I want it now! Fast fashion leaves sweatshops threatened

 

Click to follow
The Independent Online

Demand for “fast fashion” could spell the end of overseas sweatshops, a report into the manufacturing of clothing predicts.

Retailers are increasingly sourcing products closer to home to meet the demand for instantly changing trends and cheap labour is becoming less attractive if the products cannot be on the shelves instantly, according to a report by Boston Consulting Group.

BCG’s report “Apparel at a Crossroads – the end of low-cost country sourcing” found cheap labour is already a “rare commodity” as wages rise across much of Asia. Companies have recently turned to countries such as Ethiopia and Burma in their search for lower-cost locations.

However, BCG found they are now realising the inefficiencies in sourcing from further and further away can outweigh cheap labour.

Retailers are now desperate to produce key “sell-out” items and the time between the emergence of a catwalk trend and the “mass dissemination” has shrunk from one year to as little as three to five weeks. 

Being able to stock more of a best-selling product quickly can be the difference between 50 per cent gross margin and 5 per cent. If the production and supply takes too long and misses the peak moment of demand for the latest shearling gilet or cocoon coat, a retailer can lose sales – and be left with excess stock.

Atul Agarwal, a principal at BCG and an expert in manufacturing and supply chains said: “Companies are now looking at the benefits of  manufacturing as close to demand as possible.

“Companies that mindlessly outsource to low cost countries may save a few per cent on manufacturing costs but you can lose on transportation, write-offs, time delays and fail to keep your end customer happy.”

He said the UK could start to benefit in a larger way for clothing manufacturing at the high end. “On the back of technology, investment and improved productivity, countries in Western Europe are attractive again. We have seen that in the US ‘reshoring’ is well entrenched and we could well see that here in the UK”

He said the UK – in terms of the overall supply chain – comes out top compared with low-cost countries and in terms of adjusted labour costs, it is the lowest in Western Europe bar Spain.

He added: “I think the UK has potential to attract more investment in high-end manufacturing. It isn’t happening yet but it could.”

Comments