The world of garment sourcing has opened up since the eighties with the world feeling much smaller and a trip to visit a factory in the Far East being no more than 1-2 films, a read, some work, 2 meals and a little nap away.
The Far East opened its doors to the world that wanted good quality sportswear with lower costs due to their lower overheads and labour, however, in recent years, Europe has been the focus for many UK brands who either want to source less quantity or reduce their carbon footprint.
Many factories in the Far East have since adjusted their business model and set up dedicated production lines with smaller minimums to help compete with the lower volumes Europe has to offer, but the carbon footprint and travel time still remains an advantage for brands less focussed on margin and sourcing to the last cent.
This change could be reversed shortly with the imminent Brexit that could mean new trading terms with our European partners. Currently, UK brands need to pay 12% duty to import goods from China that helps level the competition between China’s low costs and higher European wages, however, this could be neutralised in the coming weeks if a no deal Brexit actually happens.
The duty-free zone between the UK and Europe may no longer exist and duty on any commercial goods purchased from Europe and imported to the UK could come into force, making European factories less attractive.
If this happens, then I see 3 options for UK brands -:
1. Continue to source from Europe with increased costs that will be passed onto the consumer.
2. Move production further afield and potentially back to China, Lao, Vietnam and Cambodia.
3. Start to develop their own factories in the UK.
We work with factories in the UK, Europe and the Far East so have all the potential bases covered, but one thing is for sure, if a no deal Brexit happens then it’s going to affect how we source sportswear with compromises having to be made, be it higher costs, reduced margins or a higher carbon footprint.