American Apparel Faces Market Forces

News is in that American Apparel has delayed filing its 2010 annual report. Speculation in the media has it that the popular T-shirt and basics retailer will report stiff losses over the past year. The company—whose popular line of primary-colored socks, tights and shirts are ubiquitous among certain demographics—has seen a spate of bad press and disappointing financial numbers recently.

According to some reports the increasing price of yarn and textiles over the past year, coupled with “labor inefficiencies,” has led to the declining profits at American Apparel. The company was forced to hire hundreds of new workers at its Los Angles manufacturing plant after a federal investigation into worker eligibility led to mass firings. The inexperienced labor supply has in turn led to a less efficient manufacturing process.

http://latimesblogs.latimes.com/money_co/2011/03/american-apparel-says-it-expects-to-report-a-loss-and-sales-decline-for-2010.html

It is interesting to look at American Apparel as a case study on the forces affecting today’s clothing manufacturers and retailers. Even though the brand is high-profile and popular, the various complexities of the market have compounded to threaten the underlying viability of the company.

No manufacturer is immune to market forces. Many of the factors pushing against American Apparel are well-known obstacles. Fluctuating raw material costs, regulatory compliance, labor efficiency; these are all factors that people in the clothing industry are well acquainted with. In fact, many manufacturers use Supply Chain Management or Product Lifecycle Management software in a concentrated attempt to bring these chaotic forces into check. For example, there is very little your company can do to affect the increasing price of cotton on the global market. However, with a well-implemented PLM system you may be able to foresee potential supply issues and enact design changes to avoid making costly mistakes. Likewise, if you use contractors or subcontractors in the manufacturing process, a PLM or SCM system can help you track and verify regulatory compliance.

So take a look at your operation and decide if you are doing everything in your power to stay on top of the kind of volatile market forces which are battering American Apparel right now. It may be necessary to implement a supply chain software system to help you oversee your efforts, and help avoid serious financial issues that result from compounded market forces.

JW Yates

New York City, New York

March 21, 2011

 

Business Management Systems

330 West 38th Street

Suite 705

New York, NY 10018

(800) 266-4046

info@bmsystems.com

www.bmsystems.com

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March 21, 2011 at 3:07 pm Leave a comment

Is Augmented Reality the Future of Marketing?

Of course technology is changing the way people do business. That’s what technology does. But recent advances in 3-D technology, and an integration of web-based information with new, ubiquitous hardware, has led to completely new marketing possibilities. We are now seeing the first phases of what is sure to be a revolution in interactive marketing that utilizes Augmented Reality technology.

Based on smart phone or tablet computer technology, AR applications offer real-time 3-D video and images which respond to print ads, logos, billboards or other visual cues in the real world. With these applications a consumer will be able to scan an ad in a magazine with their iPad, for instance, and instantly watch a 3-D commercial, or download a list of retailer locations, or view the technical specs of the product being sold. As AR applications become more common and more sophisticated it will likely be possible, in the near future, to click a shot of someone’s shoes on the bus, and immediately view a full catalog of online retailers who carry them.

So, will this change the way fashion companies market their products to consumers? Almost certainly. People will soon come to expect instant video augmentation about every item they see on the shelves and in the world. It will no longer be sufficient for people in marketing to think in two dimensions. Folks designing ads and products will have to conceive of each item as an opportunity for interactive marketing. Every logo will become the play button for an instant video commercial or a full-blown 3-D experience.

As products and packaging play a greater role in the marketing process, it becomes ever more important to be able to collect data and track the movements of your products throughout their entire life cycle. To make the most of any AR-driven campaign your company will need to have the most up-to-date product distribution information possible. This means you will need a fully functional PLM system in place when the AR marketing revolution begins.

Check out some AR marketing developments in action:

JW Yates

New York, New York

March 17, 2011

March 17, 2011 at 3:54 pm 1 comment

Inflation Worries Hit the Industry

Recent news stories have warned of massive inflation in all sectors of the economy in the coming year. A variety of forces are compounding to make for price increases for food, oil and retail goods. Political and social upheavals in Egypt and across the Middle East, severe weather patterns, and stock market worries are expected to contribute to a 10 to 15 percent increase in retail prices this fall.

The fashion and garment industry, with its dependence on raw materials and labor, is already trying to strategize a graceful entry into the era of higher retail prices. Big name value stores, like the ubiquitous Wal Mart and Target, are likely to struggle with inflation, especially in textiles like cotton, silk, and leather.

No matter what retailers and manufacturers do to soften the blow, it seems inevitable that consumers will wind up bearing the burden in the coming year. Even luxury brands will find it hard to avoid passing the price increases on to their customers.

With the profit margin in the garment industry becoming so thin, it is more important than ever for fashion companies to eliminate waste and balance their resources at every step of the production process. It seems that a data management system will be a crucial necessity for many companies in the near future. In troubled economic times companies have to take control over their data stream and their supply chain, or risk losing valuable assets due to inefficiency and redundancy.

Check out these recent news stories for more predictions and an analysis of upcoming inflation numbers.

http://www.wwd.com/menswear-news/retailers-brace-for-price-jolts-3550816

http://www.aolnews.com/2011/02/16/from-farming-to-fashion-inflation-looks-to-be-on-its-way/

And visit the BMS website to find out how Supply Chain Management tools could help your company fend of inflation troubles in the future.

JW Yates

New York, New York

March 11th, 2011

Business Management Systems
330 West 38th Street
Suite 705
New York, NY 10018
(800) 266-4046
info@bmsystems.com
http://www.bmsystems.com

March 11, 2011 at 3:59 pm Leave a comment

Theysken’s Theory: Making Use of Corporate Resources

High fashion raconteur Olivier Theyskens has a fantastic line of classic pants for women that is making a big splash in style circles and online right now. Taking a classic approach to stylish ready-to-wear pants for modern women, Theyskens has decided to show off  his Max line of pants using real-life women instead of ultra-glam models. Of course, these aren’t your average girls on the street…

Check out the Theyskens’ Theory Facebook page and you’ll see some great looks donned by Theory employees. The point is to show how his most famous pant is supposed to be worn, by real women who have places to go and people to meet. http://www.facebook.com/theory?sk=app_181012015254529

The flattering and graceful Max line of pants are a hot item as practical urbanites look forward to springtime. Taking any excuse to look good doing what they do, his “model employees” have donned some great outfits for a spread on the Theyskens’ Theory blog and online shop.

Coming in three distinct styles—Cropped, High-Waisted, and Original—the Max pants make looking good seem easy. Adaptable and classy, these pants could be worn as part of a suit, or with a T-shirt…your pick.

So, take a look at what’s new on the Theory website:

http://www.theory.com/on/demandware.store/Sites-theory_US-Site/default/Search-Show?q=pants

Maybe you’re already Mad About Max, and you don’t even know it!

JW Yates

New York, New York

March 10th, 2011

March 10, 2011 at 9:17 pm Leave a comment

Cotton Crisis on the Horizon?

Taking a look at the headlines in the past few months, it may be hard to ignore a few important global stories that may have a serious impact on the apparel industry in the year ahead. Due to various unprecedented floods and natural disasters, the world’s supply of cotton has reached a bottleneck. Devastating weather in Pakistan (world’s number three producer of cotton), and continued flooding in Australia has had a marked effect on many formerly productive cotton fields and manufacturing facilities. In addition to natural events, there are also political forces at play as India, the world’s number two cotton producer, has instituted export restrictions to protect its vital domestic textile industry. The result is a domino effect of scarcity, followed by price increases all along the supply chain. As the price of cotton rises, the supply of synthetic substitutes is affected, and the price of petroleum-based raw materials increases as well. Users of these products in the garment and sewn goods industry are caught scrambling for affordable, accessible fabrics to follow through on design plans.

According to Hameed Khan, director of operations at Masood Textiles in Pakistan, prices have increased 15-35% up through January. Speaking to industry newspaper WWD (Women’s Wear Daily) last month, Khan says, “My fear is that from May onward for two or three months until harvest time, there will be no more cotton in the local market, with scarcity determining the price.”

 

The WWD fiber price sheet backs up this point, showing that cotton prices have risen 170% in the last year from $.64 per pound to over $2 per pound, the highest levels since the cotton embargo imposed during the US Civil War. There has been a 40% increase just since the beginning of 2011. In response, heavy users of cotton in the fashion industry have been forced to make design changes, blending available stocks of cotton with synthetic fibers. The result: higher polyester prices.

Add to this the rapidly increasing demand for cotton goods in China, and it is easy to see how today’s cotton market might very well turn into tomorrow’s lesson in supply and demand economics.

According to industry experts there is little hope for prices to drop anytime soon. Big-time apparel companies are already starting to pass the increases on to consumers.

The Jones Group, which encompasses Nine West and Anne Klein, forecasts double digit increases in the coming year. Levi Strauss, Ralph Lauren Polo and JC Penney, among others, have echoed these dire warnings. The Gap, Wal-Mart and other retailers are already scrambling to find a way to soften the blow as surging clothing prices hit the store shelves.

 

 

So what does the future hold for garment and sewn goods manufacturers? For the short-term it seems that the old way of doing business is in jeopardy. To stay ahead of these brutal, inescapable market forces, today’s apparel manufacturer is going to have to look forward, and stay nimble. The ability to keep tabs on the availability and affordability of key raw materials—and to react quickly to a shifting, volatile textile market— is now imperative. It is no longer sufficient to assume that the materials on hand at the time of design are still going to be a realistic option months down the road when it is time to roll out a product line. That is why having a data management system, one that is designed with the needs of the clothing industry in mind, is now a necessity. Without total control over the complex data stream inherent in manufacturing there is no way to foresee and react to this kind of shaky market. Having a PLM system could be the only chance for a garment company to put the reigns on what some have termed a terrifying future for the industry.

 

The VerTex Product Lifecycle Management system by BMS is one of the only PLM products on the market designed from top to bottom to deal with the complexities of the clothing industry. Built by people with over 30 years in the apparel industry, the VerTex system offers configurable, scalable toolboxes to help companies turn a flood of raw data into manageable, meaningful information; the type of information that will allow you to make the most accurate predictions and most informed decisions possible. In this climate nothing can be taken for granted. Inflationary material prices, unstable market forces, political and natural events, all of these factors can influence your choices and decision-making. Having the ability to oversee a product from concept to delivery is more important now than ever before. The best defense against future uncertainties is valid, reliable information. An effectively implemented PLM tool can offer just that.

 

JW Yates

NYC, New York

 

Resources:

http://www.wwd.com/markets-news/apparel-prices-primed-to-rise-3490958

http://www.indexmundi.com/commodities/?commodity=cotton

 

 

 

Business Management Systems

330 West 38th Street

Suite 705

New York, NY 10018

(800) 266-4046

info@bmsystems.com

http://www.bmsystems.com

 

March 2, 2011 at 6:53 pm Leave a comment

Elie Tahari featured on CBS Sunday Morning

“Even a kick in the butt is good if you’re headed in the right direction.” Elie Tahari

Continue Reading February 22, 2011 at 9:16 pm Leave a comment

Can PLM tools enhance design creativity?

Creativity is the name of the game in fashion and the garment industry. Whether at the design table, the marketing meeting, or in the boardroom, to maintain a competitive edge today’s company must be able to generate great ideas and act on them immediately. In a business driven by the next big thing, and reigned in by the fickle demands of the consumer market, timely implementation of creative ideas is an absolute necessity. Therefore, your company should be willing to use any tool available to enhance creativity and enable creative thinking amongst your staff. After all, you hire the best people with the right skills, so you had better create a working environment that allows them to do whatever necessary to turn today’s great idea into tomorrow’s newest fashion industry success story.

So what can you do to enhance the creative capacities of your staff? Don’t go spiking the water cooler with caffeine just yet! First you should find ways to streamline the creative process, to eliminate frustrating logistical barriers, and to empower your staff with the vital flow of information they need.

Once you have found the right people to run your operations, it is imperative that you remove all possible roadblocks and give them the freedom to originate, refine and innovate in whatever function they perform. Whether they are doing marketing, designing products and ads, building web functions, or building relationships, your staff have creative capacities. That’s why you hired them. To let them do what they do best, you must give them the tools they require, and in today’s competitive manufacturing sector no tool is more handy than accurate, up-to-date information.

We all know what a complex and interconnected process is required to bring fashion and sewn goods products to the marketplace. Depending on your specific line of garments it may take months to go from the design phase to the store shelves, and most likely it will take the interaction and cooperation of many, many people at every step in between. While we are busy with product development, material selection, and ad design, the public is busy changing its tastes and altering its demands. So how do we keep pace with the market? How do we make sure the creative decisions we made last season don’t hold us back on the roll-out runway? Constantly updated and readily available information is definitely a major part of the answer.

One of the most productive things you can do to enhance creativity among your staff is to implement a Product Lifecycle Management system, or PLM. But not all PLMs are the same. Choosing the right PLM may mean the difference between a revenue-building software application, and a cash-burning tech nightmare that becomes a pariah to your creative staff. It is imperative that your company chose a PLM designed specifically for the garment industry, one that offers toolboxes and configurable software applications built with the capricious needs of the fashion industry in mind. One such package—the VerTex system by PLM-pioneers Business Management Systems—has been proven time and again to eliminate the time-wasting communication issues inherent in our line of business.

http://www.bmsystems.com/

Your design department will stay updated about the availability of raw materials, and can use that information to inform their design decisions. For instance, if you are working on a line of blouses, and your design team sees that certain fabrics are available, and affordable, they may be inspired to try something that hasn’t been done before. Or, if your designers have a more accurate and reliable idea of the release date of a product, they can tailor their design to incorporate timely themes such as holidays, political or sporting events, or to simply react to quickly-changing public tastes. Likewise, if your design team can predict an upcoming supply shortage, they can avoid wasted time and look for alternative, perhaps novel replacements before committing to a material they won’t actually have access to.

A streamlined production and design system will give your staff more freedom to make inspired changes all the way up to the last minute. When it comes to design, more freedom means more creativity. The fewer practical obstacles in the way, the more likely your designers will be to follow their vision.

Simply put, a properly implemented PLM tool, especially one tailored to the needs of the fashion world, will enhance product innovation. The less time your staff spends filling out paperwork and searching for information, the more time they can spend being creative, which is what you hired them for in the first place!

Similarly, your marketing specialists will be empowered by accurate, universally-updated data. Knowing everything they can about the products they are selling will enable them to react instantly to shifting public whims and changing global realities. Knowledge is power, and for creative people knowledge fuels the engine of innovation. Put into the right hands, a piece of what seems to be bad news can be spun into a creative advantage.

A PLM system like VerTex can facilitate this integral dissemination of information, allowing your team to maximize their creative input, and allowing them to work off of each other in real time. Your staff is your greatest asset. Empowering them to work effectively as a team—even if they are spread out in facilities across the globe, or even separated by linguistic barriers—will lead to the kind of innovative synergy that drives any creative endeavor.

Don’t wait for another fashion season to come and go. Discover if your staff is capable of producing the “next big thing” right now. Find and implement an appropriate PLM system so your best people can do their best work, unhindered by the chaotic, distracting mass of data we all have to navigate through in today’s business world. Give them the tools they need to create, and spare them the onslaught of chaos that stands in their way.

For more information on VerTex, the PLM tool built for fashion, check out the BMS website, or reach us at our offices in Manhattan via the contact information below:

Business Management Systems, Inc.
330 W 38th Street
Suite 705
New York, NY 10018

Phone 212.594.8770
Toll Free 800.266.4046

Fax 212.810.4601

Email: info@bmsystems.com

JW Yates

NYC, New York

February 21, 2011 at 9:52 pm Leave a comment

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About BMS

Business Management Systems (BMS) has been a leading provider of product lifecycle management software solutions to the apparel & textiles industry for 15 years, delivering VerTex Toolboxes--an easy-to-use modular system uniquely configured to meet every company's specific needs.

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