January 26, 2014 12:00 AM
In the mid-1980s, a struggling New Bedford apparel manufacturer got an offer it couldn’t refuse.
As other apparel makers were being forced offshore to stay competitive, Riverside Manufacturing caught the eye of the largest manufacturer of men’s tailored clothing in the world, Italian company Gruppo Finanziario Tessile, who needed a U.S. base to help it circumvent duty costs on U.S. imports.
For Riverside, being bought by GFT, was a game-changing opportunity. But it wasn’t the end of the story.
At the same time GFT was looking for a U.S. factory, a soon-to-be-famous young designer named Joseph Abboud was seeking a company to make his designs. He had worked in retail and for design firms, but didn’t yet have a strong brand or a factory behind him. He “was looking for somebody to make an investment in him and his design aesthetic,” reminisced Anthony Sapienza, J.A. Manufacturing CEO. “And the Italians said, ‘This is a bright young guy. We like this guy. Let’s start making his clothing for him.'”
The collision of GFT, Abboud, and Riverside Manufacturing, became a supernova that launched the creation of an even brighter company, Joseph Abboud Manufacturing.
The brand launched in 1987, becoming rapidly popular and catapulting the New Bedford manufacturer to a long successful run making high-end men’s suits in the U.S.
Joseph “had his own vision for a design aesthetic that was uniquely American,” said Sapienza. “If you take the conservative Americans, who are on the far right — the Brooks Brothers and the Polos of the world — and if you take the wild Italians that are on the left, Joseph kind of synthesized something in between that he called his own American Joseph Abboud design. It had lots of textures, lots of new looks, pleated trousers and things that were more contemporary than what the traditionalists and the radicals were doing.”
The modified company also launched a new business model that, nearly 30 years later, is being used by a handful of local startups who are making a name for themselves in the apparel industry.
After decades of downturns, U.S. production of apparel increased by 11.1 percent in 2011, and was up again by 8.5 percent in 2012, according to the American Apparel & Footwear Association. During those years, U.S.-made footwear also increased, by 7.9 percent in 2011 and 9 percent in 2012.
The increases, say local manufacturers, reflect the implementation of a sustainable model of producing high quality merchandise sold at higher price points, increased interest in American-made product from consumers, and a returning passion in the U.S. and SouthCoast, for making things.
More importantly, it gives them a sustainable niche.
While it’s not without its obstacles, Bob Kidder says his production model of selling superbly-made clothing for higher price points as ‘Made in America’ product, not only works, it is shared by others. Kidder started New England Shirt Company more than four years ago in a Fall River mill in danger of becoming vacant. His designs are produced quickly, gotten to market quickly, and are typically made in small batches, he said.
“There are lots of examples of smaller manufacturers, young people who are trying to find places to make product. They believe in what they are doing and get excited about it,” said Kidder.
Kidder sells his shirts through high-end retailers for prices between $125 and $175. “We do small runs quickly, with custom labels, private labels at a price point that’s not inexpensive, but we’re not stupidly expensive either,” he said.
Producing smaller runs quickly lets retailers take chances on new designs without over-committing to product that won’t sell.
“It allows stores not to have to commit a lot up front,” said Kidder. “They can turn product around in three weeks. They can try something, buy 30 to 40 shirts, and see if it works.”
In contrast, overseas manufacturing operations typically have 5,000 to 10,000 piece minimum orders and take four to five months to deliver, he said.
It’s a similar model to J.A. Manufacturing, except that the New Bedford men’s suit maker produces at much higher quantities. J.A. Manufacturing makes 1,100 suits a day that sell for between $695 and $1,000, according to Sapienza, and the company is ramping up to 1,200 under new owner Men’s Wearhouse. Its higher price point is what allows it to remain in New Bedford, he said.
“If we were trying to make $100 suits, we couldn’t do that,” Sapienza said. “Our labor costs are too high. We couldn’t make that happen.”
At Mother Freedom, a New Bedford startup that makes high quality outerwear, the company’s edge comes from combining the best raw materials with superb garment construction, says owner Jeff Rose.
“I don’t like to use the word luxury,” said Rose, an experienced manufacturer who chose New Bedford for its talented workforce and intriguing history. “We like to say we make product without compromise.”
But, Rose added, if you’re going to sell at a higher price, the product needs to show its value. That makes setting an optimum price crucial to a company’s success.
Manufacturers often find themselves performing a tightrope act of balancing quality, quantity, and pricing. Too high and you exclude a lot of the buying public; Kidder said, too low and you don’t adequately cover costs.
“It’s a huge issue and always will be,” he said. “The overriding problem is pricing.”
At Alden Shoe Co. in Middleboro, balancing price and value has been an ongoing challenge over the manufacturer’s 120-year existence.
“Over the course of years, I know that there have been times when the price points have seemed high,” said Bob Clark, vice president of sales. “They’re always a concern to us. We want our shoes to represent real value.”
“Having said that we’re finding less price resistance in the market now, than I can recall in my 20-plus years in the business,” he added.
Like these smaller manufacturers, customers are coming to Alden for its U.S.-made quality craftsmanship. Surprisingly, Clark said, the company is now reaching an even younger population, specifically young men in their 20s.
“The trend that affects us seems to play off other folks’ idea of what’s come to be known as heritage brands,” said Clark. “About 5 or 6 years ago, there developed in the market a fascination with companies that have been making product in the same place in the same … old-fashioned ways for many years and that introduced companies like ours to a new generation of consumers earlier than they would normally come to us.”
Once they get new customers in a pair of shoes, Clark said, the company it can retain them, thanks to a high level of comfort built into the shoes.
As it did in the 1980s, J.A. Manufacturing is undergoing another transformation, one that may strengthen its position in the market.
The company’s August sale to retailer Men’s Wearhouse gives it direct access to consumers through the retailer’s 600 Men’s Wearhouse stores, an exciting prospect, according to Sapienza. That access, he said, means the manufacturer can boost quality while also lowering price.
“With Men’s Wearhouse owning its own stores, you become a vertical organization,” said Sapienza. “So, you don’t have to have salesmen. You don’t have to have the costs associated with selling. You really take what’s called a wholesale margin out of the equation. The net result is we can trade up the product. We can put more workmanship into it, more quality. We can buy better fabrics, because we have more margin to play with.”
“So, in fact, what was a $695 suit in Nordstrom’s is going to be a $495 suit in the Men’s Wearhouse,” he said.
While the model works, multiple obstacles keep manufacturers from gushing about the industry’s future. One is that while the public may want to buy American-made goods, it doesn’t always act on that desire.
“It’s a nice movement going on for American product; if all other things are equal,” agreed Kidder. “But it’s wrong to think that everybody who sees “Made in America” automatically wants to buy the product.”
Sapienza agreed. “Everybody says, yes we prefer to buy American. But then you put a $3 t-shirt in front of them and a $10 t-shirt and they choose the $3 t-shirt every time,” he said.
Still, local manufacturers are hopeful that there is more growth ahead.
“I don’t see a boom happening, but I think we’ll continue to see gradual growth in this sector particularly as the consumer shows interest,” said Sapienza. “There’s lots of niche businesses that I think you’re going to see come back to the U.S. I think there are a number of folks, young people, out there that think they can start up.”
Beth Perdue is the editor of the SouthCoast Business Bulletin. To read about these business topics and more, see the SouthCoast Business Bulletin on news stands Feb. 1. Or, go to www.southcoastbulletin.com today. To subscribe to The Bulletin, e-mail Amy Tolivaisa at email@example.com.
January 26, 2014 12:00 AM