Coat makers aim to maintain quality and speed while looking overseas for production and materials.
Business might be up, but shorter winters and slashed prices from Chinese imports are giving some outerwear vendors cause for concern.
Many coat producers are reporting double-digit growth, citing a growing demand for luxury materials — mainly fur — from end consumers as a major factor. But looming in the background are manufacturers in cheaper production centers, such as China and South America, many of whom are able to deliver a similar quality product at a much lower price.
To protect their business, vendors are resorting to a variety of tactics.
According to Karl Matar, vice president of sales at Toronto-based Gimpex, which manufactures under the Hide Society label, one of the company’s big advantages is running its own factory.
“We are a totally integrated company,” he said.
Matar said Hide Society’s manufacturing setup strives to meet the needs of its better store and boutique customers, which include quick deliveries and a top-notch product.
“We’re not at the mercy of some factory, and that gives us a significant edge over price savings you might find anywhere else in the market,” he said. “If I get a call on Nov. 15, I can get the product in by Dec. 5. And because it’s our own factory, we can do one-off or two-off quantities, as well as the 1,000 pieces that somebody else might request.”
George Musi, vice president of Musi Furs in Montreal, agreed that being able to provide quality quickly is important. “Everything we touch is in North America,” he said. “If a customer knows what they want, they are happy to pay. For them, what the label says is important. Obviously, cheaper imports from China hurt the business, but as long as we are known for service and quality, it doesn’t make a difference to our customers.”
Manufacturers like Matar, that stand by the importance of producing everything in-house, say that in the minds of many high-end buyers, having immediate access to merchandise far outweighs any price savings.
“If you can’t meet a customer’s needs quickly, you won’t see any repeat business,” he said. “I’ve noticed that even if a buyer can get something 15 percent cheaper out of China, it’s more important that he gets what he sees, that what is delivered is equal to or better than the sample. In the end, you’re only as strong as your manufacturing backbone.”
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Even so, keeping prices competitive remains a necessity for vendors, and in an increasingly global economy, this often means sourcing materials and products from outside the U.S., particularly from China, India and South America. More and more, companies are following the old adage: If you can’t beat them, join them.
New York outerwear maker Linda Richards had been manufacturing domestically for almost two decades — until a couple of years ago.
“We’ve just started branching out,” she said, citing new production centers in Italy, Poland and South America, where she has found a high-quality grade of baby llama and alpaca.
“People wanted something different. They wanted luxury. And the question was, ‘How was I going to be different? How was I going to stand out?’ I went to South America and have tried to do some vertical operations there. It’s been wonderful for me, and the price is competitive with everybody else who was making in Macau and China.”
Then Richards began exploring China, seeking fur accessories in Beijing and Hangzhou. But before that, she had to wrestle with some preconceived notions.
“China to me was the cheap competition, and I said I would never resort to it. But the reality of it is that the whole world is doing business with China. I then realized that if you’re not doing business with China, you’re going to go out of business. Everything has become so expensive, that for a manufacturer to survive, you have to be able to compete with everyone else in the world.”
According to Allan Zuckerman, principal of Chosen Furs in Thousand Oaks, Calif., his company’s long-standing business relationships in China are a distinct advantage.
“If we were a typical importer that went to the Orient and sourced products from numerous manufacturers, we would become meaningless to many instead of meaningful to a few,” he said. “But we have partnered with the same company in China for 20 years, and that’s our little oasis. We pretty much get what we need at the right price.”
Zuckerman said that gives him extra clout with buyers — because whether they want volume or special orders, both can be “attended to at the proper time and price. Everything is done under one roof, so there is consistency in manufacturing,” he said.
His strategy also has been to provide variety; he usually has about 120 styles in his seasonal collections, including leather and fur and a combination of both. He also deals in pricy furs that can wholesale for around $4,000.
According to Mary Dong, vice president of Maxxsel Apparel in Baldwin Park, Calif., her company imports from China, but is always analyzing the best way to do business.
Dong said every few years Maxxsel will investigate the option of owning its own factory in China to see if it can attain better control of manufacturing and deliveries.
“We’ve had some good opportunities to look at some deals, but we always give up at the last minute,” she said. “The big issue is how to handle it. We’re based here, and we haven’t yet found the right management and man power there.”
Nonetheless, the company has recorded an average 10 to 15 percent increase in volume over the past few years, staking its business on being able to provide a large variety of merchandise to everyone from specialty boutiques to chain stores.
“We do minks that can sell for $1,000 at wholesale to nonleather items like microfibers and polyesters that can be $30 at wholesale. It’s always competitive because a customer might just turn around and go directly to China. It happens all the time, so it’s up to us to try and manage it.”
Though outerwear vendors have control over style and pricing, one factor they can’t do anything about is the weather. In recent years, winters have grown shorter and warmer, two trends with the potential to heavily damage sales.
“From what I understand, everybody in the industry experienced solid growth in 2005,” said Zuckerman. “December was an extremely lucrative month. But our business is totally predicated on the weather. Come Jan. 1, it got very warm nationally, and that might affect the overall performance of the year. When the weather is consistent, the outerwear business can go into February strong. Otherwise, January and February takes its toll. We’re certainly going to be cautious.”
Los Angeles coat importer Desire of All Nations is still recording healthy orders from colder climates in the U.S., as well as from Canada and some European countries.
“Business has been good,” said sales manager Stephanie Yang. “Our customers like the fact that we bring in goods from China, many of which are handmade or made of real fur. The price is good, we design for them or at their request, we take care of quality control and we deliver on time.”
Overall, vendors said the key to success in the category lies in being able to canvas new customers, protecting themselves from the inevitable risks of producing overseas and making sure they are always on trend.
“The people who thought they could never afford fur are starting to afford it,” said Linda Richards, whose eponymous collection sells in 2,400 stores nationwide. “Luxury furs are always going to be important. But I’m not putting all my eggs in one basket. I’ll definitely continue doing some manufacturing in the U.S., and I’m experimenting with places like China while still producing in Poland and Bolivia. People have gotten burned overseas, so we’re taking baby steps.”