Made in the U.S.A., Part 2: What Goes on Behind the Business of American Fashion

Our insider spills fashion industry secrets in Part 2 of a special series on American fashion manufacturing.

A Tommy Hilfiger advertisement proclaims, “Fresh American Style… discover style that truly fits the way you live.” The irony behind this statement is laughable. Here’s an “All American Brand” hardly designed by Americans, made far from American shores, that isn’t even primarily owned by Americans. Does American Eagle produce anything in America? Heck no. Think Abercrombie & Fitch is authentic? Forget it. Tommy Hilfiger sold his company to the Dutch and has been sitting pretty on his yacht ever since.

But the advertisement isn’t the only thing about that brand that is misleading. In 2000, Tommy Hilfiger, whose brand signified the great America dream, was caught manufacturing clothes in sweatshop conditions in the United States territory of Saipan in the Northern Mariana Islands. As a U.S. Commonwealth, clothes made there could be labeled “Made in the USA,” but federal labor laws including the minimum wage did not apply. Perhaps Tommy Hilfiger didn’t know what his production partners in Saipan were up to, but you better believe they pulled their production out of there as soon as the news hit the stands. Shortly after the story broke, the garment factories in Saipan were officially closed.

Are the companies entirely to blame? The pressure to keep profits high and the cost on the sales rack low is an issue driven by both investments of blind shareholders and consumers who want a good deal for name brand clothing. Where the product is actually produced is rarely even discussed with the shareholders, who tend to be more concerned about the return on their investment. For the consumers it’s clearly labeled, by law, in every garment we own: Made in Indonisa, Made in Guatemala, Made in Taiwan. The possibility that the companies that we are investing in could be harming others or destroying our economy doesn’t register for most.

For one company, this was not the case. It was the shareholders of Hugo Boss who helped keep their American factory in Cleveland, Ohio from closing. Hugo Boss has been producing its suits there for the past 23 years, in a garment factory that has been operating continuously since 1932. Recently, however, even this bright example has been tarnished. Last year, the company moved to shut down the factory. The Hugo Boss Corporation blamed consumer and shareholder demands for the decision to close. The company had issued notices to the workers that stated:

“Looking at the company’s goals, which were driven by our customer preferences and our shareholder responsibilities, it is our conclusion and decision that it is time to close the Cleveland plant…”

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The workers despaired, but turned to their union to rally against the threat of losing their jobs. It wasn’t until the union realized that a group of shareholders which had invested $150 million into the fund that owned Hugo Boss was an organization called the Ohio Public Retirement System (OPRS). When they were notified by the Union, they threatened to pull their funds out. Not surprisingly, Hugo Boss changed its tune and in the end the company agreed to keep the factory open – provided the workers take a pay cut from $13 per hour to $10 per hour. (Had these been workers in China working for one of the factories that Walmart sources with, no negotiations would be possible, and they might be paid as little as $.44 an hour, and $.65 hour for overtime hours, if they get paid at all.)

While the Hugo Boss shareholders’ interest appears to have been largely coincidental in favoring the plight of the factory and its workers, there still are some American companies so committed to keeping American manufacturers in business that they are willing to pay the extra cost of doing business here.

Images via Feral Childe Spring/Summer 11

Feral Childe is one such business. Says Alice Wu, one half of the design duo that makes up Feral Childe, “We definitely pay a higher price for Made in the USA. Saving in shipping does not compensate. We know there are manufacturers overseas that can do it at a fraction of the price, but it’s a conscious decision we make: paying fair wages, working with people we know, and doing it locally whenever possible. We’ve built a manufacturing community.”

Wu and her business partner, Moriah Carlson, are well aware of the global options, but choose to keep the operation in America regardless.

“It seems crazy not to look in your own backyard first to do business if you can. We have all the resources available to us right here – why would we do business in China when we can do it here with people we know?” she says. “Every step of the way there are people making the clothing – people we know, people we care about. You could say that everything we do is not only ‘Made in New York,’ but also ‘Made with Love.’ Everything is connected to our whole community of people and hopefully others will become aware of that.”

While she and Carlson have decided to do business in an unorthodox manner compared to the New York fashion industry, she does say that they run into problems from time to time with their homegrown model.

“We build our working relationships with manufacturers and the people we work with count on us to continue working with them to stay in business. They count on us to grow our business and therefore give them larger orders with each season,” Wu says. “They believe in us and that’s why the ones who are willing to work with small companies do it. We are all in it together, but we’re left in the lurch when mills and factories disappear overnight.”

This is something she and her partner have experienced on several occasions.

“One of the mills we’ve worked with for four years now recently went under (it was in Montreal), and a Texas mill that we were just getting to know folded before we had a chance to even work with them,” says Wu. “Our New Jersey-based textile printer closed up shop this past October after three seasons of working with them, just as things were starting to go smoothly and we had to scramble for a new printer and learn a new way of doing things.”

These issues arise as a direct result of many American fashion businesses deciding to move production overseas. If a mill or factory loses too many orders to manufacturers overseas, they can’t keep afloat, leaving no choice but to close shop. This in turn creates problems of scale for true American brands like Feral Childe. If they want to help keep their mills, factories, and themselves in business, they have to walk a fine line between large and small orders.

“The stakes grow higher as we grow which makes it difficult to finance and find consistent resources. Many fabric mills and textile printers don’t want to partner with the little guys, like us,” says Wu. “They want you to order minimums of at least a thousand yards at a time. We have great sewing contractors, but sometimes they get overwhelmed if we have more orders than usual. Manufacturing in the USA isn’t hard if you are just starting out or if you are a huge company, but it is difficult if you are in-between and growing.”

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When asked what she thinks would improve the situation, she emphasizes consumer awareness and local pride.

“I’d put fashion manufacturing on the map. I think that the garment centers in different cities need a visual representation. They should be put on some kind of map so people know these are major manufactures within their cities,” she says. “New York, L.A., San Francisco, Chicago – all the major cities in the States have manufacturing facilities and the locals as well as the tourists should know about them, and understand the economic and social value of that. So instead of looking at old factory buildings and thinking ‘industrial wasteland’ or ‘real estate land grab,’ they should think of the rich history of a once-thriving industry. And they should be conscious of the industry which is still thriving”

Wu takes a moment to reflect. “I just wish people had a greater appreciation for where their clothes come from. People now are so removed from it. I’ve met people who are surprised when I tell them we make everything in the USA. They say ‘Where?'”

Fortunately, Made in Midtown has already started a map of this sort, with interactive images of buildings in the garment district to show what is manufactured in the Garment District buildings.

Editor’s note: Louise Lagosi is not the author’s real name. Catch up on Part 1 in this series here.