men's and boys' Neckwear

SIC 2323

Companies in this industry

Industry report:

This category includes establishments primarily engaged in manufacturing men's and boys' neckties, scarves, and mufflers from purchased woven or knit fabrics. Knitting mills primarily engaged in manufacturing neckties, scarves, and mufflers are classified under SIC 2253: Knit Outerwear Mills.

Industry Snapshot

According to Dun & Bradstreet's 2009 report, the men's and boys' neckwear industry's 166 establishments posted annual sales of about $88.4 million and employed 2,270. Companies in this industry tended to be small, with 67 percent employing fewer than 20 workers. New York led with $30.5 million in sales, followed by California with $25.3 million. North Carolina was a distant third with $4.9 million in sales. Comprised of six different specialties, the primary segment was men's and boys' neckwear ($45.2 million in sales). Other categories, in order of dollar amount of sales, were men's and boys' neckties and bowties, men's and boys' bowties made from purchased materials, men's and boys' neckties made from purchased materials, handsewn ties, and men's and boys' scarves.

Background and Development

To a large extent, even before the advent of the "quick response" system, the emergence and eventual growth of the twentieth-century neckwear industry relied on consumer trends. An ability to stay abreast of fashion and changes in design construction proved critical in determining whether a company survived as an industry leader. Other growth-related influences of comparable importance were changing fashions and construction of shirts, for which neckwear apparel served as a complementary article of clothing; utilization of breakthrough technological processes, which usually emerged first in non-neckwear apparel industries and led to the progressive marginalization of handmade neckwear in favor of machine-made methods; and the development of a professional/managerial strata in the U.S. workforce.

Fashion-Related Growth
At the beginning of the twentieth century, the two most prominent styles worn with the popular wing collar shirt were the sailor's knot Teck and Joinville ready-tied neckwear. The Teck was available with both straight and pointed ends, while Joinville was a straight-end only model. According to a 1900 Sears, Roebuck & Co. catalog, Teck and Joinville ties 6 inches wide and 34 inches long were "the most popular and swellest gentleman's scarf ever produced" and were made from the purest of specially imported woven silk. Such ties were available in more than 300 designs and in almost every color and shade.

During the 1910s, which was the last decade before the appearance of the collar-attached shirt, the white, starched-collar, high-band Belmont shirt was an instant hit. It was worn with a narrow tie whose small knot was conspicuously located at the bottom of the shirt's collar. The Henley detached collar shirt worn with a wide-body necktie covering much of the shirt's front also met with wide acceptance. The other two forms of ties that were introduced during this period were the butterfly bow and the long tie formed in a sailor's knot.

Around 1920, the civilian collar-attached shirt came on the scene and was an instant success, largely due to demobilized World War I veterans who had worn a version of the shirt in the military and found it more comfortable than its detached collar alternative. At about the same time, a highly significant design breakthrough occurred in the neckwear industry. A technique that incorporated a loose stitch method to sew a bias-cut wool interlining (a line cutting diagonally across a fabric's grain) made the development of ties that retained their original shape after being knotted and unknotted possible. These relatively resilient ties went on to become an industry standard.

In the mid-1920s, marked changes in neckwear colors and fabrics were introduced. Ties were designed to capture the attention of women shoppers, who made up the largest component of consumers responsible for the purchase of men's neckwear items. By the late 1920s, the silk-and-wool tie rose to prominence thanks to its ripple weave design, which imparted a three dimensional effect. Among the growing number of college students, ties had taken hold and become an everyday part of dress, even though fashions differed across geographic regions.

Woolen ties, whose growing popularity threatened to displace silk ties, first appeared during the Great Depression of the 1930s. During this time, the influence of British fashion was at its greatest in the United States, as demonstrated by the rise in popularity of two British formal evening wear bow ties: the straight club bow and the satin butterfly bow tied in a narrow knot.

In 1936, improvements in the design and construction of the wash tie led to its widespread acceptance. Wash neckwear worn in a sailor's knot tie or bow tie was available in a twin-ply design that fortified fabric strength and wrinkle resistance. Other significant advances in the design and construction of wash ties came from the introduction of spiral seams, which increased durability; improvements in bias cut shapes, which permitted a more perfect-looking knot; and hand bar tacking, which eliminated the unraveling of loose stitching during laundering. Due to the popularity of the widespread collar shirt, the wash bow tie and the large knot tie, which was tied in a manner called the Windsor knot, rose to prominence.

World War II diverted silk fabric into the manufacture of parachutes, and rayon quickly became the number one tie fabric, while wool maintained its solid hold on second. Wool's hold in the marketplace was a result of its relatively wrinkle resistant qualities, along with the fact that it was fashionable to wear a wool tie with button-down shirt and single-breasted three-button suit. During the same period of the silk-less tie, the highly idiosyncratic hand-painted tie, usually with sport motifs, was introduced and became a mainstay for the rest of the decade.

From 1950 to 1960, three significant design and construction breakthroughs were prevalent in the neckwear industry. Washable, nonwrinkle, and no-stretch Dacron knit ties were in the stores in the early 1950s, followed by wash-and-wear all-cotton ties, which retained their original shape and appearance after washing because of a special resin treatment process. Around 1957, a more opulent line of what fashion critics referred to as "elegant air" ties became popular. The trouble with these rather expensive ties was their inability to withstand stains. The solution arrived in 1959, when ties were treated with a special finish named Scotchgard, which permitted stains to be washed out with plain cold water.

Major Technological Manufacturing Changes
While the neckwear industry has probably never been at the forefront of major technological innovations, it has proven adept at integrating other non-neckwear apparel industry technologies into its production processes.

The introduction of the sewing machine in 1846 by inventor Elias Howe prompted a general reorganization of the apparel industry and helped transform the neckwear industry from a handicraft to a form of machine-based mass production. The sewing machine's introduction hastened the division of labor and job specialization trends spreading through the apparel industry. The productivity gains made from these changes were staggering.

Other technological innovations were introduced throughout the apparel industry. For example, electric-powered portable cutting knives, motor-driven cloth spreading machines, and gas-powered pressing machines displaced devices such as small hand-held irons. Later manufacturing developments included a cloth cutting process directed by laser beams and the integration of computers used for pattern making, grading, and fabric utilization. In addition, the application of computers to other areas of manufacturing operations continued.

Rise of the Managerial/Professional Strata
As the economic situation in the United States changed, a managerial and professional strata emerged. The shirt-and-tie style of dress that was practically mandatory for white-collar workers for much of the twentieth century provided a substantial market for the neckwear industry. The industry boomed in the 1990s, peaking at $1.3 billion in 1996. Tie fashions shifted significantly during the first half of the 1990s. Conservatively patterned yellow and red "power ties," which had set the tone in the 1980s, were suddenly out of fashion. Ties tended to be wider and more brightly colored and had bolder, abstract patterns.

In the late 1990s, the two most important material inputs in this industry were broadwoven fabrics and narrow fabrics. The industry shipped $440 million worth of woven silk ties, $57 million worth of woven polyester ties, $10 million worth of woven ties made from other fabrics, and $10 million worth of other neckwear such as leather neckties and knit or woven mufflers and scarves. Despite the popularity of these fabrics, however, the growing acceptability of casual attire in the workplace continued to erode total industry sales. Total industry shipments declined from $607 million in 1998 to $457 million in 2000 to nearly $342 million in 2002. Over the same period, the number of industry employees dropped from 4,985 to 3,969 to 2,781. Sales also plummeted, falling to $800 million in 2002. In 2006, sales for the industry dropped further to $242.4 million.

A Shift in the Industry
The entire apparel industry, including neckwear, suffered a conspicuous decline from the mid-1990s to the mid-2000s. Two key forces that contributed to the decline were the introduction and widespread influence of a more casual dress code in the work environment for traditional white-collar employment and the major decline suffered by the apparel industry in general during the mid-2000s, as World Trade Organization (WTO) countries began to phase out their quotas on clothing and textiles. The phase-out was in accord with the original agreement between the member countries that had created the organization, which eliminated all quotas as of January 1, 2005. U.S. apparel imports from China grew from $5 billion in 1995 to $15 billion in 2004. However, in November 2005 the United States reached an agreement with China, in accordance with a WTO safeguard provision, to limit this growth for at least three years.

According to a 2005 FDCH government account report, between 1995 and 2004, U.S. shipments of apparel products fell more than 50 percent to about $56 billion. Overall industry employment also declined more than 50 percent for the same period. Conversely, imports of textiles and apparel products grew significantly, from $44 billion in 1995 to approximately $83 billion in 2004.

Current Conditions

The men's and boys' neckwear industry faced the challenges of tough economic times in the late 2000s. According to Daily News Record, tie-makers were responding with new textures, colors, and patterns. Al Moretti of Phillips-Van Heusen stated, "When business gets tough, the worst thing you can do is play it safe." Pink was one of the most popular new colors for neckwear for men, and bowties were back in style for little boys. Skinny ties were also making a comeback, and the use of bold patterns, as opposed to solid colors or more traditional patterns, was the newest trend. Tie-makers were also increasing their prices. For example, PVH's labels increased about 5 to 6 percent, mostly due to higher sourcing costs, according to Moretti. "You have to pay for the price increases now and pass those costs along," he said.

Industry Leaders

One of the industry leaders in the late 2000s was Tandy Brands Accessories Inc. of Arlington, Texas, with $149.3 million in 2008 sales and 767 employees. Tandy also produced belts, handbags, and wallets for men, women, and children. Another leading company whose primary business included neckwear was Carmel Valley, California-based Robert Talbott Inc., founded by Robert and Audrey Talbott in 1950. Talbott had about 250 employees and annual sales of around $50 million in the late 2000s. Castle Neckwear Inc. of Los Angeles, California, was also a major player, with $20 million in annual sales and 150 employees in the mid-2000s.

A few relatively new companies made significant strides in the industry with innovative and creative neckwear. The Richmond, California-based Mulberry Neckwear, which launched in 1988 as a subsidiary of Mulberry Thai Silks Inc., obtained licenses for Kenneth Cole, Claiborne, Jerry Garcia, and the Nature Conservancy to help build its necktie business and worked with contractors in China, Italy, and Korea to contain costs. By 2008, Mulberry was the third largest neckwear manufacturer in the United States. That year, apparel giant Phillips-Van Heusen Corp. (PVH) announced plans to purchase Mulberry for $10 million. PVH had previously acquired Superba Inc., another large neckwear company that boasted brands such as Behar, DKNY, Nautica, and Michael Kors, in 2007. Meanwhile, Big Shot Neckwear of Naperville, Illinois, began its business in 2007 specializing in 67 inch neckties for "larger guys' as compared to the typical 62-inch length.

Workforce

From 1994 to 2004, employment declined by 21,000 workers. The U.S. Department of Labor's Bureau of Labor Statistics projected moderate losses of 6,000 workers for the apparel accessories and other apparel manufacturing industry between 2006 and 2016. This represented an annual decrease in employment of approximately 4 percent. By 2007, employment in the overall apparel accessories industry was 16,490. Of this total, 11,070 employees were production workers.

America and the World

International trade has long been a contentious issue for the U.S. neckwear industry. From 1974 until 2004, world trade in textiles and apparel was regulated under the Multifiber Arrangement (MFA), or Multifiber Agreement. However, only a portion of neckwear category types that did not include most silk neckwear categories was covered by this agreement, and no specific quota structures were in effect. Therefore, neckwear producers successfully lobbied the U.S. government to impose tariff or import duties.

The 1993 passage of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) meant that the provisions contained in the MFA were to be supplanted and phased out gradually from 1995 to 2005. Much to the displeasure of the Neckwear Association of America (NAA), the terms of GATT called for a significant reduction in worldwide tariff duties.

To compete with lower-priced imports, U.S. neckwear manufacturers took advantage of tariff provision 9802 (formerly 807), as set forth by the Harmonized Tariff Schedule of the United States (HTS) in 1989. The provision allowed companies to export components made in the United States, assemble them into finished neckwear in foreign factories, and return them to the United States for sale with duty charged only on the foreign value added. Before the passage of the North American Free Trade Agreement (NAFTA), Mexico and countries in the Caribbean were the largest recipients of HTS 9802 trade. However, after NAFTA was passed, Caribbean countries expressed concern that 9802 economic activity in their region would shift to Mexico's advantage eventually. The end of WTO quotas during 2004 and 2005 led to the increase in importation of all types of apparel products, including neckwear products, particularly from China.

When the three-year agreement with China that had been reached in 2005 expired, many in the textiles industry called for a new pact that would limit Chinese exports. However, by mid-2009, no new agreement had been negotiated.

Research and Technology

Beginning in the late 1980s, neckwear companies, like all segments of the apparel industry, invested heavily in state-of-the-art communications systems that rapidly transmitted and responded to information about consumer preferences in the marketplace. These information technology systems, together with attempts to shorten the production cycle and reduce in-process inventories, formed a consumer-driven strategy called "quick response" (QR). Manufacturers often adopted QR systems because of pressure from wholesalers and retailers who were determined to accelerate shipments of hot-selling items and shorten the time required to respond to changing consumer preferences.

Neckwear firms also invested in computer-controlled automated machines to increase productivity and improve the efficiency of their design, cutting, embroidery, sewing, finishing, ticketing, and distribution operations. Most investment projects were undertaken to reduce the labor-time component per task, which remained excessively high compared to other non-apparel industry standards. Typically, larger neckwear firms were better positioned to implement high-cost technological advances because of their economies of scale and access to internal financing. As a result, the pattern of technological change was anything but uniform across all neckwear establishments.

Designer neckwear gained some protection from counterfeit and/or bootlegged products with the introduction of a new product identification technology, referred to as RFID (radio frequency identification). RFID utilizes a scanning technology similar to bar codes, but uses a tagging method that can be read through packaging and shipping cartons. This makes the technology much more useful in monitoring imports.

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