Restructuring in the wearing apparel sector

Abstract

The Clothing Industry in Malta has been for many years a labour intensive industry, which relied on the cheapness of semi-skilled and unskilled labour for its competitive advantage. Now that labour costs have risen, both local and foreign manufacturers have to decide whether it's more profitable to relocate in low-wage countries, namely the newly industrialising countries (N!Cs) and the emerging countries in Central and Eastern Europe or reinvest locally. The latter option requires a restructuring process, which does not only involve upgrades in machinery, but also an upgrade in information and communications technology, quality improvements, product development, human resource development, and export market development. Those firms that find the funds to invest in these activities will be better positioned in the global market to compete in the top-end quality market where a firm must excel in quality, design, flexibility and market proximity. The main objective of this study is to investigate how the wearing apparel sector is coping with today's changing environment, as it shifts away from cost-based competitiveness towards to fashion-sensitive and higher quality products. For this purpose I carried out a survey to analyse better how different firms are tackling this challenge.