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The U.S. textile and apparel industry complex is experiencing its worst downturn in over two
decades. It is faced with a major crisis that is believed to have been caused by recent global
trade liberalization and Asian currency devaluation. Most observers credit policies stemming
from global trade liberalization, such as the World Trade Organization (WTO) and the North
American Free Trade Agreement (NAFTA), with contributing to rapid job losses, especially in
the rural areas of the Southeast regio n where the industry complex is disproportionately
located. However, since 1995 and especially following the 1997 -98 global financial crisis, the
currencies of the top textile exporting countries in Asia seem to have collapsed, causing a
shock wave of low-priced textile products in global markets. The value of textile imports from
Asia, which had shown relatively little growth over the previous ten years, grew rapidly by
about 36 percent (%) from 1995 through 2001 in tandem with a decrease in Asian
currencies. Additionally, volatility in the apparels market, fueled by frequent fashion changes,
has contributed to exacerbating the economic stress faced by industry participants and rural
residents. Therefore, the recent spate of plant closures may seriously imp act economic
development opportunities that are offered by the industry complex in those rural
communities where a majority of plants are located.


  

Statistics from the U.S. Department of Commerce and the Bureau of Labor S tatistics (1997)
list 5,117 textile complex companies and 6,134 plants. The gross sales for the cotton -fiber-
textile apparel complex in 2000 were $58 billion, having fallen from $60.3 billion in 1999.
Nevertheless, it was still the largest manufacturing em ployer in the U.S. economy, providing
jobs for nearly 1.4 million workers in 1999.
Employment in the textile complex in 1999 was made up as follows:
562,000 in textiles, 684,000 in apparels, 41,887 in man -made fibers, 62,579 wool growers,
and 31,493 cotto n growers. The textile and apparel companies have lost about 425,000 jobs
since 1992.
The complex is the largest manufacturing employer in ten key states; North Carolina,
California, Georgia, New York, South Carolina, Texas, Alabama, Pennsylvania, Virginia , and
Tennessee. Textile and apparel firms are often the primary employers in rural regions,
although the apparel sector is also a major source of employment in metropolitan areas,
particularly in the Middle Atlantic States and California.






 
Recently, the U.S. textile complex has experienced
(i) Overcapacity of production
(ii) Global financial crisis
(iii) Multilateral and regi onal trade agreements
(iv) Rapid changes in fashion trends and demand
(v) Cheap imports from Asia and NAFTA nat ions (mainly Mexico).

To become more competitive and profitable, U.S. textile manufacturers have focused on
achieving greater speed, efficiency, and high quality production by investing heavily in
automated technology and more integrated relationships wh ile sacrificing domestic jobs. In
1997, U.S. textiles and apparel exports were worth $16.9 billion, and represented 31% of the
industry¶s $53.9 billion in total sales. U.S. exports to NAFTA partners equaled 41% of its
global textile exports. In 2000, U.S. textile complex exports to Mexico and Canada was $9.5
billion which constituted 51% of total exports. However, global overcapacities in production
of textiles and ease of substituting import products for apparel manufacturing have
intensified market compet ition in the U.S. In part because of pressure from low priced
Asian imports, prices for U.S. textile products have fallen since 1997.
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X Implementation of information technology; enhancing communication networks and

systems to facilitate interaction between customers and companies.

X Computer aided design and automated manufacturing plants

X Seamless integration through technology of each step in the manufacturing process
X An industry consulting and technology expertise will enables US to meet fast growing
demand for our comprehensive and cost -effective solutions in the fashion market.

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X Present in the Western Hemisphere it consists of forty -eight contiguous states. 3 rd or
4th largest country.
X Geography of the US varies across their immense area. Within the continent, eight
distinct physiographic divisions exist, each is composed of several smaller
subdivisions which serve as a strength by way of each area requiring a specific
fashion due to lifestyle and climatic factors.

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X Culture influenced by the large number of immigrants thus it¶s a compilation of many
ideas and customs from other nations.
X Large influence on fashion by Hollywood and television (30%), Sports (12%), Music
(11%), rest comprises other factors.
X Majorly a Christian and whites dominated country who have a open and keen outlook
towards fashion and trends.

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X With the apparel industry being labor -intensive, the effect employees laws have are
significant. Employee laws to consider are minimum wage, over time, benefits and
health and safety regulations.
X The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay,
recordkeeping, and child labor standards affecting full -time and part-time workers in
the private sector and in Federal, State, and local governments.
X The ERISA, which is the Employee Retirement Income Security Act, sets uniform
minimum standards to ensure that employee benefit plans are established and
maintained in a fai r and financially sound manner.

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 X Middle class is a major segment having 46% of the total. Women influence over
80%of the consumer purchase the fashion industry is heavily focused on women.
X Affluent households are the fastest -growing segment of the American population,
increasing 12.7% from 19.7 million in 2005 to 22.2 million in 2006.
X In the past few years men have begun to have more of an interest in shopping, and
thus the male demographic has become even more important for retailers.




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X The creation of new social classes, the subcultures and/or countercultures, is

apparently evident through fashion and style. Subcultures and countercultures
adhere to a distinctive set of values, norms and practices within a larger culture that
may oppose the dominant culture.
X Creates a divide between classes in a society, reinforcing class stratification. It acts
as a statement of wealth and prestige, or the lack thereof.

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X Apparel industry in the United States, th e future does not look promising. Wage and
salary employment in the apparel industry is expected to decline 69 percent through
2012, compared with an increase of 16 percent for all industries combined. The
expected decline translates into 245,000 lost jobs over the period greater than the
decrease for almost any other industry.

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X The top 1 % of American o wns around 34%of the wealth in US , while the bottom
80% owns only 16% of the wealth. This displays a large disparity and unequal
distribution of wealth.

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X The 62% of the American women are plus size i.e. overweight, many fashion
companies don¶t make plus size clothing.
X 28% of American population are baby boomers, they are more interested in
shopping µexperience¶ and comfortable stores which may provide them
exclusivity.

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X Increase in number of fashion shows.

 X Better and increased exposure to designers as well as promotion of careers
in the industry.




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X Trade regulations are probably the single most important factor influencing
this industry in the United States. Since the apparel industry is labor -
intensive, it is exposed to overseas competition from nations where their
employees receive much lower wages.
X As of January 1, 2005 all quotas for apparel and textile products will be lifted
among members of the World Trade Organization, which includes most of the
United States trading partners (WTO). The removal of quota and other trade
barriers will serve to increa se the competitive edge of countries with a mature
textile and clothing industry.

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X In china the economy is growing at the rate of 10% every year Chinese
citizens are increasingly becoming fixated to the luxury goods they viewed as
a status symbol.
X The country has 33% millionaires of whom are women who are attracted by
China and Europe present the large, wealthy market of luxury goods.

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X Organisation such as PETA which stands for People for Ethical Treatment of
Animals strongly opposes the use of animal skin and fur in clothing which has
been a practice since many years.
X This increasing awareness poses as a threat to the fur and animal skin
producing companies and brands.

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X Although haute couture and luxury have been doing well, the downturn in the
United States economy has had an adverse effect on affordable luxury,
mainstream and discount brands. Their target demographic is middle -to-lower
class individuals who are more susceptible to poor economic conditi ons than
their richer counterparts.
X These individuals are no longer splurging on clothes and accessories as
much as they used to, which is bad news for the industry.