Global Corporations and Smaller Actors in Textile Business: European Perspective

Abstract

Earlier in Europe, there existed many local textile brands and manufacturers. However, these have experienced significant pressure from the rapid expansion, and success of the European based global textile industry corporations, such as H&M and Inditex (Zara). Their further advancement is supported by the expansion into the new locations and application of nearshoring strategies to the favourable markets, such as Russian, which have attracted to some extent previously entirely offshored European manufacturing located in China. In this regard, the objective of the current study is the assessment of the business activities of the given companies, as well as one company from Finland, and three major textile companies from the Baltic States, through the designed methodological approach. Due to the fact that most performance indicators of companies are based on empirical data, the study is explorative in its nature. Moreover, it shows the relationship between the main key performance indicators of the company with one of the functional areas of logistics (warehousing and inventory management). In particular, analysis of this research shows that two global actors (H&M and Inditex) have experienced exceptional growth, profits and profitability during the years 2001-2016. It was concluded that nearly all of these earlier successful ones and smaller actors have faced difficulties in the past decade, and best growing has been company concentrating on warehousing and retail, instead of manufacturing. Most of these smaller actors have faced profitability challenges, and considerable amount of shareholder value has been lost during the decade.