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U.S. fashion brand says committed to Chinese suppliers
7/26/2019


NEW YORK, July 26 (Xinhua) -- U.S. luxury apparel and accessories brand Vince Holding Corp. is committed to Chinese suppliers even though the apparel and textile industry faces the threat of additional tariffs, according to a high-ranking executive with Vince.

With silk and cashmere products at its core, it is really difficult for Vince to source outside of China for reasons on supply chain, skill-set and many others, said Mark Engebretson, executive vice president of global operations with Vince in an interview with Xinhua on Wednesday.

"For us, we have a commitment to China, and we will deal with any adversity as it comes and make decisions as we go," Engebretson said.

As a 300-million-U.S.-dollar company, Vince works with just a few suppliers in China and this makes Vince and its Chinese suppliers highly dependent on each other.

"Should tariffs become reality, we're all going to have to partner in this and everyone is going to have a piece of responsibility as long as it exists," Engebretson said.

Even Vince moves some of its sourcing outside of China, it partners with its original Chinese partners in the process, he said.

In sourcing of silk products, quality requirement is very high. "Chinese factories are the best. To move products even within the Chinese factories from one to the other takes a very long time," he said.

Headquartered in New York, Vince now has its leather products affected by tariffs imposed by U.S. government and passed on the incremental costs to consumers where it needs to.

It is easier to pass incremental costs of new or fashion products to consumers but more difficult to raise prices of regular core products as consumers do expect a certain price to have certain values.

He said, "If it is fashion or something new and I raise my price by ten dollars, I don't think a customer or consumer will really know them. And we can continue to give them great product and quality and a small increase won't matter."

Speaking at a seminar on U.S. trade policy Wednesday at textile and garment exhibition Texworld USA 2019, Engebretson suggested his peers follow the needs of respective companies rather than following developments in Washington D.C. on daily basis. Industry players shall pick two priority aspects from ideal three of price, quality and delivery.

If a company needs margin, in which case there is a natural move out of China to some lower-cost countries. "But, China isn't gone away. It's here to stay", Engebretson said.

Direct sourcing is likely to give people the absolute product they want at the lowest cost, but it's not without its risks, Engebretson said, adding that the fixed costs associated with even minimum supply chain can really eat up small amounts.


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