Findings show COVID-19 disrupts sourcing and reduces optimism in industry five-year outlook
 
Washington, D.C. – The United States Fashion Industry Association (USFIA) has released the seventh annual Fashion Industry Benchmarking Study, a survey of executives from 25 leading fashion brands, retailers, importers, and wholesalers, including some of the largest brands and retailers in the country. 
 
Conducted in conjunction with Dr. Sheng Lu, Associate Professor in the University of Delaware Department of Fashion & Apparel Studies, the survey asked respondents about the business outlook, sourcing practices, utilization of Free Trade Agreements and preference programs, and views on trade policy.
 
This year, COVID-19 disruptions in sourcing and the uncertainty the industry is facing weighed on respondents.  Sourcing executives show the lowest level of confidence in the five-year outlook since the inception of this report.  One year ago, 64 percent of survey respondents were “optimistic” or “somewhat optimistic” about the outlook for the next five years. This year that number dropped to 57 percent.  And almost one-third of the respondents said they are “somewhat pessimistic” or “pessimistic.”    

Another key finding this year are the severe supply chain disruptions to U.S. fashion companies. 100% of respondents reported “supply chain disruption” as the most significant impact of COVID-19 on their business operations. These disruptions are not concentrated in one area of the supply chain. Many respondents saw disruptions with garment factories that make their products struggling with a labor shortage, contracted garment factories short of textile raw materials or facing a substantial cost increase in shipping and logistics, and barriers to conducting regular factory audits because of COVID-19. “Securing textile raw materials and production capacity has been highly challenged due to the need to implement extended payment terms, etc.” said one respondent. 

Despite all the COVID-19 related disruptions, sourcing executives are continuing the trend seen in past years that as production moves out of China,  the main beneficiaries are Asian suppliers. This year there is some evidence that reshoring for Made-in-USA production may increase in the next two years. 

All respondents represent companies with headquarters or major management offices in the United States. This year, in addition to all respondents selling products in the United States, over three-quarters of respondents also sell products in Canada, Western Europe, Mexico, and Asia. These patterns reflect the global nature of the fashion business today and the ever-closer connection of the U.S. fashion industry with markets and supply chain partners around the world. 
 
 
To speak with USFIA, contact Shannon Brady, USFIA Communications Coordinator, at This email address is being protected from spambots. You need JavaScript enabled to view it..  To speak with Dr. Sheng Lu, contact This email address is being protected from spambots. You need JavaScript enabled to view it.
 
About Dr. Sheng Lu

Dr. Sheng Lu is an Associate Professor in the Department of Fashion and Apparel Studies at the University of Delaware. With over 60 publications in academic and trade journals, Dr. Lu’s research focuses on the economic and business aspects of the textile and apparel industry, including international trade, trade policy and the governance of global apparel value chain. Dr. Lu received the 2014 Rising Star Award and the 2019 Mid-career Excellence Award from the International Textile and Apparel Association (ITAA) in recognition of his research and teaching accomplishments. He is also the recipient of the Paper of Distinction Award at the 2014, 2015 and 2017 ITAA annual conference for his study on the textile and apparel specific-sectoral impact of mega free trade agreements, such as the Trans-Pacific Partnership (TPP), Trans-Atlantic Trade and Investment Partnership (T-TIP) and the Regional Comprehensive Economic Partnership (RCEP). Several of his studies were cited by government reports such as the Congressional Research Service (CRS) studies prepared for members of U.S. Congress, U.S. International Trade Commission (USITC) official assessment on the economic impacts of free trade agreements as well as the World Bank and the United Nations research publications. Dr. Lu’s published works also have been translated into Chinese, Vietnamese, Spanish and Thai and regularly featured by leading textile and trade journals, including Just-Style, Women’s Wear Daily, and Sourcing Journal. 

More Information:  www.fashion.udel.edu and www.shenglufashion.com/blog  
 
About the United States Fashion Industry Association 

The United States Fashion Industry Association (USFIA) is dedicated to fashion made possible by global trade. USFIA represents brands, retailers, importers, and wholesalers based in the United States and doing business globally. Founded in 1989, USFIA works to eliminate tariff and non-tariff barriers that impede the fashion industry’s ability to trade freely and create jobs in the United States. Headquartered in Washington, D.C., USFIA is the voice of the fashion industry in front of the U.S. government as well as international governments and stakeholders.  With constant, two-way communication, USFIA staff and counsel serve as the eyes and ears of our members in Washington and around the world, enabling them to stay ahead of the regulatory challenges of today and tomorrow. Through our publications, educational events, and networking opportunities, USFIA also connects with key stakeholders across the value chain including U.S. and international service providers, suppliers, and industry groups