Made in L.A., for Now
Clothing firms cope with a global industry that is more competitive than ever
By Leslie Earnest
Times Staff Writer
January 16, 2005
Koos Manufacturing Inc. illustrates what has gone wrong for U.S. clothing manufacturers — and what can, sometimes, go right.
A couple of years ago, the Southgate company's factory was cranking out 200,000 pairs of private-label jeans a week for some of the largest apparel chains in the country.
But profit margins were for the most part thin. Owner Yul Ku said retailers pressed him for lower and lower prices until he refused to budge, and they took their orders elsewhere.
Today, Koos Manufacturing's weekly output is down to about 35,000 pairs — of expensive, fashionable jeans that sell for as much as $170. And though the factory's assembly line is a lot smaller than it was in 2003, business is healthy enough that Ku plans to begin making two more lines of denim next month, one that will command as much as $250 a pair.
Even now, as the clothing and textile industry is roiled by the end of 30 years of import quotas, "there will be survivors," Ku said. "We're one of them."
Across Los Angeles County, clothing companies are expecting to hang on — or do better — as the global apparel trade becomes more competitive than ever.
These companies have carved out niches in high- fashion and specialized production, with an emphasis on fast turnarounds, that could keep them in the international game.
Factories and sewing shops can crank out, within weeks of a designer's vision, cutting-edge fashions for teenage girls and young women. Workers in cities such as Vernon, Commerce and Gardena turn out the vast majority of the nation's trendiest high-end jeans, including 7 for All Mankind, Citizens of Humanity and Paper Denim & Cloth.
The pressure on the local industry, though, can't be denied. The expiration of the import quotas Jan. 1 has empowered some cut-rate producers, principally China, and prodded others, notably the tiny island of Mauritius, to tweak their manufacturing strategies to remain competitive — possibly at L.A. County's expense.
So far, China is primarily focused on the mass production of moderately priced items. But some people in the industry believe it won't be long before Chinese factories will be able to make it all, including $300 jeans.
"If they want to," said Joe Rodriguez, executive director of the Garment Contractors Assn. of Southern California, "they could wipe out the whole industry."
Los Angeles County — the largest clothing manufacturing hub in the nation — is no stranger to the tumultuous forces of globalization.
For decades, U.S. retailers have been chasing lower-cost suppliers around the world. The loss of apparel jobs accelerated after 1994, when production moved south of the border after passage of the North American Free Trade Agreement.
L.A. County's apparel manufacturing base has shriveled to 61,400 jobs, 41% fewer than in 1996, according to the Los Angeles County Economic Development Corp. Now, with the quotas' expiration, many predict that the job losses will accelerate, though there are widely differing opinions about how swiftly and to what extent.
To be sure, Los Angeles isn't as vulnerable as the Southern U.S. Textile manufacturers there spent the most political capital trying to persuade Washington to maintain some forms of protection against economical, efficient factories in China, Bangladesh, Honduras and other developing countries. Factory workers in the Carolinas are expected to take the biggest hit from the competition unleashed by the end of the quotas.
The quotas had limited the amount of apparel and textile products that could be imported into North America and Europe from any one country, forcing buyers to distribute their orders around the globe. Without restrictions, buyers can more easily shift their production to the cheapest supplier — which certainly isn't Los Angeles.
In Los Angeles County, a woman who stitches a skirt earns as much as $15 an hour, and even an undocumented worker employed by an unlicensed contractor can make $7. In China, her counterpart pulls in 68 cents to 88 cents.
But as superior as her pay might be to the going rate in the manufacturing Goliaths of China and India, a seamstress in Los Angeles is on one of the lowest rungs of the economic ladder, without health benefits and probably not unionized.
The end of the quotas that gave developing nations a leg up — and that gave apparel workers in the United States some shield from the competitiveness of the international economy — may well mean that "the poorest of the poor are going to be left with an even more difficult struggle for survival," said Edna Bonacich, a UC Riverside professor and coauthor of the book "Behind the Label: Inequality in the Los Angeles Apparel Industry."
"The more manufacturing we lose," she said, "the more destitute people we have."
Even the thriving denim business is a fraction of what it was in the early 1980s. As it is, premium denim represents a small portion of the $11-billion U.S. jeans market, and a lot of that market is supplied by foreign factories.
But about 85% of high-end jeans — selling for $120 and more — are sewn in L.A. County. Manufacturers of premium denim are banking on buyers' willingness to pay top dollar to safeguard them from the forces of free trade.
"Being a premium brand, it doesn't matter what we charge, so we can afford to make the jeans in America," said Rick Crane, the sales director for Koral Industries, which owns the 7 for All Mankind brand.
L.A.'s advantage is about more than money. It's also about the vibe.
"I can sit in a bar on Sunset and design the line" with inspiration from watching the local scene, said Adriano Goldschmied, a pioneer of premium denim who helped launch the Italian brand Diesel 25 years ago. "When I was in Italy, to see something like that I had to fly for hours."
Just as important, Los Angeles boasts some of the world's most celebrated denim laundries, Svengalis that can transform plain Jane pants into hip fashion statements, perfectly faded and frayed.
In fact, the founders of the James Jeans lines, James Sway and his wife, Seun, moved from New York because L.A. County "is the mecca for high-end denim manufacturing," Sway said.
Here, he said, sewing contractors know how to make "lifting darted back pockets" — which give the appearance of a lifted derriere.
Local laundries, he said, also are adept at shading jeans so that legs appear longer and thinner and at sanding in "whiskers" (light horizontal lines in the zipper area) so that hips seem narrower. James Jeans' new, higher-priced line, selling for about $180 a pair, employs what is called the "all in" method. That means using all techniques available to achieve a worn-in look, including applying oil stains and cigar burns.
Hollywood is a magnet too: James Cured by Seun initially was available only to celebrities. The line went on sale to the public this weekend at 10 stores, including Barneys New York in Beverly Hills and Villa Moda in Dubai, the Persian Gulf emirate.
"Any designer starting in L.A. has a leg up," said Gela Taylor, co-founder of the L.A.-based Juicy Couture brand, which creates velour sweat suits that sell for $185 and T-shirts that go for $60.
"New York is great," she said, "but right now the young, edgy, hot designers are coming out of L.A."
At Koos Manufacturing, the 700 employees at the pristine factory start from scratch, unloading piles of denim from delivery trucks. The material is cut and sewn and passed on to be sanded, ground, stonewashed and baked. Along the way, a screen-printed pocket lining is inserted in some jeans. It reads: "Made in Southgate (somewhere in California)."
The factory can turn out a sample in 24 hours, and its two-story warehouse is packed with finished products.
Ku explained the response time: "Customers call up," he said and then snapped his fingers.
Rapid production is a theme in L.A.'s garment industry and one that gives Southern California an edge over China and other manufacturing centers, at least for now.
Designers and retailers want new styles and variations to appeal to fast-changing tastes, and they demand that the latest slinky skirts or knit ponchos hit stores before the hot trend chills.
American Apparel in downtown L.A. — whose seven-story factory is topped with a banner blaring "American Apparel is an Industrial Revolution" in red letters — employs machines that can cut eight T-shirts every 9.2 seconds.
The factory has 75 knitting machines that cost $45,000 each and plans to double that number this year, said Marty Bailey, vice president of operations. As it is, if someone orders 1,000 T-shirts at 2 p.m., he said, he can ship them by 5:30 that evening.
Bailey keeps 1.8 million pounds of finished fabric on hand at all times to make sure he can turn out products quickly. About 3,100 people work two shifts at American Apparel, which is expanding its casual cotton apparel lines and opening stores to help build its brand.
On a tour of the factory, Bailey paused where an assembly line of five men and three women was putting together a shirt.
Passing cloth down the line, each performed one task: hemming, sewing the shoulders, stitching the neckline, adding the label, strengthening the shoulder seams, inserting sleeves and trimming dangling thread. A ponytailed woman then scrutinized the final product, tugging at the fabric and measuring the gap at the neck and the width of the hem.
The process took mere minutes. The team moves so briskly, Bailey said, that it can finish about 2,200 pieces a day.
Speed is essential for Esperanza Hernandez. The 41-year-old seamstress works nine hours a day, five days a week, and sometimes on Saturday. Her boss takes orders from various companies, including Forever 21, an L.A.-based retailer that sells clothes to trend-hungry teens.
"I have to produce a certain amount of clothing," Hernandez said, "so I have to work rapidly."
But the Chinese are increasingly fast themselves, thanks to billions of dollars in foreign investment and technological advances in production techniques.
"I hear that China is right now able to deliver garments in six to eight weeks, starting from fabric to finished goods — and that's what it takes to do it in L.A.," said the owner of one local factory that employs 150 workers who make women's tops. He is considering not renewing his lease.
"We may have to shut down," said the contractor, who asked not to be named because he feared it would spook his customers. "We're dinosaurs, on the verge of extinction."
Geographic diversification is one answer. Koos Manufacturing, for instance, has a plant in Mexico, where 1,200 workers make jeans for the Buckle clothing chain.
But the reality is that China's lure is difficult to resist, even for disciples of Los Angeles. James Jeans' co-founder may have moved to L.A. to take advantage of its hip denim laundries, but that doesn't mean he is immune to a bargain.
"If they can do it better and cheaper overseas," Sway said, "I have no choice but to go overseas."
In fact, Sway said, he had been sending bits of work to China to monitor the technical progress of companies making jeans there — just in case. And the Chinese are getting better.
"I'm already seeing season-to-season changes that are remarkable," he said. "It's like an arms race in a way."
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Times staff writer Evelyn Iritani contributed to this report.