Women's, Misses', and Juniors' Blouses and Shirts

SIC 2331

Companies in this industry

Industry report:

This category includes establishments primarily engaged in manufacturing women's, misses', and juniors' blouses and shirts from purchased woven or knit fabrics. Knitting mills primarily engaged in manufacturing outerwear are classified in SIC 2253: Knit Outerwear Mills. Establishments primarily engaged in manufacturing girls', children's, and infants' blouses and shirts are classified in SIC 2361: Girls', Children's, and Infants' Dresses, Blouses, and Shirts.

Industry Snapshot

According to the U.S. Census Bureau, approximately 199 establishments operated in the women's and girls' cut and sew blouse and shirt manufacturing industry in the late 2000s. Industry-wide employment was approximately 7,508 workers, 58 percent of whom were production workers. Companies in the industry tended to be small, with 66 percent employing fewer than 20 workers and 8 percent reporting more than 100 employees. Employment was expected to continue dropping each year until the mid-2010s. Total value of shipments equaled $3.2 billion in 2007. Based on figures from Dun and Bradstreet's 2009 Industry Reports, New York and California were the two top states in the nation in terms of both number of workers employed by the industry and revenues. Pennsylvania ranked number third.

Because many establishments within the apparel industry group (including manufacturers of women's and misses' blouses and shirts) do not always make the entire garment within the establishment's premises or in the company's factories, the U.S. government separates the industry into three broad producer classifications that depend on the range of a company's production activities. Producers are classified as manufacturers if they buy fabric and carry out the design, patternmaking, grading, cutting, sewing, and assembling of their garments within their own establishment or firm. Because of their integrated structure, wholly owned manufacturers operate in a manner that allows them to exercise a considerable measure of control over the production quality of their garments. Due to the relatively large investment expenditures required, such operations fall outside the financial reach of the majority of the establishments active in the industry.

A firm or establishment that carries out all garment making processes except its sewing and, sometimes, cutting operations, and that contracts out these operations to independently owned outside firms, is defined as an apparel jobber. Many apparel firms, regardless of their size, contract out their sewing and cutting needs, along with other highly skilled production functions such as embroidery, quilting, and pleating, which are performed using specialized machinery.

A firm or establishment that is independently owned and uses its own machinery and employees to sew and cut garments from the designs, materials, and specifications supplied by the apparel jobbers is classified as a contractor. The contract system makes it possible to accommodate seasonal production peaks.

Background and Development

Through the mid-nineteenth century, women's and misses' ready-made or ready-to-wear blouses and shirts were practically non-existent. From early colonial days, women typically wore clothes that were made in the household. Popular women's magazines carried sewing instructions for making new patterns or styles. From the 1860s until the turn of the century, efforts to manufacture women's ready-to-wear garments met with little success. What was available was usually of inferior quality and questionable design, despite the invention and diffusion of sewing machine technology. For the most part, domestically produced garments continued to dominate the scene, and mass produced ready-wear women's clothes were spoken about in derogatory terms.

Things changed slowly during the first two decades of the twentieth century, as women's ready-to-wear clothes encountered wider social acceptance. The combined influence of several concurrent social and economic forces explained this shift. For instance, ongoing improvements in European and U.S. textile technologies transformed the quality and availability of fabrics, enabling manufacturers to produce a more comfortable and style-conscious fit. Continuous upgrades in sewing machine technologies, cutting instruments, and pressing processes allowed the output of women's clothes to increase dramatically while their prices fell. Encouraged by the burgeoning women's movement, women were able to move beyond their traditional confines of home and family and participate more fully in society. Women increasingly entered the workforce, attended college, and became more active in sports and politics. World War I precipitated many women taking over jobs once performed by men. Given their fuller participation in social affairs outside the home, women found ready-to-wear clothes for themselves and their families a necessary convenience.

Beginning in the 1920s, small, privately owned, single-product firms came into existence in the women's apparel industry. Changes began by the late 1950s when larger, publicly held, multi-product firms started to move into the women's apparel industry. In most instances, their methods of gaining entry into the industry took the form of mergers with or acquisitions of existing firms. This growth in the industry continued unabated into the 1960s. There were 22 publicly owned firms in women's apparel industry in 1959, but by the end of the 1960s, there were more than 100. The advance of large, publicly-owned firms continued more or less without interruption until the mid-1980s when the trend reversed itself and large manufacturing firms began to "go private" again during the era of leveraged buyouts.

The progressive growth of import penetration into the domestic market for women's and misses' blouses and shirts was a significant factor in the domestic industry's protracted tailspin. As part of industry-wide efforts to lower production costs, U.S. producers participated in the import deluge through the processes of "outsourcing" and relocation by foreign investment. Beginning around 1982 and continuing into the 1990s, price competition from foreign and domestic producers resulted in strong disinflationary pressures, which triggered a steep decline in the domestic industry's rate of capacity utilization. Capacity utilization fluctuated erratically in the 79 to 83 percent range during the 1981-1982 recession. The percentage change in producer prices for women's apparel collapsed and remained relatively flat between 1983 and 1990. Although not as dramatic as the previous recession, disinflation occurred again during the 1990-1991 recession, before an uncharacteristic steep decline despite being some two years into a recovery. During the early years of the recovery, producer prices climbed, peaking at 89 percent in 1984. They then plummeted, settling at 76 percent in 1993, which marked a drop of almost 15 percent in capacity utilization in the industry. A direct consequence of the shakeout in the industry's manufacturing sector was that many traditional wholesale and retail links were either in turmoil or completely broken, spawning a number of mergers and bankruptcy filings.

Another trend in the 1980s was the opening of manufacturer-owned retail stores that were usually located in prime retail areas and carried a large and complete stock of the firm's product lines sold at regular prices. Such outlets provided manufacturers with a wealth of consumer information that was used to determine whether the prospect of future sales warranted future production runs.

According to the American Manufacturers Association, apparel imports grew only 10 percent in 1995. Imports of cotton apparel grew 1 percent, manmade fiber apparel imports increased 7 percent, and wool apparel imports rose 8 percent. Imports of fibers covered by the Multi Fiber Arrangement (MFA) fell 18 percent. Following these overall industry trends, imports of women's knit shirts and blouses fell 12 percent in 1996, while import figures for women's shirts and blouses, not knit, remained similar to those of 1995. Although import growth was down and domestic production dropped in 1996, U.S. apparel consumption grew 5.8 percent. Retail sales of women's apparel grew 5.1 percent in 1996 compared to the 1 percent growth reported in 1995.

At the beginning of the twenty-first century, there were numerous examples of streamlining women's wear as the industry attempted to calm what had become a capricious area of commerce. Portfolio expansion, information technology applications, and sourcing/distribution channel remodeling worked to shape the industry's future as well as serve as a driving force to establish the participant's position within it. The article noted that diversification was another new means to regain lost market share. It also reported that executives as well as shareholders recognized that while fashion has always been notoriously fickle, consumer focus must remain at the forefront.

Current Conditions

The American Apparel and Footwear Association (AAFA) reported that in 2007, U.S. production of women's and girls' cotton knit blouses reached 7.0 million garments. Consumption was 188.7 million garments, which resulted in an import penetration rate of 96.2 percent. The import penetration rate in the women's and girls' manmade fiber (MMF) knit shirts category was also high--92.3 percent--as the United States consumed 36.2 million garments but manufactured only 2.7 million. This production figure showed a decline from the previous year's figures of 8.9 million garments. Finally, production of women's and girls' shirts and blouses (not knit) totaled 2.0 million garments in 2007, down from 3.6 million in 2006, with U.S. consumption at 16.1 million garments and an import penetration rate of 87.2 percent. The industry was valued at over $3 billion in the late 2000s

Fierce competition from abroad continued to promote changes in the industry in the late 2000s, the most significant of which was shipping garments overseas for assembly. U.S. workers started to perform more preassembly tasks, leaving the most labor-intensive assembling tasks to low-wage workers offshore. One of the effects of this change was the loss of U.S. jobs. The projected job loss level for U.S. garment workers in the late 2000s was higher than for almost any other U.S. industry. In addition to moving production tasks offshore, employment losses were attributed to growing numbers of imports, new automation, changing trade regulations, and mergers and acquisitions.

The apparel trade responded to these challenges by enacting significant cost-cutting strategies, such as closing duplicate or unprofitable subsidiaries and moving to offshore sourcing. Growth through brand acquisitions in an effort to expand and diversify their presence was another measure adopted to remain competitive. As a result, consolidation in the garment industry continued at a significant pace during the mid- to late 2000s.

Merchandisers and manufacturers also worked to ramp up processing speed and efficiency, mostly by incorporating computer technology and tools like the Internet. This resulted in just-in-time merchandise delivery, less stagnant inventory levels, lower costs, and instant information. Online shopping continued to become more widespread through the 2000s as consumers became increasingly comfortable purchasing items like clothing via the Internet.

Industry Leaders

One of the industry leaders in the late 2000s was Liz Claiborne, Inc. with 2008 sales of almost $4 billion and 15,000 employees. Founded in 1976 and based in New York City, Liz Claiborne Inc. sold such brands as Liz & Co., Concepts by Claiborne, kate spade, and Juicy Couture worldwide in department stores, 365 outlets, 440 specialty stores, and on the Internet. Industry analysts credited its success to the company's strategy of advertising its products as designer but pricing them to attract a broader, more diverse market. The Liz Claiborne label also is licensed for cosmetics, shoes, sunglasses, watches, home furnishings, and men's clothes. The company underwent a restructuring in 2008 in an attempt to focus on its top brands.

Other leaders were Phillips-Van Heusen Corp., with almost $2.5 billion in fiscal year 2008 sales and 11,100 employees, and New York-based Jones Apparel Group Inc., which had sales of $3.6 billion in 2008 and 7,925 employees. Jones merged with Gloria d Apparel Corp. in 2002 and bought Barneys New York in 2004, two of many acquisitions that occurred during the 2000s. AnnTaylor Stores Corp. of New York had $2.2 billion in 2008 sales and 18,400 employees, and Kellwood Company of Chesterfield, Missouri, had nearly $2 billion in annual sales and 28,000 employees.

Workforce

The Bureau of Labor Statistics (BLS) predicted significant losses of workers would result in an employment figure of 77,200 in the cut and sew apparel industries by 2016. In May 2008, BLS reported that more than 70 percent of cut and sew apparel manufacturing industry employees worked in production, earning a mean hourly wage of $10.91. 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.

America and the World

Since the end of World War II, the domestic producers of women's and misses' blouses and shirts have been vulnerable to import penetration. A particularly acute phase occurred from 1983 to 1992. Although the market share of the "Big Four" (the People's Republic of China, Taiwan, Hong Kong, and Korea) accounted for the largest share of U.S. imports, it actually dropped from 63 percent in 1984 to 41 percent in 1992. Shipments from Taiwan, Hong Kong, and Korea declined, but China recorded an increase of more than 100 percent. The Big Four continued to lose market share to new players such as Bangladesh, Indonesia, and Thailand. By early 2009, the top five apparel suppliers to the United States in were China, Vietnam, Bangladesh, Honduras, and Indonesia.

To an increasing degree, many U.S. garment makers participated in this import binge and contributed to the erosion of domestic employment in the industry through their emphasis on foreign outsourcing. With respect to the Caribbean countries, this was true as a matter of policy beginning in 1983 when Congress, fearful that the spread of poverty in the Caribbean would attract large numbers of its citizens to Communist politics, passed the Caribbean Basin Initiative (CBI) program. The CBI permitted almost all apparel items that had been cut within the United States to be shipped abroad for further processing and re-enter the United States as manufactured or semimanufactured goods. According to section 807 of the U.S. Tariff Code, the percentage of duty paid on the goods was equated to the value added abroad. The duty often was equal to the cost of foreign sewing labor, which was notoriously low compared to the cost of U.S. workers. Among the countries participating in the program were Jamaica; the Dominican Republic; Haiti; Costa Rica; and, even though it was not a Caribbean country, Mexico. Trade relations between the United States and the rest of the world were supposed to be put on a more level playing field with the passage of the North American Free Trade Agreement (NAFTA) and General Agreement on Tariffs and Trade (GATT). The World Trade Organization (WTO) was created in 1995 from GATT, which then ended.

The U.S. apparel industry had been greatly impacted by GATT, whose final phase started in 1986. GATT was first established in the 1940s and created the Arrangement Regarding International Trade in Textiles, known as the Multi Fiber Arrangement (MFA). The MFA regulated apparel imports into the United States and other member nations from lower cost, developing countries and was replaced by the Agreement on Textiles and Clothing (ATC), which required the phasing out of MFA quotas over a ten-year period.

The entire fabric and apparel industry endured an expected, significant setback when, on January 1, 2005, all previous import quotas were removed for WTO member countries. By that time, the United States imported more than 50 percent of all apparel sold domestically. To compensate for the influx of imported garments, domestic manufacturers implemented several fundamental changes to meet the challenge, including consolidation, outsourcing, and domestic technological development. The deluge of imports caused the United States to invoke a WTO safeguard that resulted in an agreement with China in November 2005 to limit imports for a three-year period. When the agreement ended in 2008, the National Committee of Textile Organizations and other industry organizations lobbied Congress for a new import-monitoring program on Chinese products.

Research and Technology

Despite being caught up in an ongoing grip of establishment downsizing, major technological changes that began to affect the industry in the late 1980s led to a closer integration between retailers and manufacturers. Low-cost, labor saving technologies were introduced at larger companies, which widened the competitive cost differentials between themselves and the middle and lower tier firms in the industry.

A significant development between retailers and the industry's manufacturers was the implementation of the "quick response" (QR) system, a computerized strategy that provides for the quick and precise replenishment of "hot-selling" garments. By means of electronic data interchange (EDI), participating apparel producers have an instant, continuous flow of information concerning retail sales by styles, sizes, and colors, along with the level of retail inventory. With this information, manufacturers can plan production with more precision and discard slow-moving styles while devoting their efforts on fast-selling items. As a result, they avoid costly markdowns and increase turnover.

Automated technologies were being installed to speed up the manufacturing process and reduce the labor time required per garment. Examples included automated marker and patternmakers, computer inspection of fabrics, scanning and measurement of fabric width variance, and shade recognition apparatus, which have all become automated parts of a fully integrated quality enhancing system. Programmable sewing units that use microprocessors were also instrumental in reducing sewing labor costs. Before the introduction of these units, sewing a garment accounted for the largest portion of an article's labor cost, while anywhere from 70 to 80 percent of in-process production time was spent handling and positioning a garment. To reduce in-process handling, automatic conveyor systems, robotic systems, and automated warehouse facilities were developed.

Information technology (IT), while positive in its intent but threatening to those unfamiliar with it, revolutionized the apparel industry in the late 1990s. Combined with its many innovative computer-driven tools, this method of electronic commerce created a ripple effect that caused large and small industry players to evaluate their viability within the market. Those who could afford the necessary time and monetary investments usually saw worthwhile, if not significant, returns. Some who were cash-strapped or interested in sharing the risk opted for partnership. Others, including small family-owned businesses, chose to abandon their places within the industry.

The logistics of each area's IT market entry and evolution, along with its associated learning curve, resulted in a variety of upheaval and transition before being successful, but the overall benefits of IT were felt industry-wide. Having access to IT-generated data allowed instant interpretation and understanding of fashion trends and encouraged cooperation among all channels for the seamless flow of goods to meet, if not stay ahead of, the demands of those trends. Computer hardware and software, along with the Internet, facilitated this new infrastructure and introduced systems that improved avenues of sales forecasting, product planning, warehouse management, manufacturing, distribution, order entry, and sales support.

Other technologies affecting the apparel industry in the 2000s included computerized equipment and material transport systems. The use of computer simulation was a trend in the clothing industry in the late 2000s that was an attempt to make the manufacture of garments more efficient. Product developers in the apparel industry used software that allowed for 3D visualization of garments. Generally, these systems allow the user to "dress" a digital person, or avatar, using two-dimensional patterns, sometimes created in a CAD system. The avatar's measurements and characteristics could be manipulated to represent a particular segment of a target market. In addition, fabric textures and draping properties can be applied to a garment to better represent what the final product will look like. According to a July 2009 Apparel article, "As virtual dressing and related technologies become increasingly viable, there is an opportunity for product development teams to harness these capabilities for early identification of style and fit issues," in addition to reducing development time.

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