California apparel industry and Texas

The price of not calling on my IT friend for help setting up my new computer: Lost articles. If you are so inclined you can search for the article background. Here is the gist of the lost article. Gt

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I have often stated California’s number one position in apparel. Even now, the state’s industry is engaged in new strategies between designers and independent contractors in Los Angeles. These defensive strategies are in response to increasingly high fuel costs and foreign competition. The offensive components of this strategy include; 1.) utilization of an abundant supply of local apparel talent, 2.) quick turnaround on small and large orders not possible with large foreign and domestic manufacturers, and 3.) the development of personal relationships between designers and ICs. Thus far, this has resulted in a bustling apparel economy, despite the struggling overall economy. There may well be displaced workers who would differ with that statement, but the resourceful, innovative approach by the California apparel industry in Los Angeles brings up a question.

WHAT ARE THE LESSONS FOR TEXAS APPAREL?

Again, I have often stated Texas is number one . . . in the number of displaced apparel workers. The previously stated conditions are true and affect the apparel industry in both states. Unlike California, Texas is number one in the nation in exports for eight years in a row. Although the California economy is bigger than the Texas economy Texas continues to distance itself more and more from California in exports. Mexico is Texas’ number one trade partner, with California, again, a distant second. Certainly, Texas does not lag behind with a wealth of apparel resources of its own. The lessons for Texas apparel: 1.) utilize local independent contractor talent, 2.) quick turnaround of product orders from local ICs means nominal or elimination of inventory stockpiling and quick return of investment, too, and 3.) relationships with local ICs are a human interaction valued as much for dignity, idea exchanges and friendship as for product delivery. It bears pointing out IC-Networks are neither employers nor jobs. They are at-home enterprises.

THE IC-NETWORK MODEL

While I could be off on some details I understand the California model involves an individual designer partnering with an “independent contractor” who employs a small group of apparel workers to manufacture apparel items. This is the traditional, conventional model. Moving from such a conventional model to an at-home Independent Contractor Network model involves change. Change is seldom easy. It may be easier when it is thrown at us than when we think, plan, decide and implement it. The idea of change can make us reflect on how “everything’s fine”, “the last time I tried that I failed”, or “I don’t know if that will work” and not about moving forward. The innovative at-home IC-Network model is the Texas model for implementation of these lessons by apparel designers and contractors. The model can be implemented in California or anywhere in the nation where producers (designer/contractor) and buyer (retailer) are found. A network is as big or as small as required to fulfill orders, not just for one buyer, but as many as buyers as partner with the IC-Network. Their income is generated through; 1.) personal productivity, 2.) residual income, and 3.) bonuses. They are not the designer’s or retailer’s employees. They are truly Independent Contractors. Further, network membership options are available for all.

WHAT CAN AN IC-NETWORK ENABLE ME TO DO?

1.) A private label of your own for your, a.) seasonal apparel items, and b.) fashion designs. A favorite question I like to ask when meeting boutique owners, “Do you own your own label?) The answer is, “no”, usually.

2.) Custom-made, or customer-made apparel need not be ceiling price as in the past. Both, contractors and retailers, have cut themselves out this market through their pricing. It is far better to create a product at a marketable price sustained through quality and repeat customers than to sit idly waiting for the next “big” job or sale.

3.) Expand your sales reach to customers and retail clients through your IC-Network partners. If you are a network member and IC-Networkers who produce your apparel are contracted by a retailer to produce your fashion design that’s sales income for you and the IC-Networker without you threading a needle or lifting a finger.

WHAT WILL IT TAKE TO START A NETWORK IN TEXAS?

1.) Attend the next business presentation in Round Rock TX when it is announced. 2.) Review the FAQs on this blog to inform yourself. 3.) Prepare yourself for change.

Super-size? No thanks

I receive, and respond to, a steady stream of calls for help from people. They are ready to bring out their creativity on 1) a pattern, 2) make some samples, 3) produce their product, then, 4) bring it to market. The first two steps can be, and are performed by themselves, often. The third step, finding a manufacturer is perhaps their earliest and truest test. Actually, finding a manufacturer, rare as they may be, is not as tough as finding the desired quality at a price that won’t crush the budding enterprise before it even launches. I wish I could say I knew how they did finding a manufacturer, but that is not feedback information I have been provided. One individual had existing connections with a manufacturer she had used in China. She was ready to end that long distance arrangement in favor of a US manufacturer to produce her apparel line. Those oversize apparel producers are the same who have gave birth to the consumer’s adage on apparel choices on the rack: One size fits none.

The information I have copy-pasted below provides some simple, clear arithmetic. This information is nothing new, but I hope it may help some of you appreciate what a local IE-Network is and can do for your business. The US apparel industry has (or did) for many years relied on major big-time manufacturers to produce its apparel. The pressures of cost and price resulted in most, and at this point maybe all, those major manufacturers to go abroad.

However, equally as much a part of the US apparel industry and maybe even bigger than those major manufactures were the thousands of small establishments which contributed to apparel manufacturing. The overwhelming majority of these small establishments employed four or fewer employees. These small establishments were successful and vital to the apparel industry for the immense (and inexpensive) talent they brought to the design and production process.

My question(s):

How many times do you need to multiply by 4 before you have an IE-Network capable of producing your apparel line?

Those 4 workers in small establishments are no less skilled than the hundreds employed by an overseas major apparel manufacturers?

Why then should a local IE-Network be viewed any differently?

What the information below reveals is the apparel industry has long relied on the many, small operations for the bulk of their production. This is not McDonald’s. You may want to super-size your apparel producer, but a small one will work wonders, too. There are, according to the Home Sewing Association, over 40 million people in America who sew at home. The HSA cannot say what the breakdown is between sewing for leisure and sewing for profit.

My take on this as a profitable opportunity for Independent Contractors and Independent Retailer/resellers: It can’t be all that tough to build IE-Networks locally, regionally, statewide and nationwide; beginning in Round Rock Texas. (check out the free burrito!)

The following are clips taken from the article. I have added the red highlights.

The U.S. apparel and fabricated textile products industry is highly fragmented and quite labor-intensive. Of the approximately 24,000 establishments that produce both apparel and fabricated textile products, nearly two-fifths are establishments with four or fewer employees. More than half these establishments have fewer than 100 but more than 4 employees.
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The apparel manufacturing segment is experiencing an ongoing retrenchment. As emerging market countries continue to take on the workload of manufacturing, it is likely this will continue to be an American industry on the decline. The number of establishments engaged in cut and sew apparel manufacturing decreased from over 13,000 to less than 11,000.

________________________________________________________________________
Not surprisingly with the continued trend to outsourced jobs outside the U.S., the number of workers engaged in the industry took a very significant decrease in only 5 years. The drop of over 50%, however, is unusually large it appears employment in the industry is now around a quarter million, down from over a half million workers.

This is not an industry with a high concentration at the top. As indicated above, there are still many establishments that employ 5 or fewer workers. The four largest players account for less than 20% of industry revenues while the top 50 represent slightly over 40% of all industry revenues.
Concentration of Revenue by number of firms in the industry is as follows:

Total Number of firms Revenue as % of all firms in the industry


4 largest 18.8%
8 largest 23.8%
20 largest 32.6%
50 largest 43.9%

Private label

It is heartening and exciting to meet others of like mind. Malissa Long is one such person. I clicked my heels in midair (well, alright! It’s a metaphor. . . but I can do it) when I learned of her decision to offer private label collections to boutiques in Austin. Among the boutiques: Girl Next Door, Adelante, Blackmail, Soigne, Envie, and by George. I do not know of the boutique owners' decision.

I often broach the subject of private label when I meet independent apparel retailers. Three
things come out, typically:

They have thought about it, but it’s too expensive,
They have thought about it, but do not know how to go about it, and,
They have never thought about it.

Malissa is typical of the vast number of individuals talented in apparel in Texas, Virginia, Oregon, Florida, California, Matamoros Mexico. I mention these locations because these are just a few of the places from where this blog receives returning visits. Clearly, people are curious. They want to know how they can utilize and benefit from their KSE as independent contractors in apparel. Malissa is talented in the creation of patterns and is well prepared to tackle the challenges boutique owners see in private label:

They are hard to produce.
They are costly.
The time involved is too much.

Malissa is not reinventing anything. She is merely accessing free open source patterns that are
out there for anyone to use. She will work with clients on any adjustments, alterations to
produce the owner’s desired wishes. Contact Malissa if you're ready to try out your own private label. That sounds like an Olympic Gold idea!

Lessons from an Olympic gold medal winner

Everybody's looking for gold! Some lessons from a gold medal winner at the 2008 Olympics in Beijing China.

He, like many competition athletes, did not come to China to have fun. He came to take care of business. The business of sports is competition. The profit/loss business ledger columns of business are the win/loss columns of sports competition where a win is profit and a loss is a loss, still. He came for the gold.

Michael Phelps, the twenty-three year-old from Baltimore Maryland, has forced even the most disinterested to take notice of his remarkable Olympic feat: An unprecedented eight (ocho) gold medals in men’s swimming competition to surpass Mark Spitz' 1972 longstanding record of seven.

We spectators may find it difficult to accept this view of Olympic sports competition. It doesn’t sit well with our romantic, couch view of sports as entertainment. This is not a throw-off on capitalism or competition. It is about a lesson of independence and team work.

I wrote a Spanish post on the "Treasure of the Maquiladoras" ("El Botin de las Maquiladoras") a while back. The point of that post was to illustrate although the maquiladoras (apparel assembly manufacturers, primarily) in south Texas are gone their treasure, their gold, remains. That valuable treasure is the Knowledge, Skills and Experience which remains as the sole intellectual property of the independent former workers who now earn their livlihood at McDonald's, Walmart or the call centers and plastic injection molds which continue to seize the labor-force opportunity left behind in south Texas.

These same individuals possess the capability to team together with local independent apparel retailers; a virtual apparel manufacturer. I receive a regular stream of emails from designers in need of pattern makers and a manufacturer. At least one of them has expressed her desire to discontinue her business with China manufacturers. She has decided to go for the gold in the US, instead. Why are these two, independent individuals and independent designers, apparel retailers, not seizing the valuable treasure in their communities for the creation of their apparel items, their apparel line? They are both looking for gold, but both seem to look past each other.

As impressive as are Michael Phelps’ accomplishments they are a powerful testimony and lesson about trust, confidence and risk. Although he tied the world record when he won seven (siete) gold medals as an individual there was one more. The only race left where he could possibly, and quite likely, win another gold medal was the 4X100 medley relay; _ not as an individual swimmer, but as a team member.

Lest you think, “It’s only a game”, that is not the mindset of competition athletes. The decision by Michael Phelps to play as and be a team member was potentially costly. His image was at risk had the team suffered a loss. However, I believe it was more than just another race for him. It was an golden opportunity to play, compete and win as an American team member. He believed in the capability and willingness of his teammates to take the risk and go for gold together with them.

Take care of business. Go for the gold. Enhance your competitive edge. Build your team. Build your IC-Network.

A logistics perspective on apparel outsourcing

This article clip on apparel is from a logistics perspective. Logistics is all about the chain stretching from order placement, design, materials, manufacturing; to order delivery. Clearly, outsourcing is not the cure-all for ills affecting US apparel retail and manufacturing. Although the setting here is the global stage the issues and their solutions are real for local independent enterprises and independent retailer networks, too.

These three things stand out about outsourcing:

The pursuit by apparel companies for lowest prices continues.
The problems of contractor turnover.
Poor apparel/contractor relationships translate into poor product quality.
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Hot Topics in Apparel

Strengthening Outsourcing Relationships
Apparel companies' relationships with contract manufacturers in low-cost countries have historically been transient. Deals sometimes last only a few months as brands continuously pursue the lowest cost. On average, one-third to three-quarters of an apparel company's contractor portfolio turns over every year.
But this relationship-hopping comes with a price: poor product quality and contractors who are unwilling to invest in enhancing operations.
"Flitting from contractor to contractor hinders flexibility, hurts quality, and invites social compliance and visibility risk," says David Aquino, research director of the Industry Value Chain Strategies Service at AMR Research, Boston.
Some brands are ameliorating this risk by taking a more strategic approach and pledging longer-term commitments. They're also putting more feet on the ground -- either their own local personnel or in-country logistics or sourcing partners.

They're hoping a rationalization of suppliers and longer-term deals will build the trust required to spur contractors to invest in technology and equipment, boost quality, and prioritize their work.
Apparel companies are also setting up supplier portals to enhance long-distance communications. The most successful companies build global sourcing infrastructure slowly and methodically, rather than rushing in, Aquino says.
"We prefer to stay with the factories we have good relationships with," says Lisa Kuhns, account manager at The S Group, Portland, Ore., which maintains offices in major production countries to offer a local presence to apparel companies lacking the resources to build infrastructure themselves.
"Having strong relationships gives us better negotiating power, and helps hold down prices on behalf of apparel companies," Kuhns says.
In addition, apparel companies are getting more involved in raw materials sourcing, a task previously left to contract manufacturers. It's a strategy designed to shore up quality, which tends to suffer in the move from factory to factory.

Pinpointing New Low-Cost Countries
Rising prices in southern China are driving apparel companies to new low-cost locations throughout Asia, and focus has begun to shift to African and Pacific Island countries. But sourcing from these countries can be risky because they lack apparel production training and infrastructure.
"Critical mass has to build up before large air and ocean carriers can offer fixed-day service out of a new location," says Tom Wyville, vice president of marketing for FMI, a Carteret, N.J.-based 3PL.
It's a challenge to move to less costly, industrialized areas without higher transportation costs wiping out the savings. 3PLs and sourcing partners are helping apparel companies by opening local offices that offer services to hold down logistics costs and provide visibility and quality control. Logistics strategies include blocking out space with air and ocean carriers and operating consolidation centers.
But the number of new sourcing locations is finite. "The world is round, and eventually you come back to where you started," notes Mark Cohen, CEO of Tracy Evans Ltd., an apparel company that has returned to sourcing from Central America after a brief shift to Asia.Smart apparel companies operate multiple supply chains, balancing near-shore with distant sourcing locations, and maintaining reserve capacity to meet unexpected demand.

Grow your business on a weak US dollar

Profits from export sales are up for US corporations like Microsoft, McDonald’s and California wine makers who are taking full advantage of the weak US dollar.

A weak US dollar could present a mutual opportunity for at-home custom-apparel Independent Enterprises (IE) and Mexico (or, US) Specialty buyers.

A weak or slow economy is often seen as being bad for business and not a time for taking a risk. However, you can grow your business on a weak US dollar, too. Specialty products and services often take a back row to the company’s core business until the economy recovers. However, Independent Enterprises and buyers need not rely on high volume to sustain and grow their business even during a down economy.

Because both are among the smallest business units, compared with major manufacturers and mega-chain store retailers, they are best able to change into a surge mode the moment the economy rebounds. While many downsize their operations into a “survive the slump” mode these Independent Enterprises, because they are already “downsized”, don’t need to think or act small. They are forward and progressive thinking about opportunity. Some incoming revenue is better than not at all, but perhaps more important, parties involved are setting themselves to be ready for the economy re-surge.

What could make a partnership between an IE-Network and a custom-apparel Mexico Specialty buyer attractive and grow your business on a weak US dollar?


1. Individual attention to buyer’s client preferences.
2. Network can be as big or as small as buyer wishes.
3. Diversity of talent.
4. Potential of ever expanding IE-Network base.
5. No contracts or commitments to buy.
6. Networks and buyers, alike, are mobile.

IE-Networks can sell their “Made In USA” label, proudly and confidently. Specialty buyers can give IE-Networkers assurance of prompt payment-for-services through the setup of a Commercial Credit transaction account with a bank in the Network’s area. Even better, set it up online for electronic quickness.

I can imagine you’ve got questions. I do not have all the answers, but _ we can talk.

Independent Enterprise Network presentation

You are invited to attend a Powerpoint slide presentation on

CANCELED

My apologies for the inconvenience. Reschedule to be announced.
Independent Enterprise Networks

The Powerpoint presentation is an overview of the at-home IE-Network model:

Profits
&
Strategies

6:00PM
Friday August 15

Caffe Panini
(Conference Room on premises)
1105 S Mays Street
Round Rock, TX 78664

Caffe: http://www.caffepaninitx.com/

location: http://www.caffepaninitx.com/1698692.html

Who should attend?

Independent Apparel Retailers

Independent Apparel Contractors

Independent Computer Systems Builders

Questions or comments:
GTorresCUE@gmail.com 512.218.4627

Lining up to buy fabric from Mexico

They are lining up to buy fabric following the news release by the USTR.

The doors have just opened wide . . . for Central America.

Actually, the international conference call on July 2 by US Trade Representative Scott Quesenberry was to reassure all parties Mexico denim fabric exports to CAFTA member Guatemala will start on August 15. The savings for factory owners range from 30 to 40 percent over US-bought fabric in the past. Of course, as we know there is no longer a textile industry in America to produce the fabric for which apparel producing countries have been starving. Apparel produced in these CAFTA countries using Mexico fabric is than imported into the US duty-free, without quotas, and, _ very cheap.

This raises some questions in my mind. I submitted my question concerning ICs in Texas to the USTR on August 08 and will share their response as soon as I receive it. My question: Is this duty/quota-free denim fabric available to ICs in Texas?

Do fabric retailers, such as Hancock and Jo-Ann have an interest or plan to procure Mexico denim fabric for their customers?
If the cost-savings are so appealing for factory owners are they any less for ICs?
What if a local IE-Network of at-home apparel makers approached the store management to make known their wishes for this fabric?

Actually, this may be an opportunity best seized by an independent Mexico entrepreneur.

What if this fabrics vendor turned right around to place, pickup and purchase custom apparel orders from IC-Networks in Texas for his/her clientele in US or Mexico? Any international import/export issues would be his business to handle, not that of independent contractors.

What if your private label caught the vendor's eye? Are you ready to meet the buyer’s requests?

FYI: Powerpoint business presentation to be announced August 11 on this blog.

Independent apparel retailer unity

“No, but sounds like a great idea!”

That was the reaction from an independent apparel retailer in Round Rock to my question: “Is there an association of independent apparel retailers?”

Consider this my invitation to all: If you can enlighten me to the existence of such an association, organization or network to unite independent apparel retailers I would like to know about it. Also, I invite you to view, “CHALLENGES OF THE FUTURE”, a resource by the Illinois Retail Merchants Association.

What effect does the IE-Network have on the unity of independent apparel retailers?

First, unity among IRs means merchandisers and others businesses will see and hear them as a body.
Second, unity ceases to be a mere slogan or wish, but a reality. Independent retailers who unite can exercise their business clout to leverage textile suppliers and retailers on behalf of the IRs’ apparel-makers network.
Third, unity gives IRs a voice in local government.

The link above is the actual text. The five-point text below reflects my red highlights added for emphasis. Here is one portion I highlighted.

Some of the trends affecting retailers discussed in the report are:
1) the increasing amount and intensity of competition;
2) the impact of major demographic changes like the aging of America, the growth of the Hispanic population, and economic clout of the “Y Generation” born 1981-1995 as the largest consumer group in US history;
3) the backlash against chain expansion in smaller communities;
4) the impact of soaring healthcare costs on retail businesses; and
5) the ever-blurring delineations between market segments and buyer groups in the US.

1. The competition is not going away. It is not only from overseas, but across the street, across the street. Increasing sales revenue must come from something more than less expensive procurement. A retailer’s local, private apparel-makers network offers great promise for reducing procurement costs by minimizing or eliminating conventional inventory stockpiling practices.

2. The buyers represented by these demographic groups can best be reached through IE-Network members who themselves, as apparel-makers, both young and old, represent the community demographics. I have heard from so many young girls and young women a mere two, three years out of high school who have great desire and ideas for fashion. What snuffs their creativity is not knowing or being able to partner with independent retailers. Despite their youth many of them have old, conventional paradigms, “I-need-a-lot-of-money-to-start-my-business” mindsets toward getting into the apparel business.

3. Perhaps the best indicator of this backlash is WALMART has committed to taking on the “small business” look in local communities. Whether they achieve that is not so much the point as that they see the value of you of the independent small business.

4. I believe the allusion in this IRMA source is to BIG retail business. Nonetheless, contractors, in the truest sense of the word, represent a way for retailers to continue to build with their former employees Knowledge, Skills and Experience as independent contractors and eliminate healthcare costs.

5. This point is closely related to the first point on the demographics makeup of the community.

Star certification for independent contractors

What's the advantage of Star Certification for independent contractors?

There are two groups in the private business sector which are the focus of the TSR IE-Network model. They are the individual, private, independent enterprises (IE) of contractors and retailers. Although the primary focus is on at-home apparel makers and computer systems makers the model will extend into other areas to include; automotive, AC installation/repair, cable installation, housecleaning, roofing, satellite dish installation and more. These two sectors, independent contractors and independent retailers, are represented in large numbers throughout America. Despite the great amount and diversity of talent they are often unable to establish and grow their enterprises.

Star certification could make the difference. A Star Certification program for IE-Network members is under development and is expected to be completed by launch of the IE-Network model in Round Rock Texas. Star Certification is a means of reassuring the IC’s private clients, consumers and the IC’s retailer for whom he/she fulfills apparel orders. Overall, Star Certification establishes a standard on par with any other in the market. It is an invitation to the general public to place their trust for quality workmanship and service on independent contractors and independent retailers. The IC can display his/her Star Certification for customers. Customers can view rank (3 star, 2 star and 1 star) and grade level details of the IC's profile for their specific talents as well as customer testimonies.

The Star Certification is structured with 3 ranks and 6 grade levels. These are some of its elements:
· Verification of number of service calls performed within a specified timeframe.
· Verification of service fees associated with those service calls for purposes of determining IC grade level. (For example: Under $50 in a 1 year timeframe would classify as a One Star rank, A4 - A6 grade level; Over $1500 in a 2 year timeframe; Three Star rank, A1 grade level.)
· Verification of experience.
· Verification of education.

The Star Certification will be available for an affordable as yet to-be-determined fee. The program will be conducted through an independent accounting firm. TSR is committed to supporting independent contractors and retailers in the establishment and development of their enterprises through the creation of IE-Networks.