US Apparel Industry Finds Edge

THE United States apparel industry is no place for the faint of heart. It is a cutthroat, low-margin, labor-intensive industry that has been inundated by shiploads of clothes from as near as the Caribbean and as far as Bangladesh.

Hundreds of US clothing factories have closed, hundreds of thousands of workers have been laid off, and more than half the $160 billion US retail clothing market has been lost to imports. But surprisingly, US apparel manufacturers are just about holding their own and may be in their best competitive posture in recent years. A convergence of market forces, changing management practices, and technological innovation have given the industry a fighting chance.

``Even up against low wages and policies of industrial assistance which are unavailable in this country, US apparel manufacturers are close to being competitive with some third-world imports,'' says Richard Rothstein, a researcher for the Economic Policy Institute, a research organization.

Manufacturers in Bangladesh that pay 16 cents an hour to workers may still underprice US manufacturers paying $6.00 an hour. Yet, by developing their inherent edge in speed of delivery, US clothing makers are slowing jobs lost overseas, and are bringing some lost production home.

``The movement of the American apparel industry offshore has slowed if not halted,'' says Ed Rader, Southeast operations director for Kurt Salmon Associates, a consulting firm.

Retailers are buying fewer clothes per order, with more frequent reorders for popular styles, Mr. Rader says. Those US clothing makers that can respond in one to six weeks are muscling in on business that used to go to overseas manufacturers, most of whom still require big orders and 12-month lead times.

Factory owners on the front lines say competition is intense, but the malaise over vulnerability to imports shows signs of lifting. ``I see a resurgence in domestic work,'' says Aaron Mittleman, past president of the New England Apparel Manufacturers Association. ``During the height of the season we have to turn work away.''

The Los Angeles garment district, for example, will ship more than $6 billion of clothing this year - nearly 10 percent more than the $5.64 billion shipped in 1988, estimates the Los Angeles Chamber of Commerce.

Alex Lawlor, president of Made In The Shade clothing, a 17-year-old brand sold to retailers, says demand for variety and fast turnaround lured him back.

``In 1984, we had about 90 percent of production offshore, then about 60 percent offshore in 1986, where today we are 100 percent domestic,'' Mr. Lawlor recently told the Los Angeles Business Journal. ``We are in position, because we can turn around orders [respond to retailers] much more quickly.''

Behind the push toward variety are demographic movements Rothstein identifies as: workforce shifts from blue collar to white collar; more women working; more single adults; more people in the 35-54 age group. To attract jaded shoppers, department, specialty, and discount stores are flooding racks weekly with new styles. TJMaxx, a clothing chain, advertised recently in Boston for shoppers to come ``where nothing is ever the same.''

``What they've learned now is that the consumer is queen,'' Mr. Mittleman says. ``If the retailer puts [a smaller number of a certain item] in the store and it bombs, it's little risk.''

To respond to demand for more variety yet smaller quantities, US industry has invested in ``quick response'' technology. Scanners read bar coded tags at the register, and sold garments are tabulated by computers linking retailer, manufacturer, and textile maker.

Quick response is the industry's ``driving theme,'' Rader says. But for an industry geared to making batches of several thousand garments, the switch to making a few hundred of many more styles is difficult. It creates a manufacturing challenge not unlike that faced by US automakers.

With so many styles ``we have to develop a flexible manufacturing environment where employees are permitted to use their brains instead of just their hands,'' says Roger Webb, vice president of manufacturing at Jaymar Ruby, in Michigan City, Indiana.

``There will always be the opportunity to utilize technology and automation,'' concurs Rader. ``But the resource we're going to have capitalize on is the human resource.''

Tomorrow: Beyond the `sweatshop'