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Confidential
© 2017 Gerber Technology
EXPO Producción
1
THE GLOBAL APPAREL TRADE
March 2017
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Confidential
© 2017 Gerber Technology
EXPO Producción
2
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Confidential
© 2017 Gerber Technology
EXPO Producción
3
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Confidential
© 2017 Gerber Technology
EXPO Producción
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Confidential
© 2017 Gerber Technology
GLOBAL APPAREL TRADE
A Look At The Numbers
EXPO Producción
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Confidential
© 2017 Gerber Technology
• TEXTILES & APPAREL
• World Trade = US$ 744B; decline of 7.4% in Both Textiles &
Apparel
• Decline = Trade To Europe; US$/Euro
• Apparel Geographically
• -33% Asia To CIS
• -12% Within EU
• +14% Asia To Middle East
• +4% Asia to Americas
• +3% South/Central America To North America
EXPO Producción
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Confidential
© 2017 Gerber Technology
EXPO Producción
7
86% or US$390B >>> Top 10
*World Trade Organization WTO
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Confidential
© 2017 Gerber Technology
EXPO Producción
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70% or US$349B >>> Top 10
IMPORTERS US$B % SHARE % CHANGE
EU 180-84=96 19% -8%
USA 97 19% 4%
JAPAN 29 6% -8%
HONG KONG 15-15=0 - -
CANADA 10 2% -2%
SOUTH KOREA 9 2% 1%
AUSTRALIA 7 1% 1%
CHINA 7 1% 7%
SWITZERLAND 6 1% -8%
RUSSIA 6 1% -34%
TOP TEN 349 70%
TOP TEN APPAREL IMPORTERS
*World Trade Organization WTO
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Confidential
© 2017 Gerber Technology
US APPAREL TRADE
A Look At The Numbers
EXPO Producción
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Confidential
© 2017 Gerber Technology
EXPO Producción
10
80% or US$64B >>> Top 10 Countries
IMPORTERS US$B % SHARE % CHANGE
CHINA 28 35 -9
VIETNAM 11 13 2
BANGLADESH 5 7 -2
INDONESIA 5 6 -5
INDIA 4 5 -1
MEXICO 3 4 -4
HONDURAS 3 3 -5
CAMBODIA 2 3 -14
SRI LANKA 2 2 -3
EL SALVADOR 2 2 -
TOP 10 64 80
TOP TEN APPAREL IMPORTERS TO USA
*Textile Intelligence / US Official Statistics
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Confidential
© 2017 Gerber Technology
WHY DOES ASIA CONTINUE TO
ATTRACT THE APPAREL
INDUSTRY
EXPO Producción
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Confidential
© 2017 Gerber Technology
LABOR CONTINUES TO BE THE DRIVER IN
WHERE APPAREL IS MANUFACTURED
EXPO Producción
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Confidential
© 2017 Gerber Technology
EXPO Producción
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*Textile Intelligence / Werner International
Top 50
1 Switzerland 51.50
6 Germany 30.00
8 Japan 25.00
10 Italy 22.75
13 USA 17.75
16 Taiwan 10.75
26 Turkey 5.50
30 Colombia 3.50
33 Brazil 3.25
34 Mexico 3.25
37 China 2.75
44 India 1.00
46 Vietnam 0.75
49 Bangladesh 0.75
LABOR RATES
US$/Hr
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Confidential
© 2017 Gerber Technology
The Mexico / Central America Opportunity
EXPO Producción
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Confidential
© 2017 Gerber Technology
EXPO Producción
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Confidential
© 2017 Gerber Technology
EXPO Producción
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Confidential
© 2017 Gerber Technology
EXPO Producción
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Confidential
© 2017 Gerber Technology
LOOKING AHEAD
EXPO Producción
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Confidential
© 2017 Gerber Technology
• But a number of factors could affect growth
• The possible changes to the USA’s trading policies to increase US
manufacturing
• The intention to introduce protectionist measures and reduce
imports
• Withdraw / renegotiate NAFTA
• But…such decisions would likely lead only to a decline in US
exports - trading partners most likely would retaliate
• Bottom line…overall import levels will largely remain
unaffected
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Confidential
© 2017 Gerber Technology
• But there will be changes to the US trade policies
• Which will lead to changes in geographical sourcing patterns; some
countries will gain…some countries will lose…at the negotiation table
• First rounds are likely China and Mexico
• Imports from Vietnam should continue to rise, despite
withdrawal from the TPP but likely to be slower than that in
recent years.
• Expected declines in imports from China and slowdown in
imports from VN should provide opportunities for other
countries; Mexico.
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Confidential
© 2017 Gerber Technology
• Mexico 3rd largest supplier to the U.S., since NAFTA US
exports up 468%; ~16% overall US exports.
• President Trump now says “tweaks” would make the trade
relationship “fair for both parties.
• Commerce Secretary Wilbur Ross = NAFTA "needs an
update“; has not adapted to changes in the three nations'
economies…Mexico and Canada are two vital trading partners
for the U.S.
• While the Administration has floated the idea of a 20% tax on
imports from MX, little has been said about changes that could
make the trade relationship more fair.
• Difficult to see massive changes to NAFTA relating to the
apparel industry
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Confidential
© 2017 Gerber Technology
• Withdrawal from TPP should not have big impact US exports;
US currently have trade agreements with most countries
• Clouded with legal actions; regulate fair / unfair practices.
• Agreement to work towards an equalization of imports to the
US with exports from the US
• Preference for bilateral negotiations
• Downside – missed opportunity for collective agreement on
intellectual property; defense presence, regularizing digital
trade, and providing disciplines over state-owned enterprises
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Confidential
© 2017 Gerber Technology
In Closing
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Confidential
© 2017 Gerber Technology
• Global Trade = Necessary to maintain the life style
accustomed and to enrich life experience globally
• Trade Agreements = Necessary to raise life style of developing
countries while providing an equal opportunity to all partners
• Global Clothing Industry Continues To Grow
• Global Clothing Industry Continues To Migrate (But Primarily
Within Asia)
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Confidential
© 2017 Gerber Technology
• Reshoring Is Real – But Not Massive; New-Shoring
Opportunity
• Manufacturing Costs Continue To Rise – Wage/Infrastructure
• Retail Prices Lag Behind Costs – Industry Will Migrate
• Fashion / Delivery Wins Higher Prices
• Customization Wins Loyalty
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Confidential
© 2017 Gerber Technology
THE CONSUMER IS KING!
EXPO Producción
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Confidential
© 2017 Gerber Technology
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Thank You!