No matter, how challenging the global apparel business is going to be in future, or whatever sourcing destinations get preference due to any reason…, India is definitely, going to play an important role. This perception gets strengthened when global supply chain or sourcing companies look towards India with greater focus. Cohen and Wilks International Holdings (CWI Holdings Group), with a global business of over US $ 200 million, has recently opened its office in India and is further gearing up to increase sourcing.
With offices in China and the UK, the company specialises in design, innovation and quality, and supplies apparel clothing for men, women and children. Zhen Sun, Owner of the group for over 20 years now, has grown the group portfolio by investing in the companies in the UK, and also have its own manufacturing unit in China, producing outwear and swimwear for the global market. Though CWI was established in 2013 in Leeds (UK), most of the companies in the group are very old, some as old as 20 years. These are companies which are acquired by Zhen Sun, so growth for CWI is quite organic. Amit Kumar, Country Head (India Operations), CWI who is a sourcing expert and has earlier worked with top global brands, shared about company’s strategy and future plans regarding sourcing and overall business which is quite impressive. Given below is the excerpt from a long discussion with Amit.
Being strongly in the UK and Brexit: On Brexit we are as confused as the House of Commons is. Its impact really is that buying overall is quite conservative as no one really knows how the final deal between the UK and the EU will turn out to be. So everyone is playing safe to wait and watch and buy only what is necessary; we thankfully have seen a positive growth in most of the companies last year and are projecting growth this year also, mostly because a big junk of our business is licensed.
Strengths: Our USP is great designs as we have a strong team of close to 100 designers across group between the UK and China. Apart from that strong supply chain partnership, having a local team at the place of production does help us to achieve our targets. The fabrics we use differentiate us from others. Licenses business is our other strength as we have 52 licenses between all our companies. This segment has benefited the most because of increasing social media awareness globally…; unfortunately but true that kids today spend a lot of time online or watching TV. So get in love with characters they watch online and love to have clothes and other items associated to these characters. We have recently started our own Instagram page for Dennicci and have also enrolled with some big influencers in the UK to propel our growth, once this works out to our expectation, we are planning to expand this to our other companies and also use some more social media tools.
Challenges and solutions: The challenges are no different from other companies like ours which is reduce cost and higher expectations from customers every season, as all retailers are trying to overdo each other in terms of quality, design and price. As we are a very heavily design loaded company, we have a slight edge over our competitors; we provide the design to landed shipments to most of our customers, and expecting a growth of conservative 10% year-on-year for next two years.
All about India: Some of our companies when under original ownership have been sourcing from India for more than a decade and were mainly using local agents in India. CWI operations in India started only in 2017 with some local QA on the ground and with majority of the operations being directly managed by UK team. Looking at the growth and potential in India and challenges in China, the company has decided to now have a proper sourcing office in India.
Currently, our total sourcing from India is about 90% of knits, so we preferred to have an office in Tirupur. As a product, 80% is babieswear, kidswear and rest is ladieswear. Our FOB’s can vary from as low as US $ 1.50 and can go as high as the US $ 10 depending on the product. The current sourcing in volume is close to 4 million pieces; we expect 2019 to end at around 5 million and in long run (3-5 years) we believe it could be easily 15 million. The company’s overall buying from India currently is less than 20% (around US $ 15 million in terms of value) and which remains the most important sourcing destination for CWI. We are determined to grow this to at least US $ 50 million in the next 2-3 years as in 2019 we will end above US $ 20 million.
In woven, we are looking to source both babieswear, top wears for boys, girls and ladies, bottoms, dresses, loungewear and denim. The woven is almost 40% of our global sourcing, while from India it is not even 5% currently. Our order sizes, irrespective of knits or woven, can vary from 1,000 to 50,000 pieces per colourway and that is purely because we work with all retailers in the UK.
Currently, we are working with 10 suppliers, but we are always looking for good suppliers; that does not mean we have an army of suppliers. We actually want to work with very limited suppliers and have a meaningful relationship with all of them. I guess we are on a journey to find the right partners and hope to find them soon. Sedex is our basic requirement but apart from that, we do our own social and technical audit. For license, we need specific license audits to be in place, like if we want Disney product to be made, the factory should be Disney-approved. Some of our customers have their own specific audits and approvals too. We are also open to working with SMEs; as a matter of fact, we do work with factories as small as 100 machines, so factory size does not matter. It is about the product that a supplier makes and their intent to be a partner with us…
We are investing heavily in India as the country has skill, innovation, speed and is competitive too. India will be able to produce a great quality product for our esteemed customers. Our focus of investment is on hiring quality staff and equipment as shortly we would like to start doing as many approvals as possible from India office. This will help us in managing critical path better and will ensure we are always delivering goods on time.
Costs are increasing everywhere; we just need to find the right destination for our self which we believe is India. We found some real supply chain partners and worked with them to make sure that costs are kept under the permissible radar. As a company we believe that supply base should be deep, not wide. Consolidation is the name of the game, work with few suppliers, but be real partners in their business.
Majority of Indian companies are still not investing as much as they should invest in automation, training, lean concepts. While advantages are that we are a very young country and would have a sufficient workforce for the next couple of decades. We are flexible in accepting changes over product cycle, so buyers can make changes till later stages; mostly comply on legalities as most importantly we value relationships in India.
We are seriously thinking on lines of buying some character licenses especially for India; our teams are already doing research work on the same. We tried this in China last year by buying Peppa pig license for China and that was our best seller in 2018-19. In addition, as we have our manufacturing in China with specializing in outerwear and swimwear, we would like to explore if we could supply the same to some of the Indian retailers. As of now some of our major clients for China manufacturing are Zara, Tommy, and A&F.
Sainsbury’s, Nutmeg, M&S, George at Asda, John Lewis, Mothercare, M&Co., Boux Avenue, Harrods, Arcadia Group and many other retailers.
Best Corp., SRG Apparels, Premier Knits Apparel, Dinesh Textiles, SCM Garments, SP Apparels, Knit Gallery, Clifton Export and few more.
Group consists of…
Cohen and Wilkes International – specialises in outerwear and activewear
Dennicci – Babywear specialist of the licensed product
GWG (Great wall of garments) – Daywear, nightwear and loungewear specialists both knits and woven
Blues – Character licensed product
Brecrest – Specialist in licensed sports babywear product supplying the major UK football clubs and other retailers
Blues baby – Own brand of babywear clothing range supplying boutiques in the UK.
- Apart from sourcing from India, the company is exploring multidimensional opportunities be it license business or supplying its Chines factory’s product to Indian retailers and much more.
- Major sourcing of the company is mainly from China and India (being design loaded company and limited business of basics).