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Protectionism
Chinese bras wing their way on to EU shelves
By Elizabeth Rigby in London, Clare MacCarthy in Copenhagen and Paivi Munter in Stockholm
Published: August 22 2005 20:21 | Last updated: August 22 2005 20:21
eu chinaFor Claus Walther Jensen, getting his hands on bras for Christmas is one of the most important aspects of running Change, a Danish lingerie chain.
That is why the director went so far as to borrow a helicopter on Monday morning to secure one of the last European Union import licences for bras.
“We had 45,000 panties in Christmas colours but their 45,000 matching bras were trapped in a warehouse,” said a relieved Mr Walther Jensen after his helicopter dash.
“Other companies are suffering. I’ve got my goods in but I don’t want to win market share this way.”
Thanks to Mr Walther Jensen’s imaginative approach, Change will be stocking matching lingerie this year.
But with the import quota for bras coming into the EU from China now exhausted - last night the stockpile of bras had already hit more than 1m - other retailers have got a problem on their hands.
“The packages under the Christmas trees this year won’t contain clothes,” said Poul Lauersen, chief financial officer of Bestseller, Denmark’s largest textiles group, which is short knitwear, blouses, tops and trousers.
“The shops won’t be empty but we are missing much of our autumn range,” said Mr Lauersen.
Across the EU, retailers are scrambling to find alternative places to source goods as the crisis over import from China deepens. Trousers, pullovers, bras, blouses, T-shirts and silk have now all exceeded the quota limits agreed by the EU and China in June.
Pär Darj, head of investor relations at Hennes Mauritz, the Swedish-based clothes retailer that sources about 30 per cent of its products from China, said: “In the short-term we are shifting some production of pullovers and trousers to Bangladesh, India and Cambodia.” A big UK retailer that asked not be named said it was doing the same thing. “More production is going to India. I think it will be the new China. This problem will get sorted. But there will be a delay in getting products on to shelves,” said the retail executive.
As the stockpile of clothes at EU custom points hit nearly 76m items, retailers are pushing harder than ever for a speedy resolution to the crisis. The large European retailers – Metro, Carrefour and H&M – are quick to point out that they can easily switch sourcing and so are less hard hit by the dispute than the smaller players with less scale and sourcing infrastructure.
Lindex, the Swedish-based market leader in underwear and children’s wear that made SKr5.3bn (€565m, £380m, $690m) in sales in 2005, said its early decision not to add to production in China – it sources about 60 per cent of product from Asia, the greater part from China – had paid off.
“We already have licences for all the products coming out of China,” said Ulrika Danielsson, head of communications at Lindex.
“Our customers won’t notice any impact. We will get all the products that we have ordered.”
But with the stockpile still growing at an alarming rate and no solution in sight, many retailers are unlikely to be feeling so sanguine.
By Elizabeth Rigby in London, Clare MacCarthy in Copenhagen and Paivi Munter in Stockholm
Published: August 22 2005 20:21 | Last updated: August 22 2005 20:21
eu chinaFor Claus Walther Jensen, getting his hands on bras for Christmas is one of the most important aspects of running Change, a Danish lingerie chain.
That is why the director went so far as to borrow a helicopter on Monday morning to secure one of the last European Union import licences for bras.
“We had 45,000 panties in Christmas colours but their 45,000 matching bras were trapped in a warehouse,” said a relieved Mr Walther Jensen after his helicopter dash.
“Other companies are suffering. I’ve got my goods in but I don’t want to win market share this way.”
Thanks to Mr Walther Jensen’s imaginative approach, Change will be stocking matching lingerie this year.
But with the import quota for bras coming into the EU from China now exhausted - last night the stockpile of bras had already hit more than 1m - other retailers have got a problem on their hands.
“The packages under the Christmas trees this year won’t contain clothes,” said Poul Lauersen, chief financial officer of Bestseller, Denmark’s largest textiles group, which is short knitwear, blouses, tops and trousers.
“The shops won’t be empty but we are missing much of our autumn range,” said Mr Lauersen.
Across the EU, retailers are scrambling to find alternative places to source goods as the crisis over import from China deepens. Trousers, pullovers, bras, blouses, T-shirts and silk have now all exceeded the quota limits agreed by the EU and China in June.
Pär Darj, head of investor relations at Hennes Mauritz, the Swedish-based clothes retailer that sources about 30 per cent of its products from China, said: “In the short-term we are shifting some production of pullovers and trousers to Bangladesh, India and Cambodia.” A big UK retailer that asked not be named said it was doing the same thing. “More production is going to India. I think it will be the new China. This problem will get sorted. But there will be a delay in getting products on to shelves,” said the retail executive.
As the stockpile of clothes at EU custom points hit nearly 76m items, retailers are pushing harder than ever for a speedy resolution to the crisis. The large European retailers – Metro, Carrefour and H&M – are quick to point out that they can easily switch sourcing and so are less hard hit by the dispute than the smaller players with less scale and sourcing infrastructure.
Lindex, the Swedish-based market leader in underwear and children’s wear that made SKr5.3bn (€565m, £380m, $690m) in sales in 2005, said its early decision not to add to production in China – it sources about 60 per cent of product from Asia, the greater part from China – had paid off.
“We already have licences for all the products coming out of China,” said Ulrika Danielsson, head of communications at Lindex.
“Our customers won’t notice any impact. We will get all the products that we have ordered.”
But with the stockpile still growing at an alarming rate and no solution in sight, many retailers are unlikely to be feeling so sanguine.
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