TFG to up investment in local fashion supply chain
JOHANNESBURG - South African fashion group TFG plans to increase investment at its two clothing factories in the Western Cape as it continues to reduce its reliance on China and other international suppliers hit by the Covid-19 pandemic.
The owner of the Phase Eight and Foschini women's clothing brands said on Wednesday it will add more floor space and employ an additional 530 workers this year and 5,000 by 2025.
Five years ago, TFG sourced 70-80% of its merchandise from the East. It currently produces about 35% of its clothes locally, or around 16 million units, and said it intends to increase this substantially over the next few years.
The pandemic and associated lockdowns have ripped a hole through the garment manufacturing sector, with many retailers cancelling orders as they closed stores around the world, leading to the shuttering of thousands of factories and huge job losses.
There is also discourse among retailers about bringing some types of manufacturing back to their domestic markets, where governments are attempting to revive local industries.
"We have proven that we can be more profitable as a retailer with locally manufactured goods than with imported goods, despite a lot of conventional wisdom to the contrary," TFG Chief Executive Anthony Thunström said.
"Local allows us to calibrate stock into our system with a much shorter lead time than we ever were able to in the past."
The traditional lead time for internationally sourced clothing items is 150 to 180 days compared to 42 days on average when locally produced, TFG said.
However, the success of local manufacturing relies on the correct economies of scale, fabric availability and skills needed to produce specific products like heavy winter clothing, which are not readily available in South Africa yet, Thunström added.