- **Buyers’ Risk Avoidance & Diversity:** Maintaining a diversified portfolio of vendors and regions is a necessity for successful sourcing organizations (Sauls, 2008). The recession has increased buyers’ interest in having back-up suppliers in place in case factories go under and to cope with general uncertainty about the future (Barrie & Ayling, 2009). Some predicted the recession would lead to more local sourcing, but this has not yet happened ( _The clothing industry,_ 2009).

- **Reduce Reliance on China:** Lead firms continue to source the majority of products from China, but they also seek to diversify into other countries to avoid putting all their eggs in one basket. The Japanese government has openly declared its interest in reducing reliance on China. This could have major impacts since Japan is the world’s second largest clothing importer, and Southeast Asia and Bangladesh currently only account for 7% of imports. Japan’s plan could double or triple the total current exports from these countries, putting price pressure on European and U.S. Asian importers (“Talking strategy”, 2008; “Japan mulls”, 2009; just-style.com, 2009b).

- **Decrease in Supplier Captivity:** Lead firms no longer desire to be the main buyer for any suppliers, due to the risks associated with controlling the majority of a factory’s output. Buyers tend to follow the “30/70” rule in which 30% of a factory’s business is desirable, but not more than 70% (Fung, Fung, & Wind, 2008).

- **Decrease in Short-Term Relationships:** During the era of quotas, trade was dominated by short-term, market relationships. Now that quotas are gone, buyers are streamlining the number of suppliers they work with and focusing on developing long-term strategic partnerships with their most important suppliers. These strategic suppliers are increasingly multinational manufacturers or network coordinators that do the logistics legwork for the lead firms.

- **Supply Chain Rationalization:** Most lead firms in the apparel industry are committed to significant reductions in the size and scope of their supply chains.  They want to deal with fewer, larger, and more capable suppliers, who are strategically located near major markets around the globe. Retailers are seeking to consolidate the number of wholesalers they purchase from and they want to buy a more comprehensive line of clothing, accessories, and footwear from these wholesalers (Barrie & Ayling, 2009; Euromonitor, 2009). The recession has caused lead firms to ‘cut the fat,’ and they are confining their relationships to their most capable and reliable suppliers.

# **4. Impact of the Crisis on Apparel Suppliers in Developing Economies**

One can detect several structural impacts of the economic crisis on apparel suppliers in developing countries:

# **Decrease in Number of Employees and Factories: Survival of the Fittest**

During the recession, buyers are transferring business away from marginal suppliers to their core operations. This is creating a major problem in countries that are highly dependent on the apparel industry (Birnbaum, 2009) (see Table A-4). Lower demand from international customers and the recession have caused a large number of vulnerable, developing-country 19