From August 20th to August 23rd, USA-ITA again participated in SOURCING at MAGIC, the largest and most comprehensive sourcing event in North America. This season, the show highlighted the Western Hemisphere supply chain—including the United States, the CAFTA-DR region, and Colombia.
SOURCING at MAGIC’s Western Hemisphere celebration kicked off on Monday, August 20th, with a breakfast for sourcing executives and other invited guests and featuring a keynote by Los Angeles Mayor Antonio Villaraigosa. This event provided a unique opportunity for apparel brands and retailers—including USA-ITA member companies J.C. Penney and Pacific Sunwear—to have a candid discussion about production opportunities in the United States. The Mayor said that his office is willing to provide support to companies interested in setting up manufacturing operations, retail operations, and offices in Los Angeles. (If you’re interested, you can
Following breakfast were two seminars focusing on Made in the Americas and Made in the USA moderated by USA-ITA President Julia K. Hughes. The first session, titled “Closer to Home: Sourcing in the Americas,” opened with a presentation by Kim Glas, Deputy Assistant Secretary for Textiles & Apparel at the U.S. Department of Commerce. Glas explained to the standing-room only crowd that the United States is on track to reach its National Export Initiative (NEI) goals in this sector, and outlined some of the many opportunities for both imports and exports in the greater Western Hemisphere. In particular, she discussed the recently enacted U.S.-Colombia Free Trade Agreement, and noted that brands and retailers can find an abundant supply of products in Colombia including women’s and girls’ swimwear, cotton terrycloth towels, and fabrics coated in plastic.
L to R: Steve DiBlasi of Lanier/Oxford, Javier Chamorro of PRONicaragua, Ken Mangone of J.C.Penney, Kim Glas of the U.S. Department of Commerce, and Julia K. Hughes of USA-ITA
The seminar continued with sourcing executives’ perspectives on the Western Hemisphere supply chain. USA-ITA Board Member Ken Mangone, Executive Vice President of Brand Management, Design, & Sourcing for J.C. Penney, said that companies source in the Western Hemisphere not necessarily for the cost, but for benefits such as speed to market, flexibility, duty-free benefits, and emerging product categories, to name a few. He said that speed to market is especially apparent in denim as well as synthetics and knits, where there has been an increase in investment and product offerings. Mangone’s presentation is available here.
Steve DiBlasi, Vice President of Global Sourcing at Lanier/Oxford, agreed with Mangone’s assessment about benefits of the Western Hemisphere, and added lower shipping costs, mature industries, and fewer language and time zone barriers as additional reasons to source close to home. Lanier/Oxford exclusively uses NAFTA in this hemisphere, primarily because of the low-cost fabric options and duty-savings on products from Mexico. He suggested that companies interested in sourcing in the Western Hemisphere look closely at their business model to find where there are advantages—you cannot rely on one region, but should attempt to have a global sourcing mix.
Finally, Javier Chamorro, Executive Director of PRONicaragua, explained the benefits of sourcing in the CAFTA-DR specifically—such as speed to market, preferential duty rates, and competitive product costs, as well as the spectrum of products that can be manufactured in the region. He also talked about the competitiveness of the Nicaragua apparel companies. In particular, Nicaragua has initiatives to increase productivity, build a sustainable industry, expand a pilot cotton production program, and develop an Atlantic port by 2018.
The next seminar, “Made in the USA: Options & Strategies for Apparel & Home” continued the discussion with a focus on the United States supply chain. Mayor Villaraigosa kicked off the session by talking about Los Angeles’ garment industry, noting that you can find textiles, patterns, sewing, and logistics—basically a full supply chain—all on the same block. He was followed by Francisco Sánchez, Under Secretary of International Trade for the U.S. Department of Commerce, who discussed Commerce’s commitment to focus on Made in the USA and the goal of doubling exports by the end of 2014. Of particular note, both speakers announced the development of searchable Made in the USA online registries—a broad one covering the entire United States, as well as one specifically covering Los Angeles. USA-ITA is working with the Commerce Department in the development of this database.
Los Angeles Mayor Antonio Villaraigosa speaks about Made in the USA.
Next, executives talked candidly about their experiences sourcing in the United States. Rob DeMartini, CEO of New Balance, gave the audience a fascinating look at the company’s U.S. operations. As the only athletic shoes manufactured in the United States, DeMartini said there is a real demand for the brand, which prides itself on its crafstmanship—and right now, capacity is the company’s biggest challenge. He provided real examples of speed to market, such as the ability to make popular styles in about two hours, as well as custom styles that can be shipped in four to five days.
He was followed by Lonnie Kane, CEO of Karen Kane, a women’s apparel brand. Though the company started sourcing in China, 80 percent of the garments are now made in the United States. Kane was candid about sourcing here—he explained that there are certain products that cannot be made in the U.S., such as sweaters or garments with heavy embroidery, and brands must be realistic about price points, as Made in the USA cannot be done cheaply. He also made some important points about the shortage of labor for these domestic manufacturing jobs—Los Angeles certainly has the machinery and the opportunities, but not the workers to meet all demand. However, if you want to make a “Better” or higher product, there are many opportunities at home, and it’s good business if you can do it.
Following a presentation from John Martynec, Head of Manufacturing for Brooks Brothers—which has over 900 workers in the United States—Erica Wolf of Nanette Lepore discussed opportunities in New York. Nanette Lepore makes 85 percent of its garments in New York City—and specifically, the Garment Center, which is alive and well. Though the company manufactures in the U.S., much of the fabric is imported, and Wolf recommends that the Obama Administration and the Congress can help expand U.S-based manufacturing if they reduce tariffs on fabrics that cannot be found domestically.
Karin De Leon of CECATEC-RD and Julia K. Hughes of USA-ITA visit the USA-ITA booth in the sourcing hall.
After a long day of informative discussions, the Made in the Americas celebration closed with a reception on the show floor—featuring both domestic and imported beverages.
For more on the topic, read Apparel magazine’s piece here.