The textile and fashion industries are facing multiple, disruptive challenges the next 7-10 years. It is going to be an uncertain period, but also potentially a great opportunity. As the well-prepared, the value-based and the agile will be able to thrive.

Lutz Walter is the Secretary General at Textile ETP (the European Technology Platform for the Future of Textiles and Clothing). He tells us why the industry is having some obvious difficult years ahead, but also more about what you can do and most likely must do.

– We are once again in a disruptive decade. The last one was between 2000 and 2009. We then had 9/11, quota liberalisation leading to industry restructuring, especially in southern Europe and newer EU member states – together with the financial crisis 2008/09. Together, it all took its toll. After that we had a more stable decade leading up to the pandemic, starting 2020. The decade before Covid-19 we had low interest rates, low inflation, geopolitical stability, and growing global markets.

– The current decade seems to be more disruptive again. First the pandemic, with its disruption of traditional retail channels and global supply chains. And the high inflation and rising interest rates, geopolitical instability, and more volatile global markets. This, together with a growing lack of skilled workforce, a strong regulatory push for sustainability, and rapidly changing consumer behaviours means that most companies need to drastically adjust throughout their operations (including global supply chains, distribution channels, customer segments, end markets, and more).

Supporting adaptation into tougher times
Constant change and adjustment, while maintaining focus. These are three key points on how textile and fashion businesses can and will prevail.
– Our focus needs to be on long-term commitment to quality, in all aspects of the business. This means quality in product, in manufacturing operations, in supply chain partnerships, in customer service and, of course, in the all-important business model. But quality now also means how you manage your workforce and their training, how you ensure legal compliance in a fast-changing regulatory framework, how you become and remain a valued member of your local community, and in the end how strong your strategic leadership is.

For family-owned and owner-managed companies, some aspects in building these qualities are more natural, Lutz Walter says.
– Family-owned companies tend to have a longer-term focus (managing the company for next generation, rather than the next financial quarter). That is a very good thing, that often brings a strategic business mindset. But at the same time such often smaller companies tend to lack clarity of vision, depth of knowledge, and human and financial resources to manage all dimensions of quality really well.

Some of the future challenges might be to Europe’s advantage. One of them is the need to bring back production value chains closer to home. Especially if you want to operate things in a truly sustainable, circular, and agile manner.

 Demand of insight and strategic vision
– But you must remember that production in Europe also demands a lot of your business, knowledge-wise, cost and efficiency-wise, and people-wise. And an ability to integrate new technology, innovations, and a mindset of agility and constant change in the operations.
– It is sometimes really important to ask yourself what in your business you actually make money from. Is it the impeccable quality of your product or the reliability of your services? Is it the authenticity in your brand or the creativity and dedication of your people? Just making good enough products in the most cost-efficient operation is no longer a viable long-term business model.

Lutz is repeatedly talking about the need to both having good control of the whole business value chain and the ability to quickly meet new demand. Being able to adapt in an agile and flexible way has never been more important.
– In many ways the textile industry relies on what always worked well. Including an customer-focused and service-oriented business model, a value-based business idea and products that are of reliable quality. This is still important, but we now must add that overall need to know more about the world we live in, anticipating change and lean into it. Understanding and serving shifting consumer demands are more important than ever, together with the idea of the whole business being sustainable.

Lutz Walters tips, building prosperity in tough times
There are solid principles in accomplishing a future-proof business. Lutz points out some of the more important ones.

• Make sure your business strategy covers at least 5 to 10 years ahead
• Plan for succession early on
• Ensure that your business model and operations are solidly profitable and future-proof
• Invest in the quality in your people. Become that company people desire to work for
• Test and iterate as much as you can with new markets, new technologies and new product and service ideas
• Find strategic partners that share your values and cherish those relationships
• And look for small-scale joint business development and public funding public opportunities, where you can test innovative ideas together with your partners.

Act today, be a winner tomorrow
I asked Lutz Walter if it isn’t a very pessimistic future he is describing.
– Not really. Because we can distinctly see what is coming and we know what can be done. Those that in an insightful way act today, will probably make the bumpy road ahead feel a lot smoother.

Facts about Textile ETP
The European Technology Platform for the Future of Textiles and Clothing (Textile ETP) was created in 2004. The organisation wants to match research and innovation needs and priorities of the European industry with the knowledge, scientific and technological capacities of universities, research organisations and technology developers. The aim is to raise the sector’s competitiveness, through intensified collaborative research and innovation.

Through a broad membership base, the Textile ETP aims to represent the research and innovation interests of the entire manufacturing value chain. From fibres to final textile-based products, as well as directly allied industries.

Since 2013 the Textile ETP is an international non-profit association, under Belgian law and based in Brussels.

/For ACTE, interview by Gunnar Fägersten Novik

Lutz Walter often share interesting ideas and innovations on LinkedIn. You can find him here (click).
Read more about Textile ETP here (click).