Month: April 2026

H&M’s Evolving Apparel Sourcing Base (updated April 2026)

Founded in Sweden in 1947, H&M is widely regarded as a leading fast-fashion retailer, known for offering a high volume of trend-driven products at competitive prices. To better understand H&M’s fast fashion business model and its implications for the company’s sourcing practices, this study analyzed H&M’s detailed factory list published in February 2026, which includes 1,455 entries.

The factories on the list were classified using information from the “Product Type” and “Factory Type” columns. Specifically, Apparel suppliers are factories that produce finished garments (e.g., denim, knitwear, woven apparel) and are listed as “Manufacturing unit”. Factories that did not provide product information were excluded from the analysis.

Key findings:

First, like most other leading apparel brands and retailers, H&M utilized a geographically diverse sourcing base. Specifically, as of February 2026, H&M sourced apparel from nearly 800 factories across 23 countries and about 550 factories producing textile raw materials in 15 countries.

However, compared to its 2024 sourcing base, H&M seemed to have consolidated the number of factories it sourced from.

Notably, H&M appears to maintain long-term relationships with its suppliers. Among the nearly 800 contracted apparel factories, 314 (nearly 40%) have worked with H&M for more than 10 years, and another 126 for 6–10 years. Only 261 factories (about 33%) have fewer than 3 years of relationship. According to H&M’s website, it “onboard new suppliers or factories and, occasionally, phase them out according to our business needs.”

Second, while Asia remains H&M’s largest apparel sourcing base, other regions, particularly Europe and Africa, also play a critical role. As of February 2026, seven of the top ten countries with the most contracted factories for H&M were located in Asia. However, Türkiye, Portugal, and Morocco also ranked among the top ten. Compared to U.S. fashion companies, which tend to rely more heavily on Asian sourcing, these countries generally play a more limited role in their sourcing portfolios, highlighting H&M’s relatively greater emphasis on regional diversification and proximity sourcing. In particular, sourcing from Europe and Africa can provide H&M with shorter lead times and greater responsiveness to EU market demand, which aligns well with the speed-to-market requirements of its fast fashion business model.

Third, at the country level, in terms of the number of contracted factories, China remains H&M’s single largest apparel sourcing destination (over 230 factories, or 29.5%) as of February 2026. H&M also sourced the widest range of apparel product categories from its China-based factories, covering woven apparel (85 factories), jersey (56 factories), knitwear (32 factories), and denim (11 factories). In other words, China is one of the few countries that can make almost all types of products for H&M. In comparison, H&M was inclined to source more narrow product categories from other top-supplying countries, such as Türkiye for jersey, denim and knitwear; India for denim, Indonesia for underwear/swimwear; and Pakistan for denim and socks. This finding aligns with recent studies indicating that Western fashion companies commonly regard China as highly competitive for its product variety, which is difficult for other countries to match.

It is also noteworthy that most of H&M’s contracted factories in China are relatively small, with over 76% employing fewer than 500 workers. This pattern is consistent with China’s role in supplying more variety-driven orders with small- to medium-sized minimum order quantities (MOQs). In contrast, H&M’s contracted factories in other major Asian sourcing countries, such as Bangladesh, Pakistan, and Indonesia, are more concentrated in large-scale production, typically employing over 1,000 workers. Notably, 41% of H&M’s contracted factories in Bangladesh and nearly 40% in Pakistan have more than 4,000 workers, indicating their role in producing high-volume orders for the company.

Additionally, H&M contracted garment factories have commonly received material certification, led by those related to organic and recycled content. For example, as of February 2026, among H&M’s contracted apparel factories, 49.6% held the Recycled Claim Standard (RCS), followed by Global Recycled Standard, GRS (39%) and Organic Content Standard, OCS (38.5%). The results align with H&M’s stated material goals of increasing the use of recycled or sustainably sourced materials in commercial products to 100% by 2030, including reaching 50% recycled materials. Most of H&M’s top apparel-supplying countries already have 50–70% of factories holding at least one type of material-related certification. The ability to obtain such certifications is increasingly becoming a baseline expectation for H&M suppliers.

by Sheng Lu

Additional reading: H&M’s Evolving Sourcing Map Speaks to Global Supply Chain Shifts (Sourcing Journal, April 2026)

FASH455 Video Discussion: Ongoing Impacts of U.S. Import Tariffs on Apparel Exporting Countries (Updated Apparel 2026)

Video 1: Vietnam’s economy pivots to tourism as US tariffs threaten textiles
Video 2: Higher U.S. tariffs threaten Indonesia’s textile industry
Video 3 India’s textile firms seek more stable markets in Asia amid uncertainty over US trade talks
Video 4: How Trump’s Tariffs Upended a Hub of Denim Manufacturing in Lesotho

For FASH455 class: When writing your blog comment, consider addressing the following aspects:

  • Based on the videos, what have been the expected and unexpected impacts of tariffs on apparel-exporting countries?
  • Based on the videos, what ethical challenges emerge in apparel sourcing and global trade? How do tariffs complicate or intensify these issues?
  • What does “responsible apparel sourcing” mean when tariffs increase costs and competitive pressure? Is it still feasible? Why or why not?
  • If you were a sourcing manager for a US-based fashion company, how would you redesign your strategy under higher tariffs? Why?
  • Are tariffs an effective tool for improving labor or environmental standards? Why or why not?

Related reading: Evolving Patterns of World Apparel Trade amid Trump’s Hiking Tariffs (January 2026)

U.S. Fashion Companies’ Evolving Sourcing Practices amid Tariffs and Geopolitical Tensions (Updated April 2026)

This study aims to examine U.S. fashion companies’ evolving apparel sourcing and business practices in response to a shifting business environment, including ongoing hiking tariffs and geopolitical tensions. Based on data availability, transcripts of the latest earnings calls from about 30 leading publicly traded U.S. fashion companies were collected. These earnings calls were held between February and April 2026, reflecting company performance in the last quarter of 2025 or later. A thematic analysis of the transcripts was conducted using MAXQDA.

Key findings:

First, U.S. fashion companies identified shifting consumer demand, macroeconomic volatility, tariff hikes, and ongoing policy uncertainty as their main business concerns. The pressure on middle- to low-income consumers’ discretionary spending was emphasized as a structural issue that could persist in 2026. For example:

  • Kohls: “consumer is behaving differently in this challenging macroeconomic environment. We know our core low to middle-income customers continue to face financial pressure, and they are seeking value…”
  • Macy’s : “Our customers across nameplates skew more towards the middle and upper-income tiers. Performance remains stronger in these cohorts, while the lower tiers remain more choiceful. As we look ahead, there are many macroeconomic and geopolitical factors that could influence discretionary spend…”
  • Carter’s: “It continues to be a challenging time to forecast the business. Consumer spending appears to have held up well, while other macro indicators, such as consumer confidence and overall inflation, are less positive. Tariffs continue to dominate the headlines… there continues to be a great deal of uncertainty about where all this will settle…”
  • Oxford industries: “In an uncertain consumer environment, success comes from controlling what we can control and staying focused on execution…(we) have increased our flexibility and better positioned us to navigate continued uncertainty in the marketplace…”

Second, raising retail prices and focusing on full-price selling have become more common and systematic approaches among U.S. fashion companies to mitigate the impact of tariffs. Nonetheless, fashion companies remain selective–price increases have mostly occurred on fashion-forward, trend-driven, and premium items, while avoiding significant price increases for basic and core categories to shield most price-sensitive consumers. Companies also try to leverage new products and product innovation to justify the price increase. Additionally, many companies have reported that consumers have shown “no resistance” to price increases so far. For example:

  • Columbia Sportswear: “For both Spring 2026 and Fall 2026, we increased U.S. pricing by a high-single digit percent. When combined with our other mitigation tactics, our goal in 2026 is to offset the dollar impact of higher tariffs…Retailers remain cautious as tariff-induced price increases are just now beginning to hit the marketplace.”
  • Levi’s: “So tariffs, as I mentioned in my prepared remarks, impacts gross margins adversely by about 150 basis points, and we have an FX headwind of about 20. We’re fully offsetting this with higher pricing…We’re not seeing any initial demand reaction to it, so the elasticity is pretty good. More full price selling, which is, something that we’ve been focusing now for about 12-18 months, especially as a product, you know, and newness is resonating well with the consumer. And then lower product costs, which are a combination of lower, you know, better, and lower quarter, as well as the negotiation with the vendors as we rationalize SKUs…reduce unproductive…assortment…”
  • Kontoor Brands: “Tariffs net of pricing represent a headwind to our gross margin rate in 2026. We’ve implemented price increases for Wrangler, Lee, and Helly Hansen as part of a holistic plan to mitigate the impact of the increases in tariffs. Our pricing strategies were thoughtful and developed in consideration of the fluid macro environment, the strength of our brands, our elasticity expectations in certain categories and channels, and the retail environment around the globe.”
  • Oxford industries: “The price increases implied in our guidance range from 4%-8% and vary by brand. These increases reflect a more elevated assortment as well as higher pricing on new product with relatively limited like-for-like increases on existing product.”
  • Victoria’s Secret: “Importantly, we pulled back on promotions, driving more regular price selling and double-digit AUR (average unit retail) expansion, which benefited margins across PINK’s portfolio, showing that the brand is regaining pricing power.”
  • URBN: “We’re being highly strategic and thoughtful about taking price, these are definitely not across-the-board price increases. We’ve taken small price increases where we felt the price-value equation was appropriate, have seen really little to no price resistance where we did so. We also want to stress that we remain committed to maintaining our opening price points and our pricing architecture and protecting those items that our customers count on to have great price value. Next, we’re really planning very little incremental price increases over and above what we’ve already implemented this fall and holiday. We really don’t anticipate price resistance. Our focus remains on protecting the integrity and the value of our product while we manage our cost structure appropriately…”

Third, regarding the apparel sourcing base, four strategies stand out: 1) continue sourcing diversification including reducing sourcing from China; 2) expand sourcing from other lower-cost manufacturing hubs in Asia, such as Bangladesh and Vietnam; 3) explore near-shoring opportunities in Mexico and Central America and take advantage of lower tariff benefits; 4) carefully monitor newly negotiated trade agreement with the US, especially those with textile and apparel-specific provisions, such as the one with Bangladesh. Meanwhile, many companies noted that full sourcing realignment takes 12–18 months or more. For example:

  • Oxford industries: “Early in fiscal 2025, approximately 40% of our apparel and related products were expected to be sourced from producers located in China. Through the actions we took during the year, that figure declined to slightly less than 30% of our product purchases in fiscal 2025, and our annualized run rate entering fiscal 2026 has been reduced to approximately 15%.”
  • Abercrombie & Fitch: “Obviously we’ve talked a lot about our sourcing footprint over the course of the last year or so. Really proud of that diversified network that we have in place, and it’s taken us years to build. We currently source from over 16 different countries. That’s been obviously a core enabler for us and our read and react model here. Approach isn’t changing…”
  • Kontoor Brands: “Of particular interest to us is the trade agreement with Bangladesh, which we highlighted. That trade agreement reflected a potential reciprocal tariff ranging from 0% to 19%, depending on the U.S.-grown cotton content of products sourced from Bangladesh. More than 80% of the product we source from Bangladesh does include U.S.-grown cotton. Bangladesh is our largest country of origin from a sourcing perspective, so by nature, it’s also our largest source of tariff pressure.”
  • Gildan: “we are pleased to announce that we are moving forward with phase two of our Bangladesh complex. Over the next 18 months, we will begin construction of our second large-scale textile facility, with initial production expected to come online in the later part of 2027. Expanding our Bangladesh footprint is central to reinforcing our cost leadership in ring spin and innerwear…we are increasing our internal capacity in Bangladesh and in Central America, obviously in anticipation to support the Hanes integration.”
  • Land’s end: “our teams just got back from a sourcing trip in India with one of our major airline partners, and they couldn’t be happier about the breadth that we’re able to offer, and the opportunity that we’re creating for their employees.”
  • Ralph Lauren: “You’ll start to see our broader mitigating actions take shape, country of origin shifts, optimization, merchandising actions. You’ll start to see those all come into play as we move through fiscal 2027”

Additionally, U.S. fashion companies closely monitor geopolitical tensions, including the ongoing conflict in the Middle East; however, the direct impact on sourcing remains limited, with greater concern centered on indirect disruptions to logistics and supply chain operations. For example:

  • Nike: “This quarter, we also experienced traffic disruption from the Middle East, and we also are you know taking that into consideration as we’re thinking about where this business stands, and also as we look forward”
  • Abercrombie & Fitch: “as it relates to some of the more near term news in the Middle East, you know, we do have some sourcing operations there in the region. Haven’t experienced any disruptions that would have any sort of meaningful impact to the receipt plans here that underpin our outlook. You know, we’ll keep monitoring that and we’ll keep agile with our sourcing base in total.”
  • PVH: “It’s important to highlight that significant uncertainty remains around the conflict in the Middle East as well as evolving global trade policies, the broader macroeconomic environment and consumer spend in behavior. Our business in the Middle East, excluding Turkey, is about 1% of our total revenue and solely a wholesale business, so the profit impact is disproportionate at approximately 7%.”
  • Victoria’s Secret: “in terms of Middle East, we’re obviously staying very close to the situation and monitoring the developments and how long this may last. There’s two areas right now that we’re paying close attention to. One is just shipments to North America. We are experiencing some delays, but not material that are gonna have a broader impact on the business that way. As you said, we’ve got franchise partners in the Middle East. There are a handful of store closures right now.”

By Sheng Lu

Read the full paper: Lu, S. (2026). U.S. Fashion Companies’ Evolving Sourcing and Business Practices. Global Textile Academy, International Trade Centre (ITC). Geneva, Switzerland

FASH455 Exclusive Interview with Dirk Vantyghem, Director General, European Apparel and Textile Confederation (EURATEX)

About the interview

The global textile and apparel industry is becoming increasingly complex, shaped not only by conventional economic factors like production costs but also by trade policy, geopolitical uncertainty, and rapidly evolving sustainability regulations. While much of our course has focused on the U.S. market and the perspective of U.S. brands and retailers, it is equally important to understand how these forces are unfolding in other regions of the world, particularly in Europe.

The EU plays a distinctive role in the global textile and apparel system. It is one of the world’s largest apparel consumer markets, home to many leading luxury fashion brands, and a global leader in setting sustainability and regulatory standards for textiles and apparel. Therefore, developments in the EU have far-reaching implications for textile and apparel production, sourcing, and trade patterns worldwide.

We are fortunate to have Dirk Vantyghem, Director General of the European Apparel and Textile Confederation (EURATEX), join us for this interview. Dirk shared valuable insights into how the EU textile and apparel industry is navigating this rapidly changing landscape, including:

  • The current state of the EU textile and apparel industry, its competitive strengths in innovation, sustainability, and high-end design, and the challenges posed by rising costs and shifting consumer demand
  • Key sourcing and supply chain trends among EU fashion brands, including diversification, increased transparency, and nearshoring to neighboring regions
  • The impacts of rising trade tensions and geopolitical uncertainty on EU textile and apparel companies, and how these factors affect business strategies and consumer confidence
  • The EU textile and apparel industry’s approach to trade policy, balancing open markets with “fair trade” through stronger sustainability and compliance requirements, and expanding trade partnerships globally
  • The industry response and practical implications of the EU Strategy for Sustainable and Circular Textiles, launched in 2022, and the prospects and opportunities of textile-to-textile recycling in Europe
  • Potential areas for stronger U.S.-EU cooperation on textile and apparel trade, supply chains, and sustainability standards

About Dirk Vantyghem

Dirk Vantyghem is the Director General of the European Apparel and Textile Confederation (EURATEX), representing the interests of the European textile and apparel companies. Appointed in 2019, he leads the organization’s engagement with European institutions, focusing on promoting a competitive, innovative, and sustainable textile and apparel industry. Mr. Vantyghem brings over 20 years of experience in European business representation and policy advocacy, having previously served as a director at the European Chambers of Commerce and Industry (EUROCHAMBRES) in Brussels. He has extensive expertise in international trade, SME development, EU programs, and economic diplomacy, and holds a master’s degree in economics from the College of Europe.

About Emilie Delaye (moderator)

Emilie Delaye is a master’s student & graduate instructor in Fashion and Apparel Studies at the University of Delaware, with a specific interest in supply chain, global sourcing, and sustainability. Emilie is also a member of the Fair Labor Association (FLA) 2025-2026 Student Committee and the University of Delaware President’s Student Advisory Council.