Wearables

Make Apparel Great Again?

President Trump’s push for American manufacturing has produced mixed results for the apparel industry.

“We will follow two simple rules: buy American and hire American.” President Trump proclaimed that mission statement during his inaugural address, echoing the push for made-in-USA manufacturing that fueled his presidential campaign.

He chastised previous leadership for allowing companies to shutter stateside factories in order to move overseas where cheap labor and loose regulation provide fatter wallets for business owners. He vowed to rip up the North American Free Trade Agreement (NAFTA) and impose high tariffs on imports, urging businesses to refocus their attention between America’s borders. In mid-July, his administration took its first step in reigniting consumers’ passion by launching “Made in America” week, in which manufacturers from each of the 50 states showcased their goods at the White House. If companies commit to hiring U.S. workers for domestic operations, Trump and his administration believe that the economy will swell and more Americans will achieve financial stability.

His message has certainly inspired consumers. “There’s been a lot of nationalism aroused in the country because of Trump that makes people more likely to want to buy from companies whose employees share the same laws and cultures,” says Mitch Cahn, president of Newark, NJ-based supplier Unionwear (asi/73775). “We’ve seen a progression in end-user categories like food and technology and banks that have no real economic need for it, but want it anyway.”

In the apparel industry, it’s easier for consumers to consider buying American because there’s a label tickling their neck. The label has always been there, but consumers have been more concerned with the costly price tag. A 2016 Associated Press-GFK poll found nearly 75% want to buy American, but their first preference is to buy the cheaper, foreign-made item. At major retailers like Walmart, Macy’s and Target, 97% of the apparel Americans buy is made abroad, according to the American Apparel and Footwear Association.

But the conversation is changing. “For a long time, people just assumed everything was made in China,” Cahn says. “In recent months, we’ve seen major brands want more American-made apparel.” Unionwear experienced its most profitable year in 2016, owing in part to the U.S. presidential election. The company produced hats for presidential contenders Hillary Clinton, Jeb Bush and Bernie Sanders, as well as both the Democratic and Republican conventions. The company briefly manufactured Trump’s signature “Make America Great Again” baseball caps during the campaign, and also produced hats for comedian John Oliver with the slogan “Make Donald Drumpf Again” after a sketch on his HBO show Last Week Tonight.

Of course, Trump isn’t the first politician to rally behind American manufacturing. Small spikes in sales are usual during election years, says John McMillan, vice president of sales and marketing at King Louie America (asi/64860). “Election years wake people up to the current state of domestic manufacturing or lack thereof,” McMillan says. “Sometimes it dies off; sometimes it stays.”

The 80-year-old supplier, based in Baxter Springs, KS, has weathered political trends by actively courting unions. Historically, the greatest demand for American-made clothing has come from union-dominated industries, such as manufacturing and construction. In the mid-1950s, 35% of all American workers were unionized. By 1980, when manufacturing jobs in the U.S. were at their peak, roughly 25% of workers were still unionized. As of 2016, though, union membership has fallen to 10.7%, the U.S. Bureau of Labor Statistics reported.

“It’s always a struggle,” McMillan says. “We’ve gotten lean and mean in trying to get our cost down as much as possible. But we can’t thank the unions enough because the loyalty and patriotism of the union worker never wavers.”

He also echoes the sentiments of those who believe the Trump administration will drive consumers back to buying American-made apparel. “With the help of our leaders to balance the playing field without disrupting or driving the cost of products up in a large way, companies will definitely continue to work out how to build their products in the U.S.,” McMillan says.

hile some suppliers have seen a bump in American-made apparel sales, one manufacturer in particular has felt a negative impact. Cary Heller, vice president of sales at All USA Clothing in Keego Harbor, MI, says business suffered in the first quarter of 2017. “Trump is so divisive that some of our core customers have gone out of their way to not buy American just to spite him,” Heller says.

Other suppliers are still waiting for the Trump effect.

“I don’t think we’re going to see a difference unless there’s a big repercussion like tariffs,” says Leslye White, inside sales and support at Pro Feet (asi/79707). The Burlington, NC-based supplier makes performance socks for team athletics, public safety officials and the military. White credits the U.S. Postal Service, which requires American-made uniforms for its staff, with helping the company survive over the past 35 years while other manufacturers in the once-heavy textile trade either relocated overseas or simply vanished. “So many friends whose parents and grandparents had hosiery mills watched them go out of business,” White says.

However, over the past seven years, domestic textile manufacturers have built momentum through technological advances and operational efficiencies. Shipments of textiles and apparel rose to $74.4 billion last year, up 11% since 2009, according to the National Council of Textile Organizations (NCTO). Overseas textile manufacturers have recognized the potential, investing in the U.S. as a renewed source for raw materials and cheap energy. For example, Turkey manufacturer HPFabrics Inc. plans to reopen a textile plant in Winston-Salem, NC, creating about 260 jobs over the next three years.

In 2015, North Charleston, SC-based Vapor Apparel (asi/93396) opened a 30,000-square-foot digital apparel manufacturing and warehousing facility to better accommodate sublimation printing services. The performance apparel supplier has experienced 25% growth over the past four years, which co-owner Chris Bernat attributes to the company’s mass-customization business.

“I know people believe a change in executive leadership has a profound effect, but I can’t say we’ve noticed anything as a result,” Bernat says. He attributes the recent popularity in American-made apparel to other factors rather than the president, such as millennials.

“Millennials want something that’s been crafted, not manufactured,” Bernat says. “They want a story behind their product. Our entire supply chain from dirt to shirt is a 100-mile radius between the North and South Carolina border. People buy that shirt because of its story, not the political climate.”

The dirt-to-shirt movement is growing – Whereyourclothing.com lets consumers track the entire production process from cotton farmer to design team. By entering the tracking code or selecting the colored sleeve and tail threads, users can look up the name, address and phone number for each member of the supply chain. “People do take pride in American-made products, especially custom products,” White says.

Perhaps it’s more than a generational preference: 85% of U.S. consumers think American-made products are better quality than those made overseas, and they’re also willing to pay a premium for some of those products, The Boston Consulting Group reported.

obert H. Chapman III, chairman of the NCTO, shared his optimism regarding the new direction of the White House at a March meeting. “Thanks to the new Trump policy dynamic, the next 12 months represent the best opportunity in a generation to reorient U.S. manufacturing policy, level the playing field and usher in a new era of growth for U.S. textile makers,” he said.

The U.S. accounts for almost 19% of global manufacturing, behind China’s 25%, according to Deloitte’s 2016 Global Manufacturing Competitiveness Index. That ranking is expected to switch as the 2020 projection shows the U.S. ahead of China as the world’s top production powerhouse.

Until then, foreign imports continue to dominate. Textile and apparel imports exceed $125 billion annually, with China, Vietnam and India as the largest sources of imported textiles. Only 3% of polyester fiber produced globally last year was made in the U.S.

The index states that the most important driver of a country’s ability to compete on the global stage is talent, but the U.S. has been struggling to foster a capable workforce. Textile mill employment continues to shrink, and recent wage hikes have forced companies to reduce staff to stay afloat. “As we look to expand, our toughest challenge is finding skilled labor,” says Callum Brown, co-owner of Pro Feet. “Our industry has not been proactive enough in providing the training opportunities for new technicians.”

Brown says young people view the textile industry as a dead profession, so they’re not pursuing careers there. The ones who do aren’t given the resources to be prepared because when manufacturing went overseas, the U.S. lost many talented, experienced workers who could impart their wisdom upon future generations. Now, companies are forced to build not only new domestic manufacturing facilities, but also new workforces from scratch, a very expensive and time-consuming endeavor that’s essential for long-term survival.

However, there’s a more reliable investment on the rise: robots. The threat of automation looms over the manufacturing industry, scaring potential workers away and worrying those with 10 to 20 years of experience. Between 2000 and 2010, 85% of manufacturing job losses in the U.S. were a result of automation, according to a study by the Center for Business and Economic Research at Ball State University. Technology and machines are rapidly replacing human beings in the name of operational efficiency – manufacturing output has risen by more than 20% since 2009. More products are being made in a shorter amount of time with fewer people involved, and business owners are profiting.

It’s the catch-22 of Trump’s “Made in America” push: Factories and mills will come back to the U.S., but they’ll most likely be filled with robots rather than workers. “Even if you bring the jobs back here, are you bringing them all back? Probably not. Some are going to be robotic; some are going to be software-based,” Bernat says.

hile automation has benefitted manufacturers, it hasn't been enough to save them. As the retail industry suffers through an apocalypse, several fashion brands have shut down over the past few years. The explosion of online shopping has compelled companies to shutter brick-and-mortar locations and switch to an e-commerce-only model. Other players have entered mergers, consolidations or bankruptcies, none perhaps as high-profile as the collapse of American Apparel.

In February, Gildan Activewear (asi/56842) cemented its $88 million acquisition of American Apparel’s brand and certain assets, including some equipment. The deal closed about a month after Gildan won a court-supervised auction for the formerly Los Angeles-headquartered clothing maker, which filed for bankruptcy in November 2016. The company didn’t purchase American Apparel’s retail stores or manufacturing/distribution facilities.

Although Gildan has secured U.S.-based contractors to make fabrics and sew garments for key American Apparel styles offered to the wholesale market, it’s the end of an era for U.S. apparel manufacturing.

The Montreal-based apparel maker plans to leverage its global manufacturing capabilities to produce certain American Apparel styles abroad, creating less expensive offerings that will compete better for the business of price-conscious end-buyers. “We’ll have American Apparel product that’s made in the USA for customers who value that aspect of the brand’s heritage, and we’ll also have a more price-centric American Apparel collection that will allow distributors to target customers who are more focused on price than made-in-USA,” Garry Bell, Gildan’s vice president of marketing and communication, told Counselor in February.

An American institution making clothes overseas – the more things change, the more they stay the same.

John Corrigan is a staff writer for Wearables. Contact: jcorrigan@asicentral.com; follow him on Twitter at @Notready4Radio.