US apparel industry is goingthrough a period of profound change. US imports of cotton apparels show adeclining trend. Overall US cotton apparel imports show a downward slopingcurve falling from 18.7 percent to 15.9 percent during 2007. During January 2008,imports of cotton underwear decreased by 28.3 percent and cotton t-shirtimports dropped by 4.5 percent. Imports from Mexico and China declined, while imports figures from Pakistan, India, and Vietnam showed an increase. Apparelimports from China fell drastically during 2006 as a result of the quotaarrangement that was implemented in the beginning of the year. On the contraryimport of cotton apparels from Pakistan and India has increased. During January,and February 2007, imports from Pakistan and India were 5,297,000, and6,586,000 sq meters respectively. In 2008 January and February, importsnoticeably increased to 7,515,000 and 7,448,000 sq meters respectively.
During Jan-March 2008, apparelexports from China continued with a downward trend showing a decline of 9.61percent. During the same period, US imports witnessed a decline of 5.7 percentwith all categories of apparel registering a negative trend. The slow down ofUS imports resulted in a sharp decline in the retail sales in apparel chain stores.Apparel sales fell by 18 percent in Gap stores, and 12.30 percent in JC Penney.More specifically, sales of premium brand apparels fell indicating a shift inconsumers preferences of moving towards cheaper apparels.
During 2006, the largest supplierof T-shirts to US was Mexico. Along with Mexico, El Salvador, Honduras, Haiti, Guatemala and Dominican Republic accounted for 54 percent of the total imports toUS. These six countries enjoyed preferential access to the US market through various benefiting trade agreements. China and India stood on the seventhand eighth places respectively. Now; the countrys economy being influenced byother reasons, imports from India has increased whereas, Chinese export figuresto US has dropped down. A few North American manufacturers have relocated theirproduction facilities to these countries. But now, this trend has caused adecline in the outputs of North America. Of all six the countries that enjoyedthe benefits of supplying T-shirts to US, Mexico, Honduras and El Salvador hassuffered decline in the value of their exports to US during the recent years.
A mix of various events that occurred during the recent past years has caused a change in the imports of the country. Quota elimination, consolidation of the retail market, excess supply over demand, and faltering US economy due to the impact of US housing market have all stimulated the change. Banks tightening their borrowing rules, and decreasing home values due to unsold properties has brought a crash in the countrys economy. Slower growth in the countrys economy witnessed a slow down in the consumer spending, including a decline in the apparel spending. The average spending of the consumer on apparels also declined from 7.1 percent during 2005 to 5.9 percent in 2006.
However, the accurate reasons are hard to find. US clothing companies have to make alternate changes in their strategies to reconfigure their portfolio.
References:
4) OTEXA
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