Byline: Rose-Marie Turk

LOS ANGELES--NAFTA, downsizing, company restructuring and new approaches to the demands of retailers are helping junior manufacturers rebound from what some say was a very bad year.
The mood ranges from guarded optimism to strong enthusiasm.
Weighing in on the upbeat side is Don Shapiro, president of Action West, El Paso, Tex. He said 1995 was "the only difficult year we've had in the 25 years we've been in business," but a reconfiguration of the business has led to brisk growth. Citing a 25 percent increase in production, he projected the company would surpass $40 million this year.
To get there, he said, "We looked at the whole operation, from sales to merchandising to design to cost-cutting--everything. Initially, 300 jobs, including some middle-management positions, were eliminated, but the company has since rehired 200."
Helping the speedy recovery is the company's totally vertical operation, which, Shapiro noted, includes its own laundries. Maintaining control over laundry and finishing helps the company turn goods faster.
The effects of NAFTA have been positive.
"Although the company has had a Mexico posture for 18 years, we're doing more sewing in Mexico than ever before," he explained, "because we can do it with fewer restrictions than before. The increase in volume has helped our bottom line."
Following an industry trend, the company has moved away from basics into fashion-oriented, more highly constructed garments.
"Shorts, for example, have more pockets, darts and zippers," Shapiro said. "Price points have stayed pretty much the same. Instead of lowering them, we're putting more quality in the garment, using better fabrics and more sophisticated washes."
Although business has become "real tough," according to Paul Sung, president of Baxis here, the four-year-old jeans maker is growing and hiring. With sales up at least 30 percent, he expects a volume increase to about $15 million this year from $9 million last year.
Citing trends that affect business, Sung said consumers--including 13 and 14-year-olds--have become very smart in what they buy.
"They've got the retailers on their toes. Junior customers are very sophisticated people. They're very aware of quality, and at the same time, they know what is a bargain," he said.
Responding to retailers, who are buying too close to delivery and are trying to scramble for hot sellers, Sung said his company is playing the game like everyone else.
"We're selling current styles that have checked already and trying to work with buyers and to cater to their special needs," he added.
Fashion-forward garments, new finishes and competitive pricing of $8 to $25 are helping spur growth, Sung said, adding he is looking to the Orient to find a well-priced sandblasted denim fabric.
A number of factors, including expanded production in Mexico, account for growth at Chazz, an eight-year-old company here. Calling business very good, vice president Chris Bryer said he foresees an increase in volume to $140 million this year from $115 million last year.
Bryer said the company, which has lowered prices over the last few years to the current $4 to $16 range, is offering more fashionable bodies, such as pinwale corduroy wide-leg jeans and oversized zip-front jackets.
"The junior customer is very brand loyal, although I don't think it's the old days," he said. "There's label loyalty, but it's different. The driving force is the fashion, not the name."
"Cautiously optimistic" is how Crystal Ku, manager of Krystal K. International, maker of junior sportswear and dresses, describes the company's outlook. Krystal K. is based on the outskirts of Los Angeles in City of Industry.
Projecting volume will remain flat at $20 million, Ku noted the junior business has become very item-driven.
"There isn't really a major trend," she said. "There are 15 to 20 trends, but not one really strong one, and that has an effect on business. Reorder business makes everyone profitable. But with this, everything moves so fast, you can't repeat anything. And on top of it, you have to be very price-conscious and price-sensitive."
Refusing to believe price is the only issue, Ku said the company looks first at the quality of the product, then at the price, for anything that can be done to make it more attractive. Prices range from $7 for leggings to $24 for dresses. Among items booking well are short lace-up dresses, boot-leg lace-up pants and lace-up unitards in black, brown or midnight.
To satisfy very careful retailers and smarter consumers, Ku said, "We're reengineering the company. We definitely can't have any waste. Everyone has to work harder than before. We watch our budget carefully. We spend more on research and development to make sure our product comes out right."
She predicts the industry upheaval will last for at least another year. "Retailers have not settled down yet," she said. "There are a lot of changes among them, a lot of restructuring. I think it will get better around 1998."

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