The Bay Area and the Northwest: riding the edge of tomorrow's trends

Bobbin, Sept, 1998 by Kathleen Desmarteau

From the Golden Gate Bridge to majestic Mount Rainier, there's a common consensus among sewn products executives in northern California and the Pacific Northwest: They love where they live.

The fact that they're making a living - and maybe even are at the top of their field in the goods they make or the brands they market - is icing on the cake. But amid the richness of their regions' cultural, metropolitan and natural wealth, there is indeed a very serious apparel and sewn products industry, churning out goods that bear some of the biggest names in the business and ring up tremendous sales.

Just think about the firms and brands that call San Francisco, CA, or the states of Oregon and Washington their home base: Levi Strauss & Co., Nike, The GAP, Jantzen, Columbia Sportswear and ESPRIT. And then there's Koret, Fritzi, Joe Boxer, Jessica McClintock, adidas[TM] America, Byer of California and the list goes on.

Without question, the industries of northern California and the Northwest are design and marketing hubs, oftentimes feeding outsourced production resources that crisscross the globe. In fact, the regions' producers were among the U.S. industry's first to establish extensive importing programs, including relationships with Asia Pacific sources going back more than 30 years.

But then again, the Bay area also has an extensive domestic contractor base, and the Northwest has a network of niche manufacturers, embroiderers and screenprinters, without which neither region's industry could flourish.

With such a dichotomy of interests at play, it's interesting to see the advantages and disadvantages of doing business from these West Coast vantage points - through the eyes of those engaged in it - and to consider their outlook for the future.

A Work Force That's a Cut Above

One of the greatest advantages of doing business in northern California and the Northwest, according to a variety of industry executives, is the highly skilled work forces both regions have to offer. Indeed, Bob Tandler, president and co-CEO of Fritzi California, maker of the popular You Babes and My Michelle brands, says if he had to name one key advantage of being based in San Francisco, it would be "access to high quality domestic sourcing with a very quick turn."

Contractors of the Bay area, especially, are known for their high quality workmanship, and outstanding record for labor law compliance. On the latter point, a Department of Labor (DOL) random survey found San Francisco's apparel makers to be 90 percent in compliance with labor laws (including 100 percent minimum wage compliance), compared with compliance percentages below the 50 percent mark in the Los Angeles, CA, area.

Or as Paul Gill, executive director of Made by the Bay Inc., likes to put it: "When you come to San Francisco, besides wearing flowers and ribbons in your hair, you're name isn't going to end up on the front page of the newspaper [for labor law violations]. ... We've got our act together in many ways that other parts of the country haven't."

Made by the Bay wants to keep it that way. The non-profit organization was established in late 1997 by an alliance of various elements of the Bay area's apparel community, and is closely aligned with the Northern California Chinese Garment Contractors Association (NCCGCA). Its goal is to encourage quality production and assist area factories in marketing themselves nationally and internationally. In addition to offering technical and quality control-related services, geared specifically to the needs and budgets of contractors, Made by the Bay has worked closely with the DOt to involve some 25 contractors in voluntary labor law compliance monitoring programs. In fact, the DOL provided active support for the formation of Made by the Bay, along with the City of San Francisco and the City College of San Francisco.

Estimates vary regarding the size of the Bay's contractor base, but San Francisco Fashion Industries (SFFI), one of the United States' oldest trade associations, reports they number about 350. This is in addition to approximately 300 branded manufacturers, which bring the industry's overall number of apparel firms to about 650, employing some 30,000. For comparison, the Northwest is estimated to have approximately 300 firms, including manufacturers, contractors, design and marketing houses, embroiderers and screenprinters.

The Bay area's contracting industry is owned and operated almost entirely by Chinese immigrants, many of whom hail from Hong Kong, where they honed their apparel-making skills. Patrick Cheung, chairman of the 110-member NCCGCA, emphasizes that his members' key competitive advantage is their ability to produce complicated garments, as opposed to the simpler styles typically manufactured by many of the "border shops" in or near Mexico.

Yet this skill and quality level does come with a price. San Francisco hourly wages tend to run higher than those of the Los Angeles industry (and some say eclipse those of New York, NY). Having an even greater impact is the skyrocketing cost of real estate in the city's traditional garment district because of the surge of high-tech and other industries eager to be located south of Market Street. Made by the Bay's Gill predicts more apparel makers will be moving to East Bay (Oakland, CA) and outlying Candlestick Park areas, as their downtown leases expire.