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Index [TC]² Participates in MAGIC's Sourcing Zone [TC]² Activity Member Profile - AAFA Important Dates A Look Ahead

[TC]² Participates in MAGIC's Sourcing Zone

Touted as the world's leading destination for buyers and exhibitors in the apparel industry, MAGIC attracted over 90,000 attendees and 3,400 exhibitors to the middle of the Nevada desert for its February show. MAGIC has long been known as the main event when it comes to fashion, with its bi-annual offerings of the “best next things” in menswear, young men's looks, streetwear, juniors fashions, contemporary and misses apparel, accessories, and childrenswear. As for MAGIC's “best next thing”, Sourcing Zone@MAGIC is offering buyers and branded exhibitors the opportunity to source new factories and suppliers. Only a year and half old, this brainchild is connecting branded wholesalers, retailers and private label companies with a vast selection of full-package sourcing, fabric and trim manufacturers from around the globe, and is targeted to become the leading fashion and textile sourcing trade event. Countries represented include Bolivia, Taiwan, Ghana, Bangladesh, Mexico, India, Hong Kong, Peru, Pakistan, Columbia, Thailand, Turkey, Italy, Canada, Morocco, Tunisia, Mauritius, Nepal, Sri Lanka, Korea and China.

SourcingZone@MAGIC offered a Sourcing Seminar Series, featuring executives from the apparel industry who spoke on sourcing issues. The post-2005 sourcing era and the expiration of quotas remained a hot topic of discussion. Executives from Liz Claiborne, Kohl's, Mast Industries, the U.S. Association of Importers of Textiles and Apparel, Textile Enforcement & Operations for U.S. Customs and Border Protection, and International Trade Center in Geneva gathered to speak on the issue.

[TC]² representatives shared the results of research initiatives regarding the SizeUSA National Sizing Survey, [TC]²'s new 3D to 2D technology for the automation of fit, as well as the growing presence of RFID technology in the softgoods industry.

While over 3,000 manufacturers showcased over 5,000 brands and private label resources, it was not all work and no play at the Las Vegas Convention Center. MAGIC's opening night event featured Duran Duran, who performed to a sold out crowd of over 2000 MAGIC guests at the Bellagio Hotel. All proceeds from the Opening Night Event were donated to the Campaign Against Child Abuse, a National Children's Advocacy Center initiative.

Magic International also partnered with Kids In Distressed Situations (K.I.D.S.) to offer show exhibitors another outreach opportunity to children in need. After the show, exhibitors are invited to donate their on-site samples to the cause. Donations are to be delivered to local children who live in poverty without the most basic necessities. K.I.D.S. is a national charity that distributes donated juvenile products, clothes, toys, shoes, beds, books, art supplies and other children's products to non-profit organizations.

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[TC]² Activity

ITMEX FEIMACO 2005, Sao Paulo, Brazil - February 21 – 25, 2005

“Order and Progress” is the motto on the green and yellow Brazilian flag of the 5th largest country in the world and by far the largest in Latin America. Home to 180 million people that speak Portuguese, Brazil is a tropical country with a vast coastline, beautiful beaches and home to a variety of tropical sportswear including the world renowned Brazilian bikini.

From the merriment of its Carnaval to the immensity of the dark green Amazon, it is a country of grand proportions. It covers 8.5 million sq. km, and its capital, Brasilia, built in 1960, represents the futuristic concept that characterizes the country. Its ethnic mosaic spans Brazilians with European ancestry from Italians and Germans to those of African descent to the largest Japanese colony outside of Japan.

Brazil is a federal republic whose president is Luiz Inacio da Silva, better known as “Lula”. Under his guidance, Brazil is recovering from when its monetary unit, the Real, was devalued to more than 3 Reales to 1 US dollar. Currently the exchange rate fluctuates around 2.5. Brazil 's GDP per capita is $6,700.00, making it one of the top five income countries in Latin America. With an estimated inflation rate of 8% in 2004 and international reserves of over 57 billion dollars, Brazil is in the top ten economies of the world.

Major industries in Brazil are shoes, chemicals, timber, iron ore, steel, aircraft, motor vehicles, soy beans, sugar, coffee, orange juice, cotton and textiles. In addition, the Brazilian apparel sector is very well supplied by the thriving textile base. Last year, Brazilian companies produced over 1.6 million tons of textiles to supply the 18,000 sewing plants that exist in this immense country. Brazil produces mostly cotton based woven fabrics and has increased exports of denim as well as home furnishings. There is a shortage in synthetic fibers, especially polyester.

Infrastructure in this large country is a major problem; the logistics of transporting textiles and finished garments makes this issue a crucial one. Because of the country's size, the apparel sector is very fragmented into regions….the Northeast, the Central, and the South. With 2005 Quota eliminations, experts estimate that textile and apparel prices will fall anywhere from 6% to 20% by 2006. This will be a challenge for the Brazilian textile and apparel industry in terms of having higher raw material cost with declining finished goods prices. This challenge will require a leap in efficiency and productivity in the whole supply chain.

Most Brazilian apparel organizations are not capable of offering international buyers a “full package” option. [TC]² has begun working with a few to help them penetrate this market where they are not the low cost provider, but can deliver what the customer wants quickly and efficiently.

ITMEX / FEIMACO 2005 is a major show that [TC]² attended last week in the bustling industrial capital of Brazil, Sao Paulo. Through Ricardo Haydu of Revista Textil, Mike Fralix and Will Duncan were invited to present seminars to the Brazilian audiences on Full Package and Lean Manufacturing. Mike challenged the audience to “Think outside of the Triangle” by accepting that there are other ways of doing a given thing. As Mr. Evaristo Nascimento, the show's producer, said after the event…..”We have to provide more value added activities to the show and we will do it again in 2006 with [TC]²”.

During this 5 day show in Sao Paulo, we also had the opportunity of meeting with the ABRAMACO organization (similar to the SPESA concept) and exploring joint future activities. In this context we also met with Mr. Giuseppe Tropi of Cavemac, Brazil 's leader of parts and supplies to the sector. He also heads Costura Perfeita, the country's sewing related magazine.

Brazil has a strong domestic market with 180 million “Brasileiros” that love fashion and style, therefore Brazilian apparel companies are pushed to be creative and resourceful to succeed. This situation makes the Brazilian manufacturer less dependent on exports as compared to many suppliers in the CAFTA region or the Asian region.

Contributed by Arturo Rodriguez, [TC]²

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AAFA Annual Meeting

Attendance was high and enthusiastic at the AAFA Annual Meeting of members last week where the theme was “Winning Strategies That Connect with the Consumer”. The venue at The Breakers in Palm Beach, Florida was ideal for a variety of enlightening and entertaining speakers. Mike Fralix, President and COO of [TC]², helped to moderate the three-day program, introducing many of the speakers and moderating the question and answer sessions.

Some highlights from a few of the speakers:

Peter McGrath, Chairman of JCPenney Purchasing Corporation, spoke about “Supplier of the Future”. Peter said that JCPenney was growing their private label business and the suppliers they would grow with are collaborating, providing rapid product development, executing with short cycle times and are flexible businesses.

Watts Wacker, CEO of FirstMatter LLC, futurist and best selling author, engaged the audience with his views on future trends and entertaining stories. He pointed out that the people buying diet books are also buying cook books.

Robert D. Hormats, Vice Chairman of Goldman Sachs (International), spoke about the worldwide economy and his company's commitment to integrity in an industry where it has been somewhat lacking. When questioned specifically about his view on future interest rates and the market; he said that interest rates will continue to inch upwards and the stock market will be relatively flat with a small increase in 2005.

Peter Schutz, Retired CEO, Porsche AG Worldwide, related a story of Porsche preparing for the Lemans where the team was not planning to win. Peter told the team that he did not want Porsche to enter a car if they were not doing it to win. Over the next 50+ days they designed a car for racing and won the race that year. Using a team approach, Porsche redefined itself and today is the most successful automobile company, by all measures. Peter said that people who buy Porsches buy for the experience. They don't drive a Porsche, they wear it like apparel.

Other topics covered were “Election Aftermath: How will it Affect Your Business”, and “The Evolving Urban Consumer”.

Kevin Burke, President and CEO of AAFA presented several “Excellence in Social Responsibility Awards” for 2005. The Award recipients are:

Edward Emma, President and COO, Jockey International, and outgoing Chairman of the AAFA, reviewed the accomplishments of the last year in which AAFA expanded services, drove legislation supported by the majority of its members and improved the financial health of the Association. Emma then passed the gavel to the new Chairman of AAFA, Wesley Card, Chief Operating and Financial Officer of Jones Apparel Group, Inc.

Pete Butenhoff, CEO of [TC]², noted that this was one of the best, most thought provoking programs for an AAFA Annual meeting in recent memory. He said that ending the three-day program with a sports celebrity like Johnny Bench was ideal.

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Member Profile

The American Apparel and Footwear Association (AAFA) was formed in August 2000. This was the merger of the American Apparel Manufacturers Association (AAMA) and Footwear Industries of America (FIA), two highly regarded trade associations. AAFA represents apparel, footwear, and other sewn products companies – all which compete in the global marketplace. [TC]² is a long standing member of AAFA and [TC]² staff members are active on the AAFA Board of Directors, Enterprise Competitiveness Council, Supply Chain Leadership Committee and Human Resources Leadership Council. Kevin Burke, AAFA's President and CEO remarks, “AAFA has had a long-standing relationship with our friends at [TC]².  [TC]²  provides a valuable resource to many AAFA member companies, and I look forward to continuing to work with Mike Fralix and his team for years to come.” This is the kind of relationship [TC]² likes to establish with all of its members.

Founded in 1960, the AAMA represented U.S. apparel manufacturers. Regardless of size, location, product line or type of distribution, the AAMA helped each company by forming an environment in which the U.S. apparel industry could operate competitively and profitably in a global economy. AAMA was one of the strongest national trade associations representing approximately 80% of U.S. wholesale apparel sales with a membership spanning almost every state. Current activities include advocacy toward Congress, strong programs in education, technology, marketing, and industry relations. Resources and talent are pooled by industry leaders who help steer AAMA's programs, committees and services.

FIA, once serving only national footwear manufacturers, importers and distributors, and suppliers to the leather and allied trades, is now an integral part of the current AAFA. Helping U.S. footwear companies achieve growth through research, education and networking, its contributions to AAFA are substantial.

Competing worldwide, companies reach for AAFA's efforts in promotion and help to enhance their competitiveness, productivity, and profitability in the global market. AAFA works to do this by minimizing regulatory, legal, commercial, and political and trade restraints. AAFA's staff has made it their mission to represent each member's point of view before the public and government in order to successfully advance the association's legislative, international trade and regulatory objectives. AAFA ensures that employees of the industry are treated with fairness and respect and are afforded opportunities within the industry. Communicating information to promote the apparel, footwear and sewn products industries is part of AAFA's mission. Creating a favorable environment for the advancement and exchange of best practices and technological innovations is also a big part of what AAFA works toward.

One issue, responsible business practices, assuring that sewn products are produced under lawful, humane and ethical conditions is important to AAFA's members. The association endorses the Worldwide Responsible Apparel Production (WRAP) Principles and Certification Program. An independent non-profit corporation, WRAP is dedicated to the promotion and factory-based certification of lawful, humane and ethical manufacturing throughout the world.

To find out more about the AAFA visit www.apparelandfootwear.org .

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Important Dates

March

April

For detailed information about industry events, visit www.techexchange.com

Thanks to the techexchange site sponsors Blinco Systems Inc., Gerber Technology and Methods Workshop.

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A Look Ahead

March 16-18 – Material World, Miami Beach Convention Center

View previous editions of this newsletter

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