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Posted Date: 8/28/2012

It's Déjà vu for Western Hemisphere Manufacturing

By Susan S. Nichols, Apparel publisher
For the second year in a row, Sourcing at MAGIC, held last month in Las Vegas alongside MAGIC and its related retail buying shows, put an emphasis on sourcing in the Americas, and included for the first time a Made in L.A. pavilion, featuring Los Angeles-based brands, manufacturers, textile resources and private-label developers.

Feedback from many apparel producers indicated that indeed there is an increased interest in bringing some currently outsourced apparel programs back to the Western Hemisphere, primarily due to both rising costs and capacity issues in China, as well as to tackle speed-to-market goals.

Ken Mangone, executive vice president, brand management, design and sourcing, JCPenney, noted that a "different" sourcing environment is in place as compared to seven or eight years ago when JCP shuttered sourcing offices in Mexico and Guatemala. Today, those offices have been reopened to "show support for the region," and Mangone says the significant benefits are speed to market (as much as eight weeks saved), duty-free status, flexibility and emerging categories.

Steve DiBlasi, vice president, global sourcing, Lanier/Oxford, says his firm has balanced its global production, with locales including Asia, Haiti, Mexico and Costa Rica. He says Mexico offers the lowest cost in the world for Lanier/Oxford to make a wool suit, adding that a new product can be developed and in the stores in four months.

Gregg Pavalon, CEO of Illinois-based ApparelWorks International, who has been producing globally for more than 28 years, said he was seeing good traffic and that "all indications are that people are coming back to this hemisphere." In fact, Pavalon said he has been receiving many calls for the past six months from large manufacturers and retailers seeking to place work in the Caribbean and Latin America.

Another industry veteran, Graham Anderton, founder of Aztex Trading in Mexico City, is seeing new deals with large U.S. retailers. He wants the region to work as a whole to attract business. "Our thinking is that if we unify the region as a trading bloc, much like the Asians did to grab our business in the first place, we can help bring that business back. Nobody is going to come to the region for one country…but as a region we have almost everything to offer. It's time to regroup and take advantage of our closeness to the consumer."

Los Angeles aims to be a sourcing destination as well, and made a splashy debut with its new pavilion and appearances by its Mayor, Antonio Villaraigosa. Along with U.S. Department of Commerce Undersecretary Franciso Sánchez (back for a second year to promote U.S. exports), Villaraigosa helped kick off the event and spoke of the economic significance of L.A.'s apparel industry, which he said has added 3,200 jobs in the past year and employs 100,000 directly. He also announced, in conjunction with the LA Regional Export Council, plans for a MADE IN L.A. database of apparel and related firms, set for release in six months. The database is expected to be a model for a similar national registry, which Sánchez announced. (In this writer's opinion, a database for L.A. could make sense, but the U.S. government's attempt to develop a national register would duplicate more robust private efforts.)

L.A. industry leader Lonnie Kane, CEO, Karen Kane, which is producing 80 percent of its volume there and is committed to stay, called for the government to address such key issues as defining what "made in U.S.A." means, since it differs in California from other states. He also said the challenge in finding production labor is the "80-pound elephant in the room regarding made in the U.S.A…We need to change our immigration laws in order to get people working behind a sewing machine." Kane said it's imperative to address these issues because as much as producing in the United States can be successful, the latest "hype will die, as all hype does."

One thing is clear: to win new business in this hemisphere, best strike while the iron is hot.

Susan S. Nichols is publisher of Apparel and can be reached at snichols@apparelmag.com.

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