SEATTLE — Cascade West, Washington State’s last large-scale outdoor apparel contractor, once occupied four floors here in what is now the headquarters of Starbucks, the world’s leading specialty coffee retailer.

As fleece has given way to frappucinos, Cascade West closed in December and plans to auction its machinery next month. The company and its plant in Puyallup, 35 miles south of Seattle, are the latest casualties of outsourcing. The demise is part of a decade-long decline in Northwest U.S. apparel manufacturing as contracts from firms such as Eddie Bauer, the North Face, REI and Lands’ End evaporated because of competition with discount retailers that resulted in production going to cheaper operations in countries such as Mexico and China.

While Cascade West and others have succumbed, many industry executives said the future of the Northwest apparel sector is in small-scale, high-end niche apparel companies and textile makers such as Beaverton, Ore.-based InSport, a specialty athletic-apparel firm that makes 98 percent of its line at three Northwest factories in Salem and Hillboro, Ore., as well as Vancouver, Wash.

InSport, which brings in $10 millionto $20 million in annual sales contracts, does all cutting and sewing in the Northwest, except for its performance outerwear. The outerwear accounts for 2 percent of sales and is spread among contractors in Macau, Bangladesh and China.?

“The reason it works for us is because we’re a small second- and third-tier player,” said InSport president Eric Merk. “We’re important to a local contractor where we wouldn’t be to one offshore.”

There has been a 50 percent drop in the labor force for Washington state apparel manufacturing since 1994, according to the state’s Employment Security Department. Those seasonally adjusted figures, excluding the textile manufacturing and retail sector, show 4,693 employees for the third quarter of 1993. During the same period of 2003, the number had fallen to 2,259 after a peak of 5,402 workers in the third quarter of 1997.

“In percentage terms, that’s worse than Boeing,’’ the aircraft maker formerly based in Washington, “though the absolute numbers are smaller,” said Bret Bertolin, senior economic forecaster for the state. “You don’t see that very often in that span of time, and it reflects what’s been going on nationally.”?InSport, which ships 1.3 million units annually, is bucking the trend.

The company has closed its quality control department to save money, opting to have one employee drop in at the plants weekly to inspect production in process without a decline in the level of work. This, along with keeping the manufacturing close to home, has allowed for shorter lead times and lower minimum production amounts, Merk said.

Yet a sudden spike in sales might spell trouble. “If someone placed an order for 100,000 units per style, instead of the typical 2,000 to 6,000 units, we’d have to consider taking it offshore” because it would be more cost effective given the volume, he said.

Another company, Portland-based Pendleton Woolen Mills, maker of blankets and sportswear, moved its sewing facilities out of the region in the mid-Nineties to other U.S. locations, as well as Mexico and the Caribbean, but invested $50 million into two mills in Pendleton, Ore., and Washougal, Wash., to keep production of its iconic fabric in the Northwest. It results in shorter lead times and improved quality control.

Pendleton relies on a close in-house relationship with fabric designers and the production department to keep costs streamlined, and also employs its own wool buyer to search for the appropriate weight of the material.

That model “keeps the efficiency that affords us the ability to have a mill in Washougal,” said women’s wear division manager Pat Fowler. “And our mill provides 100 percent of the wool and wool-blend fabrics that are used in the women’s wear apparel line.”

Like InSport, Seattle-based C.C. Filson’s business keeps manufacturing jobs close to home and thrives. The company, which sells coats, pants, luggage, belts and vests to anglers, hunters and outdoorsmen, justifies the higher prices caused by using American manufacturers and distinguishes itself from large, cheaper brands with its tag line, “Might as Well Have the Best.”

Filson has never planned outsourcing, except for its long-john manufacturer in Canada because the company couldn’t locate a U.S. source to make 100 percent wool long johns, Filson spokesman Terri Young said.

Filson’s products, which retail from $60 for a leather-and-stainless steel flask to $200 for hunting vests and $500 luggage, are sold at more than 1,500 U.S. specialty outdoor sporting retailers such as Kenco in Kingston, N.Y., and the Wharf in Ventura, Calif. ?“We make a quality garment, and the customer understands and appreciates it and is willing to pay,” Young said.

In contrast, Cascade West relied on business from large retailers whose customer base shopped for bargains rather than craftsmanship. Company president Kory O’Brien reported a drop of almost 70 percent in sales since 1998, six years after the 1992 North American Free Trade Agreement. Increased globalization has meant the migration of jobs not only out of the U.S., but also out of North America entirely.

The few remaining contractors and manufacturers in the region face an uphill battle.

Washington’s unemployment rate remains among the nation’s highest, at 6.3 percent, compared with the national average of 5.6 percent. Neighboring Oregon, also once an apparel and textile manufacturing center, stands at 6.7 percent.

Chami Ro, general manager of Chami Design Inc., a manufacturing contractor in Tacoma, Wash., employs 40 to 50 workers, but said that five years ago the company had twice that number. Her workers have not had salary boosts in three years.??

The company closings have had “a very severe effect locally because communities are no longer viable and you begin to see depression because no new industries are replacing it,” said Margaret Levi, professor of labor studies and political science at the University of Washington.

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