Made-in-China fashion becomes so last season for local retailers

Etienne Vlok, director of the South African Clothing and Textile Workers Union, said the custom of South African retailers buying their goods from China and other Asian countries was changing.

"The factory-gate price was cheaper there, but then they did not factor in the cost to the environment of importing these goods, the additional costs of the long lead times, including when replenishing stock," he said.

Other issues were the financing of overseas buying operations and addressing quality or other problems with suppliers thousands of kilometres away.

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Vlok said local retailers suffered because their "Made in China" business model meant they could not respond quickly to changing consumer trends, unlike their international competitors who could change stock almost every two weeks.

So South African retailers had increasingly switched to local or regional suppliers, which was also helped by government policies aimed at improving the industry's competitiveness.

Vlok said currency swings over the past few years meant the price gap between imported and local apparel had narrowed, giving retailers further incentive to invest in the production sector.

TFG, the most diversified apparel retailer with 22 brands including Foschini, Sportscene and Charles & Keith, has invested substantially in its local supply chain and built a design centre close to its head office in Cape Town. Its local supply chain division includes wholly owned apparel manufacturer Prestige Clothing, which has factories in Maitland and Caledon in the Western Cape.

Prestige Clothing head Graham Choice, who also leads TFG's design and manufacturing divisions, said 40% of the group's women's apparel was produced locally. Prestige's two factories produced a total of 260,000 units a month.

"In 2013, 3% of four million garments were produced on QR [quick response] time and by 2016, 40% of approximately six million garments were produced on QR time, equating to about 2.4million garments," said Choice.

He said that TFG's focus was to provide its many retail brands with clothes geared to current fashions. Items could be on store shelves within two months of being designed.

For ailing retailer Edcon, going local may be the answer to its woes.

Edcon sources about 50%-55% of its merchandise locally and plans to increase this. As part of its restructuring process it is jettisoning international brands from its merchandise mix and deepening its focus on local brands.

Edcon subsidiary Celrose, an apparel manufacturer, mainly produces mid- to high-end woven garments. The Tongaat-based company employs 1,327 people , but has expansion plans that could result in more than 400 new hires.

Edcon is a member of the KwaZulu-Natal Clothing and Textile Cluster, a public-private sector partnership of clothing, textile, footwear and retail firms, which was established in 2005 to boost the competitiveness of the local industry.

block_quotes_start A significant portion of the products found in Zara stores in South Africa are made in Spain, Portugal and Turkey, countries with much higher costs than most Asian ones block_quotes_end

Woolworths, which owns Australia -based brands such as Witchery and Country Road, said it was driving a "local renewal strategy" through its import-replacement programme. This, the company said, had a strong supplier development component that helped smaller local manufacturers get established.

Susie Squire, group head of communications at Woolworths, said the group bought most of its goods in Southern Africa, with food and clothing originating in South Africa, Lesotho, Swaziland, Mauritius and Madagascar.

"The benefits of locally sourced products include shorter lead times and reduced markdowns," Squire said.

Proximity to manufacturers also allowed "quicker responses when it comes to changing styles of clothing in production".

But the move to local production has yet to give local retailers the edge in their "fast-fashion" rivalry with international chains, which still appear to be able to respond more quickly to fashion volatility.

"International retailers such as Inditex and H&M have shown this," said Vlok.

Spanish-based fashion group Inditex owns Zara, which opened its first store in South Africa in 2011.

"A significant portion of the products found in Zara stores in South Africa are made in Spain, Portugal and Turkey, countries with much higher costs than most Asian ones," Vlok said.

"But the efficiencies in Zara, including its use of QR, means the company is still hugely profitable."

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Amelia-May Woudstra, spokeswoman for the South African operation of H&M, said the Swedish retailer could not discuss details of costs or business strategy, which had to remain confidential. But she did say some elements of H&M clothing, such as beadwork, were made in Ethiopia, which allowed a quick response time.

H&M has more than 3,900 stores across 61 markets.

Vlok said labour practices should remain central to the local industry's drive to improve its speed in keeping up with changing fashion trends.

Clothing manufacturers got a shot in the arm from retailers ordering more merchandise locally, but working conditions were still tough, he said.

Vlok said retailers had to be "acutely aware" of conditions on the factory floor, because the union and the sector bargaining council had been bringing the issue to their attention for many years.

"If retailers claim not to be aware, it is purely because they choose to close their eyes and ears to it. Retailers have to be aware, taking into account the [reputational] damage it can do to their brands and even their share prices."

But Liezel Johnson, a financial manager at Cape Town clothing design and manufacture company Influence Clothing, said retailers might not always know about the factory conditions in which their products are made.

"I don't think they are always aware of what the conditions are - they just want good-quality garments at the best prices," she said.

Many of the workers were home-based, which made them difficult to monitor.

"Some of them are working in very difficult situations - just working from hand to mouth."

Influence Clothing, which mainly focuses on active wear, had an average turnaround time of 22 working days from manufacture to delivery, Johnson said. "We are in a fast-working industry and situations change very quickly. We strive to give the best quality in the best possible turnaround time."

tshandup@sundaytimes.co.za