While China has gained a dominant position in shoes, apparel and household textiles manufacturing, makers of these items located in developed nations such as the U.S. and Canada have suffered a long period of decline. For example, over 98% of the shoes sold in America each year are imports, and the vast majority of these imports come from China. To consumers in Europe and North America, this growing reliance on China as a low-cost producer has meant very low retail prices for goods of reasonable quality. However, recent increases in the value of the Chinese currency, combined with rapidly rising labor costs, have put Chinese manufacturers in a much less competitive position. Competition, from very low-cost nations in Africa as well as Vietnam, Malaysia, Bangladesh, Pakistan, the Philippines and elsewhere, is intense. While China continues to have a robust apparel manufacturing industry, it is moving up the industrial chain by encouraging heavy manufacturing in InfoTech, automobiles, trains and telecommunications gear.

Many Chinese firms are massive in size, with tightly integrated units providing rapid design, manufacturing and logistics. One of the most interesting organizations is the Esquel Group of Companies. Esquel is one of the world’s largest producers of cotton shirts, with an output of more than 60 million garments each year. The firm’s vertically integrated operation starts in China where it oversees nearly 4,700 acres of cotton farms, which supply spinning, dyeing and knitting facilities that produce 90 million yards of high-quality cotton fabric annually. Esquel manufactures clothing on behalf of brands that include Banana Republic, Tommy Hilfiger, Hugo Boss, Brooks Brothers, Abercrombie & Fitch, Nike, Nordstrom and Lands’ End, as well as private-label items for retailers such as Marks & Spencer. The Esquel companies transform their fabric into premium men’s and women’s wear at plants in China, Hong Kong, Malaysia, Mauritius, Sri Lanka and Vietnam. The company also sells its products through its proprietary brand, PYE, which markets high-end cotton apparel in China with a flagship luxury retail store in Beijing. Esquel maintains group sales offices in select locations around the world, including U.S. offices in New York City and regional locations convenient to key accounts. Unlike many textile companies, the firm has an expressed strategy of in-company resource development, seeking to ensure high standards of quality and consistency across all of its product lines.

Meanwhile, some manufacturers outside of Asia have become very efficient and quick to react to consumer trends. The most notable company in this category is Spain’s Inditex. The firm is famous for its lean inventory and fast-fashion strategy. It can get a new item of clothing from its 300-person design team, through its manufacturing plants, and into its more than 4,600 stores in as little as two weeks. The company operates several manufacturing facilities in Spain for its high-end clothing. Many of its outside suppliers are located in Spain and elsewhere in Europe. The firm has been opening large numbers of new retail stores under the Zara, Pull & Bear, Massimo Dutti and Oyosho brands.

One of the more interesting recent developments in apparel manufacturing has been a return of some of the business to plants based in America. Some designers and retailers find that their orders are not of sufficient size to interest major offshore plants, or their need for fast delivery makes it impossible to use overseas manufacturers. There is promising growth among many American manufacturers. Likewise, the need for extremely high quality is keeping some manufacturing of luxury apparel and accessories at home by Italian designers. As wages continue to rise in emerging nations, and shipping costs continue to be subject to spikes due to high fuel prices, some portion of clothing manufacturing will continue to reshore. Growing productivity from better manufacturing technology will add to this trend.

The global economic slowdown put a damper on the apparel, shoes and accessories sectors. The high-end luxury sector suffered in particular, especially in the U.S. and Europe. Retailers such as Neiman Marcus and Saks saw sales drop considerably. Consumers in the U.S., the U.K. and elsewhere are cutting back debt. However, there were good indications by 2010 that consumers in America were increasing their shopping for apparel, furniture and other nonessential items. That doesn’t mean that retailers and apparel manufacturers will enjoy the big revenues of the boom that ended in 2007. Far from it. Today’s consumers want reasonable prices for high quality goods. Also, they are likely to pay cash or put their purchases on a debit card, while in the recent boom they were willing to run up revolving debts in order to buy more.

Meanwhile, the luxury apparel, shoes and accessories market is booming in the rapidly growing economies of Brazil and China. Leading brands are opening large numbers of new stores in these markets. For example, LVMH is focusing heavily on new stores in China for its luxury brands.

During 2010, the U.S. manufactured $31.4 billion in fabrics, up from $30.8 billion in 2009, according to Plunkett Research, Ltd. estimates. In addition, according to Plunkett Research, America manufactured only $5.8 billion in apparel during 2010, compared to $5.6 billion during 2009. In carpet and rugs, American firms manufactured $10.8 billion during 2009, down from $12.4 billion in 2008 and $14.2 billion during 2007.

During 2010, America exported about $19.7 billion in textiles and apparel (up significantly from the previous year), and imported about $93.2 billion (up from $81 billion the previous year). These numbers are from the U.S. International Trade Admnistration.

In the European Union (EU), the textile and apparel sector is quite large, particularly in nations that enjoy lower operating costs, such as the Baltic States and Eastern European States. Nearby, the textile and apparel industry remains a major part of the economy of Turkey. South America, Central America and Africa also play minor roles in world apparel trade.
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