CFA Presents Made in USA at MAGIC (Las Vegas, NV)

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Presentation from the California Fashion Association at the MAGIC tradeshow

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CFA Presents Made in USA at MAGIC (Las Vegas, NV)

  1. 1. MAGIC “Made in U.S.A.” Can We Make it Here? August 19,2013 Presented By: Ilse Metchek, CFA President
  2. 2. Outline • Economic Value of Made-in-USA • Consumer Interest • Going Global • Barriers • Constructive Choices
  3. 3. Economic Value of Made-in-USA
  4. 4. 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
  5. 5. 33 indirect jobs in LA County 8 8 7 4 3 3 8 Administrative Services Professional and Technical Services Management of companies Contract Manufacturing Wholesale Suppliers All Other Sectors The Multiplier: 100 direct jobs create These are the indirect jobs!
  6. 6. 27 induced jobs in LA County 6 Health and Social Services 5 Retail trade 3 Food Services 3 Other services, ex: dry cleaning, delivery, etc. 2 Finance & Insurance 8 All Other Sectors The Multiplier: 100 direct jobs create: These are the induced jobs!
  7. 7. Total Employment 100 direct jobs 33 indirect jobs 27 induced jobs 160 jobs
  8. 8. Multiplier Impact in Selected Industry Sectors Industry Direct Indirect Induced Total General Merchandise Stores 100 9 13 122 Ornamental & Architectural Metal Mfg 100 36 32 168 Bread and Bakery Product Mfg 100 33 27 160 Upholstered Household Furniture Mfg 100 19 20 139 Women’s Cut and Sew Apparel Mfg 100 113 46 259 Source: LAEDC “Why Manufacturing Matters” Report, 2012
  9. 9. Consumer Interest Data
  10. 10. 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….”
  11. 11. ‘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 Percentage Who Agreed: Source: Cotton Inc. Lifestyle Monitor Survey 2013
  12. 12. GOING GLOBAL “Designed in LA”
  13. 13. U.S. IMPORTS vs. EXPORTS APPAREL ALL PORTS 64,300,000,000 3,500,000,000 77,900,000,000 4,800,000,000 Source: LAEDC July, 2013 Value $USD
  14. 14. U.S. IMPORTS vs. EXPORTS TEXTILES ALL Ports Source: LAEDC July, 2013 Value $USD 5,200,000,000 9,400,000,000 7,400,000,000 14,300,000,000
  15. 15. U.S. IMPORTS vs. EXPORTS FOOTWEAR ALL Ports Source: LAEDC July, 2013 Value $USD 17,500,000,000 940,000,000 23,900,000,000 1,300,000,000
  16. 16. Opportunities for U.S. Apparel Brand Expansion..IF non-tariff duties permit • Brazil – The country is young, more than 60% of population below age 29 • China – Color palettes and design tastes are different, but brand names are important • India – Apparel retail growth is on the rise thanks to a booming middle class • Turkey – The market is growing for luxury retailers • Russia – Opportunities are strong but there is a higher cost of operation • Argentina – High-end retailers are returning because of the strong economic recovery • United Arab Emirates – Companies are focusing on associating their presence with significant real estate developments, not free- standing retailing.
  17. 17. Opportunities for Global Growth • North America and Western Europe (England, France, etc.) account for 65% of the current world-wide consumer apparel market. • Engine for future market growth will be in countries like China and India, particularly at lower unit prices. Sources: HSBC Report, March 2013
  18. 18. China - What’s Happening Now? “Manufacturing production shifts out of China have been seen primarily in basic commodity categories such as apparel/textiles.” Source: GDSL&K, March 2012
  19. 19. Wages’ Map in China 400 Cities over 1 million People – What will happen to wages? Source: GDSL&K, March 2012
  20. 20. Country Wage Comparison Country ‐ Total costs for sewing worker at factory (US$ 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
  21. 21. 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
  22. 22. The RIGHT Combination ADD U.S. Company and U.S. Management PLUS ‘Third World’ assets (manufacturing, labor supply, etc) EQUAL Global Reach!
  23. 23. Barriers to Domestic Manufacturing
  24. 24. California Denim in London Selfridges LONDON – May 2012
  25. 25. 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.
  26. 26. 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
  27. 27. Constructive Choices
  28. 28. CHINA CANADA U.S.A. “Trans-national” Fashion FRANCE
  29. 29. CHINA CANADA U.S.A. “Trans-national” Fashion FRANCE
  30. 30. A Strategy for LA Fashion
  31. 31. Hollywood Reporter, June 2013
  32. 32. 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)
  33. 33. CFM Company Snapshot September 12th, 2011
  34. 34. “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…
  35. 35. 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: info@calfashion.org

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