LOS ANGELES — What’s a reliable domestic contractor worth these days? Manufacturers here are reassessing that question, after being caught short during a six-month local production crunch this spring.
This story first appeared in the August 28, 2002 issue of WWD. Subscribe Today.
Many brands had trouble placing short-lead deliveries, finding themselves booted to the bottom of contractors’ lists in favor of larger producers or long-standing relationships. One industry executive privately called the labor shortage a “wake-up call.”
“People gripe about contractors and no loyalty, but we’re creating this situation as much as they are,” he said.
Now some vendors are realizing that, like sourcing good fabrics or hiring top design talent, investing in contractors pays dividends in quality and consistency. With the contractor base shrinking every year, some producers are finding it makes sense to arrange informal partnerships with cutting and sewing shops — setting them up with machinery, financing or job training, for example, in exchange for exclusive production, or preferential treatment.
“It’s become much more of a two-way street,” said Dac Clark, president of C&C Industries, the $75 million parent of the Rusty surfwear brand. “You need to be among a contractor’s top five [customers] — and you do that by becoming dependable and reliable to them.”
The attitude marks a shift in the rocky relationship between the often work-starved contractors here and domestic manufacturers that have been increasingly wooed by sophisticated producers overseas. The trust between contractors and vendors is still somewhat delicate. Tellingly, all vendors interviewed for this story did so on the condition that their contractors not be named. Vendors praised these “loyal” domestic factories that they’d invested in — but they didn’t want to tempt fate or human nature — by advertising these reliable shops to the industry at large.
Sean Barron and Joie Rucker, partners in the year-old contemporary label Joie, have partnered with three contractors near their Los Angeles headquarters. They’ve helped the shops purchase equipment specific to the label’s needs, and Joie funnels 75 percent of its orders their way. The remaining 25 percent is produced overseas.
“Our concept is to be real partners with them,” Rucker said. “They know that when we grow, they’ll grow, too.”
Barron said that kind of partnership became especially crucial after Sept. 11, when the fledgling contemporary firm needed all the goodwill it could get from fabric suppliers and factories. It’s paid off: sources estimate the rookie brand’s business will surpass the $12 million mark this year.
Designer Trina Turk, whose $15 million contemporary firm has “hit a growth spurt,” is negotiating with a longtime supplier to move to a bigger space and hire more sewers. In return, Turk’s firm will guarantee the shop a certain number of units.
The company has helped its contractors in other ways, including establishing a payment plan for equipment.
“The really good machines, like certain pressing machines, are prohibitively expensive for our contractors to buy,” Turk said. “So we buy them and deduct a small percentage from their payment each month. At the end, they own the machine.”
Turk’s firm produces 85 percent of its tailored ready-to-wear and Palm Springs-inspired sportswear domestically, which is remarkable in a market not known for sophisticated needlework. She credits the quality to vice president Lyn Lee’s day-to-day supervision of the shops.
“Lyn’s worked for a long time to teach these contractors to sew with the hand she wants,” Turk said. “She’s doesn’t just go into the shop, yell at the owner and leave. She’ll sit down with a sewer and show them how she wants it done. I’m really proud of the quality we’ve been able to produce in Southern California.”
Industry executives emphasized that neither philanthropy nor patriotic sentiment is behind the Made-in-the-USA push. Rather, domestic production is crucial for quick reorders or testing new trends. Most observers expect contractor loyalty to remain a key competitive advantage during Los Angeles’ booming first quarter when last-minute spring goods are produced.
“If we closed the chapter on local guys, we would definitely get stuck and other manufacturers would get stuck too,” said Steve Penn, vice president of production for swimwear powerhouse Apparel Ventures. “That’s my main reason for continuing to work on these relationships. You’re not going to get 100 percent offshore in a timely fashion.”
C&C’s Clark agrees. “Ten years ago, we were just running around to get the best price,” he said. “Today, consistent quality balances out price. [Producing] here means we can come back for a second round on a style that’s really doing well.”
C&C helped put one of its cutting shops into business several years ago, buying $20,000 worth of equipment, installing cutting tables and letting the shop operate from unused space in one of its warehouses.
The cutting shop owner “has his own building now and 10 times more capacity than when he started,” Clark said. “But he’s still doing most of our cutting for us.”
Georges Atlan, chief executive officer of denim contractor Pride Jeans, credits Guess Inc. and Seven Jeans for helping him launch and build his firm in a difficult 2001.
His goal is to be a full-package operation, which will make him more competitive with other denim producers. Initially, he could only afford to start a sewing shop. A few big clients helped Atlan by giving the shop piece goods. Now he has his own cutting room.
Bubblegum USA’s chief operating officer, Ken Spiegel, said the denim brand’s decision to finance equipment and construction costs for several of its local contractors has created enormous loyalty between the companies, even though the contractors have long since worked off the debt.
“We support them year-round with product and they work 100 percent for us,” he said, adding that the automated factories help Bubblegum to keep costs down.
Joe Rodriguez, executive director of the Los Angeles Garment Contractors Association, believes AB633, the state law that holds manufacturers jointly liable with contractors for labor violations, may have brought vendors and factories into closer alliance.
“If there’s any good to come out of AB633, this could be one of the upsides,” he said. “Companies realize there’s so much liability with bad contractors, they may be concentrating on better relationships with the good ones.”
Of course, for all the success, there’s at least one tale illuminating the pitfalls of partnership. Designer Christian de Castelnau recalled how his previous company, Idecast, pumped money into a local factory, growing the operation from 20 to 120 machines.
“We advanced the owner big amounts of money,” said de Castelnau. “One day, he started doing private label for Contempo Casuals and we didn’t get the time of day.”
De Castelnau said he’s trying to avoid such an entanglement with his latest project, Crystal, a contemporary denim line, adding, “I have mixed feelings. If we can get the work done with quality, then I’d rather not get so involved again.”
Other players said they’re willing to give partnerships a try, but the best shops have their dance cards full.
“A loyal, consistent contractor would be worth a lot to me,” reflected contemporary designer Corey Lynn Calter. “But it’s hard to know whom to trust. These days, a lot of the decent contractors are really busy. I’m almost suspicious when a shop says they can take me right away. I wonder why they’re not already taken.”