Suppliers and buyers at Source count cost of Middle East conflict

Held in one of Excel London’s expansive exhibition halls, Source’s latest iteration welcomed 305 exhibitors from 19 sourcing regions, a marked increase on last season’s 250 exhibitors. Sourcing countries include the UK, Bangladesh, China, Mauritius, Portugal and Turkey. Buyers from brands including Burberry, French Connection, House of Fraser, Hugo Boss, John Lewis, Marc Jacobs and Marks & Spencer were registered to attend. As Drapers wandered through the aisles on the show’s first morning, it was evident that macroeconomic volatility was the major issue faced by suppliers and buyers alike, with the conflict in the Middle East causing a spike in prices of shipping and materials. “The market is difficult at the moment in terms of cost,” Ramazan Tanriverdi, owner of Turkish leather footwear supplier Nod Trend, told Drapers. “It’s difficult to maintain business and prices have increased, but when you put that price to consumers they don’t understand the increase.” Advertisement “The biggest challenge for everyone is volatility,” show director Suzanne Ellingham, agreed. “It used to be a black swan that happened once every year, now it’s about once every three months, and I think what that is forcing buyers to do is reassess their own supply chains. Retail is such a volatile sector in terms of needing to have the right thing in the right store at the right time, and anything that will disrupt that is going to cause cashflow issues in the business.” “Workers want to be paid more as things are more expensive but we can’t afford that,” Tanriverdi continues. “We’re stuck in the middle between consumers and manufacturers. It’s like a wave coming and throwing you somewhere: getting back on your feet is not always possible.” Another garment manufacturer feeling the squeeze is Cactus, which works with Debenhams in the UK. Based in Noida, India, its co-owner Hardeep Arora told Drapers that rising oil prices have increased the cost of finishings, yarns, and the overall price of the average garment by 15-20%. Cactus makes its products from a range of fabrics including poplin, linen, silk and rayon. “Business in USA has definitely gone down,” she says, “so we are looking to Europe to pick up those styles and quantities.” Nod Trend’s Tanriverdi added that the business had “lost a massive amount on margins and the amount people are buying has halved”. “We don’t know how long it will last or what’s going to happen tomorrow because of the person in charge,” he said, making reference to US president Donald Trump. Advertisement Premium UK brand Manière de Voir is also experiencing rising prices, but its head of production Naomi Hodgson told Drapers that this is less to do with macroeconomic factors and more as a result of changes within the business. “Costs are always a problem, but we’re changing as a brand so prices are rising because of the things we’re doing,” she says. “We opened a US store [a year ago] and a warehouse 18 months ago, as the US represents 50% of our business, as well as one [shop] in Dubai. The product is also becoming more premium over time so that adds to costs as well.” This is Hodgson’s fifth season at Source, and she noted that it felt quieter compared with past seasons. She was looking for tailoring and knitwear suppliers from China, and was particularly impressed by womenswear manufacturer Guangzhou Hongda Clothing. Diana Denny, MD of Sunderland-based retailer Bespoken Bridal – whose main product is actually prom dresses – also told Drapers that she is looking for mills in the Guangzhou region, as it is recognised as a specialist in the type of occasionwear her business provides. The business is expanding into swimwear, so she is also seeking appropriate mills for this new venture. Abigael Pillas, founder of London-based clothing and accessories business Luludoll, attended Source in January and said it was easy to discover new suppliers as well as meet with existing ones at the show. “I found a new supplier here last season,” she said, “and it was nice to talk to them in person this time.” Pillas noted that shipping times had also increased in recent months. “The [Middle East] conflict has affected shipping times,” she said. “Where shipping used to take a month, now it takes two or three so you can’t sell things when you plan to.” UK-based button manufacturer Courtney & Co, which works with the likes of Private White and Bamford, has experienced similar woes. Its managing director Andrea Courtney told Drapers that while prices have miraculously remained the same, shipping delays are increasingly common. “We’ve noticed a little bit of delay in our supply chain [due to the Iran war] as we get our raw materials from India,” she said. “There’s been a big delay for bespoke button orders where usually we are well stocked up – we never run out but it has been an issue.” “I think the biggest challenge is how you manage volatility, how you de-risk your supply chain globally, how you’re mixing your far-shore, near-shore strategies,” continues Ellingham, “because that’s the reality and you can no longer source everything from Asia. If there is a conflict in the Middle East or a tariff change in the US then the reality is container prices are going to go up, stocks are going to be delayed and your costs within your supply chain are going to increase. “Coming out of Covid that’s something we thought people would start to look at. Now that’s a reality that they 110% have to look at.” Source continues to run until 9 July. Have your say or a new account to join the discussion.