Collaboration only way to survive in fashion

Unless your company generates annual sales of 10 billion

US dollars you should quickly consider the importance of innovative collaboration with your business partners. At the IAF World Apparel Convention last month in Oporto Portugal, the need for collaboration was ubiquitous.

According to Bob McKee (Infor), we have hit a point in this industry where focus on internal efficiency is key. We will not find cheaper production and we will not find cheaper yarn. Fashion companies have become more and more competitive, and are getting smarter every day. The number of cutting edge organisations in a relatively traditional industry is growing.



Fashion companies are under constant pressure:
- Pressure for great pricing
- Pressure for innovation
- Pressure for sustainability
- Pressure for performance

The industry has hit a new era in:
- Supply chain management
- Sourcing
- Marketing
- Human resources


If smaller apparel companies (annual sales of less than 1 billion US dollars) do not work together in the near future, by 2025 a significant 80 percent share of the global apparel market will be controlled by 20 large globally-operating groups* see image.




Collaboration in fashion luxury sourcing
"The time is right for re-thinking and breaking up paradigms about the way we source and produce premium and luxury garments today," Jan Hilger, director of operations at Escada, stated during the IAF World Apparel Convention in Oporto.

In the luxury segment, production focuses on highly complex garments and low order volumes that might involve just five pieces per style which makes sourcing very challenging. "The main issue in premium apparel sourcing is that the traditional manufacturing clusters have disappeared or lost their competitive edge, 95% of the fabric we use in tailored women's wear comes from Italy, but the number of factories has reduced massively in recent years" Mr Hilger explains.

"This has made this part of the market less competitive, with every cluster dying, and with every producer closing, we lose competence. On the other hand, in the luxury business ,the product requirements grow exponentially; there are new materials, new combinations, and new ways of manufacturing to explore."

As with most manufacturing, volume is important. The solution to these sourcing challenges has been for a group of luxury firms to team up and work together as a 'High End Fashion Cluster'.

"When we put ten women's wear brands together we suddenly have the volume and importance of ten women's wear brands. Five years ago this would have been an impossible thought, but we have been doing this for one and a half years now and it's working very well." Mr Hilger says.

Possible Synergies in the cluster:
- Methods Data Base
- Pooling of Technical Experts
- Combined Shipments
- Education of Technical Staff
- Capacity Balancing
- Competent management of Global Harmful Substances Regulations
- Innovation pool

Currently, some companies in the cluster share clothing technicians to inspect products, combine shipments and even do training together. The growing number of brands in the project allows higher efficiency. "The time is right for new ways of working together, and what we are doing in the luxury segment seems to be one solution to tackle some of the problems." Jan Hilger explains.