Decline in Local Fashion Production: Trends and Solutions

Overview of the Fashion Industry’s Downturn

The local fashion production sector has experienced a gradual decline over the past five years, dropping from nearly €4 billion in 2014 to under €3.5 billion this year, as highlighted by a recent report from MKOR Consulting. Industry representatives attribute this downturn to several factors, including a significant shortage of skilled labor, rising production costs, and insufficient support from government entities.

Workforce Challenges in the Fashion Sector

Mihai Pasculescu, president of the Federation of Textile, Clothing, and Leather Employers, notes that the industry currently employs around 270,000 individuals, a stark contrast to the 500,000 workers a decade ago. In light of this workforce reduction, over 6,000 fashion producers are exploring alternative strategies such as digital transformation, technological advancements, increased wages, and outsourcing services. Consequently, the future of local fashion production appears to be shifting towards a model that caters to consumers willing to pay a premium.

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The Labor Shortage Dilemma

„The workforce willing to work in factories is dwindling. Many individuals rely on social assistance, which provides a minimal financial safety net, discouraging them from seeking employment. The closure of vocational schools a few years ago has further exacerbated this issue, leaving young people without proper training opportunities. Additionally, there is a prevailing stigma that working in a factory is undesirable,” explains Alina Rachieru, owner of the Pineberry brand.

Embracing Technology as a Solution

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To combat the acute labor shortage, companies are increasingly investing in digitalization and automation. Notable players in the industry, including D&D International, which produces the Pineberry brand, as well as Caremil, Smirodava, and Tanex, are leading the charge in this area.

„We are digitizing and automating as much as possible. We have secured funding and invested nearly €500,000 in cutting-edge technology to reduce our reliance on human labor. While it’s impossible to run a textile production facility solely with robots and machinery, we can minimize the need for skilled personnel in certain operations,” Rachieru elaborates.

Increasing Wages: A Double-Edged Sword

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Raising wages is another potential solution, but it necessitates an increase in production revenues, according to Adrian Bajenaru, general manager of Tanex.

„We are offering better pay. However, to sustain this, we need to target a market segment that can afford higher prices. My concern is that young people are increasingly disinterested in these jobs. What will happen in 15 to 20 years? What solutions do we have?” Bajenaru questions.

Exploring Immigration and Legislative Changes

Another avenue being considered is immigration, specifically recruiting workers from countries like Vietnam and Sri Lanka. Sorin Chiriac, managing director of Sense, Caremil, and Smirodava, emphasizes the need for more flexible legislation.

„Immigration could be a viable solution, bringing in personnel from Vietnam or Sri Lanka. Additionally, while automation is beneficial, it may not be effective for small-scale production. Legislative changes could also provide solutions, such as more flexible working hours and tax incentives for low-wage jobs. The construction sector has implemented successful strategies that could be adapted for the textile industry, including apprenticeship programs. However, the financial burden of training apprentices often falls on the employer, and government support is limited,” Chiriac states.

The Future: Globalization and Brand Development

The future of this sector may lie beyond national borders, particularly in developing countries. „We cannot resist the tide of globalization. We will continue to produce some items locally while shifting other production to more cost-effective regions. This will require investment in product development and financing,” Bajenaru asserts.

For Pineberry, the focus is on expanding the local brand. „We are committed to developing our local brand. We plan to open new stores and recently launched our first online franchise in the UK. We have also received interest from another city in the UK and hope to grow our brand in this market. Of course, we will not abandon our loyal customers we’ve served for the past decade,” Rachieru concludes.