Is Michelle Obama U.S. Fashion’s One-Woman Bailout? Well, she could be if she stuck to American Designers and especially designers that manufacture in the US. Even though J. Crew is an American company, most of what is available in their catalog is imported. If they chose not to outsource production they could be getting their products from a USA manufacturer, supporting the local job market.
Zara and H&M get this right and American retailers have been slow to jump on the fast fashion bandwagon. Zara’s parent company, Inditex, produces a large percentage of it’s inventory in it’s home country of Spain.
The efficiency of this model allows for a faster response time from design to shelf and reduces waste by not producing huge quantities of a potentially unpopular garment. By owning it’s factories and design systems, they can change the length of a trouser or shorten a dress and get new products to the stores in a week. This process would take The Gap at least 2 months to do and by that time, the season has changed.
The disadvantage of importing from China is that it requires a longer lead time of between three to six months from the time an order is placed to when the inventory is stocked in stores. Hopefully, you’ve guessed right and don’t get stuck with tremendous unsold inventory. H&M, the Swedish retailer, claims their inventory changes daily at it’s stores.
Some US retailers have caught on. A California manufacturer, Hot Kiss, supplies trendy stores like Hot Topic and Delia’s as well as Dillard’s and Nordstrom. Hot Kiss has doubled their local production from 30 to 60 percent with a turn-around time of 45 days. This isn’t quite as quick as the one to three week schedule at Zara but considerably better than the 4 month wait from China.
Currently, California and New York are the comeback states for manufacturing but there are some hurdles especially with California’s restrictive labor policies. American Apparel has managed to prosper in spite of them and new startups can learn from their business model.
North Carolina used to be the center of production for textiles up until the 1990s. Over 871 textile and apparel mills have closed down since 1996. In the twenty year span between 1977 and 1997, nearly 82,000 jobs were eliminated in the North Carolina textile industry. The next twenty years between 1996 and 2006 saw and increased downturn of 150,000 jobs lost in the textile industry alone. An additional 48,000 apparel jobs were eliminated during the same period.
We didn’t create our current situation overnight. We’ve been working on it for the last 30 years by outsourcing and supporting the Asian economy instead of keeping jobs here for Americans. This is hardly breaking news!
So why are we bailing out the banking industry? Are they giving loans to entrepreneurs who are starting up manufacturing plants?
Ok, so the auto industry does produce a product but should we help them out because of poor business practices, extravagent CEO salaries, and a product that doesn’t keep pace with the competition? Toyota and Honda have U.S. plants and they’re not getting bailed out.
Consider that the CEO of GM pulled down $14 million in total compensation in 2007 while the company lost $38 billion and Toyota’s CEO seems to be getting by on a mere salary of $1 million.
So far, President Obama favors American made suits from Hart Schaffner Marx and we give props for his decision. It may seem trivial when we report about Michelle Obama wearing a dress made in Italy, a sweater made in China, a watch made in France, or jewelry made in England. To us, it is a big deal because these items represent lost jobs in America.
Do the people standing the unemployment line feel “United” or betrayed? According to the AFL-CIO, The rising trade deficit has cost more than 3 million actual and potential jobs in America since 1994. The deficit with China alone is $201 billion! Just another bailout, no?
