Here’s How EU Brands are Sourcing for Speed to Market

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A display of product from Tunisia at Premiere Vision Paris

In Europe, sourcing in Asia isn’t the standard go to. The region’s cluster of sourcing countries—which includes places like Tunisia, Greece and Portugal—has provided an ecosystem that’s supporting European brands’ speed to market needs.

And most of these countries are supplying to Zara, which has figured out better than anyone else how to tap its neighbors to create a close, efficient supply chain.

Tunisia was the country of focus in the Manufacturing hall of Premiere Vision Paris last week, and it could be next to garner greater attention as a viable sourcing option for the EU market.

[Read more about how U.S. brands are adding speed to market: Speed and Decision Making Are Key in Western Hemisphere Sourcing]

The country is known for its trousers and is a leader in North America when it comes to denim sportswear, according to Boujemaa Harbaoui, an expert in textiles for COM_TEXHA, a project aimed at strengthening the competitiveness of the Tunisian textile and apparel sector. After trousers, Tunisia’s next biggest areas of production are intimates, swimwear and sportswear, and technical textiles.

There are 1,700 factories making textiles and apparel in Tunisia, and according to Harbaoui, annual turnover in 2016 was 2.3 billion euro ($2.75 billion), What the country still lacks, though, is raw materials.

“We buy raw materials worth 1.2 billion euro ($1.43 billion), so it’s a big market for textile factories,” Harbaoui said. “But the potential is here.”

Zara, H&M, Boss and United Colors of Benetton are just some of the brands that have already picked up on that potential of sourcing in Tunisia.

Turning to Greece, manufacturers like DMiss have fast fashion down pat for its clients, which include Asos, VF and Guess.

“We work with many European clients with quick response orders,” junior manager Thanos Papaioannou said. “We stock the fabric, they give us sales projections and we manufacture and ex factory in one and a half weeks.” Without stock fabric on hand, production time is still a considerably low five to seven weeks.

Eighty percent to 90 percent of the fabrics DMiss uses in its products are made in Greece, which also keeps the supply chain short. The country is known for its jacquards and cotton quality.

The production isn’t done in Greece, as labor costs there are on the higher side. DMiss has goods produced in Fyrom, Macedonia, which is less than a two-hour drive from the company’s Thessaloniki home base.

Greece’s price-quality ratio is what has set the country apart for clients, according to Papaioannou.

“I believe it’s great value,” he said. “If you go to Bangladesh, you have a very cheap price, but the quality is not good for a diffusion brand, for example.”

And more than good quality for the price, brands are benefitting from a much shorter supply chain, which means fewer leftovers and greater flexibility.

“These companies order a lot less,” Papaioannou said. For them, there’s the time and opportunity to see what’s selling well and cut into more of that, rather than buying everything up front and ending up with too much markdown product.

Portugal could soon be as top of mind for sourcing as Turkey, with its offerings continuously improving and its political stability becoming more and more of a competitive advantage as tensions around the world rise.

For Siena, a knitwear manufacturer 30 minutes outside of Porto, Portugal, whose clients include Zara, Pull & Bear, Carolina Herrera and Guess, interest in both the company and the country were high.

“We can do everything, so it’s an easy way to get ready made garments,” said Helena Pereira, who works in Sienna’s commercial department. “We have the right places to make the fabrics, we have suppliers for the accessories as well, so it’s an easy way to get the product ready in a short time.” Lead times at Sienna start as low a six to seven weeks from order placement to ex factory.

Portugal has started to pick up some market share from Turkey as the two country’s price points become increasingly comparable and Turkey’s political tensions become increasingly problematic.

Portugal has know-how for apparel sourcing, more so now that Zara’s been in town to help prepare manufacturers in the country to best fulfill its needs.

“Inditex Group is a big quota of the production in Portugal and it’s helping the industry because they are pushing to develop in areas like finishing, sustainability, fashion, new techniques, in new fabric compositions, in logistics, in all the areas,” Nuno Costa of Somani Sociedade Textil in Portugal. “And that made the textile industry in Portugal very flexible and very developed.”

Somani has been in business for 30 years and produces in three main categories: toweling products, nightwear and loungewear, and baby wear and nursery products.

The vertically integrated business controls production almost entirely, with the exception of spinning, though the yarns Somani buys are most often from Portugal, sometimes from India. Scandinavia is one of the company’s biggest markets, followed by Germany and France. Turnover at Somani is roughly 12 million every year and the employee count at its facilities is 100.

But it’s the company’s flexibility and speed to market that’s among its biggest draws right now.

“Many customers are coming back from Asia because their business models require fast deliveries and many collections during one season,” Costa said. “If you want to have that business model, you need to have suppliers that can adjust themselves to that business model…I think it’s the benefit of doing business in Portugal.”

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