California Apparel News

The Consumer Product Safety Improvement Act (CPSIA) of 2008 has caused its share of confusion among apparel manufacturers, but particularly among makers of children’s products, who are the main targets of the far-reaching act.

Passed in August, the CPSIA made significant changes to the previous regulations and imposes additional compliance requirements for consumer products produced domestically and abroad. Children’s apparel makers—which are defined by the Consumer Product Safety Commission (CPSC) as companies making apparel intended primarily for children 12 years of age or younger—will take the brunt of the law, facing staggered deadlines for new lead-paint requirements, third-party testing, small parts, metal jewelry and all other children’s product safety rules. Other requirements call for tracking labels on children’s products.

One such significant change comes into effect on Feb. 10. On that date, all children’s products must meet the CPSIA’s tough new lead and phthalate standards or they cannot be sold, distributed or donated in the United States and will be labeled as a “banned hazardous substance.” This could include items that were manufactured before the testing deadline and are already in transit. The legislation is retroactive to include any garments that were made, shipped or present on sales floors before Feb. 10.

A more-narrow law on phthalates went into effect on Jan. 1 in California, affecting many local industries. (See related story here.)

“There is a lot of confusion regarding the new restrictions, particularly on the sixth phthalate [there are several kinds of phthalates banned] used in toys and childcare articles,” said Janet Wells, president and chief executive of Insta Graphic System in Cerritos, Calif., which does heat transfer on garments. “Much of this misinformation is based on fear and politics and not on scientific evidence.

Manufacturers, in order to comply with the law, must test every product detail, including each individual paint color, fabric, buttons, thread and rhinestones. Even if the same paint, zipper, fabric or buttons are used on a variety of different garments, each garment must be separately tested. Estimates put the cost of testing each garment between $600 and $1,500.

“If you are a manufacturer who is selling 50,000 units of three styles per week to a big-box chain, the cost of the testing is insignificant,” said Richard Wortman, a partner at the Los Angeles–based firm of Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt. “The law will be hardest on small- and mid-sized manufacturers who produce smaller runs of garments that include a variety of embellishments.” Most retailers, Wortman said, won’t be significantly impacted. “On Feb. 10, the bigger retailers can use their clout and just send any garments that haven’t been tested or aren’t salable back upstream. Smaller retailers will probably have to sit on the inventory.”

Testing, Wortman said, will prove to be the biggest problem. “It can be prohibitive, and if you’re only making 300 of an item to sell to a boutique, it may not make sense to test each style.” And with a limited number of laboratories certified to perform testing, manufacturers’ inventories can be placed in limbo while they wait for results.

“The ramifications of this ruling are far more detrimental to the apparel industry than anyone ever anticipated,” said Vera Campbell, president of Los Angeles–based childrenswear manufacturer Knit Works. The law was written with very little understanding of the apparel industry, she said. “This law could put small manufacturers out of business, and the larger manufacturers will incur exorbitant additional expenses.”“National Bankruptcy Day”

The effects of the Feb. 10 deadline could be catastrophic for manufacturers. “People are absolutely going to choke on [untested inventory]. They can’t sell it, they can’t donate it, [and] they can’t even sell it for export. All of that inventory will have to be burned—there is nothing else that can be done with it,” Wortman said.

For that reason, the deadline day has been given the inauspicious title of “National Bankruptcy Day.” The term first appeared in a Nov. 18 article in The Wall Street Journal and has since been adopted by manufacturers and advocacy groups. Without intervention or relaxed regulations, manufacturers and retailers could find themselves sitting on suddenly worthless inventory that may force many out of business. In response, a grass-roots effort has been launched to compel the CPSC to relax its lead ruling.

An online petition from childrenswear and textile manufacturers urges the CPSC to amend the lead and lead-paint requirements before Feb. 10 (see the petition online at www.ipetitions.com/petition/economicimpactsofCPSIA/index.html). “Without prudent regulation from the CPSC, the CPSIA will result in unintended and devastating consequences to manufacturers of children’s products that pose little to no risk of lead exposure to children,” the petition said. “Requiring expensive tests on inherently lead-free products to verify that they, in fact, don’t contain lead will only add financial burdens to small manufacturers—most of whom are already suffering from the current economic climate—while providing no improvement in consumer or product safety.” The petition urges the CPSC to exempt lead testing for those components on articles that are inherently lead-free and require testing for those components that may actually contain lead.

On Dec. 18, the National Association of Manufacturers’ Consumer Product Safety Commission Coalition submitted a 15-page petition for rule making addressing the lead limits in children’s products. The petition—which has been supported by groups such as the American Apparel & Footwear Association, National Retail Federation, Toy Industry Association and Fashion-Incubator.com—warns that without changes, the law will “create real confusion and hardships to the industry” and that “hundreds of thousands of materials and products may be banned.”

Still, Campbell said, manufacturers have not been taken completely by surprise by the law. Major retailers such as JCPenney and WalMart instructed their suppliers in May that all goods shipped should be certified prior to the Feb. 10 deadline. “We started testing everything in June so we would minimize our exposure,” she said.