Hosiery, NEC

SIC 2252

Industry report:

This category covers establishments primarily engaged in knitting, dyeing, or finishing hosiery, not elsewhere classified. Establishments engaged in the knitting, dyeing, or finishing of anklets, boys' hosiery, children's hosiery, leg warmers, men's hosiery, socks, slipper socks, and men's and children's tights are included in this category. Establishments engaged in the production of women's full-length and knee-length hosiery and panty hose are classified in SIC 2251: Women's Full-Length and Knee-Length Hosiery, Except Socks. Establishments engaged in manufacturing elastic (orthopedic) hosiery are classified in SIC 3842: Orthopedic, Prosthetic, and Surgical Appliances and Supplies.

Products in this category range from heavy woolen socks used by hunters to lightweight anklets worn by small children. They can be made from cotton, wool, nylon, polyester, polypropylene, rayon, mohair, and other fibers, as well as blends of two or more fibers. The fabric is produced on small-diameter knitting machines.

Unlike most companies that weave fabric, establishments in this segment usually purchase yarn instead of making their own because it would be too costly and inefficient for each facility to manufacture the many types of yarn used to make hosiery. After buying the yarn, most companies in this category complete their own dyeing, finishing, and packaging. At that point, their merchandise is ready for retail sale.

In the late 2000s, 15,688 people were employed in the industry in the United States. North Carolina was home to the most sock-making operations. Other states with relatively high number of related businesses included Alabama, New York, and California. Sales totaled $732.0 million in 2008. The industry was facing stiff competition from foreign exports, particularly from Honduras, and there were dozens of plant closings from 2007 to 2009. The state of the industry remained in question as the first decade of the twenty-first century neared a close.

The industry was steady during the late 1990s and early 2000s. The increasing popularity of casual clothing and a strong movement toward active wear throughout most of the United States helped to offset the impact of recessionary economic conditions in the early 2000s. Men's finished seamless hosiery and socks made of natural fibers made up slightly more than 60 percent of sales within this category at that time.

In order to compete more effectively in the global marketplace, hosiery manufacturers focused on operating more efficiently during the early 2000s. This resulted in a number of mergers and acquisitions. Kayser-Roth Corp., previously owned by a Mexican company, was acquired by the Italian hosiery firm Golden Lady. Renfro Corp. and Ridgeview Inc. were two leading hosiery makers that closed factories to reduce their expenses. In 2001, Ridgeview filed for Chapter 11 bankruptcy protection. Its assets were later acquired by Great American Knitting Mills. Another leading industry player, Chipman-Union Inc., filed for bankruptcy in 2002.

World trade in socks totaled $5.6 billion in 2007. Imports into the European Union and North America accounted for over half of this total. The following year, the EU import market for socks was valued at $1.6 billion, with more than three-quarters of the imports coming from China and Turkey combined, and the U.S. import sock market reached $1.4 billion. China supplied about a third of the U.S. imports; other major suppliers to the United States included South Korea (with a 13 percent share), Pakistan (11 percent), Honduras (11 percent), and Mexico (9 percent). Honduras was the fastest growing source, with U.S. imports increasing by 15 percent in 2008--five times the growth of all sources combined.

Sock imports from Honduras jumped from 10 million pair in 2005 to 27 million pair in 2008. Key advantages realized by that country included low labor costs and duty-free access to the U.S. market under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). Domestic industry participants bemoaned the flood of imports released by CAFTA-DR, saying it hurt U.S. businesses. Those lobbying against CAFTA-DR claimed that between the time CAFTA-DR was put into effect and mid-2008, about 30 U.S. sock mills had closed, resulting in the loss of 6,200 jobs, and that U.S. sock production had fallen 20 percent.

Indeed, by 2007, two-thirds of the more than 150 sock mills in Fort Payne, Alabama, the previously self-proclaimed "sock capital of the world," had closed. One of the players in this drama was Canada-based Gildan Activewear. In 2006, Gildan, the largest t-shirt maker in North America, began buying out U.S. sock makers, starting with Kentucky Derby Hosiery Company of Mount Airy, North Carolina. Gildan closed all but one of Kentucky Derby's factories and moved operations to Honduras. In 2007, the company purchased Fort Payne-based V.I. Prewett & Son Inc., a major sock provider to mass market retailers in the United States, including Wal-Mart. In July 2009, Gildan closed the 56-year-old sock mill.

In response to domestic sock makers' concerns, President George Bush approved a six-month, 5 percent tariff on cotton socks imported from Honduras, in effect from 1 July 2008 to 31 December 2008. Some industry participants claimed the tariff was not restrictive enough because it covered only socks made from 100 percent cotton and that the tariff was not high enough--many had hoped for at least 13.5 percent.

The leading U.S. company in this category in the late 2000s was Kayser-Roth Corp. of Greensboro, North Carolina. Other leaders in the industry were privately owned Renfro Corp. of Mount Airy, North Carolina, whose estimated sales were $391.7 million in 2008, and DeSoto Mills Inc. of Fort Payne, Alabama. Diversified hosiery makers also competed in this industry, including Hanesbrands of Winston-Salem, North Carolina, with $4.2 billion in 2008 sales; Fruit of the Loom Inc. of Bowling Green, Kentucky, which had sales of $983.1 million; and Jockey International Inc. of Kenosha, Wisconsin, with revenues of $213.7 million. Smaller players were Americal Corp. of Henderson, North Carolina, and Triumph Apparel Corp., formerly Danskin Inc., of New York.

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