Trend Watching for Apparel Executives
Leslie Miller, senior vice president of sales worldwide at Mount Holly, N.C.–based sewing-thread company American & Efird Inc., said American Apparel & Footwear Association’s annual meeting is a good place to hear industry leaders speak about current sourcing trends and apparel production.
Indeed, the highlight of AAFA’s event was a panel discussion with the industry’s top executives: Wes Card of Jones Apparel Group Inc., Paul Charron of Liz Claiborne Inc., Steve Duffy of Wolverine World Wide Inc. in Rockford, Mich., Esther Lutz of SAP America’s Atlanta office, Phil Marineau of Levi Strauss & Co., and Jack Ward of Russell Corp.
Following are excerpts from the discussion.
What is the biggest unknown, and what concerns you the most?
Paul Charron, Liz Claiborne Inc. chairman and chief executive officer “The things I worry about are the things I have control over. These include failure to evolve with our customers and consumers. A company must evolve in order to grow. Secondly, I worry about failing to attract, develop, motivate and retain the best people in this complex time. Third, we must position our brands in dimensions that are important to consumers. Finally, I believe we must help guide our retail partners to develop winning strategies that are compelling in the long term. In so doing, we also influence our own future. If we develop and utilize the competencies that will enable our partners to be successful, that will help assure our own future.”
Jack Ward, Russell Corp. chairman, president and chief executive officer “Because we manufacture most of our products, one of the biggest unknowns we face, other than the economy, is trade legislation.There are dozens of different scenarios depending upon on what trade act will pass. In every industry apparel that is in, including the wholesale industry, we’re seeing that consolidation can be good. But consolidation also changes the leverage of the industry, and big becomes bigger, and then we have to continually worry about the credit exposure of some major customers that in the long term may not be viable. That’s really only occurred in the last few years, where there have been bankruptcies.”
How does the slowdown in the U.S. economy and the changing of our retail partnerships affect your business plans?
Wes Card, Jones Apparel Group Inc. chief financial officer and chief operating officer “The strategy that was started eight years ago still really holds true—to diversify and balance brands’ distribution channels so that as we got larger, we wouldn’t be hurt by any one particular event or difficulties in one particular channel. You have to worry about the things you can control. Yet, as an industry, if we concentrate on the fundamentals of balancing diversity, we can come through it quite well and very strong. Focus on cash flow by starting with a realistic plan. Push for growth when it’s warranted.”
How do you prioritize your company’s growth, looking at the international expansion of brands and products from a market-share position?
Steve Duffy, Wolverine World Wide Inc. president of global operations “We use a phrase in our organization about digging wells for growth. We look for where our opportunities are. We recently acquired a distributor in Europe so that our back-room operations in Europe now have critical mass. We’re constantly trying to have our balance sheet and be prepared so that when an opportunity comes we can capitalize on it.”
Given price inflation in conjunction with the anticipation of a quota-free environment, what expectations have you laid out for your sourcing needs?
Phil Marineau, Levi Strauss & Co. president and chief executive officer “We’re a company that sells our product and brands in 150 different countries, and we operate businesses ourselves in 60 countries. For us, the key is to coordinate our sources on a worldwide basis. So our focus is developing worldwide sources so that we can support those 60 operating companies in a way that meets their requirements, timetables and seasonality. From a sourcing standpoint, we don’t look at this quota-free environment and believe it’s a Y2K issue, the way people talk about it. Yes, it is a momentous event, but it isn’t a light switch that will go on and change things automatically. A lot still needs to play out to see how people respond to these quotas.”
From a technology perspective, is there technology out there that helps to collapse the design cycle?
Esther Lutz, SAP America vice president for business development for apparel and footwear “You have to cut out all of the unnecessary tasks in the design cycle, such as re-keying data from faxes or e-mails, and take into consideration that people are working in different times zones and in different languages. In order to shorten the design cycle, a much tighter and more seamless collaboration between customers and suppliers is necessary. By working off the same set of information online or the Web, many handling errors can be avoided, and time can be gained.
