Today is the second anniversary of the terrorist attacks in New York, Pennsylvania and Washington, D.C., which altered the way Americans, and people worldwide, faced their lives and their futures. The global economy continues to experience the shock waves, and the fashion and retail industries are still struggling to return to the relative vigor they enjoyed prior to 9/11. In New York City, the Chinatown area, with its proximity to Ground Zero, is a vivid example of a struggling industry. Here, a new look at apparel manufacturing there, as well as the consumer moods in Europe and Japan in the wake of Sept. 11, 2001.
NEW YORK — Two years after the terrorist attacks — and the ensuing security cordons that kept much of Chinatown closed for business for weeks or months — the neighborhood’s makers are still battling to keep their businesses operational.
Local manufacturers continue to face the pressures of high rents and rising competition from foreign producers, factors that have contributed to the ongoing decline in apparel manufacturing across the nation for the past few decades. In addition, Chinatown contractors report their continuing boom-and-bust cycle — in which periods of scrambling to turn around last-minute orders from local retailers and wholesalers on short notice alternate with long periods of trying to drum up business, causing staff layoffs — has led many of the experienced seamstresses and other workers they depended on to seek more stable employment.
While neighborhood-by-neighborhood data on apparel industry employment is not readily available, New York State Department of Labor figures show that overall apparel manufacturing employment in the city has fallen sharply since the terrorist attacks.
In July, the most recent month for which apparel manufacturing employment figures are available, employment in the five boroughs stood at 32,600, down 32.9 percent from 48,600 in August 2001. While there was a sharp drop in Chinatown employment immediately after the attacks, the year-over-year job loss in July 2002 from July 2001 of 15.8 percent was exceeded by the 20.5 percent drop in July 2003 from July 2002.
Teddy Lai, executive director of the Greater Skirt, Blouse & Undergarment Association, a Chinatown contractors’ group, said the total number of factories operating in the neighborhood, which had been 246 prior to the attacks, and last year had dropped to 137, is now below 100.
“Before Sept. 11 , if two factories went out of business, one would come back,” he said. “Now if a factory goes out, nobody comes back.”
John Lam, chairman of John Lam Fashion Group, continues to employ about 700 garment workers in his factory, down from about 900 before the attacks. He reduced his head count in an effort to cut costs and said that it’s getting harder to find skilled workers to take garment manufacturing jobs.
“There are workers who want to stay, but right now, it’s not stable, and I’m not blaming them for looking or taking other opportunities,” he said, noting that employees who are laid off during dry periods are increasingly turning their backs on garment jobs.
“There is not enough business,” he said. “It’s hard to keep everybody working.”
For their part, union representatives said while some workers have been retrained, there are still experienced garment workers who are unemployed. They said the increasing use of part-time shifts, where workers were needed only two or three days a week, was unappealing to many people who had been used to full-time work and pay.
“It’s not like there’s no one in Chinatown looking for work,” said a spokeswoman for Unite Local 23-25, which operates in the neighborhood.
Manufacturers said the most reliable business has been producing uniforms under government contracts.
“The military contracts continue to be the safest course for us,” said Deirdre Quinn, president of Lafayette 148, a unit of the Chinatown contractor Made in New York Group. Without contract work, she added, it would be “almost impossible” to keep manufacturing in Manhattan.
Lam argued that the city and state should take greater pains to find local contractors to fill uniform contracts and complained that the Fire Department had recently awarded a uniform contract to a major out-of-town producer. Lai said he continues to encourage his group’s members to broaden their manufacturing bases outside of New York. Last year, Greater Blouse sent a mission of local contractors to China in an effort to cultivate contacts there, and Lai said he hopes to repeat that process next year.
“The only way the garment factories can survive is they have to open up their focus,” he said.
— Scott Malone
PARIS — Hit hard by a heat wave, growing employment worries and a steep drop in tourism this summer, European retailers and luxury makers have had little to cheer about lately. However, executives and analysts say they see positive signs that two years of turbulence are finally smoothing out.
Ralph Toledano, president of Chloé, said he detected a sense of “back to normal” creeping into the trade in the past month.
“The business is really picking up. There is more optimism, and it shows in the figures,” he said. “I’m seeing this worldwide, but it’s a very fragile recovery. For me, it’s the beginning.”
As drastically as 9/11 frightened consumers and jolted the luxury business, Toledano said the global economic crisis and stock exchange gyrations probably had a more lasting impact. For example, young Internet entrepreneurs and Wall Street types, who had rushed to consume luxury goods, beat a hasty retreat when their fortunes turned.
“It was a scary moment for everybody, and everybody slowed down and asked themselves questions about life, relationships and happiness,” said Dries Van Noten. “It caused me to look at fashion in a different way. I think a lot of the ridiculous part of fashion disappeared. I feel people want items that are more personal and specific now. I feel the garments need to be timeless and have a lot of personal character.”
Van Noten added that his business did not feel the aftershocks of 9/11, and he said he thinks people are starting to get back to a pre-Sept.11 mind-set. “Right now, I feel people really want to enjoy life.”
Renzo Rosso, founder and chief executive officer of Diesel, said the terrorist attacks on New York and Washington had a profound effect on the industry. “Since Sept. 11, the markets are finding a new equilibrium from this forced business growth which focused more on numbers than on the content of the product,” he said.
Although the mergers and acquisitions boom and period of sky-high valuations had already come to an end before Sept. 11, 2001, the event brought things to a head, according to Andrea Paladini, an analyst with Centrosim in Milan.
“That event worsened a situation that was already deflating on its own,” he said. In his mind, the markets have not yet erased the possibility of future terrorist attacks. “I wouldn’t exclude anything. These events could always repeat themselves,” he said.
Indeed, many luxury analysts continue to cite the specter of more attacks as a key risk to the industry.
In a major report this month on European luxury, HSBC analyst Antoine Belge notes the sector probably hit bottom in the second quarter. He forecast a gradual recovery in travel, especially Japanese tourists, whose numbers were down 42 percent in the April to June period.
“The psychological aspect of the ‘feel good factor’ — especially in the U.S. — also seems to be improving after a succession of terrible events,” he wrote.
— Miles Socha and Robert Murphy
TOKYO — Iraq and SARS, which came in succession just when Japanese consumers were recovering from the impact of the 9/11 attacks, have had a far greater effect on consumers than terrorism, reducing the number of Japanese traveling abroad as much as 30 percent this year from last.
The consensus of market watchers here is that travel to the U.S. by Japanese was heading for a return to pre-9/11 levels. “The situation would have returned to normal, but Iraq and SARS emerged as new impediments,” said Norio Torigoe, a spokesman for Nippon Travel Agency Co. Ltd., one of Japan’s largest travel agents.
“I don’t think Japanese have a worry about terrorism.” Torigoe asserted. “Rather, SARS has left a far more serious after-effect on Asia, especially in such countries as China and Taiwan.”
Tsuguo Chihara, a spokesman for the Japan Travel Bureau Inc. (JTB), the country’s largest travel agent, agreed that SARS has been the main culprit hurting the industry.
“At one time the number of people on our package tours dropped to half,” the JTB executive said. “But the situation began to improve in June following the declaration of an end of SARS, recovering to about 60 percent in August and then to 70 percent in September of the pre-occurrence level.”
— Tsukasa Furukawa