U.S. Retailers: Global Sourcing of Clothing

When you make your predictions about where (from which countries) your things came from, consider in which kinds of stores you buy your things. The global sourcing of clothing by U.S. retailers creates a very distinctive geography -- see graph and table. Imported goods come by container ships in distinctive regional patterns.

Type of Retailers	Examples of Companies	Geographical Rings
fashion stores	Polo/Ralph Lauren, Gucci, Hugo Boss	rings 1 & 2 -- the most expensive & exclusive
department stores	Bloomingdale's, Saks Fifth Ave., The Gap, The Limited, Macy's	rings 2 , 3 & 4 -- better-quality and higher-priced goods than offered by mass merchandisers
mass merchandisers	Sears Roebuck, J.C. Penney, Montgomery Ward	rings 2, 3, & 4
discount stores	Wal-Mart, Kmart, Target	rings 3, 4, & 5
small importers	no national names	rings 4 & 5

More than 70 percent of items sold by Wal-Mart are made in China [Source: China Business Weekly, 2004].

Examine the distribution of the money for jeans. Workers (labor) in the South are paid only a tiny part of the final price. Read an article on the pros and cons of brand names.

Measured either in terms of trade or direct investment, [global] integration [of the world economy] has been highly uneven. A few developing countries have managed to increase their trade a lot. They are the same countries that have attracted the lion's share of foreign direct investment. And they have also seen the benefits of openness. A recent study by the World Bank showed that 24 countries, home to 3 billion people -- including China, Argentina, Brazil, India, and the Philippines -- have substantially increased their trade-to-GDP ratios over the past 20 years. These are the low-income "globalisers". On average, their growth rates have improved as well. GDP per head in these economies grew by an average of 5% a year during the 1990s (compared with 2% in rich countries) and their poverty rates declined.

However, another 2 billion people live in countries that have become less rather than more globalized. In these countries -- including Pakistan and much of Africa -- trade has diminished in relation to national income, economic growth has been stagnant, and poverty has risen. According to the World Bank, income per head in these "non-globalising" countries fell, on average, by 1% a year during the 1990s. In short, globalization is not, and never was, global. Much of the world, home to one-third of its people and including large tracts of Africa and many Muslim countries, has simply failed to participate. The shocks of 2001 now risk worsening this long-standing marginalization. The global recession hit the prices of commodities from oil to cocoa and it is these commodities that still dominate the non-globalising countries' exports. Many of these countries also rely heavily on tourism -- an industry hit especially hard since September 11th. Moreover, any rise in transport costs may harm such countries most.
Source: The Economist, 2 February 2002.

Created by Ingolf Vogeler on 13 November 1997; last revised on 16 May 2005.