Abboud bets 'made in America' will be an edge in China

Tag : american apparel

Will a new class of globe-trotting Chinese businessmen clamor forimported pin-striped suits made in America?
Joseph Abboud Manufacturing Co. thinks so.
In a move that turns the typical globalization story on its head,the company is set to disclose today that it will be manufacturingtailored suits, sports coats, and dress pants at its New Bedfordplant for export to China. The company says it will open 15stand-alone stores and shops within high-end retailers in Chinathis fall, and another 15 next year.
While some casual sportswear makers like American Apparel havetaken advantage of shifts in exchange rates to ship clothing toChina, as have European designers like Giorgio Armani, the JosephAbboud plan is believed to be the first instance of "made inAmerica" labels destined for designer menswear in Shanghai andBeijing stores catering to upscale Chinese consumers.
"China now has more millionaires than America has," said MartyStaff, president and chief executive of JA Apparel Corp., the NewYork operating company for Joseph Abboud. "China has a burgeoningmiddle class. These are people who need to dress properly, travelinternationally, and embrace the Joseph Abboud brand."
While the number of garments shipped from New Bedford over theweekend is small - 500 suits, 500 sports jackets, and 900 pairs oftrousers of all kinds, in a broad mix of "opening inventory" -company officials see the initial delivery as simply a way oftesting the waters. By 2012, they expect to have 100 retaillocations across China.
"We'll get feedback from our customers in Beijing that they likeblack suits or pleated pants or double-breasted jackets, and we'lluse our factory in New Bedford to replenish in two weeks," Staffsaid.
Joseph Abboud's gambit is an example of how companies inMassachusetts and elsewhere in the United States are capitalizingon the growing wealth in developing countries that is creating newclasses of consumers, said Paul S. Grogan, president and chiefexecutive of the Boston Foundation, a civic group that's sponsoringa forum tomorrow on the revival of manufacturing in Massachusetts.
"This tells you the declining dollar is creating opportunities fora state like Massachusetts, where exporting is important," Grogansaid. "That's the silver lining in the economic travails we'reexperiencing."
The falling value of the dollar, which makes it cheaper for USproducers to sell abroad, is only one of several factors behindJoseph Abboud's export-to-China strategy, company officials said.
Another dynamic is a US law giving manufacturers relief fromtariffs on fabrics imported from other countries, including China,that are used as raw materials in Joseph Abboud menswear.Efficiency improvements at the New Bedford plant that enable it torapidly adapt to changing tastes and handle a "cut to orderbusiness" for smaller and odd-size orders - something not currentlyavailable from Asian producers - also come into play.
The plant's 550 employees are proud of their ability to export toChina at a time when most apparel sold in the United States isimported from Asian countries, said Anthony R. Sapienza, chiefoperating officer for Joseph Abboud Manufacturing in New Bedford.
"This is a small business now, but we expect significant growthgoing forward," Sapienza said. "To compete globally against muchlower labor costs, you have to have a niche and you have to be goodat it."
While the China business will represent only a small fraction ofJoseph Abboud's production run of about 1,100 garments a day, thecompany insisted the business will be more than a symbolic moveintended to establish the brand in China.
"We don't do anything to lose money," Staff said. "This isdefinitely not a loss leader."
Robert Weisman can be reached at weisman@globe.com .