U.S. Contractors Diversify

Bobbin, Dec, 1999 by Jules Abend

U.S. apparel contractors have become very resourceful in their diversification beyond the cut-make-trim business. It's been a necessary evolution in their uphill battle to stay in the game in the face of abandonment by many of their traditional customers.

there's no way to sugarcoat the facts. The U.S. apparel contracting industry was forced to swallow a bitter pill when NAFTA went into effect on Jan. 1,1994.

During the intervening period, the United States' domestic cut-make-trim (CMT), contract-for-labor community declined from nearly 25,000 companies to about 12,000 companies, according to best estimates. In parallel, many U.S. manufacturers -- which were already chasing cheap labor in Asia -- moved south of the border to take advantage of NAFTA.

Obviously, the effect on garment sewers in contractor-hub regions has been profound. As an example, South Carolina's apparel work force alone has tumbled from 29,000 to less than 14,000 since NAFTA was ratified.

That said, and considering the repeated hits contractors have taken over the years, some of the survivors have devised new strategies to keep their businesses alive, and as a result, did fairly well in 1999. Still, the year was a mixed bag for the segment overall. As one contractor puts it: "It could have been worse."

Although many in the U.S. producer base maintain that there will always be a need for domestic apparel contractors, what the industry will look like nationally in the new millennium, both in numbers and direction, is uncertain.

U.S. Contracting Associations: Finding New Ways to Stay in the Game

In the face of increasing global competition, associations and organizations that represent U.S. contractors are working hard to ensure the survival -- and prosperity -- of the remaining companies on their membership rosters by being creative and encouraging members to think outside of the dotted lines.

In the South ...

American Apparel Producers' Network

The reinvention of the Atlanta, GA-based American Apparel Producers' Network (AAPN) began before the organization changed its name. (AAPN formerly was known as the American Apparel Contractors Association.)

Since the advent of NAFTA, Mike Todaro, AAPN's managing director, has been striving to create an Internet commerce presence to revitalize the group, which has seen its membership drop from 350 to 175 over the past five years.

His electronic efforts culminated in 1996 with the launch of a not-for-profit site, usawear.org, and not long after, the introduction of a for-profit site, usawear.com. Todaro, who stresses that marketing is essential in the current industry climate, declares: "I have been urging the members for five years that the Net would payoff. And those that have gone on-line with us, inexpensively, got business as a result. And we can prove it!"

For $500, a member can be included in the AAPN's on-line database, which offers 60 fields of data, under 200 different categories of goods and services. Information is updated weekly if companies send changes to the AAPN. For an additional $450, AAPN will provide the member with a Web site.

In other moves, under a private venture, Todaro created and registered a brand called [@usawear.sup.TM] and AAPN also is making several dozen different garments for Habitat for Humanity under the Habitat USA label.

Most recently, the AAPN ventured into the direct-to-consumer business by working with a member to open its first virtual store, which is selling bib overalls. In the first two weeks, sales reached $800. As Todaro recounts: "We put [the site] on Yahoo without announcing a thing, and within hours we got our first order. I got an e-mail, I sent the e-mail to the factory, the pants were shipped, the credit card was processed [through Yahoo] and we cut a check to the factory. I don't know what could be easier than that."

A second virtual store is now selling sweaters, and at press time, Todaro expected to have a dozen additional "e-tail" sites up by Thanksgiving, representing a variety of members' lines. The AAPN charges $50 a month, or 6 percent of sales, whichever is larger, to manage the Web business. As he sees the future for U.S. producers, it's not a question of whether they should stay with CMT versus offering full packages. The push is to develop full package product and sell on the Internet, he concludes.

SEAMS

If Todaro is looking for solutions to energize contractors, so too is Sarah Friedman, executive director of the SEAMS Association.

SEAMS, which had 400 on its rolls in 1994 but now maintains about 200 members, also features its members on a Web site (www.seams.org), and Friedman notes that "Net activity is getting stronger all the time."

While the association has been able to attract some newcomers, Friedman acknowledges that it has been rough going for her members. As part of one strategy to help them, the Columbia, SC-based group is working with 14 South Carolina state agencies, including the governor's office, to build support. (See "They Do Not Go Gently," Bobbin, September 1999.)