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Sourcing’s New Way: Expanding Beyond China While Maintaining a Foothold

While the Sino-American trade war has spurred global apparel sourcing to diversify within Asia and throughout the world, China still holds a special place for many clothing companies.

For many apparel players, “’unpredictability’ is the code word for last year, and certainly it’s going to be for this year, as well,” Julia Hughes, president of the U.S. Fashion Industry Association, said Tuesday while moderating the Texworld USA panel, “Global Sourcing Trends: What’s on the Horizon for the Textile & Apparel Industry.”

Angora Group, a strategic product management consulting firm serving socially conscious fashion brands, focuses on helping businesses launch new products, and part of that is setting up customized sourcing strategies, according to company president and partner Nesli Danisman.

Asked about the trade war’s impact, Danisman said beyond the major challenge it created for any company sourcing in China, it has also resulted in “being more open-minded and nimble, and also less focused on our base of factories.”

“It’s been about taking more trips, seeing what’s out there and having more options on the table for different product categories and different regions,” she added. “We’ve really been building our database. That’s because we work with some brands that are in China and want to diversity and shift some of their production base.”

At Komar Brands, the diversification plan has evolved from being “narrow and deep,” with loyalty to factories that had performed well over the years, to “knowing right now that China’s not necessarily the place to be,” and putting production in places like Vietnam, vice president of sourcing and production Yelena Mogelefsky said.

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“One of the keys that I have found is my current factory base actually has facilities they own” outside of China, she noted. One, for example, operates a large factory in Bangladesh, and Mogolefsky has shifted extensive production there.

“More so than ever, I feel that planning is so important–I need to know the sales plans so I can hold capacity in certain factories instead of maybe just seeing how it goes” in a certain season or product, she added.

With that said, certain styles are still produced in China, Mogolefsky said, because “at the end of the day, it might not even be cost-effective to move it out of China,” even with the tariffs in place.

Importers are making a big push to find alternative sourcing countries, Hughes said, noting that Vietnam, a key destination, might soon be reaching capacity in certain areas. The fastest-growing U.S. suppliers with double-digit increases have been Cambodia, Pakistan, Egypt, Jordan, Ethiopia, Turkey and Myanmar, Hughes said.

For Mogolefsky, Bangladesh has been the top alternative to China for many years, while Sri Lanka has more recently been a destination for making Komar’s sportswear, sleepwear and intimate apparel, as well as Vietnam. She has started to investigate Ethiopia and Colombia.

“It’s worth going outside your comfort zone right now,” Mogolefsky said. “It’s worth spending a little money to try a new destination. We need to find what that new country is.”

Angora Group is doing more in Eastern Europe and Turkey, Danisman said, as well as North African countries such as Tunisia and Morocco.

“We also do a lot in L.A., with some Mexico thrown in,” she said. “We do keep high end in China. They use technology for intimates that no one has.”

Mogolefsky agreed that she has the same strategy about China for high-end intimates because “sometimes you can’t beat what you’re getting.” Throughout the trade war, Chinese factories have been willing to partner with brands and share the costs to maintain the business, she added.