From rags to rich apparel

By Dita De Boni

The long and loud lament for the loss of Bendon is seen as yet another nail in the coffin of apparel manufacturing.

While Kiwi designers such as Karen Walker and Zambesi are burning up the runways in London and Paris, some are asking why our successful fashion profile does not necessarily translate into jobs, growth and opportunity for an industry eager to provide the clothes the world wants to wear.

But as the chatter and hum of factories full of sewing-machine opera-tors is rapidly replaced by the mad scramble for cut-price Korean-made knickers, a large number of highly successful niche exporters are crawling out from under mounds of mass--produced rags and creating riches.

The remaining manufacturers agree that to survive in a market which has reduced by half over the last 10 years and is now awash with imported garments, aspirations must go beyond the tiny domestic market to supplying distinctive products that will stand out on the world stage.

The survivors have accepted that they cannot compete with the low costs of Asia or Government assistance in Australia, and, albeit with dramatically smaller workforces, are slowly shaping a sustainable industry.

Despite the flood of cheaply-tariffed clothing selling furiously through large discounters such as Farmers, Deka and the Warehouse, the industry has seen exports grow 10 per cent to $180 million this year with imports increasing only 4 per cent to $626 million.

The big problem for survivors and thrivers alike is the loss of a vital infra-structure that continues to shrink with every large player - like Bendon - that disappears and takes years of expertise with it.

Paul Blomfield, the chief executive of the Apparel and Textile Federation, is concerned that there are ever fewer sewing-machine providers, label and thread-makers and apparel technicians rounding out the industry. He also wonders about the surplus of design graduates emerging from poly-technics that while passionate, greatly outnumber highly-skilled machinists.

But he has been working on a message of good hope for the industry and emphasising the success of firms targeting the middle to high end of for-eign markets.

"The domestic market is a big red building with lots of stuff in it," he says.

"It's dominated by discounters look-ing for a price advantage and players like Bendon, unfortunately, were competing in a market that is driven by the east."

Lingerie has struck particularly diffi-cult times, with the import of support garments trebling from 1.25 million in 1993 to 3.42 million in 1999 combined with New Zealand women's overwhelm-ing preference for bras costing less than $29.

But Mr Blomfield says all these signs point to the obvious: lingerie will have to go the way of other garments, where New Zealand can excel providing "small runs of fashionable ideas" and all but ignore the over-serviced bulk markets.

He points to the success of specialised players such as Moontide swimwear, Heart Industries and Ashley Fogel, who were among the first to take to international markets and establish a reputation for stylish women's fashion products from these shores. There are success stories in the in-dustry and they are the ones that have been able to provide excellent service, fast turnaround and high-quality, unique garments.

To gain a glimpse of the future for larger-scale manufacturing, industry eyes have now turned to LWR Industries - one of the few high-volume players left on the scene producing reasonably priced wares. The company still sells a high percentage of product to the domestic market - around 70 per cent - although only 35 per cent of that is made locally.

Corporate general manager Glenn Keen says although the company here has downsized from 3,500 workers to 800 in line with the industry at large, it has remained large by working on brands - Jockey and Liberty among them - and looking to fashion to boost "Brand New Zealand" overseas.

"Growth will come from exporting, and more and more, from high exposure in the fashion world establishing New Zealand as a designing force to be reck-oned with."

After export tariffs started dropping from 65 per cent in 1987, companies such as Auckland-based Cambridge Clothing had to think along the same lines and whittle down its range of styles. Ninety per cent of Cambridge's production is now high-quality men's suits.

The company's New Lynn plant, employing 290 workers, produces up to 150 suits flown to Australia every night.

Managing director Joe Macky says although the reality of the industry is that you "can't rule with your heart anymore," the company believes it has become stronger since deregulation of the market. "I'm not sure the Bendon closure says a lot other than there is a significant difference between New Zealand wages and Asian wages," he says.

Cambridge, with a turnover of $27 million, can continue its winning streak as long as the Employment Contracts Act and ACC remain unhampered, but does not rule out going offshore for more product if volumes increase. "New Zealand just doesn't have the capability to manufacture those huge runs."

Another operator having trouble supplying demand is the Yakka group.

Yakka NZ make and sell all their products, mostly industrial wear and uniforms, in New Zealand and say the only reason they would look offshore would be because there is not sufficient capacity here to sustain more production. Yakka Apparel Solutions, an offshoot company formed to handle the newly acquired $180 million defence contract for warehousing and distribution, will be sourcing that contract from local supplies.

Managing director Simon Harvey says he supports the lowering of tariffs in an orderly manner. Strong players in the industry would not be rocked by lower tariffs as long as they had the time to plan and prepare for their eventual elimination.

While many small players have found it hard to maintain a niche when exposed to an onslaught of foreign products, some have found a distinct marketing advantage in the boutique export arena playing the New Zealand card. Ashburton-based Tekau Knitwear has cut its workforce from 120 in 1990 to just 20 today, but is hopeful its merino and fine-knit products will find a corner in the world market.

"I would like to think the survivors will survive and flourish," says managing director Alan Kyle.

Tekau has just had a big morale boost with the London success of Kiwi fashion house Nom D, for which the company manufactures.

"We are ever hopeful of gaining a foothold in the northern hemisphere, and although we are aware of our limitations, feel we have the ability to find the right markets for our products."

Not everyone, even those turning good profits, are happy with low barriers to the New Zealand apparel market, pointing to the fact that by next June the 15 per cent import tariff rate in New Zealand will be much less than Australia (25 per cent) and the US and Japan (35 per cent).

Gary Gwynne, managing director of Outdoor Heritage, says while it can afford to engage around 300 direct and indirect workers for now, it may ultimately be forced to shift some production to Eastern Europe because of what he describes as an impossible manufacturing climate.

Outdoor Heritage produces the highly successful Rodd & Gunn and Logan Yachting high-end casual lines.

"The infrastructure is not going to survive if this type of thing [Bendon] keeps happening. Big manufacturers like that keep a lot of people employed and now a huge resource is lost forever."

Outdoor Heritage has earnings of over $30 million and keeps 18 stores going in Australia and New Zealand by providing good quality niche garments and staying close to the market.

Designer Textiles' Kerry Harding says if it was not for the quality difference between Australian and New Zealand merino wool, he would have based in Australia and been profitable "three times quicker than the time it took in New Zealand."

He says with shorter runs and higher quality products the company has stabilised a workforce that once numbered 200 to around 150 at its Otara plant. The Australian arm of the operation has seen a jump from 55 workers to 100 under a "better manufacturing environment, better infrastructure and help to access the global marketplace."

Acknowledging the difficulties but leading the charge in cautious optimism is Gulf Star Products, makers of the Line 7 label, who have felt confident enough to offer their workers a "job for life," says managing director Ross Munro. With clothing contracts for the America's Cup and the Sydney 2000 Olympics, as well as earnings in excess of $40 million, Mr Munro says brand-driven companies are the key to industry survival.

"At the end of the day, we were never going to be able to compete in the [clothing] commodity market. We have to differentiate ourselves."