Clothing Business a Major Player in Los Angeles Manufacturing
Apparel and textile manufacturing in Los Angeles contributed $40.3 billion to the economy in 2010, up from $22.8 billion in 1997.
The industry accomplished that despite reducing its work force by nearly half, said Ilse Metchek, president of the California Fashion Association, a trade group that represents hundreds of apparel- and textile-related entities in the state.
The Los Angeles area has become the top apparel-manufacturing spot in the United States. In 2010, the industry employed 128,148 people in the Southern California region, which includes Orange County and San Diego, compared with 207,318 workers in 1997.
“People are focusing on what they do best and outsourcing the rest,” said Metchek, who was speaking at the “2012 West Coast Manufacturing Conference,” held at the Millennium Biltmore Hotel in downtown Los Angeles on April 11.
Metchek headed a panel of Los Angeles apparel manufacturers and retailers discussing the challenges and direction of an industry in an area that has overtaken New York as the clothing-manufacturing center of the United States.
Joining Metchek on the panel were Lonnie Kane, president of womenswear maker Karen Kane; Paula Schneider, the new chief executive at juniorswear manufacturer Big Strike Inc.; and Sung Won Sohn, vice chairman of fast-fashion retailer Forever 21.
The industry is evolving, but manufacturers and retailers are still trying to fully take advantage of e-commerce to increase their sales.
Kane noted that for the first time, his company, this year, hired an account executive devoted exclusively to e-commerce. She is only 26 years old but understands social media and working with the Internet. “Social media is important,” Kane said.
His company is also working on e-commerce sales with its department-store customers, such as Dillard’s and Macy’s, but the company is taking the photography in-house to guarantee quality, he said.
At Forever 21, e-commerce is one of the fastest-growing areas in the company. The fast-fashion retailer, whose revenues in 2011 were $2.6 billion, gets Internet orders from around the world, including countries that have no Forever 21 stores. “However, we do not see it replacing the traditional way of shopping,” Sohn said.He noted that Forever 21 stores have become destinations, with pleasing interior design and lots of loud music. The retailer’s merchandise changes about every three to four weeks and is sold at bargain-basement prices that average around $25.Major global expansion plans are underway. This summer, the company is opening two stores in China, one in Beijing and another in Shanghai.
Recently, the company opened a large flagship store in Hong Kong. China, Japan and South Korea are major growing spots in Asia.
Many Los Angeles apparel companies design their products here and produce them overseas.But in recent years, the Karen Kane label has pulled away from China because of production problems and cost. About 80 percent of its collection is made in Los Angeles.
That shift turned into a sales boon. Many retailers, including Macy’s, are clamoring for “Made in America” products.
One department store did a big “Made in America” promotion, showing a large picture of Karen Kane in her design room and highlighting the label’s “Made in USA” roots.The concept has become so popular that the Karen Kane brand now has a hangtag that says “Made in L.A.”
Forever 21 does some local production, too, but the bulk is done in China and other Asian countries because their price points are so low. “I’m an economist by training,” said Forever 21’s Sohn. “There is a comparative advantage to producing what you are good at.” China is good at producing apparel and is still an option even though wages are rising.
About 70 percent of Big Strike’s production, which includes its HeartSoul label, is done overseas. “Manufacturing in Los Angeles has speed, but my first choice is Vietnam,” Schneider said.
Still, there are challenges to producing in California, such as Proposition 65.
The state law requires apparel companies to post warning labels on their product or on their premises if consumers or employees are exposed to a list of dangerous chemicals. Those could include lead in zippers or cadmium in jewelry.Metchek said there are “bounty hunters” searching for apparel makers and retailers that may be violating Proposition 65. Suing parties keep 25 percent of the assessed penalty.
In January, 64 notices were issued to companies that include retailer Hot Topic, clothing maker American Apparel, surfwear manufacturer Hurley International and retail chain Target Corp. Another hot-button issue for the apparel industry is Senate Bill 3728, the Innovative Design Protection and Piracy Prevention Act, which aims to prevent apparel designs from being copied during a three-year period. The federal bill has support from the Council of Fashion Designers of America and the American Apparel and Footwear Association. The California Fashion Association opposes the bill.—Deborah Belgum
