Men's and Boys' Separate Trousers and Slacks

SIC 2325

Companies in this industry

Industry report:

This category includes establishments primarily engaged in manufacturing men's and boys' separate trousers and slacks from purchased woven or knit fabrics, including jeans, dungarees, and jean-cut casual slacks. Establishments primarily engaged in manufacturing complete suits are classified in SIC 2311: Men's and Boys' Suits, Coats, and Overcoats; those manufacturing workpants (excluding jeans and dungarees) are classified in SIC 2326: Men's and Boys' Work Clothing. Knitting mills primarily engaged in manufacturing men's and boys' separate trousers and slacks are classified in SIC 2253: Knit Outerwear Mills.

Industry Snapshot

From 1995 to 2008, the value of shipments by U.S. companies making men's and boys' trousers and slacks declined, as did employment levels. This was due in large part to shifts in the nature of consumer demand, especially a growing preference for casual clothes, which led manufacturers to introduce new lines and new products. By the early years of the twenty-first century, the marketplace was overrun with men's casual pants, and it appeared that U.S. men had completed their casual work wardrobes.

Concentration in the U.S. retail industry meant that manufacturers of pants had fewer potential retailers with whom to deal. Consequently, this process gave greater leverage to those powerful chains that remained. In response to retailers' demands for cheaper goods and faster restocking, manufacturers invested in new communications technologies and developed new production methods. Finally, U.S. manufacturers had to compete for space on retailers' shelves with cheaply produced imported pants, which was a trend that intensified in the aftermath of the implementation of new international trade agreements and the elimination of all remaining trade quotas that became effective January 1, 2005. By 2009, apparel imports from China, Vietnam, and India had increased significantly. Figures from the Commerce Department's Office of Textiles & Apparel showed that in May 2009 apparel shipments from China totaled 592 million square meter equivalents (SME), up almost 9 percent from the same period the previous year. Shipments from Vietnam rose 2 percent to 120 million SME, and imports from India jumped 17.1 percent to 83 million SME. One response to pressure from foreign competitors was to downsize domestic production and base an increasing share of production offshore.

Organization and Structure

According to Dun and Bradstreet's 2009 Industry Reports, approximately 228 establishments operated in men's and boys' trousers and slacks manufacturing in the late 2000s. About 22,576 people were employed in the industry, with California accounting for 15 percent of employees. Other states that employed significant numbers of people in this category included Texas, Georgia, and Kentucky. California was also the number one state in terms of revenues, with $8.9 billion in 2008, followed by North Carolina with $7.7 billion and New York with $5.1 billion.

Establishments in this industry sold their goods to department stores, specialty clothing shops, mass merchandisers, and discount chains. In addition, a number of leading pants manufacturers were expanding their own network of brand-name retail outlets. In the late twentieth and early twenty-first centuries, bankruptcies and consolidations caused a substantial concentration among U.S. apparel retailers. The remaining retail chains controlled a large share of the market and enjoyed greater leverage in their relationships with manufacturers.

Background and Development

In colonial America, the trousers worn by members of the elite classes were, in part, a means of denoting social status and wealth. Typically, these trousers, or breeches as they were then called, were produced by highly skilled craftsmen. Although they had utilitarian function, no effort was spared in trying to embellish these slacks, which were made from the finest fabrics and decorated with ornaments of distinction.

The outcome of the American Revolution propelled the emergent and growing middle class, which was composed of industrialists, merchants, storekeepers, and their various assistants or professionals, to the forefront of political and economic activity and had a profound impact on men's fashion. The fashions of the European nobility were quickly discarded because they symbolized the garb of counter-revolutionaries. Gone were ornately designed trousers. Garments manufactured by U.S. producers gained prominence, while those woven from imported fabrics were looked upon with political disfavor. Simplicity and utility were central to what was regarded as good taste in dress. The day George Washington was inaugurated as the first president of the United States, he wore a suit coat and pants of fine dark brown broadcloth woven in Worcester, Massachusetts, one of the regional hotbeds of the American Revolution.

The taste among American men for utilitarian design contributed to new production and commercial methods in the industry. Tailors began to cut pants in batches and, after sewing them, stored them as inventory on demand or displayed them on retailers' shelves. Advertisers attempted to drum up demand for these ready-made goods. In Boston, George W. Simmons made extensive use of newspaper advertising when, in 1842, he began to promote slacks using enclosed window displays rather than simply hanging or stacking trousers outside his shop. Simmons also was reported to have launched balloons announcing sales and to have established a successful mail order department. Similar efforts using various novel forms of advertising meant to enhance brand recognition were undertaken by Jacob Reed and Brooks Brothers.

Almost from the end of the American Revolution until 1860, the embryonic U.S. apparel industry, including the trouser business, was nurtured by a highly protectionist government policy. Until 1816, the duty for imported slacks remained at 25 percent. By 1828, it had reached 50 percent, where it remained until 1860. During the same period, an additional tariff was applied when imported trousers arrived on U.S. shores in foreign ships.

After 1860, U.S. producers believed they could hold their own against foreign competitors. More than half a century of protection provided the industry with the necessary breathing space to mature and eventually enter the global marketplace with a world-class level of productivity. Confidence in the industry's second-to-none productivity level was warranted, due primarily to the introduction and diffusion of sewing machine technology by the late 1850s, which decreased labor time and, consequently, costs of finished garments.

From the standpoint of the workers, however, the sewing machines' productivity-enhancing virtues were anything but a benefit. The widespread diffusion of the sewing machine quickly eliminated the need for highly paid skilled laborers performing hand-sewing operations. At the same time it permitted the employment of semi-skilled employees, whose wages gravitated toward a bare subsistence level. Whether employed in domestic tenement quarters or in factory sweatshops, working conditions were abysmal, health hazards went unchecked, and child labor was common. For the next couple of decades, the ranks of semi-skilled workers grew, and working conditions became more miserable with each successive wave of immigration. These conditions were not contested until the formation of apparel-based trade unions.

Until the outbreak of the Civil War, manufacturers and retailers of ready-made pants did not have reliable sizing standards to assure that mass-produced clothing would fit properly. This persistent problem was solved following a study performed by the U.S. Army's Philadelphia Quartermaster Depot, which collected body size measurement data on more than 1 million recruits and conscripts. The Depot organized these measurements into tables of standard body proportions to create a set of data that could be readily applied to the standardization of manufactured civilian garments.

Body-sizing standards, coupled with the infusion of sewing machine technology, radically transformed the clothing industry by increasing the division of labor. By 1895, these changes resulted in what came to be known as the bundle system of production, where one or more workers performed a single operation on a repetitive basis. Once the bundle limit was reached, the work in process was passed to the next station of workers who performed another distinct operation. This process continued until the entire garment was completed. The bundle system proved to be an enduring and flexible method of production, capable of being refined, modified, and integrated with advances in technology.

The first major improvement in the nonsewing processes came about in the 1880s when the sword knife and slotted table were introduced into cutting rooms. The electrically operated knife, which, though immobile, proved to be the forerunner of the more modern, portable, electrically driven assortment of cutting tools came next. Consequently, the widespread application of portable rotary and reciprocating electric knives would not have been possible without earlier advances in the construction of electric motors. In the late 1890s, pressing operations were transformed. Operations reliant upon gas- and coal-heated irons were replaced first by the steam pressing iron and later by the steam pressing machine.

Technological developments in the late twentieth century featured a laser beam-directed cloth-cutting process along with the integration of computers utilized for pattern making, grading, and fabric selection. The extension of computer-aided job processes to most areas of trouser production was expected to continue. Such efforts were in step with the industry's drive to raise the level of productivity, a measure usually achieved by changes in the value added per production worker.

These changes were the results of attempts by U.S. pants manufacturers to adapt to the shifting clothing habits of men in the United States, in a society where informal dress became increasingly common in business as well as leisure contexts. This was a trend that showed every sign of continuing according to a Levi Strauss survey that showed that by the year 2000, one-half of all U.S. corporations would no longer require formal dress at all, and 75 percent of U.S. workers would be wearing casual clothes to the office. In order to capitalize on this trend, major manufacturers, such as Levi Strauss and Haggar Corp., introduced lines of pants in the mid-1990s that would overlap the division between casual and formal wear.

Another important product innovation in the early 1990s was the introduction of wrinkle-free cotton pants. These pants, which were treated with a chemical finish to prevent wrinkling, were first marketed in 1989 by Farah Inc. By the mid-1990s all major manufacturers had introduced their own wrinkle-free products, which represented the fastest growing segment of the domestic men's apparel market.

U.S. manufacturers endeavored to maintain their share of this market in the face of competition from foreign manufacturers by taking advantage of tariff provision 9802 (formerly 807), of the Harmonized Tariff Schedule of the United States (HTS). This provision allowed U.S manufacturers to ship cut pieces offshore to Caribbean Basin countries, where they were sewn, either by outside contractors or in company-owned factories, then imported to the United States with duty assessed only on the value added outside the United States. The other side of this process was the downsizing of U.S. manufacturing, which involved shutting assembly plants and layoffs of workers. This trend was more pronounced for manufacturing of formal pants, which required considerably more labor than jeans.

Some of the same manufacturers, however, developed strategies to increase the competitiveness of domestic manufacturing operations. Known as "quick response," (QR) the goal of these strategies was to enhance the flexibility of manufacturers in responding to changing buying habits of consumers and changing demands of retailers. The most widely adopted QR strategy was the development of state-of-the-art communications networks, known as electronic data interchange (EDI), which link the computer systems of manufacturers to retailers and allow manufacturers almost instant access to information about retail sales of their items. Manufacturers could immediately adjust production schedules and shipments according to this data.

Manufacturers also attempted to speed up the production cycle to take full advantage of their access to data about market conditions. A far-reaching, but not very widely implemented, strategy for meeting this goal was the replacement of the long-standing bundle system with modular systems of production. In modular systems, teams of multiskilled operators work together to sew an entire pair of pants. Pay is based on the entire team's output, rather than an individual piece rate, which gives team members an incentive to shift tasks when backlogs develop and to focus on maximizing the number of finished pieces produced by the whole team, rather than the number of individual operations performed. While individual labor productivity may not be quite as high as in the progressive bundle system, where each operator performs just one specialized task, in-process inventory levels are reduced, and the production cycle for assembly of an entire garment is greatly accelerated.

Although industry analysts, industry leaders, and unions began to advocate for adoption of modular production as a key part of quick response strategies in the 1980s, manufacturers were slow to undertake such a dramatic overhaul of their management and human resources practices. A study of firms from a number of different branches of the apparel industry in early 1992 revealed that less than 10 percent of all garments were produced according to the modular system. However, at least one major company in the trousers and slacks industry, Levi Strauss, adopted modular production with enthusiasm in the mid-1990s.

After growing steadily through the 1990s, sales of casual pants began to level off in 2000. The number of industry employees declined from 45,219 to 37,684. Industry analysts credited this downward trend to a glut in the khaki market, as well as to the beginning of a backlash against the so-called "casual Friday" phenomenon. Discount stores, national chains, and department stores were the top three outlets for the purchase of men's apparel.

As of January 1, 2005, all import quotas for World Trade Organization (WTO) member countries were eliminated, and the onslaught of imported apparel continued to pummel domestic manufacturers. According to a 2005 FDCH government account report, U.S. shipments of apparel products fell more than 50 percent between 1995 and 2004, to about $56 billion. Likewise, overall industry employment 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.

According to Bruce Raynor, president of the Unite Here labor union, nearly 10,000 apparel and textile jobs were lost in the United States in the first 60 days of 2005, largely as a result of China's impact on the apparel industry. In the area of men's and boys' cotton trousers and slacks alone, imports from China increased 989 percent from January 2004 to January 2005, according to the National Cotton Council of America.

Current Conditions

Production in the overall U.S. apparel wholesale market dropped from almost 3.1 billion garments in 2003 to 2.2 billion garments in 2005, then dipped below the 1 billion mark to 986 million garments in 2007, according to the American Apparel & Footwear Association (AAFA). Meanwhile, imports rose to 19.1 billion garments in 2007, as compared to 15.9 billion garments in 2003 and 18.3 billion garments in 2005. China's portion of the market increased to 19.7 percent in 2005 from 12.3 percent in 2004, then surged to 34.4 percent in 2007. As the first decade of the twenty-first century neared a close, production numbers continued to fall as import figures climbed. The National Council of Textile Organizations reported that in November 2008 China accounted for a record 54 percent of the U.S. apparel market. On the other hand, other free-trade countries, including Mexico and those involved in the Central America-Dominican Republic-United States Free Trade Agreement (CAFTA-DR), lost market share.

The AAFA indicated that U.S. production of men's and boys' cotton trousers, slacks, and shorts was 3.2 million garments in 2007, while U.S. consumption reached 61.3 million, leading to an import penetration rate of almost 95 percent. In 2005, the import penetration rate for this category of apparel had been 82.1 percent.

Industry Leaders

The leading U.S. manufacturer of men's and boys' trousers and slacks was V.F. Corp. (Wrangler, Rustler, Riders, and Lee brands) of Greensboro, North Carolina, with 2008 sales of $7.6 billion and 46,600 employees. Also significant was San Francisco-based Levi Strauss Associates (Levi's, Levi Strauss Signature, and Dockers brands) with $4.3 billion in 2008 sales and about 11,400 employees. Other leading manufacturers were Phillips-Van Heusen Corp. of New York City with $2.5 billion in 2008 sales and 11,100 employees and Haggar Clothing Co. of Dallas, Texas, with $822 million in mid-2000s annual sales and 1,500 employees.

Levi Strauss, which was still owned in the early twenty-first century by the descendants of its founder, was one of the largest brand name apparel manufacturers in the world. The company was in a position to benefit from the move to more casual business clothing and successfully pressed its advantage by aggressively marketing its products at fashion shows and seminars as well as in videotapes that were targeted at thousands of corporate employers. The 1986 launch of the Dockers casual pants was successful as was the 2003 introduction of the Levi Strauss Signature brand, which also focused on casual wear. Another strong aspect of the company was the prestige of its Levi's brand name among foreign consumers, which enabled it to sell blue jeans as a fashion item at considerably higher prices than it could domestically.

Levi Strauss earned notoriety for its values-based approach to management, which is based on encouraging employee input in decision making, diversifying management personnel, and applying ethical standards in foreign sourcing operations. In January 1999, Levi's President Peter Jacobi retired after 28 years with the company. The following month, Levi Strauss closed 11 North American plants, laying off 5,900 of its 19,900 U.S. workers. Revenues for the company remained above $4 million in the late 2000s, despite the industry declines. At that time, the company sold its products in 110 countries.

A key to V.F. Corp.'s early success was the performance of its quick response computer links to major retailers, such as JCPenney and Wal-Mart. V.F. Corp.'s computer center received nightly data from these retailers about the day's sales and the process to replenish the sold products began immediately. Replacements for a pair of jeans sold on a Tuesday were often on a retailer's shelf by Thursday. The effectiveness of this system was seen by some analysts as the cause of V.F. Corp.'s growing edge in domestic jeans sales over Levi Strauss, which had begun implementing plans to emulate its competitor. Haggar's success was at least partly due to its aggressive marketing of wrinkle-free cotton pants, which were introduced in 1992.

Workforce

More than 70 percent of cut and sew apparel manufacturing industry employees worked in production in the late 2000s, earning a mean hourly wage of $10.91 according to the U.S. Department of Labor's Bureau of Labor Statistics. Sewing machine operators comprised about 47 percent of production employees with a mean hourly wage of $9.70. Employment in the overall apparel manufacturing sector had dropped to 173,000 workers by January 2009, according to the American Apparel & Footwear Association.

Major employers in this industry reported that only small minorities of their workers were covered by collective bargaining agreements. Unite Here, which was formed in 2004 by the merger of the Union of Needletrades, Industrial and Textile Employees (UNITE) and the Hotel Employees and Restaurant Employees International Union (HERE), continued to campaign, or "organize," on behalf of their members for acceptable working conditions as well as fair wages and benefits. The American Apparel & Footwear Association had a similar goal after the American Apparel Manufacturers Association and Footwear Industries of America joined forces in 2000.

America and the World

With the passage of the North American Free Trade Agreement (NAFTA) and the Agreement on Textiles and Clothing (ATC) in the mid-1990s, competition from foreign manufacturers and pressures to downsize domestic operations increased significantly. The former lifted quotas and removed some tariffs on apparel imports from Mexico. The latter called for accelerated growth in quota levels for apparel imports from other countries that were sequentially eliminated in total as of January 1, 2005. After large amounts of apparel imports from China landed in the U.S. market, the United States utilized a World Trade Organization (WTO) safeguard that resulted in a three-year agreement between China and the United States that set specific limits on those imports. When this agreement ended in January 2008, the National Committee of Textile Organizations and other industry organizations lobbied for a new import-monitoring program on Chinese products. Although officials from China and the United States held meetings on the issue in mid-2009, no agreement was reached, and Sheng Lu in New Cloth Market predicted that "The Chinese government is less likely to compromise on any major trade restrictions in 2009 compared with 2005."

In 2009, the top four apparel suppliers to the United States in early 2009 in addition to China were Vietnam, Bangladesh, Honduras, and Indonesia. Julia Hughes, senior vice president of international trade for the U.S. Association of Importers of Textiles and Apparel, said, "If you're talking about where apparel executives are sourcing from, if they are going to expand, you're looking at what we should call the big three: China, Vietnam and Bangladesh."

Research and Technology

In addition to the quick response system, men's and boys' trousers and slacks firms directed major investments at computer-controlled automated machinery in an effort to increase productivity and secure production efficiencies in the areas of design, cutting, embroidery, sewing, finishing, ticketing, and various distribution operations. Independent of the particular area of operation, most investment projects were undertaken with the intention of reducing the labor-time component per task, which remained excessively high relative to other nonapparel industry group standards. Because of economies of scale and access to internally generated funds, the large trousers and slacks firms have been better positioned to implement technological advances. This has resulted in a pattern of technological change that is highly uneven across the entire men's and boys' slacks industry.

The industry, particularly branded segments, acquired 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.

In the late 2000s some pants manufacturers were making use of the Eton Unit Production System, an assembly system that transports all the pieces of one complete product through the manufacturing process using a product carrier. Tullahoma Industries in Brilliant, Alabama, which makes the U.S. Army's Generation III uniform trousers, experienced a 15 to 20 percent increase in production less than 90 days after installing the system. Russell Boren of Tullahoma told Material Handling Management "The slick and lightweight materials were far too difficult to keep organized manually. Operators got frustrated trying to stack, tie and untie, and position the fabrics for assembly." Boren went on to say that the Eton system "eliminated the need for two general material handlers and dramatically reduced operator handling time across the board."

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