Par­a­lyz­ing mo­ment for fash­ion in­dus­try

China Daily (Hong Kong) - - BUSINESS - By BLOOMBERG in New York

When LVMH’s chief ex­ec­u­tive of­fi­cer was seen strid­ing through the Trump Tower lobby on Mon­day, the fash­ion in­dus­try held its breath.

Bernard Ar­nault runs the world’s largest lux­ury-goods com­pany — a sprawl­ing em­pire that in­cludes Louis Vuit­ton, Fendi and Dior — and here he was meet­ing with a pres­i­dent-elect who has threat­ened to roil the in­dus­try with trade re­stric­tions. Fol­low­ing Ar­nault’s sit­down with Trump, LVMH said the French com­pany was con­sid­er­ing ex­pand­ing its pro­duc­tion in the United States.

The en­counter un­der­scores an ag­o­niz­ing mo­ment for ap­parel mak­ers, most of which had writ­ten off the US as a ma­jor source of pro­duc­tion. A whop­ping 97 per­cent of clothes sold in the US is man­u­fac­tured in other coun­tries, but Trump has threat­ened to rip up trade agree­ments and im­pose tar­iffs in a bid to bring do­mes­tic jobs back.

That’s led many cloth­ing gi­ants to freeze their over­seas ex­pan­sion plans — and at least pay lip ser­vice to the idea of mak­ing more of their wares in the US.

“You’re not go­ing to have a big ex­pan­sion un­til you know what’s go­ing to hap­pen,” said Ju­lia Hughes, pres­i­dent of a fash­ion in­dus­try as­so­ci­a­tion that rep­re­sents names such as Ralph Lau­ren Corp and Un­der Ar­mour Inc.

LVMH al­ready has a fac­tory in San Di­mas, Cal­i­for­nia, where it has made Louis Vuit­ton prod­ucts for 25 years. The com­pany is con­sid­er­ing ex­pand­ing that plant, as well as open­ing an­other fa­cil­ity in the South or Texas.

But the de­ci­sion has more to do with meet­ing lo­cal de­mand, said So­nia Fell­mann, a Paris-based spokes­woman.

REUTERS

Don­ald Trump speaks to re­porters with LVMH Chair­man and Chief Ex­ec­u­tive Of­fi­cer Bernard Ar­nault (right) af­ter their meet­ing at Trump Tower in New York.

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