Location, location, location. It could be the mantra for JA Apparel Corp., maker of Joseph Abboud suits. The company has defied conventional wisdom by keeping its manufacturing in New Bedford, Mass., and simultaneously increasing revenues and profitability.
The 21-year-old company decided to take advantage of its proximity to its market, and switched from conventional manufacturing to a more efficient style inspired by Japanese lean manufacturing, such as Toyota’s. The company also opened a distribution center closer to its factory to speed up shipping.
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Now it can produce and ship a made-to-measure suit in about one week. It used to take the company about four weeks to turn out one suit. The suits retail for $695 to $995. Made-to-measure suits are a quickly growing part of the business.
The speed “increases turnover and generates cash,” said Anthony Sapienza, president of JA Apparel Corp.’s Joseph Abboud Manufacturing Corp. Fast turnaround time is particularly useful for quickly filling replenishment orders, which represent sales that might otherwise be lost.
In the past, workers were paid by the piece. Now they are rewarded as a team and meet with management to solve problems and speed up the process. The average worker earns about $12 an hour, including a full union package of benefits.
“Eventually, we will save money with reduced inventory,” Sapienza said. The company has considered moving overseas, but Mexico and China cannot provide the quality JA requires, even though the cost of labor is less. In Mexico, for example, workers earn $1 to $3 an hour.
“We still think we can be more efficient and take advantage of the proximity of our distribution center and where we sell,” said Sapienza.
The company also makes coats, boys’ clothing and housewares. It plans to expand into fragrance and women’s clothing, which will be produced offshore.
New Bedford was traditionally an area where men’s suits were made, and the JA factory is the last tailored clothing maker in Massachusetts. The factory employs 600 people and added 90 workers last year.
The company has grown from $120 million in 2004 to $300 million in 2006. It predicts revenues will reach $400 million this year. Earnings before taxes have been growing at about 20 percent a year, and are expected to increase in the double digits this year, said Sapienza.
The company looked into using body scanners to measure customers for suits, but Marty Staff, president and ceo of JA Apparel Corp., said, “We don’t think it works yet.”