State of the union

The trendiness and timelessness of made in America menswear.

By Christian Chensvold

When Randolph Ashton founded Collared Greens in 2008, he was confident consumers would respond to his mission of sustainable menswear: polo shirts made from organic cotton, neckties packaged with post-consumer recycled paper, with a portion of proceeds going to environmental initiatives. And everything, of course, would be made in the United States of America.

Though he calls customer feedback “fantastic,” what Ashton didn’t anticipate was the difficulty in getting products made in post-outsourced America. With so few factories left in the U.S., the ones that remain are booked solid. His polo shirt maker, based in Lamar, South Carolina, can only give Ashton a fixed amount of production time each year. “And once we tap that we’re out of luck for the remainder of the year,” says Ashton. Likewise, his tie maker, Mane in New York, can only find time towards the end of the season, so Ashton has to work extra hard preparing for when his brief time slot opens. “We have to put in hard work up front so everything’s prepared and when the manufacturer has a little time, he can crank us out,” he says.

While Collared Greens has so far been able to meet the demand of its retail accounts, Ashton worries about being able to grow the company with so few domestic production options for a start-up brand. He’s unwillingly the perfect example of what the country faces if it wants to bring back manufacturing: here’s an entrepreneur with the will and the vision to bring innovative products to the marketplace, but without the infrastructure to support his own American dream.

For brands committed to domestic production, right now is both the best of times and the worst of times. While brands reap the rewards of the broader social awareness about domestic products and jobs (even if quantifying the sales benefit is difficult), they also struggle with an aging workforce difficult to replenish, skyrocketing costs in everything from raw materials to labor, and, in Collared Greens’ case, the challenge of finding factories with the capacity to handle new clients.

The plot thickens: Even when factories can handle increased production, they need workers. The steady loss of apparel manufacturing jobs has led workers to acquire other, more marketable skills. With little demand for the apparel industry skill set, the workforce has not been replenished. This is the chief concern at Ike Behar, which has seen growth of 20 percent in its custom shirt program. But its Miami factory is full of aging workers, including a head cutter who’s put in 30 years with the company and is near retirement. “It’s harder and harder to manufacture in the U.S. because of the workforce,” says company president Alan Behar. “The skill set for the needle arts for the next generation doesn’t exist. You need people who know how to function as tailors, seamstresses, to operate sophisticated sewing machines, and to cut by hand. We’re concerned, as we couldn’t aggressively expand production because of the worker situation.”

At Lotuff Leather, co-owner Joe Lotuff has taken on the mission of showing young men the career option of being a leather artisan. “Our challenge is educating a whole new group of people to be proficient in the trade,” says Lotuff, whose factory currently has 10 workers able to make about 50 bags and briefcases per week—not enough to meet demand. Lotuff needs workers with the ability to cut leather hides, both for function (certain sections of cowhide work better for certain parts of a handbag), as well as beauty. “You have to find somebody who cares,” he says. “We’re selling a $600 to $1,500 bag with our name on it, and it’s not something to be trifled with. You can imagine having a neophyte cut 300 feet of beautiful leather and none of it is usable because there’s a flaw on every piece. It would be enough to make you rip your hair out.”

Currently Lotuff and his partner are cutting all the leather themselves while training apprentices in the craft of selecting, dyeing and stretching hides—and hoping they stick with it. “With so many people out of work, when you place an ad you can imagine all the types of applicants you get. We look at 10 people and hire one if we’re lucky, and he may or may not last.”

Out in Carmel, California it’s a different story at the headquarters of Robert Talbott. Though it outsources certain items to factories in Canada, Europe and Asia, much of its line is made in its Monterey factory, which is capable of handling far more capacity. “We are looking to increase U.S. production,” says president Bob Corliss. “We have a great facility that is not fully utilized, and we’re interested in making everything here when it comes to apparel.”

The pros and cons of manufacturing domestically versus overseas are pretty straightforward. The tricky part is the judgment call as to which side weighs more heavily. On the surface it’s less expensive to manufacture in Asia, says Corliss, but it’s also more of a management challenge. “You have to commit to a certain number of finished goods well in advance, provide capital up front, and rely on someone with whom you don’t have supply-chain visibility every single day.

“Is going overseas cheaper from an input perspective of dollars and cents? Yes,” continues Corliss. “But when you look at it from an output point of view, does being made in the U.S. have added pull? I think the answer is yes. Our overall direction is to come back.”

Robert Talbott would require new equipment and labor skills to increase its production capacity, and some things—such as shoes and leathergoods—will never make sense to produce domestically. But bringing back made in America is a gradual process, says Corliss. “You didn’t flip a switch to go offshore, and you can’t flip a switch to come back.”

There is one light that can be instantly turned on, and that’s the marketing message that a brand is made in the United States. When Corliss joined Robert Talbott as president two years ago, he immediately updated labels, packaging and ticketing to broadcast the made in USA message. “I don’t think the company played up the fact that it was made in the USA enough,” Corliss says. “There’s a higher degree of awareness now, and the company had unused assets, such as its history of manufacturing here since 1950.”

Domestic manufacturing is also business as usual for Schott NYC, maker of fine leather jackets, which is celebrating its 100th anniversary this year. It too has taken advantage of the new awareness about domestically made apparel by upgrading its hangtags to more emphatically state its products’ domestic provenance.

But chief operating officer Jason Schott, the fourth generation of his family to work in the business, is quick to note the growing bifurcation between the heritage Americana fashion trend—the kind of thing taken up by Brooklyn hipsters the past few years and showcased on popular Americana blogs such as A Continuous Lean—and the broader issue of domestic manufacturing. “There is a heritage Americana fashion trend that will wax and wane as all trends do,” says Schott. “But we’re starting to see the distinction between this and the concept of ‘made in America,’ which is not a trend.”

This distinction is also sorting out the brands that provide real jobs in real American factories and the ones that are heritage in name only. “The Americana trend started with legitimate heritage brands,” says Schott, “but lately some have stolen the heritage identity by simply reinventing brands that existed a hundred years ago. It may be heritage-inspired product, but it’s not made in this country. That’s when you started to see the difference between true heritage brands and the trend-driven ones that are invented and marketed. Heritage is not a marketing ploy for us.”

For Agave Denim founder Jeff Shafer, made in America awareness in the apparel industry is absolutely a guy thing. But he sees a third piece of the puzzle. In addition to the heritage Americana trend and the bigger issue of domestic manufacturing jobs, there’s another hot-button issue for clothing manufacturers: the speed-to-market benefit for the fast-moving women’s contemporary market.

Though it began as a menswear line, Shafer now produces for both men and women and manufacturing in Los Angeles gives him tremendous nimbleness. “I can see something and technically ship it 60 days from now,” he says, “so I can respond to trends and consumer preferences and not have to make a nine-month, up-front commitment. Also, I know what the value of my dollar is nine months from now, but not in China.”

That doesn’t mean remaining an American-made brand is a cakewalk on a catwalk. “It’s harder than ever,” says Shafer. “Over the past five years we’ve seen massive cost inflation combined with retail price compression. Energy, labor, raw materials—it’s like apples and oranges from where it was five years ago.” Since Shafer refuses to compromise on quality (he asserts that premium denim can only come from the U.S., Japan or Italy), he must accept lower margins. “There are many brands in the premium category,” he says, “that are selling jeans for $150 to $200 and the fabric is from China, Turkey and Pakistan. We have not gone that route.”

While the internal benefits of domestic manufacturing are easily measured—close proximity to factory, better speed to market, fewer advance commitments—the actual sales benefit is very difficult to measure, says Bill Thomas of Bills Khakis, which has operated a factory in Reading, Pennsylvania since 1990. While Thomas has seen sales growth over the past few years despite the recession, it’s impossible to say how much can be attributed to a newfound appreciation for the brand’s made in the U.S. status, especially as that’s a message Bills Khakis doesn’t bullhorn. “We’ve never led with the flag,” says Thomas, “though we’ve proudly had the flag by our side. I’d like to think people buy Bills Khakis because it’s a great product, but by the way, if it makes you feel better, they’re also made in the USA.”

The only way to ascertain whether made in America really provides a sales boost, Thomas says, would be to perform a highly controlled study with products both foreign and domestic that are equally appealing and equally marketed to determine if the domestic one outsells its imported rival. “I believe being made in America helps,” says Thomas, “but I can’t show how. It’s tough to speak to its actual value.”

Which brings us back to square one: product. You can hoist the flag of made in America on all your hangtags, print ads and social media messages, but without compelling product the message will fall on deaf ears. “It’s all about product,” says Allen Edmonds CEO Paul Grangaard. “Nobody’s going to buy something made in America if they don’t like it. The automobile industry learned that pretty painfully in the ’70s and ’80s.”

Several years ago the Wisconsin-based shoemaker began a major overhaul of its product portfolio, deepening its dress shoe offerings and significantly widening its casual shoe selection. The result was record sales for 2011 and a further 20 percent increase for 2012. “One of the cylinders firing that is clearly made in the USA,” says Grangaard, continuing the automotive analogy, “but you need more than one cylinder to get the car to move.”

For the past 20 years the Allen Edmonds customer has come to value the brand for being one of the last remaining American shoemakers, Grangaard says, and with that has come tremendous loyalty. “Made in the USA is not new to our customer base,” says Grangaard, “but it’s new in that it’s getting a lot of press, which is spreading out to newer customers who are discovering us because we’re made here.” To help lure these new customers and more emphatically state its domestic roots, Allen Edmonds recently introduced the tagline “The Great American Shoe Company.”

During its record growth phase Allen Edmonds has added over 200 employees. Because of its location in Milwaukee, a city with longstanding manufacturing roots, finding workers skilled at hand labor has not been difficult, Grangaard says. It’s the cost of labor that’s the challenging part. “We’re lucky to be selling a shoe with tremendous value that can last up to 20 years, and because of that we’re able to get our higher labor cost built into the cost of the shoe more easily than if we were making glued-on, rubber-bottom shoes.”

Domestic labor costs are harder to manage than ever, he continues, due to the combination of wages, 401(K) contributions, and ever-increasing healthcare costs. “Chinese and Indian plants, where 90 percent of shoes bought in the U.S. are made, don’t have our benefits costs and their workers are paid a fraction of ours.” Yet what really concerns Grangaard are big economic issues such as the fiscal cliff and euro crisis, things that could curtail consumers’ willingness to spend $300 to $500 on a pair of shoes. “If those things don’t get resolved satisfactorily in 2013, it’s going to weigh down on our customer base. That’s what keeps me awake at night—our customers being kept awake at night.”

But closer to home, on the floors of America’s last standing factories, Grangaard sees the rays of a bright new dawn shining through the windows. “The cost of energy is moving in our favor thanks to things like fracking, which I know some people don’t like. But this is a huge opportunity for our country to get a competitive advantage for manufacturers by lowering our energy cost relative to the rest of the world. Also, the cost differential on the labor side is closing as people in the developing world assert themselves for better pay.

“I think American manufacturing is in the early stage of a major rebound,” Grangaard says confidently, “becoming more competitive all the time, and I’m very excited about it.”

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