Posts Tagged ‘Forever 21

06
Jan
17

Are Amazon and Forever 21 Competing to Buy American Apparel? – Racked

Source: Are Amazon and Forever 21 Competing to Buy American Apparel? – Racked

Are Amazon and Forever 21 Competing to Buy American Apparel?

The bankrupt basics brand reportedly has a number of suitors.

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17
Jul
12

Ralph Lauren and the Olympic Uniform Controversy

Made Where? – NYTimes.com. This is a link to the best short article out there about the controversy about the Ralph Lauren designed Olympic Uniforms made in China from the New York Times.

Olympic uniform
designed by Ralph Lauren

So, this has been an unexpected firestorm of controversy. All of us bloggers of “Made in USA” have seen a great increase in our traffic since this story blew. Josh Miller of Made in America: 30 Day Journey also noted a great increase on his Facebook page following the Ralph Lauren story.

Public Opinion

While it is great that there is a great deal of interest in the Olympic uniforms being made in China and the Made in USA movement, I have been somewhat disheartened by some of the posts to the discussion boards on some these on-line newspaper articles or Facebook posts. The most common entry is, because it is an election year, about politics: Republicans blaming Democrats, and Democrats blaming Republicans. There are some who just don’t like the Olympics at all and won’t watch it anyway. Some people think the outfits are either ugly or too expensive. Many people blame Ralph Lauren and threaten to boycott all Ralph Lauren products. Some people talk about the money involved with the Olympics and Ralph Lauren and then quote erroneous amounts of money. “All American clothing is too expensive,” is a frequent incorrect  feeling. “The United States can’t compete with China” is also a favorite posting by some. And then, there are the people who take the time out to say they don’t care. I find that funny. If you don’t care, why go to the trouble to: sign up,  sign on, then log on, and say I don’t care. We already know that most of Americans either don’t know or don’t care. That is why all the Made in USA/America websites are around, – to spread the word. Then, there are the “contrarians”. The contrarians disagree with the great majority for unknown reasons except maybe just to be different. Have you ever noticed there is never 100% agreement on any issue? I believe the contrarians make up 2% of the general population, but on websites, because one can be anonymous, it is probably more like 5%.

The Real Story

To help sort out truth from fiction, I will try to tell the story briefly. Since we are talking about clothing made in the USA, we have to talk about manufacturing, because clothes are manufactured, not grown. The United States had been a manufacturing giant going into 1980 (why pick 1980? Because at the beginning of 1980, it was the highest ever number of US manufacturing jobs). The decline in manufacturing was not the fault of one party. It was the coalition of both parties to cause this major breakdown in manufacturing. (Although one could argue that from 1980 to 2009, Republican Presidents ruled for 20 years, Democratic Presidents 9 years, after June, 2009, manufacturing has increased). Just a few statistics: In 1980, the US had 21 million manufacturing jobs, manufacturing accounted for 20% of the entire economy (GDP-Gross Domestic Product) and we made 80% of what we used. By contrast, in 2010, we had 11.5 million manufacturing jobs (-9.5 million jobs), manufacturing accounted for 11% of entire economy (-9% GDP, for instance a -4% is considered a “Great recession”), and we make only 5% of what we need, for clothing only 2%. (-78%).

Manufacturing – Should we care?

Manufacturing has been a genuine proven driver of economies for centuries. One makes a product, sells it and one can export it. It creates manufacturing jobs and creates multiple affiliated jobs: transport, sales, construction, development of other products that work with your product, research and development, advertising, etc. It is estimated that for every manufacturing job created, there is another 5 – 10 more indirect jobs created depending on the type of manufacturing. Plus, manufacturing workers are better paid than many in the U.S., but on a world wide scale, American workers pay is somewhere in the middle. For a lot more information on manufacturing and forming a national manufacturing policy, see “Why Does Manufacturing Matter”, 53 page report from the Brookings Institute.

The Decline of Manufacturing (Briefly)

Why the decline? Simply put, bad economic advice. For some reason, in 1980, manufacturing was no longer “cool”. “Service” jobs were the wave of the future. “High Tech” was the buzz word. One of the important factors of the downturn was the theory of President Herbert Hoover (many blame him for the Great Depression), re-invigorated by Ronald Reagan, as the trickle-down theory – whereby, giving money to the very rich will (theoretically) trickle down to the poorest. Additionally, tax breaks were created for closing down factories and moving them around, first, to other states and then, to other countries. Then, there was the removal of import quotas, which had been protecting the U.S. against unfair import manipulators. Then, there was the Free Trade Agreements which removed import taxes from other importing countries. (China, although not part of the the Free Trade Agreements, did gain “acceptable” status as a trading country and also received beneficial deals from import taxes.) All these, together, with improvements in communication and travel and reliable computer software programs it became far easier to move jobs overseas (outsourcing) due to “globalization”. One can actually visualize the loss of manufacturing jobs in “Manufacturing State by State 1971 – 2011, What Went Wrong”, by using the map. For more in depth discussion of these factors, I refer you to my entry “How Did We Get To Here, Part II”.

Further more, following more bad economic advice caused a worsening of the U.S., such as believing that” Consumer Spending” was a legitimate method to measuring the strength of the economy. Consumer Spending is as accurate as the Dow Jones predicting the strength of the economy. Both of them are not predictive of anything except the mood of the country. Other bad advice was to ignore the trade deficit with China. Economists said that we could forget about the trade deficit with China because it helped Americans to spend money on cheap products. It is always bad to forget one of the most basic tenets of Economics that exports help the country’s economy. And then there were the factors causing the Great Recession: deregulation, bundling of knowingly bad home mortgage loans, bank failures, etc, causing high unemployment.

The Outrage & The Apology

Ralph Lauren had made the U.S. Olympic Uniforms at Vancouver, Canada for the 2010 Winter Olympics, and for the Summer Olympics in China in 2008, those outfits were made in China. But not a peep. But this week, a story ran that the Olympic outfits were made in China, the main media picked it up, and there was public outrage. Then, because there was public outrage, politicians, on both sides, expressed outrage as well. Ralph Lauren was shocked and immediately apologized and promised the 2014 Olympic uniforms will be Made in the USA.

So Why The Controversy

To Ralph Lauren, this was the perfect storm. He was totally unaware that he was doing something that would make so many Americans unhappy. First, Americans have been quite unhappy with outsourcing for quite a long time, but the economy was not terrible, not too many people they knew personally were affected right away (yes, certainly over thirty years, they did see quite a devastating effect), and because our top economists were telling us all along that it was good for the economy. By analogy, our economy was like a house that had been attacked by termites. We first noticed it 30 years ago, but we were unconcerned. In the 1990’s, outsourcing continued to increase but we were adding jobs by manufacturing computers. It was like we let the termites keep eating, but we slapped on a nice, new coat of paint. Then, in October 2008, the roof collapsed, we nearly missed a run on the banks. People began to realize we had been following the wrong economic path. Slowly, the public began to recognize that everything we buy (except food and military weapons) was being made overseas. A Made in America movement slowly grew. People started going into stores and asking if their clothes were made in the USA. Now, as part of an unorganized grassroots movement, there are more than 100 different “Made in USA/America” websites/blogs. Economic growth has been slow, but there is no hope coming from a gridlocked Congress, and still no national plan to increase manufacturing or exporting. People’s frustrations continue to mount. Then the spark hit. Regarding the Olympic team, one of the few things that inspire nationalistic feelings, it was announced that their uniforms were made in China.

The Aftermath

This firestorm will be but a blip of awareness in the minds of the US public. It will fade quickly, but, many will remember, when they go shopping and find all these Chinese made products. Ralph Lauren will be slightly damaged by this, but not severely. Whether Ralph Lauren will make more clothing in the USA remains to be seen. I would say presently, the Ralph Lauren company makes about 0.5% of their clothing in the USA. The only clothing made by Ralph Lauren is under the line Retro Ralph Lauren or RRL. I have tried to find made in USA made clothing at Ralph Lauren several times, first, it will only be carried at their larger stores and if they carry RRL line. One may find an occasional pair of jeans and pair of shoes. (Once I found a flannel type shirt made in the US last year but none since.)

Regarding the Made in USA websites, they will probably experience a weeks worth of increased hits, but, in the long haul, some visitors that will continue to come back. Regarding Congress, they will go back to politics, filibusters and gridlock. Regarding the incorrect Facebook posts, The US can compete against China. Labor only accounts for about 5 – 8% of total costs. Companies are bringing manufacturing back to the United States and this is expected to greatly increase in the next couple of years. Not all American clothing is too expensive. For instance, some of the internet only, American made clothing is very affordable, such as Texas Jeans, All American Clothing, etc, see link to Listing of Brands of Clothing Made in the USA via internet. Also, in brick and mortar stores, many stores carry inexpensive young women’s clothing such Demasque, Charlotte Russe, and Forever 21 (in these stores, the clothing is about 2-3% US made). Socks made in the USA are the same price as ones made overseas.

The Solution

The United States needs a coherent manufacturing plan. The United States has increased 228,000 manufacturing jobs since June 2009 in the midst of the Big Bank Failure. And the reason for the increase in manufacturing jobs starting in June, 2009? The answer: the stimulus package. The United States needs more government investment in businesses especially manufacturing and research, as well as infrastructure. Tax laws need to be changed so that outsourcing is no longer favored, but insourcing is. Corporate tax reform would be preferred but it is also very politically charged.

For private citizens, we need to be vigilant. First, we need to check where the products were made. We need to ask the salesperson whether the product is US made, and if you want to go the step further, write a letter to the corporate office saying you want more US made products. By doing this, we are basically voting with our checkbook or Mastercard. And all businesses listen to this. And most importantly, stop listening to Economists. Buy American and spread the word.

For more facts and information on manufacturing see: The Importance and Promise of American Manufacturing.




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