The success of the business models of H&M, Nike, Abercrombie & Fitch and other fashion apparel industries over the years has focused on low prices. However, with supply bottlenecks and rising freight costs, the fashion industry used to change items every three weeks on average. “Fast fashion” has become increasingly difficult.
Gus Bartholomew, CEO of Supply Compass, a British business that specializes in product development and supply software for fashion companies, said that many companies are currently facing delivery problems, especially from Asia. Commodity, no specific solution can be seen in the short term.
At the end of September this year, Swedish fashion chain H&M admitted that it had encountered delivery bottlenecks in production and logistics. Helena Helmerson, chief executive of the group, said that despite improvements in supplier conditions, delays in the fourth quarter of this year will continue. Matt Friend, CFO of Nike Sportswear Apparel, explained that the delivery time from Asia to the United States doubled to 80 days in November. Abercrombie & Fitch, Boohoo, Asos and other merchants also complained about delivery difficulties and rising raw material prices.
Vietnam is one of the world’s largest textile manufacturing countries, with more than 6,000 clothing and textile factories, such as Ralph Lauren, North Face, Lacoste, Nike, Zara, etc. Well-known brands are all produced in Vietnam. However, in order to curb the new wave of COVID-19 epidemics, local governments were forced to adopt relevant restrictions, and the textile and apparel industry fell into extreme difficulties in the last quarter of this year. The apparel industry expects that the situation will improve and recover until enough people are vaccinated against COVID-19 in the second half of 2022.
In view of the fact that low costs and delivery times in manufacturing countries such as Vietnam, Bangladesh, and China are the core keys to the success of the fast fashion model, relocation of manufacturing locations to market countries , it is possible to solve the problem in the long term. In addition to shortening delivery time and reducing transportation costs, it is also environmentally friendly. For example, compared to its competitor H&M, which has 70% of its products from Asia, Inditex, the parent group of Spanish business Zara, which leads the global fashion market, is more capable of fighting the crisis because most of its products are produced in its own country or in neighboring countries such as Portugal and Morocco. .
In addition, the world-renowned German men’s fashion brand Hugo Boss has not heard of any delivery problems because the products are processed and sewn in Turkey, Germany, Poland, Italy and other places. . In addition, the Italian brand Benetton is also moving more and more products from Asia to neighboring countries for production and manufacturing.
