AAFA Annual Conference Is Built for Speed

DANA POINT, Calif.—Fast fashion has been the latest buzz word in the world of apparel and footwear manufacturing.

But business executives haven’t seen anything yet. In years to come, the world is going to be changing at an explosive rate, and only the nimble and those with a niche will survive.

That was the message at the annual American Apparel & Footwear Association executive summit, held Feb. 28–March 2 at the St. Regis Monarch Beach Resort.

An array of speakers, from a four-star general to a global analyst, gave their take on everything from the changing role of business leaders to the economic outlook over the next 20 years. The underlying theme was that change will be a constant, not a passing visitor.

“We need leaders who can lead under stress,” said Gen. Anthony Zinni, a retired fourstar general with the U.S. Marine Corps and a former commander in chief of the U.S. Central Command. “Nothing is standardized anymore. Nothing lends itself to a prescription.”

Erik Peterson, senior vice president of the Center for Strategic & International Studies in Washington, D.C., noted that good leaders need to know to do a better job of predicting the future so they aren’t handcuffed by unexpected short-term events that cut into their ability to maneuver their companies forward.

With that, he went on to inform the group of 200 AAFA members that the world’s population by 2050 will be about 9.1 billion, about 50 percent more than it is today.

More people will be living in urban areas (about 60 percent by 2020), the world’s populations will be older, and some countries will see explosive growth while more developed nations will experience a population decline. Biotechnology and genomics will help to develop new drugs and cures that will only extend life.

“The United Nations says aging will be without parallel,” Peterson said. “We will have more older people on earth than younger ones.”

Redefining brands

So where does this leave the apparel and footwear industry? Manufacturers will have to cater to an ever-changing world where fashion is now global instead of local. Teenagers in Tokyo are dressing like young people in Mexico City; Stockholm, Sweden; or Redondo Beach, Calif.

“As an industry, we have to keep in step with the changes far better and far quicker than we ever had,” said Killick Datta, chairman and chief executive of Global Brand Marketing Inc., a fashion company in Goleta, Calif., that designs, develops, manufactures and sells brand-name footwear and apparel, such as Diesel shoes.

Mackey McDonald, chairman and chief executive of VF Corp. in Greensboro, N.C., said his company, with its scores of brands, is concentrating on finding a niche that will stick with consumers. That means the company is developing its better-known sportswear brands—such as North Face, Vans and Nautica—so they appeal to a certain lifestyle market. “We feel lifestyles are driving trends more today than before,” McDonald said. “This means the winners will be those people who have the most information about consumers and understand globally what is happening and translating that into innovative products.”

He said VF Corp. is working on developing technologically advanced apparel for its North Face brand, used by hikers and mountain climbers. With Vans, which caters to the worldwide surf-and-skate crowd, a certain beach coolness is essential.

“We feel these brands are rooted in activity and not a fad,” McDonald explained.

Dick Baker—former chief executive of Ocean Pacific, a Southern California surf brand that was recently sold by the Warnaco Group to Iconix Brand Group Inc. in New York—said the new brand model is this: high consumer recognition; niche-dominant exclusive retail partners vertically sourced with creative design services; and an invested marketing program connecting the consumer with the retailer. “This is what the new brand model is evolving to,” he said. “If you are missing one or some of these components, you will not be relevant.”

Marshal Cohen, a retail analyst with The NPD Group in Port Washington, N.Y., said that manufacturers can throw age and ethnicity out the window when catering to a consumer. “The 50-year-old father is interested in buying the same things as his 18-year-old son,” he said.

Cohen has interviewed scores of highschool students across the country, finding they don’t think in terms of race when defining themselves. When asked what ethnicity they are, students reply: “I’m a human being.”

Industry challenges

Kevin Burke, the AAFA’s president and chief executive, said the industry has some new challenges ahead in Washington, D.C. A new Congress controlled by the Democratic party means more opposition to free-trade agreements. “There is a rise of protectionism, not only in this country but across Europe. The current Congress’ attitude toward trade is not good, not good at all,” he said.

He said he would like to see all pending free-trade agreements wrapped up and pressure put on ending the stalemate surrounding the Doha Multilateral Trade negotiations to reduce tariffs around the world.