Centric Brands LLC is a leading lifestyle brand collective that designs, sources, markets, and sells high-quality products in the kids, men’s and women’s apparel, accessories, beauty, and entertainment categories. The company’s portfolio includes licenses for more than 100 iconic brands, including Calvin Klein, Tommy Hilfiger, Nautica, Spyde, and Under Armour in the kid’s category; Joe’s Jeans, Buffalo, Hervé Léger, and Izod in the men’s and women’s apparel category; and Kate Spade, Michael Kors, All Saints, Frye, Timberland, Kenneth Cole, and Jessica Simpson in the accessories category. In a candid chat with Fibre2Fashion, Centric Brands’ Sourcing Director Herve Orzech talks about the problems in sourcing during and post pandemic.
What are your key takeaways from the textile and apparel industry developments in 2021?
We have understood that there is need to shorten delivery times and anticipate purchases in order to better control prices in an unstable market. We also need to take into consideration the working conditions of our partner suppliers. Plus, implement a progressive and responsible sustainability policy for the long term.
How has the COVID-19 pandemic affected your production worldwide, and how have you responded?
The closures of production lines, breakages in the supply chain and the extra cost of logistics have forced us to rationalise the global supply policy for the design of new products while maintaining product quality, the quality-price ratio at pre-existing levels.
What steps have you taken to mitigate post-COVID – be it at the supply chain level or sourcing of raw material, logistics, etc?
The objective is to anticipate raw material needs in order to guarantee the supply of production chains, considering the distance between raw material factories and manufacturers in order to reduce the risks related to logistics. The reduction of hidden transport delays must be part of the global supply strategy. This anticipation will be important during the crisis management which we will be leading us through the next seasons.
Do you expect any significant movement in textile and apparel supply chains in 2022 due to the geo-political scenario, particularly the US-China trade war?
The US-China trade war has taken a backseat sine the war in Ukraine started, as it indirectly impacts the prices of raw materials (oil, gas, polyester, paper, cotton etc…).
But in the long-term, the US-China trade war would impact the market. On the one hand, there is increase in import taxes. On the other hand, there is increase in the price of raw materials and wages, and sometimes strategic extension of delivery times.
Is Brexit having any significant impact on the sourcing scenario of the world or is it just limited to the European nations?
Brexit does not directly impact North America’s supply chains. On the contrary, many Europe-oriented suppliers are looking to open up new markets by offering their production capacity.
According to reports, by March 2021, just 40 per cent of global cargo shipments reached their destinations on schedule. How is the increasing shipping prices and limited availability of containers affecting sourcing?
The rupture of transcontinental transport caused a real cataclysm. It was impossible to anticipate such a situation, and the industry started focusing on managing orders placed between cancellations and delays in deliveries. The partnership between various players across the supply chain and distribution became essential. The financial impact was very strong, and producers, transporters and customers have had to show solidarity with each other and find acceptable compromises for all parties.
By when do you expect the challenges of shipping industry to relax? Also, how pressing could be the labour issues for the textile and apparel industry?
A balance could return in the second half of 2023. At the moment, cargo ships are taking more time to get back due to numerous port closures, particularly in China, due to the resumption of the pandemic.
Do you see a rise in nearshoring for the apparel/fashion industry as a result of the pandemic? Is Latin America benefitting out of it?
Closer sourcing for North America could benefit from these changes but the end consumer is not yet ready to pay the price. Central and Latin America were unfortunately late in industrialisation and transfer of technology compared to Asia. So, moving production there will take a lot of time.
How to do you think the power shortages happening across Europe, China, and other nations is going to impact the apparel supply chains?
The impact is already being felt with factory closures in China for few days a week. In fact, it is one of the reasons why orders must be placed well in advance.
How do you feel customer preferences have changed in current times and what is Centric doing about it?
Customers count on us to maintain price levels and respect confirmed delivery dates. Solidarity and transparent management is the solution.
Will we see greater technology adoptions in 2022 to solve transparency and traceability issues in the supply chain?
Traceability is something very important to us. Our partners are selected according to very specific criteria as well as the based on the choice of raw materials. We scrupulously verify every step of our supply chain.
The demand from the market and pressure on the industry as a whole is today on circularity. What steps have you taken towards this?
We use a maximum of recycled materials for many seasons. We also focus on traceability of cotton. In collaboration with our industry partners, we are working to reduce our ecological impact.
Does 2022 seem to be as uncertain as 2021? Which factors would you rank as of topmost concern?
The factors of topmost concern this year are increase in prices of raw materials, closures of our partner factories in the middle of production cycles due to the pandemic, extended transport times, and increase in labour prices.
Published on: 05/04/2022
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
