Economy, Retail

Trade wars on clothing retailers could create fashion victims

Kevin Moore /

As the US ‘trade wars’ headlines roll on, and the UK’s future trading relationships with Europe and the rest of the world continue to take shape, I want to take a closer look at the real, day-to-day effect raising tariffs is having on shoppers and manufacturers?

Walking a Zara store in Split, Croatia this week, it became clear just how hugely diversified sourcing for retailer-owned brands has become. We all assume our cars, buses and motorcycles come from a limited number of different countries. Our wines and spirits too. It’s obvious most of our electronics come from a few of the same countries in Asia. But clothes are a completely different story.

I randomly photographed eight labels on some Zara items within 10 metres of each other in the women’s section of the store: Bangladesh, China, Mexico, Mauritius, Turkey, Vietnam, Bulgaria and Portugal. 

I wasn’t looking for a ‘trade wars’ angle within the store. I’d come in to look at the consistency in Zara’s global store format, range, branding and their online offering. I’ve walked their stores in five countries in the last month and it’s very good, as are the consistently high service levels. However, it was the breadth of sourcing and logistics that jumped out at me.

If the upcoming trade war skirmishes drag in a broader range of countries and categories, it’s likely clothing prices will jump. We’ve had a great run of high-quality, well-designed clothing being available to every level of shopper income over the past decade. 

Globally, Zara has led the way with accessibly-priced, quality fashion, with Primark bringing up the rear with low prices and consistent functionality. In Australia, Guy Russo’s Kmart brought a Primark-like offering to all Australians.

At the other end of the supply chain, these higher-quality items, sold to a wider range of retailers and countries, has improved the economies, quality of the factories, quality of training, livelihood and work opportunities for millions of people in the developing world.

I do hope the countries involved in the trade wars solve their differences soon. I’d hate to see reasonably priced, high-quality clothes out of reach for regular shoppers once again. One only has to look online at images of what we wore 10 years ago to see why we don’t want to take a step backwards. It’s scary!

NOW READ: How two Aussie entrepreneurs combined technology and fashion to make $1 million in three months

NOW READ: Sydney clothing-sharing startup GlamCorner raises $4.2 million to change the way Australian women think about fashion

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Kevin Moore

Kevin Moore is a retail expert and the chairman of Crossmark Asia Pacific Holdings and Now Comms Group. He is also an independent director of Australian fintech company InvestSMART.

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