MONTREAL — Montreal-based Utex Fashion Group, founded by two brothers in a bicycle shop, is celebrating its 60th anniversary this year.
The company is a designer and distributor of misses’ outerwear under the Utex, Hilary Radley, Jones New York and Perry Ellis labels. It also designs and distributes men’s outerwear under the Utex, Massimo Moda and Perry Ellis labels and men’s suits, jackets and sportswear under the Utex, Perry Ellis and U & I names. Private label is also an important component of the company’s business.
Started as Utility Textile Industries by Irving and Harry Gurberg in Victoriaville, Quebec, about 50 miles east of here, Utex’s first product was the Utexans men’s Western sports shirt. From there, it moved into a former biscuit factory, and in 1960, into its own 100,000-square-foot factory with 1,200 workers.
Today, the company’s head office is in a 140,000-square-foot building that is mostly a warehouse, design and distribution center, with a minimal amount of production done locally. Most production comes from China, Eastern Europe and Bangladesh.
Utex began sourcing products in Japan in the early Sixties and started importing cottons and wool from Romania, Bulgaria and Czechoslovakia in the late Sixties. From there, it moved into mainland China.
In addition to its head office, Utex has a 70,000-square-foot warehouse and distribution center in Fairview, N.J., and showrooms here, as well as in Toronto, New York and Chicago.
“We work with a few factories in China where we represent such a high percentage of their business so they won’t take on extra accounts for a dollar more,” said David Gurberg, who became company president after the death of his father, Irving, in 1991. His sister Marian Gurberg is vice president.
“We used to supply everything, like fabric, thread and buttons,” he said. “It was a logistical nightmare. Now the factories are a lot more sophisticated, and we just send technicians overseas to supervise overall quality inspection.”
When David Gurberg joined the company in 1961, annual sales were $5 million. By the end of the Seventies, they topped $35 million. Today, they are closer to $80 million, with half generated in the U.S.
But the company’s customer base has shrunk with the bankruptcy of the Eaton’s department store chain in Canada and retail consolidation in the U.S. Utex products are in stores like Saks Fifth Avenue, Bloomingdale’s, Nordstrom and Lord & Taylor.
“We’re also facing competition from some of our retail customers who buy on their own,” Gurberg said. “They’ll take 60 items of ours then order 6,000 similar items produced at the low end. That’s why it’s important to have a label that consumers can identify with.”
Utex decided to mark its 60th anniversary with a major branding campaign that includes billboards, airport advertising and print ads.
“We’ve been around for 60 years, but with quotas ending, we’re facing more and more competition from wholesalers and retailers, and that’s why it’s important to have brand recognition,” Gurberg said.
In terms of fashion products, Utex faces the marketing juggernauts of companies like DKNY, Calvin Klein and Hugo Boss that put a lot of money into advertising. But the company’s challenges don’t end there.
“Outerwear drives our business and a lot of that is now carried by big-box stores and discount chains like TJ Maxx, Winners [in Canada] and Burlington Coat Factory who compete with traditional department stores who are our main customers,” David Gurberg said.
Utex has responded by operating at both ends of the market. In addition to supplying Sears Canada and the Hudson’s Bay Co., it sells down jackets and PVC products to Costco.
“We’re apparel-driven and can focus on other areas,” Gurberg said. “The word ‘collection’ comes to mind, as in ready-to-wear for both women and men, which we will be launching for fall 2006. Right now, we’re debating which labels to use.”
Despite keeping one step ahead of other competitors, Utex is facing an even bigger adversary.
“Now we are facing competition from overseas manufacturers who may even be one of our own suppliers. We will continue to find ways to bring the latest fashions out at very attractive prices. If we can’t, we won’t survive,” Gurberg said.