It’s been more than 15 years, and Rick Helfenbein still doesn’t have a job description.
But Helfenbein, president of Luen Thai USA, seems to have figured out what it entails to run the U.S. division of the Hong Kong-based manufacturing and sourcing giant. Although that’s not to say it isn’t complicated, the executive noted in an interview at his corner office on Madison Avenue.“I first met Henry Tan in 1998,” said Helfenbein, referring to the chief executive officer of Luen Thai Holdings Ltd. “I was working for a U.S. textile mill that wanted to be vertical in Mexico under NAFTA [the North American Free Trade Agreement] because I had done those types of programs a few times. Henry was very interested in expanding in Central America and I was recommended to him as a consultant in that area.”
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Helfenbein then took a two-week trip with Tan, visiting American textile mills and facilities in Mexico.
“Then I didn’t hear from him for about a year,” Helfenbein recalled. “He called me up one day and said, ‘I really enjoyed that trip we took.’ And I said, ‘Have you done anything yet?’ and he said, ‘Not really,’ so I said, ‘What can I help you with?’ He said, ‘We’re here in Asia, you’re there in the U.S. and all our customers are in the U.S. I’d really like to have somebody on board Stateside who can help us develop our customer base and deal with issues of importance there.’ I said, ‘I’m very interested…what exactly do you want me to do?’ He said, ‘I really don’t know, I just know we need somebody.’”
So, Helfenbein said with some amusement, “I’ve spent the last 15 years under a job description of ‘I really don’t know, but this will grow over time.’”
When he started with the company in late 1999, it was generating annual sales of about $330 million, with three factories and a few good customers in the U.S.
“Today, 15 years later, we’re now nearly a $1.3 billion company making multiple products in mul- tiple countries,” Helfenbein said. “So it’s been a really extraordinary experience and a really good marriage.”
When the company decided to go public in 2004, he said he was on the “IPO trip” to lure investors with the concept that this was always — and still is — a family business, “and by having a public offering, we could use the funds to expand the business, which in fact, we did.”
The company went public and used the funds to make acquisitions, which “were all very interesting because they were all new ventures for us.”
“Originally, we were a men’s and women’s knit and woven-top supplier — that was our core business, with really good customers, predominantly a U.S. customer base, strictly private label,” he said. “Our business plan was openness, honesty, sharing our costing, trying to figure out how to grow together. We weren’t an agency; we were a direct factory relationship. On-time delivery and good quality were the two most important ingredients, along with human rights — our customers were able to sleep at night because they knew they were doing business with someone that was reputable.”
Jump ahead to the present day, and Helfenbein said, “When I look at the units we make today — somewhere close to 140 million units a year — we could fill Yankee Stadium [which seats about 50,000] eight times a day, every day of the year. And we’re not just apparel anymore — we’ve ventured into other businesses.”
The U.S. is the largest export market for Luen Thai, representing 50.8 percent of total revenue in 2014, with sales that were up slightly to $621.6 million. This includes sleepwear and sweaters in the apparel sectors, and new ventures in footwear and handbags.
“We’ve expanded into all these other businesses, but we haven’t lost control of the company in any way, shape or form,” he said. “When a customer becomes very large, we set up a division in the company just to handle them.”
Helfenbein, who has had vast experience in global sourcing during his 40-plus-year career, said in addition to a major facility in China, Luen Thai has substantial production in the Philippines, Cambodia and Indonesia, and recently entered Vietnam.
“Every country is different,” he said. “We like the Philippines a lot. We’ve always found it a good place to work.
“I would also like to point out that we’re not involved in Bangladesh,” said Helfenbein, who told WWD after the major factory disasters occurred in Bangladesh, that he had researched the potential of manufacturing there and decided against it because “it was like the Wild West. It’s very important if you’re going to own and operate a facility that you have control. You have to work in a place that has rules. If you don’t have rules, you’re subject to chaos. If you’re subject to chaos, the unexpected will happen.”
As for his and Luen Thai’s approach to business, Helfenbein said, “We listen to our customers. We try to get a mutual understanding. The way you drive lower price is through efficiency. We own our own factories, so if you can keep the factory reasonably full, then your cost goes down. And if you increase efficiency in the factory, the cost goes down.”
Helfenbein became chairman of the American Apparel and Footwear Association last year, a role he said has allowed him to look at the industry more broadly. For example, a major development over the last few years has been the revival of U.S. textile and apparel manufacturing, after almost being buried by imports.
“Those companies that are able to survive and compete today are doing so because of speed-to-market and flexibility, and carving out a niche industry,” he said. “We’re able to spin very efficiently in this country, and we have the whole CAFTA-NAFTA [Central American Free Trade Agreement and North American Free Trade Agreements] area for exports, so there’s a reason to have the textile industry here and it works,” referring to the duty-free benefits that yarn mills have been able to utilize to build exports in those regions.
Besides lobbying for trade legislation like the Trans-Pacific Partnership and renewal of the African Growth and Opportunity Act and General System of Preferences, as well as taking a stand on what AAFA views as Alibaba’s poor record on selling counterfeits, he said, “We’ve tried very hard to do what we can to develop Made in the USA.”
He feels the domestic industry has risen from its low point, thanks to its quick-response ability. “I always say the first word of AAFA is ‘American,’” said Helfenbein, who received a bachelor of science degree in economics from the Wharton School at the University of Pennsylvania. “We buffed up our Web site with a database to locate U.S. manufacturers. A big component of our membership is also government contractors. What I believe for American manufacturing is that it will rise to the level that most accommodates it. What we can do as an entity is provide all the tools to help make it work.” During Helfenbein’s career, he’s also had extensive experience in Haiti, beginning with manufacturing for the Le Tigre brand and the crocodile shirt for Izod Lacoste there in the Eighties. He then advised President Clinton on efforts to get President Jean-Bertrand Aristide back into power, which occurred in 1994, three years after he was ousted by a coup, and then got involved with the Clinton Global Initiative’s efforts after the devastating earthquake on the island nation in 2010.
“I traveled three times with President Clinton to Haiti,” said Helfenbein, noting he has great regard for Clinton’s accomplishments and commitments during and after his presidency. “It’s been an interesting ride.”