Webinar: Opportunities and Trends of the U.S. Market

Transcription

1 Webinar: Opportunities and Trends of the U.S. Market Kevin M. Burke President and CEO American Apparel & Footwear Association David Queen Senior Vice President Sourcing and Compliance Gerber Childrenswear LLC August 1, 2013

2 AAFA Snapshot Representing more than 1,000 world famous name brands, the American Apparel & Footwear Association (AAFA) is the trusted public policy and political voice of the apparel and footwear industry, its management and shareholders, its four million U.S. workers, and its contribution of $350 billion in annual U.S. retail sales. Learn more about how AAFA wears our mission at wewear.org >

3 Our Members Include

4 The U.S. Market at a Glance State of the U.S. Apparel and Footwear Market What are U.S. Consumers Buying? Last year, Americans purchased: 20 billion garments 2 billion pairs of shoes Americans spend more than $350 billion every year on new clothes and shoes. On average, every single American purchased 62 garments and 7 pairs of shoes last year.

5 Made in the World More than 97% of apparel and 98% of footwear sold in the United States is made outside the United States. Vietnam Apparel: #2 Supplier at $7 billion (9%) Footwear: #2 Supplier at $2 billion (8%) CAFTA-DR Apparel: #2 Supplier at $8 billion (12%) Footwear: #7 at $260 million (1.1%) Bangladesh Apparel: #3 Supplier at $4.5 billion (6%) Footwear: #15 Supplier at $26 million (.06%) Indonesia China Apparel: #1 Supplier at $30 billion (42%) Footwear: #1 Supplier at $16 billion (84%) Apparel: #4 Supplier at $5 billion (5%) Footwear: #3 Supplier at $1 billion (3%)

6 Opportunities and Trends of the US Market November 14, 2012 (1 st Draft) Wisdom begins with wonder. ~ Socrates

7 Gerber Childrenswear Overview Key clients by brand: Gerber: Walmart, Target, Kmart/Sears, Amazon, Burlington, Buy Buy Baby, Babies R Us Jockey: Kohl s, Macy s, Belk, BonTon NFL: Walmart, Kmart, Sears, Burlington, Kohl s, NFL.com, Buy Buy Baby Lamaze: Buy Buy Baby, ShopKo, Fred Meyer, Amazon.com Product Offering: Layette, sleepwear, underwear, bedding Sales: Over 140 MM units sold last year 33% market share in the layette category

8 Brand Excellence 100% Brand Recognition Moms know and trust Gerber for all their baby needs - Over 1 billion packages of Gerber branded products are purchased at retail every year. 82% Market Share in Baby Food #1 in Brand Loyalty! 96% Onesies Brand Awareness Over 45 million garments sold every year! Gerber brand in Top 10 of all Children s Apparel! Most credible brand for baby apparel category awareness. 98% Share of Food Business in Mexico Hispanic consumers are loyal to the Gerber Brand! Mega Brand at Retail Success across multiple categories Apparel, Food, Care, Wellness, Diaper Bags & Shoes - under one master brand, Gerber! Gerber is the Top Newborn/Infant Brand in National Advertising Gerber Childrenswear talks to millions of consumers every year! A Powerful Brand in the Infant & Toddler Apparel Market!

9 Supply Chain

10 Globalization Sourcing Structure by Country Note: 95% of our products come from 5 key suppliers who we have had a relationship with for over 10 years. *62% of all FOB $ s are in the India sub-continent

11 Globalization Supply Chain: 5 C s 1. Country 2. Compliance 3. Capabilities 4. Consistency 5. Cost

12 Globalization Supply Chain: Country Infrastructure Country Political Stability Labor Pool Vendor Base Ship to Point Transit Time

13 Globalization Supply Chain: Compliance Worldwide Responsible Apparel Production certification? JCPenney and Walmart certification and for how long? If not, can the plan be WRAP certified in six (6) months? CTPAT (Customs Trade Partnership Against Terrorism) certification required. CPSIA and children s wear expertise

14 Globalization Supply Chain: Capabilities Size of program (# of SKUs / Quantity) can factory handle the program? Development time available can factory manage timeline? Size of program relative to annual plan Is this program a good match for the vendor? Vertical supply chain fabric, printing, screening, embroidery, trim Professional Management

15 Globalization Supply Chain: Consistency AQL (Acceptable Quality Level) 2.5 expectation Merchandising staff support for program development Factory leader or follower do they provide value added design with new development or are they order takers?

16 Globalization Supply Chain: Cost FOB Terms FOB Price Vertical vs. Cut & Sew

17 We're all working together; that's the secret. -- Sam Walton

18 What is the single biggest concern for the U.S. apparel and footwear market? Right Now Five Years From Now Material Prices % Factory Costs % Consumer Demand % Government Regulations % Product Innovation - 3.5% Competition from Non-U.S. Brands - 7% Other - 9.2% Material Prices % Factory Costs % Consumer Demand - 9.4% Government Regulations % Product Innovation % Competition from Non-U.S. Brands % Other %

19 What You Can Do Listen to your customers: They have needs. Regulations vary from market to market. Knowing the regulations will help you help your customers. Keep learning: AAFA offers resources At AAFA offers many free educational resources to help you, including: AAFA Restricted Substances List Fire Safety Training Videos Labeling Information Environmental Reporting Guidance

20 AAFA Restricted Substances List Available for FREE on the AAFA website at The RSL is intended to provide apparel and footwear companies with information related to regulations and laws that restrict or ban certain chemicals and substances in finished home textile, apparel, and footwear products around the world. Available in Chinese, Vietnamese, Spanish, English

21 Webinar: Opportunities and Trends of the U.S. Market Kevin M. Burke President and CEO American Apparel & Footwear Association David Queen Senior Vice President Sourcing and Compliance Gerber Childrenswear LLC August 1, 2013