High-tech knitting facility Evolution St. Louis has ambitious plans to assemble a Made-in-America supply chain and reinvigorate the Missouri city as the fashion hub that once claimed the title of the nation’s second-largest apparel manufacturing center after mid-century New York City.
New business model
CEO Jon Lewis and chief operating officer John Elmuccio brainstormed the idea behind Evolution five years ago after watching consumer spending shift to online.
“The last business we had was a licensing company in the high-end apparel space, when we started to notice the dynamic shift in consumer buying patterns. We saw how difficult it was, even with the better designer brands, between department stores firing tens of thousands of people and Amazon hiring more people,” Elmuccio said. “A whole generation was buying online and on their phone, and you now had all these new brands emerging in direct-to-consumer…. We realized that the supply chain model, where manufacturing in Asia is typically a 12-to-15 month cycle, is not sustainable with that new trend in consumer buying and we knew there was a need for change in a meaningful way in the U.S.”
Elmuccio described how traditional cut-and-sew manufacturing in Southeast Asia and in other areas still remains very labor intensive, with one person at a sewing machine. New machines, at least in flat-bed knitting, digitize operations into an efficient and cost-competitive process. While the pay scale might be higher in terms of labor costs, businesses require fewer people to operate the machines and the increase expense is offset when companies no longer have to ship samples from outside the U.S. pay duties, and pay exorbitant transportation fees.
The Evolution St. Louis founders were happy to abandon that outmoded method of running an apparel business and instead investigate technology-based solutions. “We became enamored with what those machines could do so we started to pursue that idea,” Elmuccio said, noting the firm’s close, collaborative relationship with Stoll, a German manufacturer of 3D flat-bed knitting machines. And instead of buying one or two to test out its business model, the two partners went all in and purchased 30 to quickly ramp up with the most technologically advanced machinery available. The full-service facility offers a yarn storage area, temperature and humidity controls, industrial washers and dryers and a warehousing unit, as well as a steaming and finishing process at the site.
“The tech advances in machinery mean we can make product we were never able to produce before—knit blazers that appear to be woven,” Elmuccio added.
The path forward
After considering multiple locations including Detroit, the duo decided to put down roots in St. Louis following conversations with the St. Louis Fashion Fund and local lawmakers. It was a decision made easy given the assistance from the Missouri Department of Economic Development and the St. Louis Economic Development Corp. Tax credits and other incentives helped the startup convert a 34,000-square-foot space in downtown St. Louis at 3830 Washington Blvd. into its factory. In turn, Evolution will create about 50 or so jobs for St. Louis residents within the first three years of operation, up from 10 staffers working full-time now.
Another 20 Stoll machines, set to be delivered over the next few months, will join the current 30. Because of high demand, a second facility also in St. Louis, is planned for next year and will be housed in a 130,000-square-foot building, Elmuccio said. An added benefit is that order minimums can be in the hundreds of units, much lower than the thousands required in Asia. And the ability to shift from one style to another is merely a matter of how long it takes for the design and development teams to program the change into the computer.
“One of the big factors [helping us] is lead time. The traditional five seasons is disappearing. Now there’s as many as 12 to 15 because everyone is talking drops and reacting to consumer demand rather than projecting it,” Elmuccio said. “That gives brands the opportunity to be able to react to trends, and be locally based to allow them to control their inventory.” Vendors can commit to yarns kept in inventory without committing to a specific style, so they have the ability to react to demand and have something made and shipped from a central location in a matter of weeks instead of months, he added.
Plus, “St. Louis is just a two-hour plane ride from anywhere in the U.S.,” Elmuccio said. It was that central location that put St. Louis on the map years ago for apparel manufacturing. Once the center for footwear manufacturers, apparel production tripled in the 1950s thanks in part to the number of junior dress firms that began setting up shop in the area, according to the St. Louis Fashion Fund. Kellwood, a one-time fashion stalwart born in 1961 through the merger of 15 soft-goods suppliers, moved to the city from Chicago in 1966. Today, St. Louis is home to design firm Stars Design, footwear firm Caleres, direct-to-consumer swimwear brand Summersalt, multi-channel lifestyle brand Soft Surroundings, and accessories brand Aquarius LTD.
Evolution counts Gary Wassner, chairman and CEO of factoring firm Hilldun Corp., as an investor through a private family investment. “There are a number of issues with bringing back production to the States, but knitwear works because you don’t need all the bindings and stuff that is needed for ready-to-wear,” said Wassner, who heard about Evolution through his involvement in the St. Louis Fashion Fund, where he was asked to judge the incubator’s final season show.
“Coming out of the coronavirus pandemic, retailers are going to start asking questions of their manufacturers not because of anything other than [wanting] a shorter term to get product to stores so they don’t have all that time with goods on the ocean or any issues with monitoring production overseas and having to send things back and forth,” he added. “Quickness to market is being requested more and more, and so there’s going to be more interest in domestic products.”
Industry support has been instrumental in getting Evolution off the ground. “One of the things we found when we moved to St. Louis was that the interest and outreach of the St. Louis Fashion Fund, an accelerator and incubator, rivals anything you see in New York and Los Angeles,” Lewis said. An early meeting to talk about starting operations in St Louis was attended by 40 industry leaders, the city development office, the investment community and representatives from apparel and shoe manufacturers based there. All were willing to offer their money and influence to invest and help revitalize the city, he added.
Between public and private partnerships, financing and tax credits, plus a sales tax abatement, these incentives all helped to make building a factory affordable. “The tax credits were awarded through the St. Louis Development Corp., a seven-year tax program. The sales tax piece is a two-year program for payroll and employee taxes and the sales tax abatement allows us to spend money on the manufacturing equipment,” Lewis said.
Although Lewis can’t name any of Evolution’s fashion clients, he pointed out that the knitwear firm sometimes is involved in from the brand concept stage through development. The company is already in production on some projects and as retailers are starting to reopen and plan for fall and holiday, Lewis expects to ramp up production in the third quarter. While looking primarily at apparel and footwear at first, the factory can also tackle soft textiles for home, as well as textiles for furniture, office and automotive.
Even when the U.S. had a thriving fashion manufacturing sector, multiple moving parts—from finding sewers to getting the fabric and finding a converter and getting trim—made the process problematic. Now that’s all changed, at least for the knitwear sector in apparel production.
“In the traditional sourcing model, you book all the inventory and production almost a year in advance before you get out of the season that you’re in. That forces brands to modify their risk profile,” Lewis said. “Taking risks in fashion is what we do, but the old model doesn’t offer flexibility. Our model is closer to market and allows more freedom and ability to drive fashion and risk in design. As [brands] start to understand what machines could do, they can take chances and not have to do huge commitments in advance.
“Consumers want innovation and our level of manufacturing is what we bring to the table,” he added.
Lewis believes Evolution will change the face of manufacturing in America. “It’s a game changer for the industry…. People say we are re-shoring jobs from China to the U.S. No, we are re-shoring revenues and creating the manufacturing jobs of the future,” he said.