China will remain the major garment sourcing destination of the developed and developing countries
Harel Wiesel, Co-Founder and CEO of Fox Wizel Ltd, discusses about subtle and transformative changes in the clothing industry worldwide.
Synopsis:
Fox-Wizel Ltd, an Israeli fashion retailer, owns and operates fashion chain stores of its own brand "Fox". In addition, Fox has sole distribution rights to the American Eagle and Aerie fashion brands in Israel, successfully opening and operating 29 stores in 2 years. FOX also received exclusive franchisee status for The Children's Place in Israel. Moreover, FOX has successfully expanded into the home goods and home fashion market via its brand: "Fox Home".
Wiesel, 48, is also the controlling shareholder of Fox Wizel. He was born in Israel and is married with 3 children.
Excerpts:
As a global retailer and distributor of private label apparel products for men, women and children, what do you think are the major factors that may drive changes in the clothing sector worldwide?
The major factors which will drive changes in the apparel sector include:
Increase in purchasing power of lower segments of the population, which will result in more consumption circulation, especially in the lower and middle segments of the clothing business. At the same time, we will also witness faster mobilization inside the social casts.
Using new as well as advanced fabrics and technology will lower the production cost and it will also allow the industry to rely more on technology than on manpower.
Mobilization of production from country to country and closing the professional gap between them.
How do you see bricks and mortar stores competing with e-commerce and m-commerce companies coming in? Is it viable in textile and garment sector?
I'm not an expert in internet business but it seems that garment business has a way to go as it is still in the single digit market share. The main reason is that customers still want to feel the fabric and to try it prior to the purchase.
On the other hand, I'm sure that the trend of digitalization will increase in the clothing business with supportive technologies.
For instance, we have already seen mannequins representing the size and color of individuals. So the gap between brick & mortar stores as well as online shops will become less in the next few years.
Let me ask you this, the global travel retail sector is expected to reach US$ 60 billion by 2015. What do you think is the share of garment business in it?
The airport business is in a loop, on one hand massive consumer traffic, on the other hand imaginary rent , so only high-end apparel business with a very high gross margin can sell there and the sales are not high.
What they should do is to go all the way with the "percentages from the revenue" scheme, this could bring a lot of other brands which could generate massive sales, and both side could be satisfied, the consumers, the brands and the airport authorities, wherever they are.
But nobody is brave enough to think outside of the box, and it is not happening.
Fox Group became exclusive franchise for leading brands in the US, UK and continental Europe. How do you look at the prospects of expanding your business to Asia and Middle-Eastern countries? What are the reasons?
Fox Group is a franchise for apparel brands from the US and Australia as well as a leading manufacturer of its own garment brand 'FOX'. We intend to add more franchisees with concrete knowledge of the retail arena in the countries apart from those wherein we are already operating our store, such as Philippines, Thailand, Singapore, India, etc.
For that manner, we offer best partnership and real 'know how' of franchise operation and brand management.
Emerging technologies are changing the entire supply chain in both subtle and transformative ways. What further developments do you foresee in the apparel supply chain in the next few years?
I think, clothing brands around the world will try to diversify their supply sources and they will also try to cut the lead time of the supply chain. At the same time, apparel makers will try to be more flexible with the production in order to provide fast as well as quality solutions to the buyers and to deliver emerging trends in shorte time to market.
Countries like China are now in a transition stage and are moving to high-end apparel manufacturing. How will this impact the current production and marketing of high-end apparel segment?
From our experience, even after ten years, China will still remain the major garment sourcing destination of the developed and developing countries.
Can you let us about the increase in demand for organic cotton garments globally?
This trend is rapidly growing in countries like Japan and Australia. Rest of the world is sharing only a fraction of market share in organic cotton garments.
With continuing potential for labor disruptions at the ports, disruptions from natural calamities and other factors, how important is contingency planning within the supply chain operation? What are the keys to an effective contingency plan?
We are managers but not wizards, so what we can do is to narrow the proportion of relying on single source, both in production and transportation. For instance, we can try to have more ports in the country of origin; we can also try airways and roadways.
But at the end, we are also limited to what we can do; general strike or major disaster will reflect us like all the others.
While consumers have come to expect a seamless experience across all channels, delivering on that promise can be very complex. What are the keys to overcome such challenges and be successful?
From our experience, this seamless trend is more visible in innerwear and sportswear segments and these segments are very small in our business. We have not seen it yet in the high and casual fashion segments, wherein we are mainly focusing our business.
Being a global firm, what would be your message for companies' aspiring to become truly global?
First of all, if you would like to play in the global market you must conduct 'open business environment' both in your company and outside of it.
You must be open to the local trends and integrate it with your brand DNA. You must have a thorough knowledge about the tastes and preferences of every country.
You must show your presence in the markets as early as possible, in order to let them pick whatever styles they like and to consolidate the orders early enough to maximize your global supply chain advantages.
You have to monitor global trends, cost of rent, cost of labor, etc. for each country.
In a nut shell, you must have global thinking with local solutions, or with a new buzz word "Glocal".
Finally, to be successful in today's world, a company needs to be ever aware of the pulse of the market place. Is there any technique for this?
There is no one technique for feeling the market pulse, but if your company has good technology, you know what is your brand DNA, you are consistent with it, you use best tools to analyze your sales, you investigate your wins and your failures, you hire brilliant staff in the key position, you succeed to preserve them in the company, while they improve their knowledge and experience.
Take these ingredients with systematic work and high-quality staff will provide you the secret formula to how to do it
