710,353 4.58 12.74
7 India 5,024,614 214,240,239 4.37 9.47
10 Peru 2,082,019 119,864,498 1.81 -3.34
HTS No. 6110.20.20.79Women’s or Girls’ Knit Other Cotton
PulloversYear Ending February 28, 2011
Rank Country Million SME Million $ % Share % Growth
1 Honduras 11,765,749 215,548,611 20.11 105.60
2 El Salvador 8,444,190 162,885,415 14.44 39.79
3 Haiti 6,104,819 98,475,729 10.44 19.03
4 Mexico 5,554,509 143,023,185 9.50 4.51
5 Bangladesh 3,897,435 61,093,269 6.66 -2.04
6 Pakistan 3,810,869 79,480,392 6.51 40.09
7 China 3,617,129 105,993,821 6.18 20.41
14 Peru 867,561 63,386,533 1.48 44.03
HTS No. 6109.10.00.12Men’s Knit Cotton Other T-Shirts, except
UnderwearYear Ending February 28, 2011
2007 2008 2009 20100
5,000
10,000
15,000
20,000
25,000
FabricYarn
U.S. Exports to Peru 2007-2010
Global Supply Chain
ComplianceQA & TechProduct Development
Global Logistics Production QA & TechGlobal Logistics Production
Garment Costs
Material is about 40 percent of the overall costs, trims add one-third to the price of the garment, and then labor and finishing and transportation become more impactful as they go up.
David Bassuk, global retail practice, AlixPartners
Sourcing Outlook
• Multi country sourcing for maximum flexibility
• Strong supplier partnerships• Social compliance• Quality product at a value price
Sourcing Outlook