Near-sourcing UK apparel: value chain restructuring, productivity and informal economy

The article analyzes the increasing diffusion of the “fast fashion” business model within the UK garment industry. This business approach requests shorter lead times and higher quality levels. Therefore, the decision to offshore production in Asian countries has to be revised relocating manufacturing activities closer to the lead firms. As a consequence, authors found several evidence of what they call “near-sourcing”, that is companies which shifted from offshored and outsourced manufacturing to production outsourced to local suppliers.
However, the very few lead firms operating at the top of fast fashion value chain are still pushed by price competitiveness. Therefore, in order to maintain high profits levels, they often cooperate with actors belonging to the so called “informal economy” (e.g. suppliers). This term is generally referred to economic systems that are not taxed and/or controlled. More specifically, authors state such companies have been used to adopt “informal subcontracting and informal employment” instead to implement strategies to improve the company productivity.
As a consequence, unions and policy makers are requested to pay attention to such an issue and play a greater role with this respect.