California Apparel News

HONG KONG—Outside in the hot, humid air, Florian Gashi took a break from Hong Kong Fashion Week to puff on a cigarette and collect his thoughts.

Every six months, the New Yorker attends the four-day apparel trade show to discover new overseas factories that can stitch the wedding dresses and eveningwear his wholesale company, S Fashion G in Brooklyn, N.Y., stocks.

But this year, he is buying 50 percent less than normal. “You have to work harder for the same money,” he said with a weary shrug.

That was the opinion of just about everyone at theJuly 6–9 run of Hong Kong Fashion Week for Spring/Summer 2010, held at the Hong Kong Convention Centre.

The 1,164 exhibitors (up slightly from 1,154 last year), who came primarily from China and Hong Kong, were seeing fewer buyers. Those who did shop the show were placing smaller orders and requesting faster delivery times.

“It is very, very quiet,” said Michelle Keeling, managing director for RTHK Clothing Exporters Ltd. in Hong Kong, which manufactures men’s, women’s and children’s clothing. She said Hong Kong and China have been affected by what everyone is calling a “financial tsunami.” It’s the delayed wave of financial disaster washing over export-based economies now affected by the downturn in importing regions such as the United States and Europe.

That was evident in the trade statistics coming out of Hong Kong. According to the Hong Kong Trade Development Council, clothing and clothing-accessories exports from Hong Kong to the United States slid 14.4 percent to $2.8 billion during the first five months of this year compared with the same period last year. Exports to Europe were down around 13 percent.

“This past year has not been easy,” said Vincent Fang, chairman of the Garment Advisory Committee to the Hong Kong Trade Development Council. He is also chief executive of Toppy International Ltd., a Hong Kong company that owns one apparel factory in China with nearly 5,000 workers that supply his two retail chains, operating under the Episode and Jessica nameplates.

Fang, who also makes shirts for Polo Ralph Lauren in the U.S. market through contractors in Central America, said the fragile economy in the West is forcing him to expand his business in China. “The whole world is looking to China as a savior,” he observed.

China may be putting the brakes on its rapid expansion, but it still has a relatively healthy economy. The World Bank projects that China’s gross domestic product will grow a robust 7.2 percent this year. In comparison, the U.S. gross domestic product is expected to contract between 5 percent and 6 percent.

Flu bug

If a stubbornly tough recession was keeping some buyers away, the threat of the swine flu acted as another deterrent. While Hong Kong has had no deaths related to the virus, travelers and businesspeople seem to be particularly cautious about trekking to the region. They remember the SARS epidemic that claimed 299 people in Hong Kong and 349 in China between November 2002 and July 2003.

“Last year’s show was much better,” said Mandy Chan, a merchandiser for the Zhejiang Seven Fortune Group, which manufactures sweaters in China for apparel companies such as Chico’s, Guess? Inc. and Zara. “Maybe it’s the economy; maybe it is H1N1 [swine flu],” she said.

Hong Kong officials were taking every precaution to make sure the flu didn’t spread. Cleaning crews at the convention center were constantly disinfecting elevator buttons, hand rails and door handles. Touch-free hand-sanitizing dispensers were everywhere. On streets and sidewalks around the city of 7 million, scores of people wore face masks.

At Hong Kong International Airport, white-clad health officials were checking all inbound passengers and making them fill out health forms.

“Hong Kong is a global hub with people coming in from all over the world, and it can spread easily,” said William Cheung of RTHK Clothing in Hong Kong. “People are thinking, ’If I can miss any show, this would be the one.’” \

A third factor affecting U.S. buyer attendance was an unprecedented early July show. Normally, Hong Kong Fashion Week is held a few days later. With the show beginning on July 6, many U.S. buyers didn’t want to depart on the July Fourth holiday to make the two-day trek to Hong Kong. (Travelers flying from the United States to Asia lose a day when they cross the international date line.)

The Hong Kong Trade Development Council moved up the date so it could hold Hong Kong Fashion Week in conjunction with the smaller Summer Sourcing Show for Gifts, Houseware & Toys, normally held a week before Hong Kong Fashion Week. The convergence of the shows was due to a major expansion project completed at the convention center, cost-cutting efforts and the idea that buyers might be in the market for apparel as well as gifts.

Economic exceptions

Even though most exhibitors and buyers complained about these challenging times, there were pockets of prosperity.

In the India Pavilion, Vinay Agarwal, vice president of Aman Exports International in Jaipur, saw some positive results at the show, mostly from European buyers. A representative from 25-year-old French boutique chain Camaiuml;eu was asking for various samples. “The European market is very good, and the U.S. market is getting better,” Agarwal said. His two factories in India now have 1,500 workers, compared with 850 last year. “Compared to last July, business will be up 30 percent,” he said.

Sheldon Mazoff, president of Canadian label Alison Sheri, said his business has doubled since last year after he was able to place orders with Nordstrom for the first time and that the brand will be in 25 stores operated by a German chain. He was looking for new factories to make bottoms.

And Luca Merlone, an Italian who recently moved to Hong Kong, was wandering the halls looking for new Chinese and Asian factories to help with the expansion plans of Kappa, an Italian sportswear company whose brands include Kappa, Superga and K-Way. “We grew 30 percent last year,” he said. “Things are going well in Europe.”