Forget Vogue. Sourcing Journal should be required reading of you really want to know how the business of fashion works. Clare’s guest this week Edward Hertzman founded this highly regarded trade journal (now part of FairChild, which owns WWD) out of frustration that no one in media was telling the full story about how supply chains operate. A former apparel sourcing agent himself, with a degree in economics, the tough-talking New Yorker tells it like it is.
In the garment game, suppliers and manufactures take most of the risks, while brands wield most of the power. “It’s a very one-sided relationship,” he says. Add in unfair purchasing practices (which are way too common) and downward pressure on prices, and you’ve got a recipe for disaster - as we saw during the pandemic.
Furthermore, who do you think has to invest in all these new sustainability initiatives brands are talking up? Yep, very often it’s the manufacturer. Of course some forward-thinking brands partner with them to shoulder the costs, but that is by no means the norm. Remember what brands always say: “Well, of course we don’t own the factories or the mills …” For too long, they’ve been allowed to avoid responsbility.
Can the industry change? Who's doing it right? What does a true partnership - as opposed to a purely transactional relationship - between brands and suppliers look like? And what should we expect to happen this year when the cost of living crunch meets the realities of overstocked warehouses? Because many brands, particularly in the US, says Eddie, are sitting on giant piles of unsold stock ...
Required listening for anyone working in the fashion sector.
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JASMIN MALIK CHUA is Sourcing Journal’s Sourcing and Labor Editor, and a leading sustainable fashion journalist since way back. And we love her. Read her work here, and here. Follow her on Twitter
FASHION SUPPLY CHAINS “The fashion supply chain refers to the process of tracing each step of the clothes manufacturing process, from sourcing of the raw materials, to the factories where those materials are made into garments; and the distribution network by which the clothes are delivered to consumers. It’s a lengthy process, and it’s extremely rare for raw materials to be grown, processed, sewn, and sold all in one location.” Via Good on You, read the rest here.
The above graphic is from Drapers is a good start, but it doesn’t tell the whole story. In between is a whole network of agents and BUYING HOUSES - the latter include Li & Fung, Asmara, Synergy and William Connor.
Let’s just say, supply chains are complex. That also makes it problematic to generalise. Some players are very committed to sustainable solutions. Equally, the solutions aren’t black and white.
Is NEAR-SHORING the answer? That means shifting manufacturing closer to home. McKinsey reckons 71% of fashion companies are considering it post-pandemic, for faster response times plus reasons of resilience and sustainability. But will it really fly? Costs remain an issue. Read more on Fibre2Fashion
PERCEIVED EFFICIENCIES Alas “chasing the cheapest needle” continues, and some brands are always looking for cheaper, faster, cheaper still. Way back in 2019, McKinsey was warning: “The question is no longer whether but how to scale social and environmental sustainability in apparel sourcing,” and that, “There are diminishing returns from the old model of moving continually from one low-cost sourcing country to the next.” So why are we still here? Power dynamics have a lot to do with it. When brands call the shots, suppliers face a Hobson’s choice - cut costs or risk losing the business.
ANTI-BLACK FRIDAY is increasingly a thing. Eddie mentions a brand selling a jacket for 1 million euros as an anti-Black Friday statement. What was he referring to? “Hiut Denim really turned its back on Black Friday this year. Rather than discounting and promoting sales and consumption, the Welsh brand instead had a ‘one-day price hike’ on Nov. 25 and—with tongue firmly in cheek—offering to sell ‘the world’s most expensive pair of jeans’ at the cost of 2 million pounds. The so-called promotion offered it, and four limited-edition, custom-made pants ranging in price from 1 million to 195,000 pounds ($1.2 million to $235,659). The proceeds from the “sale” of them would be used to plant 1 million trees to offset the carbon footprint of the five most polluting stores in the U.K. according to the brand.” Genius! Via Sourcing Journal.
Huit Denim
SALE SEASONS keep getting closer together. Have you noticed? We had an opportunity during the pandemic, says Eddie, to reset this, but we squandered it. “I appreciated everyone talking a big game in ‘21, as if they figured out this retail conundrum…[but] now they’re right back where they started.”
“INNOVATION COMES FROM THE OUTSIDE” - the music industry is a good example. So who will disrupt fashion? Answer: We’re not sure yet.
THE SUSTAINABILITY ACTION GAP There’s a lot of sustainability talk, but is it matched by measurable action? Short answer: no. Eddie mentions that 80% of brands are working on sustainability initiatives, but less than 20% are tracking these commitments - which means they have no ability to know if they are complying with their goals. He’s referring to Alix Partners’ 2022 report producing in collaboration with Sourcing Journal - the snappily titled “Fashion in Focus Survey Report: New Norms and Paradigm Shifts”. Get it here.
FIBRETRACE gives textile brands and suppliers 20/20 vision of their supply chain at every step from raw fibre to store. Their new MAPPED tool is an advanced digital transparency solution which maps the global textile supply chain from fibre to retail. They say: “It is being introduced free of charge because we believe there should be no barrier to transparency, and no reason for fashion and interior brands globally to not take accountability.” We say: it’s good stuff.
ESG LEGISLATION is coming for fashion. Want to deep dive into a podcast series that’s all over it? We humbly recommend Series 3 of The Ethical Fashion Podcast, co-hosted by Clare, listen here. But in summary: the EU’s Green Deal, Circularity Action Plan and ESG Due Diligence directive are shaking things up, while across the pond the Uyghur Forced Protection Act and NY Fashion Act are also shifting the goal posts.
Meanwhile, reports Business of Fashion: “On January 1, France quietly made it mandatory for fashion’s biggest companies to give shoppers detailed information about environmental characteristics like the proportion of recycled material in a product, as well as where garments are sewn and materials woven. The law is an early salvo in a broad regulatory push taking shape across Europe and the US that is set to end years of lax controls over the fashion industry’s environmental footprint and links to labour abuses. Compliance is complicated and will require companies to have a much greater command of their supply chains than most currently do. And while some of the proposed new rules are likely to take years to wend through the legislative process (and even longer to come into force), others – like France’s new law – will require companies to act now. Fashion isn’t ready…” Read the rest here.
BURNING BALENCIAGA Here’s the Renoon post on IG Clare mentioned. And Lo, ‘tis indeed January, and, Eddie was right, no one’s talking about it…
THAT WAS THE WEEK THAT… “Spray paint on stores. Slashed and burned products on social media. Accusations of promoting pedophilia on cable news. This week, the risks of Balenciaga’s edgy approach to marketing became painfully clear — as did the errors of the company’s initial response to the crisis — as public outrage and confusion in response to the brand’s ads featuring children posing with BDSM-inspired teddy bears reached a scale not seen in the fashion industry since Dolce & Gabbana’s 2018 meltdown in China.” READ back over BoF’s take from December here.