The US women’s apparel industry, in 2007, was highly mature and competitive and consumers were price sensitive. Half of the apparels were sold on sale. The short lived fashion was challenging for the industry. So the apparels differentiated each other on the basis of
1. Fabrication (patterns)
2. Silhouette (outlines)
3. Quality
4. Brand
5. Price
Brands were in a great competition to increase their market share and to get the best shelf spacing. To differentiate themselves from others, some companies integrated the vertical value chain while others were outsourcing to reduce production cost. Production cost in china was lower than in US, when the import quota on textiles was removed from china, out sourcing went on its peak and sales from imports in US went up to 82% in 2005.
To increase the …show more content…
20% of these comes from company owned sources, rest is comprised of 40:60 from specialty and department stores respectively. The production facilities are located in US and Mexico.
Retail group constitutes of 49.7% of company’s profit. This profit comes from 120 company’s stores. These 120 stores are comprised of 50 Vigor stores and the rest are others. From retails, 20% profit is earned by Harrington Limited.
Harrington has been a large manufacturer of high end women apparel but it’s been facing loss from past three years. If we see exhibit 6 from the case study, it’s been having loss from past three years in both manufacturing and retail divisions. There are a lot of reasons behind this like short lived fashion product’s life cycle, competitors with low prices as consumers are price sensitive now, and a mature and competitive market. Harrington is having difficulty in maintaining its financial position.
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