Sports apparel brand to reduce dependence on China
22 Feb '11
2 min read
European sporting and apparel goods industry are suffering supply problems, because most commodities- especially textiles - are made in China, while wage costs in China are rapidly rising.
Chinese manufacturers prefer to supply more products to domestic market, rather than to the European market, due to which, China's exports of sports and apparel goods to Europe have decreased.
European trader of sports goods - Intersport currently sources 75 percent of its requirements from about 1,200 factories in China and is expected to possibly reduce the proportion to 50 percent in the near future.
Chairman of the company, Franz Julen explained at the International Sporting Goods Show (ISPO) held in Munich that wages of Chinese workers will double in the next five years and production capacity would be compressed.
He added that, manufacturers have delayed supply by a few months and in some cases, products ordered for Christmas last year, have arrived just now. The company has already put up orders, for supply in time by next winter.
Intersport wants to get rid of dependence on China, and intends to shift some production to the Baltic States or Romania, Bulgaria, Turkey and even India and Bangladesh. The company's turnover stood at nearly €10 billion last year.
Intersport expects that prices of sporting and apparel goods will move generally higher, in which prices in Austria and Germany will grow up 10 percent, price in the US will rise 15 percent.
Price increase does not only connect with China, but also involves the problem of raw material prices. Cotton prices rose explosively last year and specialty fibers widely used in sports apparel are in short supply.
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