Kathryn Hildebrand watched in horror last week as hundreds of thousands of dollars of production orders went up in smoke in a matter of hours.
The president and CEO of the Good Clothing Company, a garment-manufacturing facility, in Fall River, Mass., knew it was coming, but she was still shocked when it did. Worldwide, scores of assembly lines have ground to a halt as garment factories have shuttered or stalled in the wake of the coronavirus pandemic, first because of raw-material shortages from China, which went on a nationwide lockdown after the disease was first detected three months ago, then after spooked brands and retailers facing widespread store closures started zeroing out orders.
Hildebrand did the only thing she could: she laid off her fewer than two dozen employees so they could file for unemployment and batten down at home with their families.
“We have just been getting emails canceling orders right and left—our entire schedule has been completely eradicated,” Hildebrand told Sourcing Journal. “So you can’t continuously bring people to work when you don’t know if you have work for them. And it takes money to run a factory floor.”
Propelled by the forces of globalization, more than 98 percent of the clothing worn by Americans today is produced overseas. But holdouts remain, especially in the garment districts of Los Angeles and New York City, which collectively employ some 67,600 makers of apparel, accessories and finished textile products, according to census data.
Then there are businesses, like the Good Clothing Company, that are on the frontlines of a reshoring renaissance to bring jobs back to the United States. But the economic fallout of COVID-19 could roll back progress for “made in the U.S.A.” as more factories go offline, whether voluntarily or because no other option remains.
“It’s important to note that the net margins in manufacturing are extraordinarily low,” said Hildebrand, who had 40 active clients out of a roster of 350. “So not a whole lot of damage has to get done for things to be destroyed. But I get it—everyone’s terrified, so they’re all stopping.”
Dynotex, a full-service production factory in Greenpoint, N.Y., has similarly closed up shop. Though the company has enough orders to keep production humming for the next few weeks, most of its 20 employees have asked to stay at home. At present, more than 15,000 people in New York State have tested positive for COVID-19, with the majority stemming from the New York City region. Now an epicenter for the contagion, New York City has ordered closed all nonessential businesses. Garment manufacturing doesn’t count as an essential service but even if it did, Dynotex would still be dark, said CEO Alan Ng.
“The workers don’t want to come in anyway,” Ng said. “We’re not in immediate financial difficulty at this point, but if what President Trump said is true and the virus will continue till July or August, then there is a real concern that we’re not going to survive that long without income.”
In California, where authorities have issued a shelter-in-place decree for all but “critical” manufacturing, Reformation will be shutting down its downtown L.A. plant until at least April 19, a spokesperson told Sourcing Journal. (The brand will not be fulfilling e-commerce orders, though customers can still shop through Nordstrom, Net-a-Porter and Shopbop).
San Fernando-based Argyle Haus of Apparel is also complying with the executive order, though it was already down to a “significantly reduced” staff of fewer than seven as early as last week, according to CEO Houman Salem. He has put long-term plans on ice.
“We’re in a defensive mode now,” he said. “We’re not hiring any new employees or making any new, significant investments until further notice.”
What a bailout might look for American garment manufacturing remains to be seen. The U.S. Small Business Administration is offering low-interest federal disaster loans to small businesses “suffering substantial economic injury as a result of the coronavirus” in designated states and territories. New York City’s Department of Small Business Services is working to deploy a zero-interest loan program and an employee retention grant. And on Tuesday, Vogue and the Council of Fashion Designers of America announced A Common Thread, a “fundraising initiative supporting those in the American fashion community who have been impacted by the COVID-19 pandemic,” per a press release, though details are still scant.
Some factories are keeping production lines humming—and workers employed—by pivoting to making masks and other protective gear that are in desperate supply across the country.
Oregon’s Portland Garment Factory was one of the first facilities to volunteer to shift production to disposable masks made from medical-grade polypropylene, which it will release on its website in a series of “drops” rather than accept pre-orders so it doesn’t oversell and have people “beating at our door,” said founder and owner Britt Howard, who estimates she can pump out 2,500 units per week.
“We’re calling them frontline barriers,” Howard said of the masks. “They’re not technically FDA approved, but we did our best to get what we think regular masks are made of.”
Turning to masks was a way of gaining a foothold of control amid the chaos and uncertainty: More than half of Portland Garment Factory’s orders have been cancelled or put on hold.
“I don’t want to be a mask maker for the rest of my life,” Howard said. “I want to go back to running my regular business and I want everything to be normal again. But until then I’m just going to do what’s the most helpful for the community.”
UStrive Manufacturing, the first factory in the United States to gain both Global Organic Textile Standard and Organic Content Standard certifications, has been negotiating with the L.A. Mayor’s office to become an “essential manufacturer of medical supplies.” It had ceased production on March 17 after clients began rescinding orders, but it will kick the production of surgical gowns and masks into gear and hire an additional 100 sewing operators on top of its existing 90 employees as soon as its status is greenlit.
“Without the essential contract, it would be hard to stay in business,” said Scott Wilson, the company’s founder and partner. “Yesterday the sky was falling, today [it] looks like we will become part of the solution; who knows what tomorrow will bring?”
Former American Apparel head Dov Charney says his Los Angeles Apparel venture can crank out 300,000 surgical masks and 50,000 gowns per week in its 150,000-square-foot factory in downtown L.A. He wants to do this, he told Sourcing Journal, because “preserving commerce is good for the American worker and good for the world.”
For Days, a closed-loop clothing company, has converted its sewing capacity in Hawthorn, Calif., to make hospital masks out of a double layer of cotton jersey and elastic straps. They’re not the N95 masks that offer medical workers the most effective protection, a spokesperson said, but rather washable and reusable barriers “best worn over an N95 mask to extend the life of the N95.”
Hildebrand of Good Clothing Company, too, is investigating mask production as a way to contribute to the crisis response while keeping her business—and the mostly immigrant women she had hired—afloat. But while President Trump has invoked the Defense Production Act to enlist the private sector in securing medical equipment and other supplies, he’s been loath to activate the mandate to its fullest extent and pour defense dollars where they’ll count the most, she said.
“The army that’s going to fight this thing is going to be your first responders and your medical professionals. And it’s going to be your manufacturing community that supplies them with the goods that they need,” Hildebrand added. “We just need money and fabric. We have to be able to pay our workers to come back and you can’t do that without a purchase order.”
For a few bright spots in U.S. manufacturing, however, business as usual is still the order of the day. In Carlstadt, N.J., Suuchi and its employees are still chugging along. (Manufacturing is exempt from the state’s stay-at-home edict.) CEO Succhi Ramesh says she hasn’t seen a downstream impact of lowered sales yet, but that may change in the coming months.
Still, Suuchi’s business model affords it some measure of extra resilience, Ramesh said. The company is vertically integrated, nearshores its materials from the western hemisphere and wields predictive consumer analytics as its secret weapon. It’s also situated on a digitized grid that provides clients with real-time access to the shop floor. If one arm of production drops off (or gets shut down), another elsewhere on the network can pick up the slack.
“This could be a wake-up call for us on how to run supply chains,” she said. “If it’s a local-for-local system on a platform, you have better control versus having a supply chain halfway across the world in China.”
OnPoint Manufacturing, an on-demand apparel maker in Florence, Ala., is also weathering the pandemic better than most. “We’re worried it’s going to happen but we haven’t seen the decline yet,” said CEO J. Kirby Best. Most of its material is sourced in the United States, so it hasn’t experienced many disruptions, and because it only produces clothing when a consumer places an order, it’s not weighed down with inventory it can’t sell.
Like Ramesh, Best believes the crisis may jolt the garment industry out of its sense of complacency over the manufacturing status quo, particularly as worsening climate change and overpopulation render future supply-chain disturbances inevitable.
“We believe that this will be the tipping point for the garment industry to rethink and to challenge traditional ways that they’ve been doing things,” he told Sourcing Journal. “We’re going to go through a horrible mess for a while, but now’s the time to be thinking about what it should look like on the other side.”
David Billstrom, CEO of Kitsbow Cycling Apparel, which runs its own production line in Old Fort, N.C., agrees. A former first responder, he put out a call on Facebook over the weekend to see if there was interest in plastic face shields and fabric face masks. In just 48 hours, he received requests for 30,000 units.
“Onshoring is definitely more important than ever, both for medical supplies and apparel,” he said.