The apparel industry is entering a new era.
Today, speed is taking precedence in a new way, as apparel brands and retailers look for ways to mitigate risk, manage expenses and react to ongoing geopolitical volleys. To make quick turns work for an industry known for lengthy calendars, companies are committing to trusted supply chain partners and leaning into regions that offer vertical operations.
“The smartest brands and retailers and the most valuable ones are figuring out that speed results in better net margins because you own less product,” said Jamin Dick, CEO of J. Dick Advisory and former supply chain executive at Lands’ End and Alibaba. “What that looks like is small, more frequent buys,” Dick said.
This is something fast fashion players have long understood. And it’s why they’re “knocking the socks off of most retailers.” To compete, he said mainstream brands have to forget about first costs and embrace a “massive shift” in mindset. “You can’t incrementally change an internal process that goes from 50 to 10 weeks.”
Dick said the shift comes from building teams for speed and measured on net profits.
Faster together
But even fashion firms that are ready to take the plunge, can’t go it alone. Speed is a supply chain-wide commitment.
Katherine Chan, director of business development for The Hong Kong Research Institute of Textiles and Apparel (HKRITA), said production companies across Asia and Eastern Europe are offering new solutions because “the old production system is not going to work in this quick order world.”
To make themselves more favorable in this environment, these factories are now platforming greige fabrics and working with buyers to streamline the number of fabrics used in each collection. Chan said this requires trust borne out of strategic partnerships. “It has to be a partnership from spinning to weaving or knitting, to dyeing and finishing and then garment making,” she said.
Collaborations like this stand in stark contrast to transactional sourcing, which can offer short-term cost relief but fails to provide many of the benefits of established partnerships.
“Speed comes through long-term planning and long-term partnerships,” Dick said, warning that companies that choose to bounce around from factory to factory could find themselves empty handed when the music stops. “Speed really is related to finding vendors who will reserve capacity for you.”
“The smartest brands and retailers and the most valuable ones are figuring out that speed results in better net margins because you own less product.”
—Jamin Dick, J. Dick Advisory
He cautions his clients to not be lured by the siren call of deals that can be found in the market right now because they come with a tradeoff. “You’ve got to be careful that you don’t end up on the wrong side of it when the market turns again,” Dick said.
It’s a lesson the industry learned during covid. Some companies that chose to be opportunistic at the expense of their supply chain partners are still living with the consequences.
Jeff Streader, founder and managing partner at brand investment platform Go Global, considers himself to be a contrarian as he looks at some of the strategies being employed today. “I don’t believe in opportunistic sourcing and a knee jerk reaction,” he said. Instead, he’s focused on long-term supplier partnerships that can yield the quality, compliance and efficiency his brands need.
His company, which owns children’s wear brand Janie & Jack and Hatch maternity, is evaluating new production countries with a primary focus of bringing supply closer to the new markets the brands are developing.
“Our brands in our portfolio are all premium. It’s a higher needle, better fabrics. The vertical supply chains are linked or nearby. It’s been planned, it’s been tested, it’s been proven, and if there are implications because of tariffs, at that moment, we will find a way to either absorb some of the tariffs—which we are—or where the product quality and marketplace would warrant a marginal increase,” Streader said.
Ultimately, Streader said speed is about digital product creation and leveraging pre-positioned raw materials—regardless of location—with proven partners.
“We believe in fast-response capability within a disciplined structure. That means test-and-react models, capsule drops, and cross-border shipping—without rewriting the entire supply chain,” he said.
Vertical aspirations
Until recently, the tariff situation looked as though it would favor those with production partners with tentacles reaching around the globe. These days, even that may not be good enough. With rules of origin potentially driving prices up on inputs imported from outside a given region or country, each of these outposts may need its own vertical operations to support production.
Zaki Saleemi, SVP of global sales for Material Exchange, and former SVP of Pakistan-based denim producer Crescent Bahuman, said even just a few years ago if he were able to find the quality and price he needed on multiple fabrics from China, he’d source them all there and ship those textiles to garment producing countries around the world.
“That’s going to disappear,” he said. “It’s going to be more verticality now—country wise. It doesn’t have to be supplier wise.”
“We believe in fast-response capability within a disciplined structure. That means test-and-react models, capsule drops, and cross-border shipping—without rewriting the entire supply chain.”
—Jeff Streader, Go Global
Saleemi said the trend of local for local production has been gaining traction for four years, and he feels the tariff situation will “fast track” that evolution.
Dick is seeing the same. “People are seeing that vertical integration is very powerful, and so a lot of the mills and bigger production houses are starting to merge together and work together to invest in localized raw materials supply that’s nearby to the cut and sew,” Dick said.
The challenge, of course, is a less centralized supply chain means more manpower to manage operations in multiple countries.
“Essentially, it means double the work,” Saleemi said.
Not only is it more to manage from a geographical standpoint, it requires a more hands-on management style when working in countries and factories that might be less sophisticated. With China, apparel executives had kind of been able to set it and forget it.
“The idea of having a remote control from your headquarters office is not going to work,” Dick said. In many countries, he said, brands and retailers must have “heavy” quality assurance in place, and he sometimes employs production engineers to manage production and a digital design team to stay on top of patterns and yields. “It’s a very hands-on model, and that’s the price you have to pay for getting out of China.”
Location, location, location
For companies that want to react quickly but also need to be agile in their production quantities, there’s a reason why China was the go-to, according to Angela Chan-Dasini, a sourcing and supply chain consultant and fashion merchandising professor at Kent State University.
It’s hard to find that mix elsewhere, she said.
Mexico, though close for brands operating in the U.S., could also be burdened with tariffs and it lands on the high end of labor costs and an over reliance on Asia for textiles and trims. Similarly, AGOA countries face challenges with logistics and the volumes to fill large container loads is prohibitive. She added the high minimum order quantities in Vietnam and Bangladesh can also be challenging.
Increasingly, Chan-Dasini said U.S. brands are discovering Morocco, which has been a staple for European fashion firms for years. She’s also hearing more about Jordan, which has a free trade agreement with the U.S. as well as expertise in synthetics.
In terms of verticality, Saleemi points to Pakistan and India as leaders in cotton-rich products, with India making a strong play to build up its synthetics capacity now as well.
Dick notes Latin America for cotton basics, saying raw material availability there is better than it used to be “and growing by leaps and bounds.” He also lauds India’s capabilities in wovens, and though more expensive, he said Turkey and Egypt both offer a good mill base.
Given the demand for verticality, what that region needs to truly be competitive today is cut and sew, according to Besim Ozek, sales manager for Turkish denim mill Bossa.
As the tariff pressure began, big brands started diversifying out of China and specifically looking for regions that offered both fabric and garments. For denim, Ozek said the industry expected orders to flow into Turkey for fabric and Egypt for garments. That happened but at a much more modest rate than they’d hoped for. Inflation and energy costs in Turkey could be one reason. Another, Ozek said is that “Egyptian quality and quantity does not satisfy U.S. brands.”
So instead of leveraging the short lead times that companies like Inditex enjoy in the region, U.S. brands are producing elsewhere.
“Shipping to Vietnam is six weeks. And then six weeks to U.S. No one is going to wait for that,” he said, adding the solution is to build a vertical setup that works for the American market. “We need good garment production in the Mediterranean.”
Even as sourcing shifts, it’s much too soon to count China out, these executives say. Ultimately, it’s the only nation that has the capabilities, quantities, raw materials and relationships the industry needs. And while it’s generally very easy to pick up and move sewing to another country, that’s not true for all categories. Some will remain in China for the foreseeable future. Swimwear is one example given that the necessary technical synthetics originate in China, Dick said. For Streader, sweaters could fall into that category as well, given the country’s unmatched pricing and quality.
It’s a further proof that tariffs are just one consideration in a laundry list of sourcing priorities—and sometimes they’re actually fall near the bottom.
“There’s certain countries where there’s just so much advantage that even the Trump tariffs are not worth moving out of those regions,” Dick said.
