Abdul Rashid Dadabhoy knew he had a critical problem when Orange County supervisors closed all unnecessary businesses on March 17 in response to the coronavirus, forcing him to stop production at AST Sportswear, one of the country’s biggest shirt makers.
But he also had a solution that was almost instantaneous.
After hearing about the lack of a critical facial mask, Dadabhoy sat down with his three brothers the next morning and made a prototype cotton version, which workers at the vertically integrated Brea plant in the company issued 1,200 sheets the next day. The company has made more than 10 million masks since then.
“We continue to do that and we still do that,” said Dadabhoy, chief operating officer of the family-owned business, which boasts the label “Made in USA” and the ability to fill orders faster than its competition abroad.
Indeed, demand is not expected to decrease in the near future, especially now because Governor Gavin Newsom issued an order on Thursday to make masks mandatory in most public settings.
The virus outbreak has cut trade and destroyed the economy, but it also provides opportunities for several companies and industries that have maintained supply chains and production near home – and a prime example is the clothing industry in Southern California which is shrinking but is still vibrant.
While other sectors remained closed for months, the Southern California clothing manufacturer, which employs thousands, lit pennies to produce masks and other personal protective equipment that was badly needed. This agility allows local businesses to compete with low-cost overseas suppliers, but also exposes employees to the possibility of infection and reignites allegations that their low-income workforce and most immigrants are being exploited.
More than 400 clothing companies have participated in Laks. Mayor Eric Garcetti LA Protect initiative to produce 5 million masks, which are open to Los Angeles city and county businesses. AST joins the national PPE consortium of major clothing makers that includes Los Angeles Apparel and large apparel such as Hanesbrands.
AST Sportswear in Brea has sent about 10 million masks so far.
(Myung J. Chun / Los Angeles Times)
This initiative highlights the prominence of domestic industry excellence that has persisted despite being hit in recent decades by the growth of international trade, including through the North American Free Trade Agreement in 1994 and the entry of China into the World Trade Organization in 2001.
According to one estimate, employment in the apparel industry has shrunk since the early 1990s from around 150,000 to only 45,000 today as leading brands move production abroad to take advantage of lower labor costs in Mexico, Central America and Asia. But Los Angeles remains one of the top fashion centers in the country, now determined by trendsetters like Revolve and Fashion Nova, e-commerce businesses that have experienced skyrocketing growth from Instagram’s broad influencers base.
This is an industry segment where responding to rapid changes in taste is paramount, and where local production can provide an edge over foreign factories with long supply chains – and potential quality control issues, something that has recently been highlighted by mask imports. China.
One company that started making masks and other PPE is Lefty Production Co., a vertically integrated “one-stop” shop that provides design consulting, pattern making, cutting, sewing and other services for smaller brands. It was founded by Marta Miller and partner Emily Roiff in 2012, after realizing that future designers needed help making their clothes locally made.
“We do not knit fabric, but apart from that part of the supply chain, we have everyone on one team under one roof doing all that,” Miller said.
Lefty Production serves nearly 100 small designers who sell directly to consumers online or wholesale and want a stack of 300 to 10,000 clothing items – a type of order that is not handled by large volume Asian factories or that may cost too much.
“When the volume decreases, their prices go abroad, and it starts to make less economic sense. My client wants a low and fast inventory. Things that can’t be done abroad, “Miller said.” I have a client. We cut the top and bottom of the same bikini maybe in a hundred different colors, and each color is like 20 or 30 units. “
When the home stay order was issued, Miller began serving the medical industry. “Large hospital. “They ordered abroad and they didn’t get their packages, so they ran out of masks, ran out of bob hats, ran out of shoe coverings,” said Miller, who was able to keep 35 of his workers working.
Meanwhile, big fashion brands that have struggled from reducing mall traffic and growing online sales driven by Instagram, have experienced hard times. Preppy entrepreneur J. Crew, who did not have a mask to sell on his main website at the end of last week, filed for bankruptcy in May after a debt-laden chain was pushed to the edge by a virus-related closure. This follows the bankruptcy filing of the fast fashion retailer based on the Forever 21 mall in September, at least in part because of online competition.
Los Angeles Apparel, founded by Dov Charney, deposed from its previous business, American Apparel, after a term spotted by sexual harassment and other charges, has expanded its new business quickly through an online sales model, directly to consumers since it was founded in 2016 He also quickly shifted to making masks.
Los Angeles clothes making elevated bases similar to American Apparel, which during Charney’s possession operated a retail shop, knitted his own cloth, and cut and sewed his clothes in a factory in the city center. The new company is not yet knitting yarn, but instead is vertically integrated in the South LA factory complex.
Charney said that although the clothes cost more than imports, the price difference is not important for fashion conscious buyers who can afford $ 24 chat shirts and $ 78 pants. More important is the ability to quickly respond to online fashion trends that can quickly change .
“What’s really important right now is product assembly, to speed up or slow down production. Nobody said that Walmart should not be free to buy in Bangladesh for five cents. I’m just saying it’s a business flow. There is also a flow of millions of dollars from the rapid reaction of urban manufacturing, “he said.
The Los Angeles outfit took advantage of that power in February to start making masks, hospital gowns and other PPE. The company is so busy that it employs hundreds of workers and opens two newly leased buildings. Charney said the company now employs 2,000 people.
At AST, Dadabhoy said the company could place products in the hands of buyers within four to six weeks after placing an order, about twice as fast as suppliers abroad. In contrast, Levi Strauss & Co., sourced from hundreds of factories around the world and only a few in the U.S., just this month announced it was selling masks.
AST has also been able to reduce the price difference – despite paying workers an average of $ 20 per hour plus benefits – through vertical integration. Apart from cutting and sewing, he knits and dyes his own cloth, which removes markup through the production process. But for some buyers it’s still not enough.
Brothers Mohamed Dadabhoy, left, Abdul Rashid Dadabhoy, Taher Dadabhoy and Shoaib Dadabhoy have AST Sportswear.
(Myung J. Chun / Los Angeles Times)
“Retailers drive price points. That’s when they say, “I can only sell this much,” or they want to get a certain margin. “At that point I cannot sell to them because they can buy the same product at half the price as an import,” he said.
Of course, there are dangers to the model, apart from retailers whose main focus is cost. While keeping production at your doorstep can help minimize supply chain risks, there is no guarantee in the age of the corona virus.
The Los Angeles outfit has struggled to keep the coronavirus at bay. The company said it was conducting temperature checks, encouraging social distance and washing hands, and had set up a cardboard barrier at each work station to try to protect workers. But one employee recently died, prompting the company to do a worker test.
“People were very scared at the time,” said one worker, who sewed a mask and asked not to be identified because he immigrated to the United States without documents. While he was tested negative, a woman sitting next to him tested positive, as did two of his coworkers whom he called friends. Overall, more than 10 employees tested positive in this month’s outbreak, the company confirmed.
Charney said the company had experienced previous cases, and he called the outbreak “worrying,” prompting the company to increase workstation barriers, reemphasize social distance rules and begin routine testing of all employees every seven to 10 days. “We do everything we can,” he said. “This is a scary time.”
He said the factory was inspected by Cal / OSHA and the Los Angeles County Department of Public Health. Officials at Cal / OSHA cannot comment immediately. Tim Gilman, a public health spokesman, said the department is working with the company to investigate this issue.
The industry has long been plagued by wage theft, and labor lawyers say that some factory owners have exploited workers who make masks and other protective equipment, paying them wages below the standard in dangerous conditions because they have nowhere else to turn. Los Angeles Apparel pays its workers a minimum wage of $ 14.25 per hour in the city and a bonus piece rate that can more than double the hourly rate, according to Charney.
“This is an industry that has had workers working in very unhealthy conditions before [COVID-19], and we see a lot of business as usual now, “Marissa Nuncio, director of the Garment Workers Center in downtown LA, told The Times in April.” When workers produce something that is very much needed, it is unacceptable that they should continue working in unsafe conditions and for wages in the sweatshop. ”
Labor supporters say the domestic clothing industry is profitable, but there is no dispute that Los Angeles factories are under price pressure from foreign competition which employs millions of low-paid workers.
More than 97% of clothing sold to US consumers is produced abroad, with around 80% coming from China, Vietnam, Bangladesh and other Asian countries, said Sheng Lu, a professor of fashion and clothing studies at the University of Delaware.
Even so, the U.S. apparel industry remains substantial, especially in textile production, which is largely based in the Southeast and continues to grow. Capital-intensive and technological textile manufacturing, which has enabled the US to become the fourth largest exporter of cotton, synthetic and cotton textiles in the world – fabrics that are finding their way to clothing imported back into the country.
Meanwhile, California has more domestic clothing manufacturers than any other state, which accounts for 24% nationally, twice as much as New York, the second leading state, according to an analysis conducted by Lu and other researchers from the federal database, which he notes is not comprehensive.
However, Lu doubts that the pandemic will have a significant effect in returning overseas production to the US, where he agrees that the advantage is speed to market, usually on higher-priced women’s clothing that is not price sensitive. “The labels – ‘Made in the US’ – are still a niche,” he said.
Most likely, he said, some apparel companies might decide to look for more from Mexico and Central America – where they have sent US textiles to be assembled into clothing and there is widespread political support because of the recently passed United States-Mexico-Canada Agreement and the Treaty Central American Free Trade Agreement 2006.
“There are no signs that clothing production will return to the US in a sizeable manner,” said Lu, who prepared the annual industry study of the US Industry Fashion Assn.
Jon Gold, vice president of supply chain and customs policy at the National Retail Federation, said that even before the pandemic, the trade war had encouraged clothing and other producers to inspect their distant supply chains and risk being very dependent on China. .
He said his typical response was to try to diversify into other Asian countries, while he agreed that outsourcing near the coast to Mexico or Central America would also be an option.
“There’s a reason we grew as an economy for decades. There are certain things that we don’t do anymore and can’t do. We are a more developed economy, “he said.
The Times’s staff writer, Sam Dean, contributed to this article.
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