LONDON FOG TO KEEP ONE U.S. PLANT OPEN

Byline: Joanna Ramey

WASHINGTON--Instead of shutting its remaining three U.S. factories as proposed, London Fog Industries said it has decided to keep one open as part of a new quick-response strategy designed to broaden its outerwear market share.
The announcement followed several months of negotiations between the company and Amalgamated Clothing and Textile Workers Union officials, during which London Fog executives expressed little optimism the factories, all in Maryland, would stay open.
"It took a great deal of creativity," said Douglas Hillman, president of the trade division of the Darien, Conn.-based company.
Keeping the factory open is expected to cost more than $4 million over the next two years, in addition to a $2 million investment to retrofit the remaining factory, located in Baltimore. In return, workers made a 45-cent-an-hour wage concession.
Hillman said between 225 and 250 workers will be retained and produce 220,000 women's and men's coats a year. Previously, 550,000 coats were produced at London Fog's three Maryland factories, employing 700 people. Instead of producing a wide range of styles, the Baltimore factory will focus on hot sellers, or roughly six or eight styles a season. This will enable the company to react within 10 days to retailers' reorders, while producing its initial, core inventory at its offshore factories, Hillman said.
"The key is to read the demand at retail," Hillman said. With this strategy, London Fog hopes to enlarge its market share by quickly filling orders for hot styles, he said. Hillman estimated it will cost $8 to $10 more per coat to produce in the U.S. than abroad. While the company will have to absorb some of the added cost, Hillman said low inventory at the manufacturer and retailers, in addition to increased volume, will help to defer the higher costs of domestic production.
London Fog coats sell for between $150 and $250 at retail. Hillman said there wasn't one single issue that kept London Fog from pulling up its manufacturing roots in the U.S. entirely, but rather a group of things that came together to formulate a quick-response strategy. Other changes will be use of modular manufacturing and work teams.
Carmen Papale, ACTWU Baltimore regional manager, said workers are rejuvenated by London Fog's plans. He said the wage rollback to $6.90 from $7.35 will be made up for by an increase in piece-rate pay since production will likely rise because workers will be manufacturing in teams and will have fewer style changes.
--Fairchild News Service

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