FASHION INDUSTRY

Fashion Industry



Fashion Industry

The fashion industry defines an industry sector that is unique and global in character. It defines a context that can be characterised as increasingly complex and dynamic. The dramatic shift in the scale and power of major retail buyers in the market, the advent of own brands, the nature of sourcing and supply chain decisions which are increasingly global in nature are some of the issues that have contributed to this complexity. The interactions between those managing the buyer-supplier relationships have, particularly in the past five years, changed substantially as a consequence.

Supplier firms in this sector face specific challenges to respond to this dynamic environment, in order to obtain and maintain competitive advantage. They need to re-examine the nature of their key relationships with their major retail buying organizations.

On the other side of the dyadic relationship are those major retail buyers who appear to have increasingly gained relative power.This brief overview of the sector is given to ground the current research in its current and historical context from a UK perspective. The conditional matrix, begins with a macro view of the sector, and moves on to discuss issues at the micro level before focusing upon the unit of analysis at interfirm levels of interaction. McCarthy (1993:35-59) estimated that in 1923 there were 1.95 million people employed in the textile and clothing industries in the UK. This is further broken down into 1.3 million in Textiles and 650,000 in clothing manufacture. This accounted for 10 per cent of all employment. Pickle (2008:10-20) noted that in the three years between 1979-1982 when the Thatcher Conservative Government took office a fifth of all manufacturing jobs disappeared from theUKeconomy. This sharp fall in manufacturing employment was a consequence of Government policies attempting to improve the UK competitive position within the international market place. By 1995 employment levels in the sector had fallen to 361,000 people,188,000 in textiles and 178,000 in clothing. However, and significantly it is worth noting that by 2002 employment levels had fallen to 198,000 people with 120,000 textile workers and 78,000 clothing workers (Levitt 2007: 24-47). In a seven year period employment levels had almost halved with 68,000 jobs disappearing in textiles and perhaps more alarmingly 100,000 jobs lost in clothing manufacture. Many of the hitherto big brand supplier names in the industry were condemned to the history books though merger, acquisition or liquidation. The expectation is for the employment picture in UK clothing manufacture to continue to worsen as more and more UK retailers migrate 'off shore' to source clothing product, attracted by lower production costs and higher 'intake margins'. At work here are a number of key influences. Firstly there are the shifting patterns of sourcing decisions by UK based retailers reflecting the increase in power they have over their suppliers and second the emergence of a greater retail concentration within the UK market giving retail organizations power in the channels to market. (Kotler 1993:88-95)

As a consequence retailers will need to develop procurement policies and decisionmaking ...