TARRANT EXPANDS ITS MEXICAN PRODUCTION

NEW YORK — Moving to increase its Mexican production, Tarrant Apparel Group on Monday said it had entered into an agreement with a Toluca-based garment producer to use all of its production.
The company, Manufacturers Cheja, runs three plants that can turn out about nine million units a year, Los Angeles-based Tarrant said.
The deal runs through March 2002.
Over the past few years, Tarrant has broadened its sourcing base. The company, which once produced almost all of its private-label apparel in the Far East, now — after acquiring cut-and-sew operations and fabric mills in Mexico — sources more than half its apparel in this hemisphere.
The company has focused on producing basic jeans and twill bottoms in Mexico, while continuing to source fashion goods from Asia. Last year, the company bought the Mexican apparel manufacturer Grupo Famian, which produces about 10 million garments a year.
Gerald Guez, Tarrant’s chairman and chief executive officer, said in a statement: “This exclusive production agreement with Cheja strengthens our existing sourcing capabilities in denim and twill garments and further expands our vertical integration strategy in Mexico.”
Added Simon Cheja, president of Manufacturers Cheja, “Tarrant has a great reputation in the industry, and this agreement allows us to continue expanding our business on a global scale.”
Tarrant also has a denim mill in Jamil, Mexico, and a garment processing plant in Tlaxcala. In May, when the company reported a 58.7 percent decline in first-quarter earnings, the company blamed margin declines on start-up costs for its Mexican operations.
In addition to broadening its sourcing operations, Tarrant in recent years has been working to increase its customer base. In 1996, sales to Limited Inc. represented 67 percent of sales. In the first quarter, that company accounted for 39 percent of Tarrant’s $102 million in revenues.

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