Beware of Industry's Growing Divide


The divide between small- and large-sized apparel businesses is growing, and that's a problem.

After quota elimination, our industry's largest apparel brands are planning to source from fewer vendors, and many of those vendors will become, if they are not already, one-stop shops. They will be huge, integrated, vertical businesses, offering everything from design and product development to knitting, weaving, sewing and shipping direct to stores.

While this scenario no doubt is efficient, eliminating many pass-offs and players in the supply chain, it has some serious consequences for the many small- and medium-sized firms in our industry, and for the large-sized firms aborting their business with them.

Firms that only punch their own weight when they pick and choose supply chain partners miss key opportunities that come from working with enterprises that are not just like them in scope.

From the supply side, small manufacturers lose because they don't have enough opportunity to reach the consumer audience that shops the mass market, mall-based specialty stores and other channels dominated by large manufacturers and retail conglomerates. Large brands lose because when they focus so much effort on serving the big retailers, they limit their potential to reach consumers who shop in the thousands of independent apparel specialty stores.

From the retail side, large retailers cannot provide consumers with wonderfully diverse merchandise when they insist on buying exclusively from vendors who can support huge volumes. By the same token, small retailers lose out when they cannot offer at least a little merchandise from major brands because of large order minimums.

Worst of all is the prospect of an elite group of giant apparel firms dominating the business. This scenario will exacerbate the problem of too much apparel sameness in the marketplace. Every organization has a core competency, whether that be manufacturing, fashion innovation, sourcing savvy or distribution. But today, many apparel enterprises are trying to do it all at the expense of being really good at anything. The saying "jack of all trades, master of none" comes to mind.

For instance, how can an apparel contractor give enough attention to the quality of sewing while trying to travel the world to gather fashion trends to share with customers?

There should still be room in this industry for businesses to specialize in their craft or trade, perfecting their abilities in a certain area, whether it be in production (i.e., to be the best at pleating) or retail (i.e., to offer the best selection of plus-sized ladies' dresses). This specialization, by definition, suggests that a business cannot be huge, vertical or fully integrated. Its purpose is simply to be good at what it does. Who would not want to do business with a supplier or retailer that lives up to this basic objective?

In conclusion, it is not easy for firms of vastly different sizes to work together, and there has to be a willingness on both sides to make the relationship work. But those who see the benefits and give it a try will bring the best apparel to market. They also will strengthen the industry by ensuring that it remains diverse, with room for entrepreneurialism, specialization and flexibility to meet changing market demands. 

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