Clothing production in Europe - challenges during wartime

The war in Ukraine has changed the face of the European industry, affecting many areas of life. This includes the fashion industry, which, thus far, has been developing intensively on the Old Continent, generating high profits for businesses.

Can the armed conflict among our eastern neighbors destabilize the situation on the fashion market? How will it affect the condition of Polish companies involved in the production of clothing?

The war in Ukraine and various challenges for the fashion industry

Russian aggression against Ukraine changed the face of Europe in social, political, and economic terms. There is no denying that the conflict has caused enormous destabilization, which affected clothing manufacturers and distributors in international supply chains. It is worth remembering that they have not had it easy recently. Most of them have not had time to recover from the problems caused by pandemic lockdowns.

So what is in store for the fashion industry in the coming months? Supply disruptions are expected, especially from the East. Rising prices of gas, oil, and other raw materials, that the fashion industry relies on every day, could also cause a lot of turmoil.

Currency fluctuations – record-breaking euro and dollar prices

From the very first days of the war, the Central and Eastern European regions were hit hard by its consequences, especially in terms of currencies. Rubles and hryvnias were losing value and reaching all-time lows. The geopolitical crisis also affected the Czech koruna, the Hungarian forint, and the Polish zloty, which at one point fell to levels seen during the 2009 financial crisis.

Currency exchange rates fluctuate like a kaleidoscope, making it difficult to plan transactions even within the next few weeks. This has had a negative impact on fashion industry entities involved in international supply chains in the region.

Volatile raw material prices – is production and international trade still profitable?

Fuel and electricity prices are currently equally unstable, rising every day. It is, obviously, influenced by the threat of sanctions, limitation, or even disruption in the supply of raw materials from the East. At the same time, panic broke out in many places, causing fuel prices to skyrocket to levels unrealistic a few weeks ago. Equally large surges affect gas and electricity prices.

All the above-mentioned raw materials are of great importance in ensuring the production, storage, and transportation of clothing. Combined with inflation, which is now dangerously approaching double digits, it could soon lead to higher clothing prices for end consumers.

Supply problems and closing of factories and stores in Ukraine

The war poses real manufacturing, logistical, and facility problems as well. Many companies from Poland and other European countries had factories in Ukraine or worked with suppliers based in the country. Currently, due to the warfare in the area, production and distribution in the region are very limited, which translates into shortages of goods and downtime.

The issue of producing, selling, and importing fashion goods to Belarus and Russia is equally problematic. Many companies consider it unethical to remain in these markets. On the other hand, companies that have not yet decided to exit the two countries face a global boycott from consumers.

Sanctions against Russia and Belarus – luxury goods not for oligarchs

When analyzing the challenges of the fashion industry in Europe during and just after the war, one cannot forget the consecutive sanctions issued by the European Union and the United Kingdom against the invaders.

The fourth block includes sanctions on luxury goods, especially footwear, clothing, and leather goods priced above EUR 300, imported from countries such as Italy or France. This measure is intended to hit the richest people in Russia, without worsening the living situation of average citizens.

However, for the fashion industry it means closing a large trading area – cancelling stores in Russia and limiting or eliminating deliveries of goods to the country. It should be remembered that Russia has been a key customer for many luxury fashion brands.

Strus Wear – stability for the clothing market not only in Poland

So how should you handle such dynamic and uncertain times? A good solution is to simplify the chains as much as possible and use reliable supply networks. Therefore, it is worth considering cooperation with entities such as Strus Wear, a professional company with a long tradition, which has been producing knitted fabrics and sewing products for clothing brands from Western Europe (especially from the Netherlands and Belgium) for years.

It is a very practical solution as it reduces costs, delivery times, and fees related to imports from outside the European Union, which translates into competitiveness on the market. Contact us if you are looking for high quality goods with an individual approach to your company’s operations!