Light and right sets the season for some fashion and apparel companies
INSIGHT ARTICLE |
Pandemic-related disruptions to the economy have lent an air of uncertainty that continues to cloud the present business climate. In response, some fashion and apparel companies are keeping it “light and right” when it comes to inventory choices as they plan for seasonal shifts in the coming months. As consumer products companies ready themselves for a critical holiday season, their lean mindset can be seen in Q3 U.S. import bill of lading data. As home furnishings, electronics and toy retailers import inventories at rates far exceeding levels during the same period the prior year, apparel imports are down 12% at the start of November.
At a recent RSM- and American Apparel & Footwear Association-sponsored roundtable, fashion and apparel company executives shared their business strategies to address possible surges and inventory changes, as well as anticipated consumer preferences and other needs.
According to one executive, his apparel company committed to being “light and right” by August 1 in preparation for the fall season, which meant tightening inventories, assessing trends and making some educated guesses on what apparel might work for the season. The intention was to scale down, and it’s been a smart strategy for them, he says.
Other executives discussed the importance of cash preservation related to internal operations and managing risk across the business, from labor challenges to business controls. Still another indicated that “less is more” for her business, creating more styles from a smaller range of fabric selections. She said the focus has helped reinvigorate the company’s brand and encouraged the business to truly look at the needs and wishes of their customers.
Finally, several executives discussed the importance of a sharpened inventory and supply chain, including improved relations with their suppliers and retailers to better anticipate ebbs and flows.
One executive, whose company had deep-dive discussions with their suppliers and retailers to improve product trigger points, identified challenges and implemented improvements across the chain. As a result, all parties are now more realistic; his organization consequently has both truer partnerships and an enhanced understanding of their factories, suppliers and retailers.
Many fashion executives were taken by surprise when the pandemic caused the cancelation of customer orders and froze their supply chain. Faced with adversity, many companies are emerging stronger and leaner—and ready for whatever comes next.
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