We have spent the past three parts of this series providing an overview of the current landscape in terms of garment manufacturing in the U.S., including outlining the potential pitfalls of reshoring manufacturing jobs. It seems an apt opportunity to ask: Even if all goes as planned and we are able to add hundreds of thousands of jobs to the U.S. economy (without replacing them by machines), train enough people to fill these jobs, and employ them in an ethically sound, well-paying manner, what does that actually mean for the fashion market?
In Part IV of this longer-running series, Reshoring Fashion Manufacturing: Will it Live up to the Hype?, we examine what a return to U.S. manufacturing would mean for the price of garments and accessories.
In recent years, an industry once shrouded in mystery has been democratized by releasing constant streams of information, photos, and video once reserved for industry insiders. This move toward more consumer-facing business practices and ‘fashion for all’ has resulted in the rise of fast fashion and other methods of fashion manufacturing and distribution. Such models have made trendy clothes accessible to all.
Regardless of whether you consider the playing field to have been leveled as a result of such mass market distribution of fashion-centric garments and accessories, it definitely made room for a host of new players and allowed many consumers to shop high fashion-inspired styles for the first time through lower priced collaborations put forth by the likes of Target and H&M. While the opinions in connection with the alleged “democratization” of fashion have been varied, one thing that has been largely certain is that this trend of not going away. Will the reshoring movement change that?
WHO CAN AFFORD "MADE IN AMERICA" PRODUCTS?
Walmart, a leading low cost retailer, as a part of its pledge to bring American jobs home has reached out to manufacturers willing to do just that, and given their scale they’re probably best poised to push suppliers on cost. Yet, spokesmen for Walmart have been quoted as saying they will not push apparel suppliers to produce domestically given the inherent labor costs.
It seems clear that if manufacturers were to follow U.S. labor laws, that would not allow for truly cheap clothing and accessories to be manufactured here; certainly, fast fashion in its current form and with all its current offerings would not thrive as a law-abiding business in the U.S.
While many American manufacturers are currently making relatively low priced garments, these tend to be things like t-shirts that are mass produced much with the help of machinery, and are a far cry from the trend-specific wares that fast fashion retailers are churning out on a regular basis. Speed to market is unlikely to be a problem for U.S. manufacturers – as producing domestically means shorter lead times – but the hallmark of fast fashion is not just speed, it’s price, and fast fashion retailers’ prices are not ones that can be sustained with drastically increased manufacturing costs.
Take Bangladesh, a rising world power in garment manufacturing and the world’s second-leading apparel exporter. The country’s minimum wage for the garment industry is set at $68 a month, which is actually a considerable markup from the previous $38 a month wage. Assuming that Bangladeshi factory owners actually follow this legal standard (and there is widespread evidence that they do not), and even given the costs of transport, it’s hard to believe it would ever be more cost effective to incur U.S. production costs for standard products that do not require a high level of craftsmanship.
The opposite of fast fashion is by no means luxury. There are offerings in the bridge/contemporary (under $500) and advanced contemporary ($500-$1200) price points, but these prices would not allow for a huge segment of the U.S. population to participate in fashion in the way to which they have grown accustomed thanks to fast fashion. Consider that in 2010, the U.S. Bureau of Labor Statistics reported that the average American family spends $1,700 on clothes annually, 3.5% of their total expenses. While $1,700 will certainly go a long way in terms of shopping at Forever 21, that figure will generally allow for the purchase of far fewer American-made garments, especially if consumers desire something other than jeans and t-shirts.
Even supporters of the “Made in America” movement have acknowledged the production costs price many out of the market. Fashion designer Nanette Lepore, for instance, has long voiced her support for U.S. made – and specifically New York made – goods through her involvement with the New York-based organization Save the Garment District. Yet, when she signed on to design a lower priced line with J.C. Penney, she knew production would take place elsewhere.
In the battle between U.S. and foreign made, it has proven easier to convince consumers to pay a premium for a technically complex and/or finely-made garment than to pay a premium for a basic garment that could easily be made more cheaply overseas. As a result, companies are being forced to focus their “Made in America” efforts on higher quality goods that will justify higher prices, positioning “Made in America” as a new niche in the luxury market. This seems fitting given that The Row, Altuzarra, Prabal Gurung, Juan Carlos Obando, Maiyet, Thom Browne, Marc Jacobs, Brock Collection, and Greg Lauren – produce some of – if not all of – their garments in the U.S.
The world is more connected now than it has ever been before so even if American companies focus all their effort on reshoring production and producing costly pieces, those who have been priced out of that market will easily find pieces they can afford elsewhere. Assuming that drastic legislative changes do not prohibit the entry of – or price out – foreign brands, we are in no real danger of undoing all of the work of democratizing the fashion industry.
However, unless the cost of U.S. production can be decreased substantially (perhaps through increased automation of the manufacturing process), this will add a new layer of elitism to the fashion industry. Albeit one not based on frivolity but predicated on the notion of providing much needed U.S. jobs, stemming the tide of clothes entering landfills and stopping some the heinous labor abuses prevalent overseas (and even amongst fast fashion suppliers in Los Angeles).
WHO CAN BUILD A BUSINESS THIS WAY?
If it costs more to manufacture in the U.S. and domestic manufacturing is being strongly encouraged, it stands to reason that the cost of doing business will now be higher, perhaps giving way to less of the fashion startups we have grown accustomed to as of late.
It is worth noting, of course, that overseas manufacturing has added costs and barriers to entry that local manufacturing does not. For instance, there are higher transportation costs, longer lead times, more complex (and more difficult to navigate) supply chains, and the added level of uncertainty that arises when goods are being manufactured halfway around the world. In addition, while smaller and often newer companies tend to require smaller production runs, overseas manufacturers tend to mandate larger minimums in order to make a profit considering elements, such as transportation costs.
In that vein, local production proves an asset for some businesses. The proximity to factories allows for heightened oversight, faster turnaround, and serves to eliminate most transportation costs. This must be balanced with the fact that as businesses begin to grow, they tend to outgrow most domestic manufacturing operations. Some domestic factories allow for increased quantities and skill sets; however, given the skills gap explored in Part III, we know that is not always the case. In order to keep production stateside many will have to undertake the costly and time consuming process of building and staffing their own facilities, adding an additional barrier to entering or remaining in the market.
While local production helps even cash strapped businesses by allowing for small runs under close supervision the higher costs associated with local production favors businesses with more money on hand. Ironically, Shinola founder Tom Kartsotis used at least part of the fortune and goodwill amassed from Fossil Inc.’s Asian produced goods to re-brand and re-launch Shinola as quintessentially American and a bastion of hope for U.S. manufacturing.
With this in mind, the new normal for U.S. fashion manufacturing may very well be led by brands that can afford it – and that desire to bring manufacturing home – and/or by startups with strong financial backing.
Gabrielle Turnquest is a graduate of The University of Law (formerly The College of Law) in London. After law school her interest in fashion lead her to explore the industry from the side of the creative through studies at the Fashion Institute of Design & Merchandising in Los Angeles, California.