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03/10/2014

In Reviving Made in USA, the Value Proposition is Top of Mind

Old brands, new brands and even a blue brand are reinforcing the importance of American manufacturing in the apparel ecosystem.

As nationalist pride is bubbling into the collective consumer consciousness amidst this nascent U.S. manufacturing renaissance, one ambitious entrepreneur brainstormed a product that he hopes will symbolize solidarity with garment production in the U.S. much the same way that yellow ribbons have become synonymous with support for American troops.

Jake Bronstein, founder and CEO of American clothing brand Flint and Tinder known for its men's and women's underwear in addition to men's apparel, successfully completed a $25,000 Kickstarter fundraiser to launch the Bluelace Project, which would produce a line of bright blue shoelaces — the symbol, he intends, of U.S. manufacturing. "There are only two shoelace factories left in the U.S.,” says Bronstein. "Now the Ohio factory is hiring.”

There's further evidence that American manufacturing matters to American consumers. Public outrage over revelations that Team USA's apparel for the London Olympic Games was produced in China drove Ralph Lauren to manufacture the opening ceremony outfits for this year's Winter Olympics in the U.S. This, despite manufacturing apparel, including Olympic gear, overseas having been business as usual for decades, according to Jason Schott, CEO of 101-year-old Made in USA leather jacket and motorcycle apparel brand Schott. "Suddenly there's a backlash.”

Despite the return of garment production in the U.S., Bronstein stresses that brands have to be in it for the right reasons. "There's a lie that Made in America sells stuff,” he notes. "To be successful you have to add value beyond ‘where it's made.”

The wonders of technology today — especially the wealth of information available through the Internet — enable knowledge-hungry consumers to identify the components of a company's value chain and cost structure that most resonate with them, says Bayard Winthrop, CEO of American Giant, a San Francisco-based athletic apparel brand. And what's more, the Internet and its cheaper commerce systems enable cost structure to be a significant part of the value proposition.

This is a stark shift from the mid-20th-century apparel landscape, Winthrop observes. "The industry contorted itself around access, getting scale, getting into malls,” he says. "Americans got tired of that and want a return to value.” Instead of paying for the bloated 80 percent of product costs that include markups for factors such as distribution and marketing, consumers would rather pay the 20 percent of products costs, such as labor and materials, that they deem essential and valuable.

For what it's worth, Winthrop says he was surprised not only by how much growth American Giant experienced in 2013 but also by the quality of manufacturing talent available. And Schott says his company began working overtime in June of last year to try to keep pace with demand but couldn't. "We refuse to go to China to save money,” he adds.

For all the reasons to bring apparel manufacturing back to the U.S., companies should focus on the business value it creates and avoid the murkier ethical arguments, Winthrop adds. "When the conversation on Made in USA is moral, that's where you get into trouble because there are plenty of moral people in China and Bangladesh that need jobs, too.”

Matthew Burnett and Tanya Menendez, co-founders of Maker's Row, conceived their online marketplace as a means of simplifying the manufacturing process for smaller to mid-sized brands and have been caught offguard by inquiries from larger, established fashion brands seeking U.S. suppliers. "Some of the biggest brands in the world are also looking for manufacturing capacity in the U.S.,” Burnett explains. "We're solving a big problem.”

To date, Maker's Row has generated hundreds of thousands of leads for manufacturers, with companies whose profiles include photos and videos of their facilities and staff garnering the most attention.

Demand for a quality product comes in many forms, and Bronstein shared his unfortunate experience of being mugged for the Schott jacket he was wearing. "That's the highest mark of excellence,” he says. "No one has ever been mugged for our underwear.”