Blue Cast: Newtimes Group’s Alex Angelchik on Sourcing Strategy Shifts
Blue Cast is a podcast series from the TENCEL™ Denim team. Each episode features a conversation with a special guest from within the industry or the fringes of the denim community. The following is a recap of Episode 518.
Between tariffs, geopolitical tension, transportation upheaval and other disruptions, fashion companies are navigating a dynamic, consistently changing environment. As group managing director at Hong Kong-based sourcing firm Newtimes Group, Alex Angelchik has a front-row seat to how brands are strategizing and pivoting in this moment.
As Alex explained to Lenzing’s Tuncay Kilickan on the latest episode of our Blue Cast podcast, even before the tariffs hit earlier this year, Newtimes Group and many of its customers had already diversified manufacturing away from China due to the geopolitical tension between the production powerhouse and both the U.S. and Europe. Among the destinations that received some of these volumes were Bangladesh, India, Jordan and Egypt.
War is also throwing a wrench in sourcing as usual. Ocean freight firms have been avoiding shipping routes through the Red Sea amid Houthi rebel attacks tied to the conflict in Gaza. This reroute tacks on extra lead time, causing companies to look closer to home for speedier options. “That 14-day shipping from Shanghai to the West Coast of the United States is very attractive,” said Alex. “When that goes away and all of a sudden, you’re faced with the 40-day lead time from India, Bangladesh, it definitely changes the equation.”
Nearshoring is gaining attraction, and Alex is a proponent of made in the U.S. apparel. Newtimes has been doing some production in the States for denim, blazers and men’s shirting. However, onshoring is not without its challenges. “One of the biggest mistakes we made in the United States is letting our textile and apparel manufacturing industry die to go overseas,” he said.
Tariffs have just compounded the challenges. Newtimes has created detailed models of what hypothetical trade changes would mean for its customers. “We can react very quickly and give our customers almost an instant view of costing in that particular country and where there’s an advantageous situation,” said Alex. He added that Newtimes’ customers will likely have to raise their prices. Additionally, due to the “Walmartization” of fashion and the depreciated costs, it makes it less feasible for suppliers to absorb any added costs. Both brands and their suppliers are also facing a “credit crunch” as fashion firms become less attractive for lending.
Alex noted that there is more openness to shifting the sourcing map these days. “[Brands are] much more willing to jump on a plane and go to a new country, go to a new region to explore,” he said. “People had their established sourcing matrix for the last 20 years. So the game was really about, how do you get your current vendors to meet your new pricing, quality and design objectives? That was the old game. The new game is, what’s your new price, given the tariffs, and where can I go to maintain the price and quality that I need for my consumer?”
Listen to the full conversation here.