For apparel companies, volatility has become embedded in the way the business operates. Tariffs can change the economics of a sourcing country. Freight disruptions can alter lead times. Consumer demand can move faster than production calendars. Costs can rise just as brands face pressure to protect both price points and margins. All of this demands greater flexibility at every stage of the business—from sourcing and inventory commitments to pricing, planning and logistics.
The “Staying Agile When Costs Spike & Trade Shifts” panel at PI Apparel, executives from Happy Socks, The Bar, Mission and Fashion Institute of Technology (FIT) address how this reality is driving their business decisions.
For Bryant Vitanza, chief operating officer of heat relief innovation company Mission, the goal is to make decisions with the best information available while preserving room to change course.
“When we were looking at these challenges as a company last year, and I continued to and have over my career, it’s: Is it directionally right? Is it directionally correct?” Vitanza said. “You’re aligning with your leadership, with your team on the information that you have today, which is the best information you can have.”
That philosophy requires companies to distinguish between commitments that are difficult or expensive to reverse and the many smaller decisions that can be adjusted as conditions evolve.
“Most decisions we’re making, there’s a ton of optionality related to those,” Vitanza said. “You make them based on the information you have today. And so when I look at decisions, it’s how many micro decisions do we need to make across the organization.”
Casey Royster, who has worked in sourcing and product development for companies like Ralph Lauren and LoveShackFancy, takes a similar approach to imperfect information.
“I’m more than happy to make a decision with 80% of the data because I’d rather be able to make a decision today when the time is necessary than wait three weeks for 100% of the data and have actually missed the mark and the opportunity,” Royster said.
Build Optionality Before You Need It
That ability to act quickly starts well before a disruption arrives.
Throughout his career, Royster has maintained a diversified vendor matrix and invested in supplier relationships that allow production to move when circumstances change. Those relationships become especially valuable when a company suddenly needs different capacity, materials or geography.
“I continuously nurtured vendor relationships to ensure that when conditions change that I can quickly pivot and ensure that the wheels continue to move,” he said.
Sonja Chapman, associate professor of international trade and marketing at the FIT, sees echoes of an earlier era of apparel sourcing. Before the elimination of quotas in 2005, companies frequently sourced across dozens of countries because trade rules required it.
“We’re probably entering an age where we have to develop parallel supply chains,” Chapman said. “We’ve always had trade disruption. It just hasn’t been as obvious as it is now.”
Today’s sourcing toolkit can include parallel product development, nearshoring where appropriate, free trade agreements and first-sale programs that lower the dutiable value of qualifying goods. Companies also need multiple transportation scenarios as geopolitical events, drought and other disruptions affect traditional routes.
The growing importance of trade also means those specialists need a bigger seat at the table. Trade policy increasingly affects sourcing, costing and production decisions at the earliest stages.
“Now trade is invited to the larger meetings of sourcing [and] production to work with those groups and kind of advise on where we can go and what we can do,” Chapman said.
Margin Percentage Doesn’t Tell the Whole Story
Flexibility also requires questioning some of the apparel industry’s most entrenched performance measures.
Emma Reid, GM of planning at Happy Socks, learned that lesson through the brand’s gift-set business. After Happy Socks raised prices on successful gift sets, B2B preorder revenue initially increased. The results in the company’s own channels told another story: revenue stayed level, volumes and sell-through declined and discounting increased. Wholesale customers subsequently saw the same performance, weighing on future orders.
Reid responded by substantially reducing prices and accepting a lower opening margin.
“I made the very, very aggressive decision to not just reduce the prices, but I was going to bulldoze that margin and I wiped about 15 percentage points off,” she said.
The strategy produced a different financial equation. Volumes tripled, revenue tripled and net margin increased by double digits, Reid said, even as the margin percentage remained lower.
“The percentage is a pretty KPI to present to your board and investors, but ultimately what matters and impacts the P&L is that cash, so how do we control and influence that,” Reid said.
Higher volumes subsequently gave Happy Socks more negotiating power with suppliers, creating an opportunity to improve product costs and eventually rebuild margin percentages.
The experience illustrates why costing decisions need to travel across functions. Vitanza said companies should follow the implications of a decision through the organization rather than allowing individual departments to optimize against isolated targets.
“What’s the impact of making that decision on the business, not just today, but long term?” he said. “And then really what’s the conversation we should be having around the health of the organization as a whole?”
Rethink the Critical Path
Traditional apparel calendars can also limit the ability to respond to demand.
Happy Socks moved from one end-to-end development timeline to three: long-term, midterm and short-term critical paths. That gives the company room to react to trends while maintaining longer commitments where they make sense.
“We have allowed that space and that timing to be able to react to the trends where you need to be able to be quicker,” Reid said. The change also required different conversations with suppliers accustomed to receiving designs or quantities as much as a year or 18 months ahead. Now, she said, the company can approach them with opportunities three months before goods are needed on the selling floor and ask, “What can we do together?”
Royster uses another lever: pre-positioning materials in the appropriate production regions so product can move faster when demand emerges.
Mission has similarly broken commitments into smaller stages. Pre-positioning materials and reserving capacity can give planners flexibility without forcing them to commit fully a year or more in advance.
“As we get more information either from our customers or global changes, then we can recalibrate and adjust,” Vitanza said.
Keep the Customer in the Equation
Internal financial pressures can easily dominate conversations about cost. Reid argues that companies also need to keep asking what their decisions mean for the person buying the product.
“No one in this room knows what the best seller is going to be,” she said of a previous assortment review. “We can forecast, we can guide, we can try and influence, but ultimately it’s the consumer who will tell us what that bestseller is.”
This is important to keep in mind when companies consider raising prices, reducing quality, changing packaging or customer service, or imposing tighter return policies.
Vitanza sees the same tension. A move that improves margin immediately can weaken the longer-term relationship a company is trying to build with its customers.
“Yes, we can increase our margin by doing this, but we’re sacrificing this and it’s maybe a short-term gain that’s going to really hurt the brand long term,” he said.
Royster recommends keeping the bulk of the business centered on proven products while creating controlled room for experimentation.
“It’s that 80/20—80% of the core product and then spoon-feeding the 20% of where you can drive new revenue,” he said. “For the most part, it’s maintaining the heritage and the DNA of the business.”
Turn Data Into Better Decisions
Technology is giving apparel companies considerably more information to make those calls.
At Mission, whose assortment centers on cooling towels, hats and apparel, Vitanza pointed to weather information as an example. The company can now access detailed weather data globally that can feed into planning decisions.
“The access we have to weather data at my fingertips in every possible variation across the entire world that we didn’t have even a year ago is incredible for what it can do for the business in terms of making decisions and planning,” he said.
The challenge becomes deciding which information matters and embedding it into processes across planning, finance and other functions.
Royster is also using AI earlier in the product cycle, including during ideation and merchandising, to visualize products, test interest and support leaner inventory positions.
More data still requires judgment. When sales disappoint, Reid’s first response is to determine what actually happened. A supposed demand problem can turn out to be an execution problem: merchandise sitting in a stockroom, missing marketing support or another issue unrelated to consumer appetite.
The final piece is institutional learning. Once a decision has played out, Vitanza recommends revisiting the assumptions behind it and incorporating the findings into future decisions.
“We thought it was going to be this, it’s not that. What can we do differently? How can we build that into the muscle of the organization?” he said. “There’s so many learnings that you can gain from that that can help impact the future for the better.”
