The Globe and Mail reports in its Wednesday edition that as Groupe Dynamite copes with U.S. President Donald Trump's global trade war, it has found that fast-fashion cuts both ways.
The Globe's Susan Krashinsky Robertson writes that Groupe Dynamite depends heavily on the U.S. market for growth and quickly felt the impact of U.S. tariffs on countries, especially China, that manufacture goods for its Dynamite and Garage chains. That is because Groupe Dynamite does not tend to stock up on inventory. Ordering frequently from suppliers helps the stores to keep up with trends, but meant that Groupe Dynamite had little buffer in its U.S. business when the tariffs took effect. The company reported on Tuesday that its gross margin declined by 1.8 per cent in the first quarter, largely because of elevated tariff costs. However, the same quick turnover of its stock has also made it possible for Groupe Dynamite to shift its supply chains in response to trade tensions. In the first 13 weeks of its fiscal year, the retailer slashed its orders coming from China to the U.S. by more than 50 per cent. Groupe Dynamite chief Andrew Lutfy says it takes less than eight weeks from making a purchase order to having the product in the store.
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