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'Made in America' label grows fashionable among luxury brands

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By Marketwatch
Saturday, Jan. 19, 2013, 12:01 a.m.
 

NEW YORK — Discounter Wal-Mart Stores Inc. isn't the only company taking steps to buy more goods made in America.

It's also on the minds of luxury and upscale retailers and brands.

With the industry under pressure to respond quickly to fashion trends and seeking to shorten the period between designing a product and getting it on store shelves, there's a growing appeal to buying U.S.-made products, retailers said.

Meanwhile, increased labor costs in markets such as China, high import duties, fluctuating currency exchange rates and uncertainty over volatile fuel costs make manufacturing in the United States more attractive.

Add in questions about quality and recent evidence that worker conditions in some countries remain unsafe, and the result is that more and more companies have started to look seriously at buying more domestically manufactured goods.

“There are opportunities to test products” made in America, Brooks Brothers Chief Executive Claudio Del Vecchio said, adding that the percentage of the retailer's made-in-the-U.S. stock as part of the total has increased. “It's part of our culture to support American manufacturing. We like to buy from America.”

Brooks Brothers, which makes 70 percent of its suits in a Massachusetts factory, 100 percent of its ties in New York and 15 percent of its shirts in North Carolina, is also looking at increasing the manufacturing of its men's shoes and accessories in the United States, Del Vecchio told MarketWatch. The company's website has a section that touts only made-in-America products.

With the sputtering U.S. job growth rate, the industry, at the National Retail Federation's annual convention this week, has called for its members to do their part to support American jobs. Wal-Mart U.S. CEO Bill Simon, in a keynote speech to the federation, said the retail giant is buying an additional $50 billion in U.S.-made products over the next 10 years. It plans to do this by increasing orders for things such as paper and sporting goods it buys domestically and by helping bring back production textiles, furniture and higher- end appliances.

At luxury retailer Saks Inc., Chief Executive Steve Sadove said that while its customers of traditional European luxury labels care more about the brands and their quality and workmanship, Saks also has been increasing domestic sourcing in its “contemporary brands,” which usually refers to brands that are considered younger and hipper and carry a more affordable price tag.

“We are seeing a resurgence in ‘Made in America' in contemporary” brands, Sadove said. “We are increasing sourcing there because you can get replenishment much more easily (through) supply chain in America.”

In a Brunswick Group survey of more than 200 U.S.-based investors interested in the luxury sector, 80 percent of them said the reputational risk associated with offshore manufacturing is beginning to offset the cost savings for luxury goods manufacturers.

“A lot of our (luxury) clients talk about bringing sourcing back home,” said Susan Gilchrist, group chief executive at communications firm Brunswick Group, at a Financial Times Business of Luxury panel on Thursday. “It's not just about publicity. The actual (cost) differential gap is really closing.”

Marcus Wainwright, head designer for the contemporary apparel label Rag & Bone, said more than 60 percent of its products are made in the U.S. — and at a profit.

“To have flexibility and nimbleness is incredible in the U.S.,” Wainwright said at the presentation. “There's something intangible and valuable. It's more about craftsmanship and authenticity than margin and profit.”

At designer house Vera Wang, high-end wedding gowns are also made in America.

“It's almost impossible to do the dress elsewhere,” Mario Grauso, president of Vera Wang, told the panel. “We have 12 weeks to deliver the dress. We don't want to disappoint the bride. Our high-end customers care where it's made.”

Lingerie maker Cosabella, which makes 99 percent of the lingerie and sleepwear it sells at retailers including Saks, Macy's Inc.'s Bloomingdale's and Nordstrom Inc. in Italy, is considering making investments to have its products made in the U.S.

“The opportunity of coming to the U.S. is attractive,” Guido Campello, vice president of sales, branding and innovation, told MarketWatch, adding that as a second-generation Italian-American, his heritage is part of the reason behind the desire to do domestic sourcing. “Oversight is easier. When you have to go to Italy and China, you lose three or four days, and that costs money. There's awesome potential.”

 

 
 


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