The full article is here (Just-Style access required). Below are the key findings:
Based on a content analysis of the annual reports of about 30 largest US fashion brands and retailers from 2018 to 2023, this study aims to identify these companies’ most critical evolving sourcing practices, including their sourcing destination adjustment, primary sourcing factors, and emerging sourcing-related “hot topics.” The findings provide critical market intelligence, informing US fashion companies about their peers’ emerging sourcing trends and popular practices. The results show that:
First, maintaining a relatively diverse sourcing base remains common among US fashion companies. Results show that large-size companies today typically source from more than 20 countries. One critical factor behind fashion companies’ sourcing diversification strategies is that no single supplying country is “perfect,” given the increasingly complex sourcing factors. Sourcing diversification allows fashion companies to balance various sourcing factors. For example, according to company #19, “the (sourcing diversification) approach provides us with the greatest flexibility in identifying the appropriate manufacturers while considering quality, cost, timing of product delivery and other criteria.” On the other hand, sourcing diversification enables companies to adapt quickly to market uncertainties and enjoy supply chain flexibility and resilience.
Second, while US fashion companies are not necessarily leaving any particular countries they source from, many have substantially reduced the number of vendors they work with over the past few years. Specifically, out of the 30 fashion companies the study examined, over 60% explicitly mentioned they consolidated their sourcing base at the vendor level from 2017/2018 to 2022/2023, although the degree varied. For example:
- Company #4, a leading sportswear brand, cut its contracted factories from 363 to 291 (or down 19.8%)
- Company #6, which owns several jeans and sportswear brands, reduced its contracted factories from 1,000 to around 340 (or down 66%)
- Company #9, a well-known specialty clothing store, cut its vendors from 800 to 250 (or down 68.8%)
- Company #26, a specialty clothing store targeting the youth, cut its vendors from 150 to around 119 (or down 20.7%)
- Company #28, a discount department store, cut its vendors from 3,100 to around 2,800 (or down 9.7%)
Associated with the trend of “country diversification and vendor consolidation,” US fashion companies are increasingly interested in working with “super vendors,” e.g., those with multiple country presence or vertical manufacturing capability. The use of “super vendor” can also be observed in fashion companies’ willingness to give more sourcing orders to their top suppliers. For example, Company #18, a casual and outdoor wear retailer, reduced its vendors from 200 in 2017/2018 to 110 in 2022/2023, but increased the cap of sourcing orders for its top 10 vendors from 40% to 47% over the same period.
Third, regarding the sourcing base, many US fashion companies have intentionally reduced their apparel sourcing from China, given the US-China tariff war, deteriorating bilateral relations, and the forced labor concerns with China’s Xinjiang region (XUAR). Specifically, more than one-third of the examined companies explicitly mentioned their strategy to reduce finished garments sourcing from China. Furthermore, several US fashion companies indicated their “reducing China exposure” strategy would continue, implying China’s market share in the US apparel import market could decrease further.
Nevertheless, even though fewer finished garments are coming from China, US fashion companies admit that China will continue to play a critical role as a textile raw material supplier as no immediate practical alternative is available. For example, Company #20, a specialty clothing chain focusing on trendy and fashionable items, says, “During fiscal 2022, we sourced most of our finished products with partners and suppliers outside the US and we continued to design and purchase fabrics globally, with most coming from China.”
Fourth, in line with trade statistics, US fashion companies consider other Asian suppliers, such as Vietnam, Bangladesh, Cambodia, and Indonesia, as their top choices as China’s alternatives. In comparison, few fashion companies explicitly mentioned moving their sourcing orders from China to Western Hemisphere countries or other regions.
Additionally, regarding emerging “hot topics” related to sourcing:
- Geopolitics: the deteriorating US-China relations, escalated trade tensions expanded from tariffs to forced labor, and the potential trade disruptions have concerned US fashion companies significantly. Notably, US fashion companies regard sourcing from China as increasingly risky, with the implementation of the Uyghur Forced Labor Prevention Act (UFLPA) in June 2022. For example, according to Company 2, “The Uyghur Forced Labor Prevention Act and other similar legislation may lead to greater supply chain compliance costs and delays to us and to our vendors.”
- Near-shoring: due to the decoupling and de-risking from the China movement, US fashion companies have begun actively exploring near-shoring sourcing opportunities in the Western Hemisphere, particularly from members of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR). For example, Company #1, the North American manufacturer, disclosed that “(our) Company relies on a number of preferential trade programs (…) including the Dominican Republic – Central America – United States Free Trade Agreement (CAFTA-DR (…) Collectively, these agreements strengthen US economic relations and expand trade with Central America, the Dominican Republic, and Haiti.”
- Sustainability and social responsibility: It is noteworthy that aside from climate change and forced labor, which are typically addressed as risk factors, US fashion companies generally hold an optimistic and forward-looking perspective for sustainability, such as new technologies and endeavors toward more sustainable production and sourcing. Terms such as using preferred or recycled materials, supply chain transparency and traceability, and emerging sustainability technologies have been more frequently mentioned in companies’ annual or ESG reports. For example, Company #17 says, “Increase the usage of environmentally preferred materials to comprise 32.6% of the brand’s global materials footprint.” Company #2 adds, “Our goal is to use preferred materials in 100 percent of our products by 2030.” Company #9 states, “We collaborate with suppliers to increase the supply of preferred raw materials.”
- Supply chain transparency: US fashion companies attach great importance to improving supply chain transparency and traceability. Compared to the past, fashion companies are more willing to invest in new technologies and digital tools, allowing them to map supply chains and achieve sustainability goals more effectively. Related to this, US fashion companies have actively engaged with industry associations and other industry communities outside the company to stay informed about sustainability trends and learn best practices.
By Emily Delaye and Sheng Lu
FASH455 Global Apparel & Textile Trade and Sourcing 
This blog post discussing the analysis of the ever-evolving sourcing practices among the largest US fashion brands and retailers offers a plethora of valuable insights into the landscape of the industry.
The emphasis on maintaining a diverse sourcing base emphasizes the industry’s recognition that there is no one-size-fits-all solution. Through engaging with over 20 countries, fashion retailers have the opportunity to effectively balance key factors such as quality, cost, and timely product delivery.
I found the trend of creating vendor relationships particularly interesting. The reduction in the number of vendors, coupled with the rise of “super vendors,” speaks to the industry’s pursuit of efficiency and streamlined operations.
When it comes to fashion companies sourcing their textile and apparel, all “hot topics” and issues are interconnected. For example, the leading goal for companies is sourcing diversification which strongly relates to the third factor of exiting China due to the US-China tariff war. This action has an overall result of the increase of production in ASEAN countries including Vietnam, Indonesia, Bangladesh, and Cambodia. All these key factors all relate to one another and have resulted in fashion companies’ current actions. Ultimately, the most surprising was the second leading factor in regards to companies not leaving their current locations. I believe this is very interesting but it also explains why so many companies continue to source and produce products in China. However, this explains the rise of “super vendors” for fashion companies’ objective of streamlined operations and efficiency!
One thought I have about the article is that it is interesting how companies tend to source from many different countries. As mentioned, today large sized companies tend to source from about 20 different countries. At first, I would of thought that companies would try to source from the same sourcing destination to ensure that products are the same in terms of quality. After learning more information about sourcing in FASH455, this idea makes more sense. With different trade agreements, it makes sense that fashion companies want to source from somewhere where they can get duty free benefits. This is why the CAFTA-DR trade agreement has grown in popularity among US fashion brands. Even though CAFTA-DR is beneficial to both US companies and the countries involved in the CAFTA-DR trade agreement, CAFTA-DR countries do not have the technology to make the same products as countries like China can. This is why many businesses still source from countries like China. Spandex has become a popular fabric in the past few years due to a rise in activewear. China is one of the only sourcing destinations that can make spandex, so many companies have to source there in order to use that fabric in their garments. Overall companies need to source from multiple sourcing destinations in order to get the products they want, at the price they want. Another thought I had about this article is the comment on sustainability and social responsibility. It is mentioned how US fashion companies hold an optimistic view when it comes to sustainability. I find this interesting because while their is advancements in technology that helps the fashion industries impacts on the environment, many US companies still participate in harmful practices. An example of this is sourcing from places that do. not have strict regulations regarding what materials can or cannot be used when making garments.
This is interesting from a sustainability standpoint because I am finally seeing companies operate from a truly sustainable perspective, not the buzzword eco friendly used in the past. By increasing supply chain transparency, companies can show consumers exactly how products are made. I think it would be interesting to see more and more brands start out of a willingness to be sustainable, as opposed to older companies switching their ways. Although we need companies to become more sustainable, it is hard to do this as a fully operable brand with a small margin to mess with. I think the future of sustainable fashion comes from the brands that will focus on fully sustainable production from the start. The best ways of doing this currently include Upcycling, which is taking waste and making it more valuable, and zero waste design, which is minimizing pre consumer waste in the manufacturing process.
This article provided me a really in depth and simplified understanding of all of the issues we covered in class this semester. This class taught me how geopolitical relationships play a major impact on trade relations, efficiency, and a companies pledge to sustainability. Reading the geopolitical part of this article reminded me of the discussion we just did in class about worsening trade relations with China due to the Section 301 tariffs, but it also made me think about how the “winners” and “losers” in these political situations are changing year by year. Additionally, the “winners” and “losers” are different depending on who you ask. For example, I am sure that other Asian countries such as Vietnam and Cambodia would consider themselves winners right now because many apparel brands are turning to them for the sourcing and production of their goods. In the same breath, however, I am sure China considers itself a winner because the tariffs the US imposed is not affecting them as greatly as the US wishes because many apparel brands still have a reliance on China and we have not found ways to combat their IP issues (although that was a major factor for imposing these tariffs). Lastly, it surprises me that many fashion companies are reducing the number of vendors they work with and in turn working with “super vendors”. This highlights the idea that efficiency and productivity is on the forefront of companies minds; less vendors means more of a working relationship with the remaining ones to ensure those goals are being met.
I found this article very interesting, specifically how companies prefer to source from 20 countries because no country is perfect. The interdependence of the fashion industry allows for countries to source their clothing globally, depending on a multitude of factors. It also makes sense why many countries source from China, because they have such a ride range of skills, while also being cost effective. Overall, this post gave great insight into apparel production.
I felt the same way while reading this article. I like how the apparel production process allows for so much interdependence between countries, and each country brings it’s own benefits to the process. It’s refreshing to see countries diversify their sourcing practices.
I found this article very interesting as it provides valuable insights to the changing landscape of the US apparel industry. I think it is a smart move for large companies to continue to diversify their sourcing bases. As mentioned above that most US fashion companies source from over 20 different countries because no country is perfect, I also think this is smart because you do not create too much dependence on one country. You want to make sure your company can stay afloat if one of your sourcing locations was to go under. Another key takeaway that I found from this article was how many US fashion companies are intentionally reducing their apparel sourcing from China due to the tariff war. I think this is an intelligent move by companies because of China’s unfair trade practices that the Section 301 tariff is aiming to reduce along with concerns about forced labor.
I find it very interesting how fashion companies are reducing the number of vendors they use while some are choosing to source from “super-vendors”. I personally believe that reducing the amount of vendors a company utilizes can create issues in managing their supply chain. As we saw with COVID-19, some fashion companies faced difficulties such as getting orders on time and sourcing their materials. I think that having a more diverse sourcing strategy can eliminate some of these problems because there are other suppliers these fashion brands can rely on if some of their suppliers are faced with difficulties.
My impression of the piece is that it’s fascinating how businesses often source from a wide range of nations. As previously shown, multinational corporations now frequently source from around 20 different nations. Initially, I would have assumed that businesses would try to source from the same location in order to guarantee uniformity in the quality of their products. This notion makes more sense now that I know more about source in FASH455. It seems reasonable that fashion corporations would seek to source from countries with duty-free benefits given the various trade agreements. This is the reason why US fashion businesses are becoming more and more interested in the CAFTA-DR trade pact. Even though the CAFTA-DR trade agreement benefits US corporations as well as the participating countries, the CAFTA-DR countries lack the technological capacity to produce goods on par with those of nations such as China. For this reason, a lot of companies continue to source from nations like China. The increase in sportswear over the past several years has made spandex a popular fabric. Since China is one of the few sourcing locations capable of producing spandex, many businesses are forced to source there to use that fabric in their clothing. In general, businesses must source from a variety of locations to obtain the goods they need at the prices they desire. The article’s remark on sustainability and social responsibility also crossed my mind. It is said that US fashion brands have a positive outlook on sustainability. This interests me because, despite technological developments that lessen the fashion industry’s negative environmental effects, many US businesses continue to engage in destructive business practices. One illustration of this is sourcing from regions where there are lax laws governing the kinds of materials that can and cannot be used to create clothing.
I thought that this was a very interesting read! I never heard the term “super vendors” before this article, and I find it interesting how companies are more inclined to go to these types of vendors. Also, I think it is interesting how many U.S. fashion companies are starting to depend less on suppliers in China, and are moving towards other Asian countries like Vietnam, Cambodia, and Indonesia. By switching to where they are sourcing from, these U.S. fashion companies are able to adapt more quickly to changing market conditions, as well as other uncertanties.
uncertainties**
This article shared some interesting highlights about companies’ sourcing habits in 2023. There were a couple of points that stood out to me, including the diverse sourcing methods used by retailers. Retailers have multiple sourcing destinations around the world, which allows retailers to have more control over their supply chain. By sourcing in different countries, retailers also avoid the chances of all manufacturing shutting down if their sole country for sourcing faces issues. Another interesting point in the article was the growth of nearshoring by US retailers. The idea of nearshoring and the growth of trade in the Western Hemisphere has been a hot topic over the past couple of years. Additionally, the pandemic has made nearshoring a more suitable option for some retailers who experienced major delays of items.
I thought this article was really interesting and brought a lot of light on the current sourcing strategies of companies. I think sourcing diversification is a great way for companies to adapt to the ever-changing market and it provides more business to other ASEAN countries besides China. When the UFLPA was put into act, it geared even more companies away from China as US fashion companies did not want to be associated with any forced labor allegations. Social responsibility plays a large role in companies’ sourcing decisions as consumers are beginning to see incidents of unfair and unsafe working environments and choose not to take their business to places that allow that to happen. Sustainability goes in hand with that as consumers want to know where their products are coming from. Being aware of environmental and social impacts has become so important to sourcing decisions and being transparent can allow them to reach their goals.
This article emphasized how geopolitical dynamics significantly influence trade, efficiency, and corporate commitments to sustainability. The geopolitical insights brought to mind our class discussions on declining trade relations with China, especially due to Section 301 tariffs. The article also made me reflect on how the dynamics of winners and losers in political situations are everchanging. For instance, Asian countries might see themselves as winners due to increased sourcing, while China, despite tariff impacts, still maintains its importance to many apparel brands. Interestingly, fashion companies are streamlining operations by reducing vendors and favoring “super vendors,” underscoring the industry’s focus on efficiency and productivity. This trend signifies a closer working relationship with a select few vendors to achieve overarching goals. Overall, I found this article’s perspective interesting and how it emphasized companies diverse sourcing options due to Section 301.
The idea of a “super vendor” is so fascinating to me. I find it intriguing that many US clothing brands have decreased the number of factories for sourcing while increasing output for these “super vendors”. In a way, these unique suppliers must have better reliability and flexibility than hundreds or thousands of factories. It also explains why countries are apprehensive about leaving China as a sourcing destination due to its reputation for having these qualities. Still, I find it interesting how many US fashion companies are unable or do not want to source from Western Hemisphere countries like Mexico or Colombia as it would be an opportunity to use nearshoring for their supply chain. In the future, I hope US brands will increasingly explore US free-trade agreements like CAFTA-DR and USMC
I really find this discussion interesting and it also surprised me because after reading this post and what I learned in our class discussions, I did not know that the U.S reduced their sourcing from China. After our discussion in class with the US-China Tariff war, I learned that Section 301 tariff is increasing their sourcing costs due to inflation and is creating more tax on U.S consumers products. However, it has been difficult for the U.S to find a similar alternative for their low prices and I recommend they still try to source within the Western Hemisphere because this can bring closer relationships with their vendors. They should work with countries a apart of the CAFTA-DR trade agreement that supports American jobs and can bring more opportunities to grow and trade with near-shoring countries.
I thoroughly enjoyed reading this article. I found it very informative given our in class discussions. I especially liked the discussion on supply chain transparency. This reminded me of when we had our case study #1 discussion. Since the Rana Plaza tragedy, many US based fashion companies are trying to in force more transparency within their sourcing practices. This involves new technological investments and advancements that indicate a sign of a higher level of sustainability practices for the company to their consumers (given the increased importance of sustainability).
This article brought up a lot of really thought provoking points about the pros and cons of the sourcing industry as it is. Personally, I find the most compelling part of the article is the necessary sourcing from China for textiles since there isn’t another viable alternative. As the US is trying to rebuild their textile industry this should be a big red flag or opportunity for the US government when thinking where to invest in. Which leads back to the continuing conversation of encouraging nearshoring in the CAFTA-DR. Everything is interconnected. To have the best success you really need all of the goals to happen at the same time for everything to run as efficiently as possible. I think it is easy to assume you have to make huge financial investment, but transparency is something brands can start immediately.
Drawing parallels to recent class discussions on deteriorating trade relations with China, the article highlighted how those who win/lose in political scenarios tend to be quite evolutionary; varying depending on perspectives. For instance, while countries like Vietnam and Cambodia may view themselves as winners due to increased sourcing and production opportunities, China perceives itself as a winner despite facing tariffs from the US. Moreover, the article noted a trend among fashion companies towards reducing vendor numbers and collaborating with “super vendors,” indicating a prioritization of efficiency and productivity in business operations. Given my initial unfamiliarity with this term, I found this piece to be overall incredibly informative.