Month: April 2024

2024 WITA Academy Pathways To Opportunity: Textiles and Apparel-University of Delaware

On April 30, 2024 (Tuesday) from 2:15 pm. to 3:45 p.m, the Washington International Trade Association (WITA) Academy, in partnership with UD’s Fashion and Apparel Studies Department, will host a virtual workshop (on Zoom) exploring career opportunities in textiles and apparel trade, sourcing, supply chain, and sustainability.

This event is free and open to ALL UD students (undergraduate and graduate) and faculty, but registration is required (please use UD email address): https://www.wita.org/events/pathways-april30-2024/

Note: Students in FASH455 do not need to register for the event. We will attend the workshop and participate in the live Q&A session in the classroom.

Confirmed speakers include:

  • Katherine White, Chief Textiles and Apparel Negotiator, Office of the U.S. Trade Representative (USTR)
  • Nate Herman, Senior Vice President, Policy, American Apparel & Footwear Association (AAFA)
  • Felicia Pullam, Executive Director, Office of Trade Relations, U.S. Customs and Border Protection (CBP); former Deputy Assistant Secretary of Commerce for Textiles, U.S. Department of Commerce
  • Stephanie Lester, Vice President, Head of Government Affairs, Gap Inc.
  • Maristella Iacobello, VP of Global Customs and Trade, PVH Corporation
  • Sarah Thorn, Senior Director, Global Government Affairs, Walmart

FASH455 Exclusive Interview with Tricia Carey, Chief Commercial Officer of Renewcell, about Textile Recycling and Implications for Apparel Sourcing and Supply Chain

About Tricia Carey

Throughout her career, Tricia believes in ‘progress over perfection’.  As an advocate for innovation and circularity in the textile and apparel industry, she recently joined Renewcell to accelerate the commercial development of CIRCULOSE®, making fashion circular. With a vast global network, as well as experience in brand building, storytelling, and business development, she is an invaluable partner to close the loop and optimize the benefits of CIRCULOSE®.

For more than twenty years, Tricia held various commercial management positions at Lenzing Fibers to establish the TENCEL™ brand, build mill partners, and set retailer specifications.  Her roles comprised marketing, Americas business development, and global denim segment expansion, including the creation of the Carved in Blue platform and numerous collaborative collections with mills and brands.

Tricia holds a bachelor’s degree in Fashion Merchandising from The Fashion Institute of Technology, as well as certificates in Digital Marketing and Strategy from Cornell University and MIT.

Tricia serves on the board of Accelerating Circularity, as well as the Transformers Foundation and the Fashion Impact Fund.  She was Vice Chair at Textile Exchange from 2014-2018.  In 2020 she was nominated as B2B Content Marketer of the Year by Content Marketing Institute, as well as top 100 Denim Legends by WeAr Magazine.  In 2019 Tricia was awarded the RIVET 50 for influential denim industry leaders.  She has been a speaker at various industry events, including the Conscious Fashion and Lifestyle Network at the United Nations, Transformers, Kingpins Show, Southern Textile Association, Texworld, Premiere Vision, Wear Conference, and more.

Tracia lives in New York City and can be seen dashing on the Peloton leaderboard.  The best way to connect with Tricia is through LinkedIn.

The interview was moderated by Emilie Delaye, UD’s entrepreneurship major and fashion management minor. Emilie has been involved in several research projects on the textile and apparel trade, sourcing, and sustainability issues, including authoring a paper on US fashion companies’ evolving sourcing strateiges published in Just-Style. Emilie is also the recipient of the 2024 Warner and Taylor Awards for Outstanding Seniors, the highest recognition for UD’s graduating seniors.

The Puzzling US Apparel Import Data…

The latest US apparel import data raises several puzzles that deserve to be investigated further.

Question 1: Why did imports suddenly surge, and is this surge sustainable?

Unexpectedly, US apparel imports experienced a significant surge in February 2024. This surge was marked by a 12.9% increase in quantity and a 2.9% increase in value compared to the previous year. Seasonally adjusted US apparel imports in February 2024 were also nearly 10% higher than in January 2024. The import surge was particularly surprising given that the value of US clothing sales in February 2024 was only 1.3% higher than a year ago and even 0.5% lower than in January 2024 (seasonally adjusted).

That being said, US total merchandise imports also enjoyed a 2.2% increase year over year in February 2024, the best performance since last fall. Meanwhile, the World Trade Organization (WTO)’s latest April 2024 forecast predicted the world merchandise trade volume to grow by 2.6% in 2024 as opposed to a 1.2% decline in 2023.

Therefore, it will be important to watch whether the US apparel trade has indeed reached a turning point and will continue growing in the coming months and throughout the year.

Question 2: Could the volume of US apparel imports in 2023 have been underreported?

With over 98% of clothing sold in the US retail market being imported today, there exists a strong correlation between US apparel retail sales (NAICS code 4481) and the volume of apparel imports. Between 2015 and 2022, the US clothing sales to clothing import ratio remained consistently around 3.0-3.2 (seasonally adjusted). In other words, the value of retail sales was approximately three times the value of apparel imports. However, in 2023, this ratio increased to 4.0-4.5.

One suspicion is that as more apparel imports came into the US through the de minimis, the official US apparel import data in 2023 was somewhat underreported. Notably, according to Euromonitor, about 40% of US apparel retail sales were achieved through e-commerce in 2023, a substantial increase from 9.4% in 2010. Likewise, with US customs tightening controls on “small package shipments” and enhancing UFLPA enforcement, more imports likely began entering through the standard procedure in recent months, which explains why the US apparel sales to import rato fell back to 3.8 in February 2024.

On the other hand, some say the lowered US apparel import volume in 2023 was due to retailers’ efforts to control inventory levels. Data shows that US clothing stores’ stock-to-sales ratio in the last quarter of 2023 averaged 2.34, slightly lower than 2.43 from 2015 to 2019, but was higher than 2.19 back in 2021. In other words, while there was some effort by retailers to control inventory (as seen by the ratio being lower than pre-pandemic levels), it wasn’t a significant enough change to have a large impact on import demand. Also, considering that apparel is a seasonal product, it doesn’t seem too likely that retailers would risk losing sales opportunities during the most critical selling season of the year (i.e., 4th quarter) by promoting outdated items instead of stocking new ones on the shelf.

Question 3: Why did Asian countries export more apparel to Mexico?

As a developing country, Mexico is not traditionally a leading apparel import market due to consumers’ limited purchasing power and the sufficient local apparel supply. Take China, Vietnam, Bangladesh, and Cambodia, the four top Asian apparel exporting countries (Asia4), for instance. Between 2018 and 2020, Mexico typically accounted for 0.4%-0.7% of Asia4’s total apparel exports. However, since 2022, Asia4 has almost doubled its apparel exports to Mexico (i.e., increased to 1.5%-2.0%). Moreover, during the same period, the percentage of Asia4’s apparel exports to the United States declined from 27% to below 20%, especially in the last quarter of 2023.   

What’s behind the increase in Asian countries’ apparel exports to Mexico needs to be investigated further. As noted earlier, Mexico itself is a leading apparel-producing country. Also, according to Euromonitor, the clothing market in Mexico stayed relatively stable at around 7.6%-7.9% of the size of the US from 2017 to 2023 (in quantity). In other words, Mexico’s increased import demand for Asian clothing doesn’t make much sense.

Others suspect some Asian apparel exports to Mexico eventually entered the US market either by taking advantage of the de minimis rule or the US-Mexico-Canda (USMCA) trade agreement. However, the exact size of this particular trade flow calls for further investigation.

By Sheng Lu

Current Event Discussion: U.S. Customs and Border Protection (CBP) and Textile Enforcement

#1: On April 5, 2024, the US Department of Homeland Security (DHS) released its new enhanced strategy to combat illicit trade and level the playing field for the American textile industry and the estimated over 500,000 US textile jobs*. *note: according to the Bureau of Labor Statistics, as of December 2023, the US textile and apparel manufacturing sector employed about 272,400 workers (seasonally adjusted), including 89.3K in NACIS313 textile mills, 95.6K in NAICS314 textile product mills and 87.5K in NAICS315 apparel manufacturing. As of December 2023, NAICS 4482 apparel retail stores employed about 850,000 workers (seasonally adjusted).

According to DHS, the new enforcement plan will focus on the following areas:

  • Cracking down on small package shipments to prohibit illicit goods from U.S. markets by improving screening of packages claiming the Section 321 de minimis exemption for textile, Uyghur Forced Labor Prevention Act (UFLPA), and other violations, including expanded targeting, laboratory and isotopic testing, and focused enforcement operations.
  • Conducting joint Customs and Border Protection (CBP)-Homeland Security Investigation (HIS) HSI trade special operations to ensure cargo compliance. This includes physical inspections; country-of-origin, isotopic, and composition testing; and in-depth reviews of documentation. CBP will issue civil penalties for violations of U.S. laws and coordinate with HSI to develop and conduct criminal investigations when warranted.
  • Better assessing risk by expanding customs audits and increasing foreign verifications. DHS personnel will conduct comprehensive audits and textile production verification team visits to high-risk foreign facilities to ensure that textiles qualify under the U.S.-Mexico-Canada Agreement (USMCA) or the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR). (note: As CBP noted, most US free trade agreements and trade preference programs have complex textiles and apparel-specific rules of origin requirements. CBP is “responsible for ensuring that the trade community complies with all statutory, regulatory, policy, and procedural requirements that pertain to importations under free trade agreements and other trade preference programs.”)
  • Building stakeholder awareness by engaging in an education campaign to ensure that importers and suppliers in the CAFTA-DR and USMCA region understand compliance requirements and are aware of CBP’s enforcement efforts.
  • Leveraging U.S. and Central American industry partnerships to improve facilitation for legitimate trade. (note: The Biden Administration aims to leverage textile and apparel trade as part of the solution to address “root causes of migration in Central America. According to the White House Fact Sheet released in March 2024, the Office of the U.S. Trade Representative and Central American Trade Agencies and textiles and apparel industry stakeholders will work together to build a directory with detailed profiles of manufacturing and sourcing companies in the region, including information on business practices and production capabilities, to facilitate transparent sourcing, and bolster the region’s supply chain.)
  • Expanding the Uyghur Forced Labor Prevention Act (UFLPA) Entity List to identify malign suppliers for the trade community through review of additional entities in the high-priority textile sector for inclusion in the UFLPA Entity List. (note: Once an entity is on this list, in general, it is prohibited from exporting its goods to the United States. Importers are required to ensure the supply chains of their imported products are free from entities on the Entity List).

#2: Several US textile and apparel industry stakeholders have publicly responded to DHS’s new strategy.:

 The National Council of Textile Organizations (NCTO), representing the US textile manufacturing sector, made several points in its statement:

“We strongly commend DHS for the release of a robust textile and apparel enforcement plan today. We also greatly appreciate Secretary Mayorkas’ personal engagement in this urgent effort and believe it’s a strong step forward to addressing pervasive customs fraud that is harming the U.S. textile industry.”

“The essential and vital domestic textile supply chain has lost 14 plants in recent months. The industry is facing severe economic harm due to a combination of factors, exacerbated by customs fraud and predatory trade practices by China and other countries, which has resulted in these devastating layoffs and plant closures. DHS immediately understood the economic harms facing the industry and deployed the development of a critical action plan.”

“The industry requests include

  • Ramped up textile and apparel enforcement with regard to Western Hemisphere trade partner countries, including onsite visits and other targeted verification measures to enforce rules of origin as well as to address any backdoor Uyghur Forced Labor Prevention Act (UFLPA) violations.
  • Increased UFLPA enforcement to prevent textile and apparel goods made with forced labor from entering our market, including in the de minimis environment.
  • Immediate expansion of the UFLPA Entity List, isotopic testing, and other targeting tools. Intensified scrutiny of Section 321 de minimis imports and a review of all existing Executive Branch authorities under current law to institute basic reforms to this outdated tariff waiver mechanism. “

Joint Association Statement on New DHS Textile Trade Enforcement from the American Apparel & Footwear Association, the National Retail Federation, the Retail Industry Leaders Association, and the United States Fashion Industry Association:

“We appreciate the Department of Homeland Security (DHS)’s announcement today outlining enhanced enforcement activities to prevent illicit trade in textiles. Our members support 55 million (more than one in four) American jobs and invest considerable time and resources in their customs compliance programs. Many of our members are Tier 3 participants in Customs-Trade Partnership Against Terrorism (C-TPAT). They are trusted traders and meet the high standards required to receive that designation by U.S. Customs and Border Protection and DHS. Our members are on the front lines for ensuring that they have safe and secure supply chains.

 “While DHS launches this enforcement plan, we urge it to partner with our associations and our associations’ members. A successful enforcement plan must include input from all stakeholders, clear communication with the trade, and coordinated activities with importers, especially if DHS finds illicit activity happening in the supply chain. The results of any illicit activities must be shared so that our members and other importers can act quickly to address the issue. As our members look to diversify their supply chains, especially back to the Western Hemisphere, we must make sure efforts are included to incentivize and not deter new investments.”

#3 Comments: Overall, the new DHS textile enforcement plan suggests several key US textile and apparel trade policy directions: 1) revisit the current de minimis rules that are used by many e-commerce businesses; 2) further strengthen the UFLPA and forced labor enforcement; 3) expand the Western hemisphere textile and apparel supply chain and encourage more US apparel sourcing from CAFTA-DR members; 4) scrutinize US apparel imports from China and imports from other Asian countries that heavily use textile raw material from China.

Discussion questions for FASH455 (please answer them all):

  1. How do the perspectives of the US textile industry and US fashion brands and retailers diverge concerning CBP’s new strategy? What are the areas in which they share common ground?
  2. Building on the previous question, how can the difference between the US textile industry and US fashion brands and retailers be explained regarding their response to DHS’s new enforcement strategy?
  3. As a sourcing manager for a major US apparel brand with global operations, how do you plan to adjust your company’s sourcing practices in light of DHS’s new strategy? You can list 1-2 detailed action plans and provide your analysis.

Background

The U.S. Customs and Border Protection (CBP) is an agency within the Department of Homeland Security (DHS), responsible for “regulating and facilitating international trade, collecting import duties, enforcing U.S. trade laws, and protecting the nation’s borders.”  

Homeland Security Investigations (HSI) is also a division within the Department of Homeland Security (DHS), responsible for “investigating transnational crime and threats, specifically those criminal organizations that exploit the global infrastructure through which international trade, travel and finance move.”

Product Development and Apparel Sourcing: FASH455 Exclusive Interview with Abby Edge, Product Development Associate at Eileen Fisher

About Abby Edge

Abby Edge is the Product Development associate at Eileen Fisher, where she supports key initiatives in sourcing and sustainability. She graduated from the University of Delaware (UD) in 2020 with a degree in Fashion Merchandising. During her time at UD, she developed a passion for sustainable sourcing and social responsibility, which led her to pursue a career with a company that aligns with these values. Abby also served as a teaching assistant for FASH455 in Spring 2020 and was the co-author of How will EU Trade Curb Affect Cambodia’s Apparel Industry published in Just-Style.

Sheng: What does a Product Development Associate do? Can you walk us through your typical day at Eileen Fisher? Also, what makes you love your job?

Abby: Product development can mean different things at different companies, but at Eileen Fisher (EF) it means costing and development prior to product development (PO). All samples, fabrics, and costs need to be approved during the Product Development period before the business teams place their buys. Every day, I communicate with our vendors to cost styles and create time & action plans so that delivery will be met. We work with our vendors and fabric mills to align and finalize pricing to achieve our margin goals. We also must think strategically about material and vendor allocation to improve lead times and mitigate carbon footprint.

I work hybrid, and our beautiful office is on the Hudson River in Irvington, New York. I enjoy going into the office to spend time with my team and review the product in person. I love my job because I am exposed to so many new and exciting sustainability initiatives every day. I admire everything that EF stands for and that we can promote a “less is more” wardrobe.

Sheng: What are the key steps involved in product development, and how do you collaborate with your sourcing team throughout this process?

Abby: At Eileen Fisher, there are two main stages of the product development process before “commitment”: “development” and “dupe.” At the development stage, we focus on any new materials that are being added to the line. We make sure the costing, testing, and lead times are workable. Then, at the dupe stage, we cost and sample the entire product line so that the merchandising and buying teams have all the information they need to place their buys. After commitment, we pass the baton to the Production team to finalize quantities, issue purchase orders, and track orders. Together, the Product Development

Sheng: Sustainability is a key focus in the fashion apparel industry today. From the product development perspective, what notable improvements have been made in recent years, and where do opportunities lie for further progress?

Abby: Eileen Fisher is leading the way in sustainability within the fashion industry, and it has been incredibly rewarding to be a part of a team where this principle is integrated into every aspect. For example, materials are at the core of EF. We focus on natural, organic, and regenerative materials and steer away from synthetics. Regenerative organic cotton is a new material that I’m really excited about. It all starts with the health of the farm and the people growing our cotton. The regenerative organic certification means that the cotton is grown holistically and healthily, contributing to the soil’s health and mitigating the impacts of climate change.

Additionally, the certification has strict social responsibility guidelines, requiring a living wage and safe working conditions for all farmers. This is just one example of innovative improvements that are being made in the material sector. Others include Lenzing Tencel lyocell, regenerative responsible wool, and organic linen.

Another key initiative at Eileen Fisher is our take-back program called “Renew,” where customers bring back their old EF garments in exchange for a $5 store credit. Since the program started in 2009, 2 million garments have been collected. Of the 2 million, 660,885 have been re-sold in stores, and the rest have been donated, repurposed, or downcycled. Some of my favorite EF pieces have actually been purchased from the store’s renewal section! It is also great to see other brands following suit and creating take-back and recycling programs. Clothing waste is an industry-wide problem; we need all hands on deck to make a difference.

Sheng: From your observation, how has the adoption of digital technologies transformed the practices of product development and apparel sourcing?

Abby: Our Product lifecycle management (PLM) system— Centric— has helped streamline the design and product development process tremendously. All teams have access to the PLM system, which allows everyone to be on the same page and easily access any information they might need. For example, designers use the system to set up styles and tech packs, whereas the merchandising team uses the system to line plan and set retails. In my role, I use PLM to enter and land costs and analyze margins. It is dynamic and provides everyone the key tools to succeed while working on multiple seasons at once.

Sheng: Are there any other major trends in the fashion industry that we should closely monitor in the next 1-2 years, particularly in product development and sourcing?

Abby: Traceability and transparency have become increasingly important in the industry. Technology platforms are emerging that can ensure transparency throughout all supply chain tiers using a digital “fiber coin.” The specific platform we use— Textile Genesis—maps the supply chain from fiber to retail to verify any sustainable fibers so that all claims we make are valid. In other words, they ensure the “transactions” between each supply chain step (fiber to yarn to fabric to garment) are authentic. It has been very exciting to see this project come to life, and I feel that platforms like this will become increasingly more prominent in the coming years.

Sheng: What reflections can you share from your experiences at UD and FASH? what advice would you offer to current students preparing for a career in product development and apparel sourcing?

Abby: I am so grateful for my time at UD in the FASH program. I made so many connections with my peers, professors, and alums that have helped me get to where I am now. My advice to current students is to get involved as much as possible, whether through study abroad programs, internships, or clubs. Don’t limit yourself or close yourself off to areas of the industry and embrace any opportunity you get, as you never know where it could lead. My internship with Under Armour in Hong Kong through the FASH study abroad program really helped me grow personally and professionally and I would not be where I am without that experience.

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