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Catalogers' Sri Lankan Operations Hurt by Tsunami

Several catalogers with manufacturing operations in Sri Lanka are feeling their own aftershocks from the recent tsunami in the region.

The confusion following the disaster that hit Indian Ocean nations last week makes it difficult to ascertain how extensively Sri Lanka's manufacturing infrastructure has been damaged. However, it has been widely reported that most of the country's manufacturing facilities are inland and therefore were undamaged.

But damage to roads, ports, electric lines and water supplies was extensive and could have long-term ramifications for the country's apparel industry and the companies that manufacture products there.

According to the Sri Lanka Apparel Exporters Association, Abercrombie & Fitch, Victoria's Secret, Cabela's, Eddie Bauer and J. Crew are among big-name catalogers with operations in Sri Lanka. Attempts to contact representatives of these firms for this article were unsuccessful.

Apparel, tea and tourism are Sri Lanka's top industries, and the United States is a major customer. Of the $1.8 billion in goods and services the United States imported from Sri Lanka in 2003, apparel accounted for 77 percent, according to the U.S. Department of Commerce.

Sri Lanka's apparel industry already was due to take a hit from increased competition with China once international trade quotas expired Jan. 1.

News from Sri Lanka regarding the apparel sector is limited.

“I have heard some reports of production that was damaged or of workers missing and killed in Sri Lanka, but no indication that it is extensive,” said Erik Autor, vice president and international trade counsel for the National Retail Federation.

Autor heard a report that a Victoria's Secret facility is missing about 350 workers.

Victoria's Secret sourced more than $350 million in merchandise from Sri Lanka in 2003, according to the country's embassy.

The logistics of moving merchandise out of the country could pose one of the greatest challenges in the aftermath of the disaster. Reports conflict regarding whether the country's largest port in Colombo was damaged. Several other ports in the region are barely operable.

“There have been instances of delays in Madras [India] and Colombo, but it's mainly a congestion problem — there's no widespread disruption,” Autor said.

The severity of the problem won't be known for several months, as the summer merchandise in the factories now makes it way — or doesn't — to U.S. shores.

“I'd doubt that we'd see any real impact on merchandise on the shelves in stores,” Autor said.

Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters

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