About Denim

Some weeks ago, I was asked to fill out a questionnaire, giving my opinion about near-term denim pants retail sales.  As my clients will be the first to tell you, my knowledge of marketing is somewhat below Zilch.  However, I do have knowledge of the global industry, and under the circumstances, I thought it more appropriate for me to provide relevant data about the current state of U.S. denim pants (jeans) imports, in the hope that those of you who are marketing specialists may use this information to make your own, more educated conclusions.

All of the data for this article comes directly from the U.S. Government Office of Textile and Apparel.  It is freely available from the OTEXA website.  I would also say that it is probably the most accurate and complete garment trade data available any where in the world.[i]

Now to business

The Denim Decline

Walking down any street in any city in the U.S., you might think that at least half the people you pass are wearing blue denim pants (jeans) This may well be true.  Perhaps despite the best efforts of the hi-tech denim-garment-distress industry, jeans still last longer than other types of cotton pants and therefore require fewer replacements. On the other hand, this perception may be the result of some alien induced mass hallucination.

Whatever the cause, I can assure you that once again perception has proven wrong.

The truth is that More...

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India’s Global Garment Initiative: Part I – Governance

As we have discussed in the previous articles, India’s garment factories face strategic and systemic barriers, which by definition cannot be overcome by either the individual factories or even by the industry working as a whole.  Until Government is willing to phase out its policy of favoring the local textile industry against local garment makers (and farmers), thus creating a level playing field, India’s garment factories will not be able to compete effectively on the world market.

However, even with the removal of these barriers, India’s garment export factories will not be able to reach their full potential without overcoming their self-imposed operational obstacles.

Among the most important is the issue of governance — compliance and sustainability.

The whole business of governance is filled with misunderstanding, evasion, dissimulation and lies.

On the customer side, brand labels and retailers insist that they must impose code of governance to ensure their suppliers meet the minimum standards acceptable to the civilized world.

On the supplier side, many factories consider governance to be a public relations scam, imposed by their customers to sound good to their consumers.  Quite correctly they point to decades of unfair audits where factories where suppliers throughout Asia were branded as exploiters while those located in Bangladesh were given a free-pass for even the most egregious systematic failures.

To many in More...

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India’s Fragile Recovery

India’s garment factories are doing well. . .

Exports to the EU are recovering:  After a disastrous 2012 when exports fell by 19%, 2013 rose by 6% and for the period year to date March 2014 rose by 18%

Exports to the U.S. are also recovering:  After a poor 2012 when exports fell by 8%, 2013 exports rose by 4% and for the period year to date March 2014 rose by 3%

. . .but India’s garment industry is not doing well at all.

 Market share for the EU has a long way to go:  After a disastrous 2012 when market share fell by 10%, 2013 showed only a 1% recovery and for the period YTD March 2014 3%

Market share for the U.S. also has a long way to go,  Market share in 2012 fell by 7%, rising by only 20% in 2013. YTD March showed a 6% recovery, which was later reduced to 4% when the YTD data for May 2014 was released.

The seeming paradox is easily explained.

A factory concentrates on its own business. The factory does not care about market share.  The factory does not care that their increased business is the result of two factors.

  1. Increased demand for imports from their customer’s country
  2. The higher regard their customers hold the factory supplier

The factory owner cares only that his operation has new and bigger orders.  The owner does not realize that at a time when demand for imports is rising 10%, the only factory not enjoying increased orders would be one More...

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Role Reversal in the Garment Industry Drama

In 2009 my company Third Horizon was retained by the Inter-American Development Bank to create a strategy to revive the Dominican Republic garment export industry.

From the outset, the situation appeared lay somewhere between serious and hopeless

As of 1994 The Dominican Republic ranked was the 6th largest garment supplier to the United States with a 5% market share. It was also the world’s 3rd largest cotton pants supplier with a 10% market share.  So important was pants exports that Dominican garment industry was nicknamed  Isola Del Dockers

By 2009 — when we were invited to effect the great change — the Dominican industry rank had slipped to 20th with a 0.97% U.S. total garment market share.  Market share for cotton pants had fallen to 0.79%

From the period 2000 to 2009 employment in the garment industry fell by 82%, from 141,945 to 25,200.  This was perhaps the greatest collapse in the history of the global garment industry.  In a country where 41% of the total population was living below the poverty line the loss of 116,700 was nothing short of catastrophic.

Remarkably the Dominican garment industry failed despite enjoying overwhelming advantages over its competitors

  • As part of CAFTA, Dominican Republic enjoyed duty free access to the U.S., its most important market, which at that time imposed an average of 18% duty rate on garment More...

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