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USA:Apparel firms prepare for free market |
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2004-9-14
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Expiration of textile and Apparel Quotas have attracted leading companies to outsource form China.
"We see China as the way to keep our business," said Francie Buckles, purchasing and logistics director for the Beachwood, Ohio, intimate-apparel company marketing its brand Leading Lady.
Many U.S. clothing manufacturers such as Leading Lady, based in the United States will source their requirements from operations or contractors around the world, but mainly from China and other developing nations.
With China expected to capture about 50 percent of the U.S. clothing market, up from 16 percent, once quotas end, as per the World Trade Organization figures, textile companies — such as Glen Raven, a North Carolina fabric manufacturer, and National Spinning Co. of North Carolina, which spins yarn for sweaters fear American job losses by the thousands. Textile companies this month plan to file dozens of requests with the Bush administration to cap imports of specific Chinese products, effectively maintaining some kind of quota. China agreed to such "safeguards" as part of the price for joining the WTO, though the Bush administration would have some latitude to accept or reject the requests.
The apparel industry in not unanimous on the issue, but it generally believes an end to quotas will benefit its companies and consumers.
"Our members have been told — 10 years ago — the quotas would come off, and have made decisions based on that," said Stephen Lamar, senior vice president at the American Apparel & Footwear Association.
For Leading Lady and other companies that make and sell finished products to U.S. consumers, the end to quotas on China, India and other nations means better and cheaper products and easier logistics.
That, in turn, means the company can reallocate resources to go after new markets.
"That''s the only way we can stay competitive," Ms. Buckles said.
Leading Lady, in business since 1939, makes nursing bras, full-figure bras and post-mastectomy garments for retailers such as Wal-Mart and Nordstrom.
The company, with a staff that ranges from 150 to 175 employees, still sews about one-quarter of its products at factories in central Illinois, with the rest contracted out to Central American manufacturers
The company has not hired a sewer in about 20 years."Nobody wants to sew. But our distribution center has gone from a little corner of our plant to a space that is four times the size of our plant. So we are hiring more people but in higher-level roles — managers, [information technology] people, clerical," Ms. Buckles said.
Leading Lady is a small, family-owned company with niche products. At the other end of the apparel spectrum, many big players see China as an opportunity — or, at least, neutrally.
Kellwood, a St. Louis company that makes and markets Koret, Sag Harbor and other clothing lines, says free trade in apparel will benefit the majority of Americans."[The end of quotas] will allow us to do a better job and at a lower cost. That''s what will happen, the cost will go down for the consumer because of quotas going away," said Tom Austin, president of Kellwood''s New York-based operating services division.
Kellwood buys a small amount of clothing from U.S. manufacturers. But many companies with significant production in the United States do not oppose quota elimination."For us, we don''t see [the end of quotas] as having a devastating impact. For the pure apparel piece, even some non-apparel, we don''t see it as a major issue," said Nancy Young, a spokeswoman for Russell Corp., an Atlanta company known widely for its athletic wear.
Russell, with about 7,000 U.S. employees and 7,000 overseas employees, manufactures its fabric in the United States and sews most garments in Mexico, Honduras and other countries.
Import duties, transportation costs, delivery times and other logistical issues mean that China is unlikely to overwhelm Russell or force layoffs, she said."It is hard to say, not knowing what would come in the market. But right now we don''t anticipate that. That''s because we''re apparel and sporting goods, and not textiles. It''s a different environment," Ms. Young said. |
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