With the BAT Defeated, What Call to Action Should the Apparel Industry Answer Next?

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Sourcing Summit 2017

Once the apparel and retail industries began to fully grasp the affect the Border Adjustment Tax could have on our industries, the groups sprang into action.

The proposed plan, which was the cornerstone of the Republican’s failed tax reform strategy, would have penalized businesses importing the 97 percent of apparel sold in the U.S. that’s made overseas. What that could potentially mean for apparel firms—and consumers—inspired new coalitions, numerous meetings on the Hill and consumer television ad campaigns.

Though it cost a ton of aggravation and untold sums, beating the BAT proved the power this industry wields when we all come together.

When asked where this newfound spirit of collaboration and camaraderie should be focused next, attendees at this month’s Sourcing Summit coalesced around a few specific ideas.

In terms of the next issue the industry needs to lobby Washington about, one thing was top of mind.

“The next thing we need to work on are the trade issues,” said Bjorn Bengtsson, chief merchandising officer, Untuckit. “NAFTA—it’s important from the apparel perspective, and a personal perspective, for the U.S. to look out for the prosperity of Mexico. We need to look, from a production perspective, if there are any agreements in NAFTA that are unfair to the U.S. industry. It doesn’t mean you discard it, you improve it.”

Whether the North American Free Trade Agreement will get amended or discarded is still unclear but recent meetings between the three stakeholders aren’t going as smoothly or quickly as the White House had hoped.

Read more on the latest with NAFTA: NAFTA Standoff Doesn’t Bode Well for the Future of the Trade Deal]

Ultimately, Joseph Mellaci, vice president of business development Americas for Impactiva, indicated the talks should be on everyone’s radar. “We should probably be aligned with anything with NAFTA,” he said.

NAFTA was an obvious pick for Monica Sullivan, director of sourcing at DXL Group, but she also touched on the second topic people seem to be focused on, which is how the industry can “continue to be on the same page with sustainability.”

Picking up on that train of thought, Sullivan’s colleague, Lauren Foley, director of sourcing for DXL, says we need to partner with vendors and suppliers to ensure sustainability extends the whole length of the supply chain.

Sediqa Farouq, product development and sourcing manager for Perry Ellis International said she’d like to see apparel executives spend time asking, “How can we make products more eco-conscious?”

Along those same lines, Monica Sachdev, production manager at Bonobos, wants the industry to re-evaluate how its current priorities have affected quality—of both products and the planet.

“Beyond trade agreements, on my mind are consistency of factory compliance audits and being able to stand behind those results,” she said. “There is so much cost pressure and we need to do more in the direction of sustainability.”

From sustainability, talk turned to what talk always turns to lately: the consumer. Or, more specifically, how to meet the new consumer expectations.

“They need to swallow the hard pill and really fight inefficiency. It’s been forced upon them because of the Amazons in the world,” said Frederick Magner, director of Americas for apparel product consulting firm Alvanon. “The consumer is now the dictator, and they need to change with the consumer.”

Christopher Bray, director of financial and strategic advisory firm MMG Advisors, echoed that sentiment, adding speed will be the key to giving shoppers what they want in a timely manner. “Without the consumer, there is no business…They [retailers] would be only left with pretty store fronts with high rent.”

Reporting by Genevieve Scarano

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