cfa presents made in usa at magic (las vegas, nv)
DESCRIPTION
Presentation from the California Fashion Association at the MAGIC tradeshowTRANSCRIPT
MAGIC“Made in U.S.A.”
Can We Make it Here?
August 19,2013
Presented By: Ilse Metchek, CFA President
Outline
• Economic Value of Made-in-USA• Consumer Interest• Going Global• Barriers• Constructive Choices
Economic Value of Made-in-USA
Ex: Apparel Manufacturer
A firm specializing in Domestic
Production of Apparel in LA County
has 100 workers.
These are the direct jobs!
Source of this and next 4 slides – LAEDC “Why Manufacturing Matters” Report, 2012
33 indirect jobs in LA County
887 4 338
Administrative ServicesProfessional and Technical ServicesManagement of companiesContract ManufacturingWholesale SuppliersAll Other Sectors
The Multiplier: 100 direct jobs create
These are the indirect jobs!
27 induced jobs in LA County
6 Health and Social Services5 Retail trade3 Food Services3 Other services, ex: dry cleaning, delivery, etc.2 Finance & Insurance8 All Other Sectors
The Multiplier:100 direct jobs create:
These are the induced jobs!
Total Employment
100 direct jobs
33 indirect jobs
27 induced jobs
160 jobs
Multiplier Impact in Selected Industry Sectors
Industry Direct Indirect Induced Total
General Merchandise Stores 100 9 13 122Ornamental & Architectural Metal Mfg 100 36 32 168Bread and Bakery Product Mfg 100 33 27 160Upholstered Household Furniture Mfg 100 19 20 139Women’s Cut and Sew Apparel Mfg 100 113 46 259
Source: LAEDC “Why Manufacturing Matters” Report, 2012
Consumer Interest Data
Likely to Buy 2010 2011 Age (% of Group)18-34 35-44 44-54 55+
More Likely to Buy it 59% 61% 44% 61% 66% 75%
“Made in America”......By Age(% of All U.S. Adults… “When you see an ad emphasizing
that a product is “Made in America,” are you….”)
Source: Harris Interactive October 2012
Likely to Buy Region (% of Group)East Midwest South West
More Likely to Buy it 60% 67% 61% 57%
“Made in America”......By Region“When you see an ad emphasizing
that a product is “Made in America,” are you….”
‘Made in USA’ is the most influential attribute when I buy a new product
0%
10%
20%
30%
40%
50%
60%
70%
2008 2009 2010 2011 2012
PercentageWho
Agreed:
Source: Cotton Inc. Lifestyle Monitor Survey 2013
GOING GLOBAL“Designed in LA”
U.S. IMPORTS vs. EXPORTSAPPAREL
ALL PORTS64,300,000,000
3,500,000,000
77,900,000,000
4,800,000,000
Source: LAEDC July, 2013
Value $USD
U.S. IMPORTS vs. EXPORTSTEXTILES
ALL Ports
Source: LAEDC July, 2013
Value $USD
5,200,000,000
9,400,000,000
7,400,000,000
14,300,000,000
U.S. IMPORTS vs. EXPORTSFOOTWEARALL Ports
Source: LAEDC July, 2013
Value $USD
17,500,000,000
940,000,000
23,900,000,000
1,300,000,000
Opportunities for U.S. Apparel Brand Expansion..IF non-tariff duties permit
• Brazil – The country is young, more than 60% of population below age 29
• China – Color palettes and design tastes are different, but brand names are important
• India – Apparel retail growth is on the rise thanks to a booming middle class
• Turkey – The market is growing for luxury retailers• Russia – Opportunities are strong but there is a higher cost of
operation • Argentina – High-end retailers are returning because of the strong
economic recovery• United Arab Emirates – Companies are focusing on associating
their presence with significant real estate developments, not free-standing retailing.
Opportunities for Global Growth
• North America and Western Europe (England, France, etc.) account for 65% of the current world-wide consumer apparel market.
• Engine for future market growth will be in countries like China and India, particularly at lower unit prices.
Sources: HSBC Report, March 2013
China - What’s Happening Now?
“Manufacturing production shifts out of China have been seen primarily in basic commodity categories such as apparel/textiles.”
Source: GDSL&K, March 2012
Wages’ Map in China
400 Cities over 1 million People –What will happen to wages?
Source: GDSL&K, March 2012
Country Wage Comparison
Country ‐ Total costs for sewing worker at factory (US$ per month)
China ‐ $310 ‐ 630 ‐ In some cases more expensive than Mexico!
Indonesia $202 ‐ 346
India $132 ‐ 296
Vietnam $134 ‐ 290
Bangladesh $62 ‐ 110
Even when factoring in efficiency expertise – China is NOW expensive
Source: GDSL&K, March 2012
What Third World Growth Offers• Fastest growing economies in the world• Low labor cost• Skilled resources• Strong government support• Very large domestic market
WHAT THEY NEED :* US Management (sales marketing distribution)* US technology* Business services and Intelligence
The RIGHT Combination
ADD U.S. Company and U.S. Management
PLUS ‘Third World’ assets (manufacturing, labor supply, etc)
EQUAL Global Reach!
Barriers to Domestic Manufacturing
California Denim in London
Selfridges LONDON – May 2012
The Retaliation Effect of Trade
Effective May 1, 2013:
• EU announces that tariffs on women’s denim trousers jump from 12% to 38%.
• The women's 'premium' jeans business represents 22% of the entire global jean's market. US shoppers spent nearly $16 billion on denim in 2011...and 75% of the premium denim market comes from Southern California!
• Jobs - jobs - jobs! This ruling affects domestic sewing contractors, cutting services, dye and wash facilities, textile suppliers, and a myriad of other indirect employee-based companies working on US-made denim brands.
Manufacturing Challenges .......with continuing
strong competitive pressure from offshore production
• Immigration Status Ruling• Industrial Training ...where will the ‘new’
workforce come from?
• Manufacturing Tax Credits• Equipment Financing... machinery,
technology, and workforce training
Constructive Choices
CHINA CANADA
U.S.A.
“Trans-national” Fashion
FRANCE
CHINA CANADA
U.S.A.
“Trans-national” Fashion
FRANCE
A Strategy for LA Fashion
Hollywood Reporter,
June 2013
MISSION: To gather information about California manufacturing, designing and creative services To promote these services and products to retailers and media.
New CFA Program:California Fashion Manufacturing (CFM)
CFM Company SnapshotSeptember 12th, 2011
“Use the best equipment, have the best design, train the best workforce, and educate the consumer with branding.”
....Don Randolff, President, Brooks Brothers
The Secret of Success…
The California Fashion Association (CFA) is the Business-to-business forum for California's
Apparel and Textile Industries.
Please visit our website:www.CaliforniaFashionAssociation.org
Email: [email protected]