SIC 2369
GIRLS', CHILDREN'S, AND INFANTS' OUTERWEAR, NOT ELSEWHERE CLASSIFIED



This category includes establishments primarily engaged in manufacturing girls', children's, and infants' outerwear, not elsewhere classified, from purchased woven or knit fabrics. This includes, but is not limited to, bathing suits, jeans, jogging suits, playsuits, shorts, skirts, slacks, and sweatsuits. Knitting mills primarily engaged in manufacturing outerwear are classified under SIC 2253: Knit Outwear Mills.

NAICS Code(s)

315291 (Infants' Cut and Sew Apparel Manufacturing)

315222 (Men's and Boys' Cut and Sew Suit, Coat, and Overcoat Manufacturing)

315224 (Men's and Boys' Cut and Sew Trouser, Slack, and Jean Manufacturing)

315228 (Men's and Boys' Cut and Sew Other Outerwear Manufacturing)

315221 (Men's and Boys' Cut and Sew Underwear and Nightwear Manufacturing)

315211 (Men's and Boys' Cut and Sew Apparel Contractors)

315234 (Women's and Girls' Cut and Sew Suit, Coat, Tailored Jacket and Skirt Manufacturing)

315238 (Women's and Girls' Cut and Sew Other Outerwear Manufacturing)

315231 (Women's and Girls' Cut and Sew Lingerie, Loungewear, and Nightwear Manufacturing)

315212 (Women's and Girls' Cut and Sew Apparel Contractors)

Industry Snapshot

In 1999 approximately 872 companies were engaged in the production of clothing covered in this category. Of this, there were 121 establishments that either had more than 180 employees or more than $9 million in sales. The number of companies in this category steadily declined throughout the 1980s and 1990s, because, as with much of the U.S. apparel industry, manufacturers faced stiff competition from low-cost imports. Nevertheless, during this time, a well-educated baby-boomer generation, with more disposable income than their parents had, were themselves having children and spending increasing amounts on children's clothing. Consequently, children's clothing became more fashion-oriented and expensive, as reflected in industry shipments that totaled approximately $9.59 billion in 2000. However, the economic downturn in the U.S. that year began to undercut revenues for most segments of the apparel industry, including girls', children's and infants' outerwear.

Organization and Structure

Clothing lines in this industry include "infant wear" for babies up to one year in age, "toddlers' wear" for children from ages two to three, "children's wear" for ages three to six, and "girls' wear" for girls between the ages of seven and fourteen. Children's apparel manufacturers generally produce one new line of clothing per season (spring, summer, winter, and fall) or four lines per year.

Establishments producing children's clothing are comprised of contractors, jobbers, and manufacturers. Contractors are independent manufacturers, hired by various—usually competing—manufacturers. Contractors specialize in sewing the garment from pieces provided to them and are hired by producers who either do not have their own sewing facilities or producers whose own capacity has been superseded.

Jobbers are design and marketing businesses hired to perform specific functions, including purchasing materials, designing patterns, creating samples, cutting material, and hiring contractors to manufacture product. After purchasing materials needed to produce the pieces, jobbers then send the cut material to contractors for assembly.

When creating apparel from the purchased materials, manufacturers retain staffs either to produce designs or buy them from freelancers, as well as to purchase the fabric and trimmings. While cutting and sewing the garment is generally performed in the manufacturer's factories, outside contractors are hired when demand for an item exceeds the manufacturer's capacity or shipping deadlines cannot be met. For the purposes of this entry, the term "manufacturers" will refer cumulatively to contractors, jobbers, and manufacturers.

Background and Development

Children's apparel production developed early in the twentieth century, concurrent with the emergence of the women's apparel industry. During this time, as women joined the professional workforce in increasing numbers, they had less time for sewing their own or their children's clothing. Advances in the industry eventually led to the production of more durable children's clothing available in standardized sizes.

The growing popularity of television during the 1950s, particularly among children, provided a boost to the children's apparel industry. Not only did young people begin to emulate fashions worn by their peers on television, but they were especially responsive to advertising. During this time, children assumed a greater role in choosing the clothing purchased for them by their parents. Moreover, children came to represent an independent consumer market, purchasing clothing themselves with the money they received as gifts or for allowances. In the 1990s practically every major character on children's television shows or in the movies had a line of clothing available.

Current Conditions

The number of employees in the industry dropped throughout the late 1990s as the value of shipments rose. The total number of industry employees fell from 60,582 in 1999 to 57,114 in 2000. Over the same time period, the value of industry shipments increased from $8.66 billion to $9.59 billion. As in other sectors of the apparel industry, increased consolidation and the popularity of imported clothing contributed to downsizing in the industry. After experiencing significant growth in both 1999 and 2000, the children's apparel industry began to feel the effects of the economic recession of the early 2000s, which affected most segments of the apparel industry.

Industry Leaders

OshKosh B'Gosh, Inc. was a dominant force in the children's apparel industry in the late 1990s. It operated more than 120 outlet and specialty stores as well as an online shopping site. In 1998 the company reported sales revenues of $423.2 million, an increase of 7.1 percent over 1997. The number of employees for 1998 was 3,800, an increase of 5 percent over 1997. The company made colorful clothing for children, and still produced the overalls it had turned out since the late 1800s.

Another leading manufacturer in this category was The William Carter Company, a private company founded in 1864 and acquired in 1996 by Investcorp. The company's estimated revenues for 1998 were $408.2 million, an increase of 12.5 percent over 1997. Carter produced children's apparel under its own name as well as licensed apparel under several brands, including the Christian Dior and Campbell Kids labels. The William Carter Company manufactured newborn layette clothing, sleepwear, playwear, underwear, diaper bags, strollers, hair accessories, and shoes. The company operated approximately 145 outlet stores in the United States.

Another industry leader, Buster Brown Apparel, Inc., became a private company in 1993 when it was sold by Gerber Products Company. Originally founded in 1903, Buster Brown was once a highly profitable company, but leaner times necessitated Gerber's sale in an effort to cut costs. Its revenues in 1993 were estimated at $150 million, and it employed approximately 3,200 people.

Workforce

Total employment for 2000 was 57,114 people and most of those employed in this category were production workers, approximately half of whom were union members. Production workers consisted largely of sewing-machine operators, whose average wage in 1997 was $8.10 an hour. While many manufacturers in this sector of the apparel industry, as with the industry as a whole, were small, family-owned businesses, there were a number of large and growing establishments dominating the industry.

Although New York was the long-time center of the apparel business in the United States, in 1997 California overtook that position. That year, approximately 313 establishments, employing about 14,000 workers, were headquartered in California. New York had approximately 139 establishments, with Florida, Pennsylvania, and Texas also having significant concentrations of workers in this category.

America and the World

In the 1960s the U.S. children's apparel industry began to lose significant market share to imports, which offered consumers lower prices and acceptable quality. This trend accelerated in the 1970s, and, by the 1990s, imports had reached all-time highs. Moreover, with U.S. manufacturers relying more heavily on offshore assembly plants, the industry experienced further losses.

Manufacturers in the Far East represented a significant source of children's apparel. In the 1960s the U.S. children's apparel industry began moving manufacturing operations abroad, focusing on Hong Kong, Taiwan, and South Korea, where labor was cheap. By the 1980s, however, labor costs in these countries had increased and operations were moved to Bangladesh, Thailand, Pakistan, Indonesia, Malaysia, Sri Lanka, and India. By the early 1990s China replaced Hong Kong as the greatest supplier of imports to the United States. In the late 1990s, Asia remains the largest supplier of imports to the United States; Mexico's import growth, however, increased 278 percent between 1993 and 1997, and Caribbean imports increased 91 percent during that time.

The North American Free Trade Agreement (NAFTA)—ratified in 1993 to create a free-trade zone between the United States, Mexico, and Canada by gradually eliminating tariffs over 15 years—was generally supported by executives in the apparel industry. While the International Ladies' Garment Workers Union and other unions sought to stem the loss of jobs among Americans in the industry by limiting the imports allowed in the country, the free-market philosophy ultimately triumphed in the passage of NAFTA.

Throughout the 1990s, increasingly more imports entered the United States under provision 9802 (formerly known as Section 807) of the U.S. Harmonized Tariffs Schedule. This provision allowed clothing assembled abroad—from pieces cut in the United States and then exported—to be reimported with duty paid for the value added abroad. This meant that the most labor-intensive part of the assembly process could be accomplished for lower wages. Many U.S. manufacturers took advantage of provision 9802, moving assembly operations to the Caribbean, where they expected to reduce costs and more successfully compete against imports from Asia. While the process greatly decreased the turn around time for assembling more complex clothing items, its logistics sometimes proved cumbersome and time-consuming as contractors in other countries managed the transportation, paperwork, and assembly required. Furthermore, the passage of NAFTA led some to expect that the Caribbean would largely be replaced by Mexico as a more desirable manufacturing destination.

In 1997, as a result of concern about working conditions in the apparel industry, President Bill Clinton announced an agreement—the Apparel Industry Partnership—among industry, labor, and consumer and human rights officials that offered a voluntary code of conduct intended to uphold workers' rights in the United States and abroad. This code of conduct included a guaranteed minimum or prevailing industry wage, a maximum 60-hour work week, and a prohibition against employing persons younger than 15 years of age.

Research and Technology

In the battle against imports, U.S. apparel makers tried several strategies, including increased use of automation, delivering higher quality goods, and trying to track consumers' needs and desires more closely. Although the intrinsic "soft" quality of material made the extensive use of automated equipment difficult, most of the larger manufacturers continually sought to invest in newer machinery to improve efficiency. Nevertheless, apparel manufacture remained a labor-intensive industry.

Another new strategy involved "quick response," the idea that bringing apparel to the retailer more rapidly would shorten the production cycle, reduce inventories, improve productivity, and help manufacturers avoid overstocking by providing them with more timely information regarding consumers' preferences. Using computers to track inventory, sales, and consumer response, domestic manufacturers hoped to compete more effectively with importers. Department stores and manufacturers worked together to find ways to speed deliveries and increase efficiency.

Further Reading

Fairchild Fact File: Children's Market, Infants', Toddlers', Girls', and Boys' Apparel, Juvenile Products, Toys/Dolls. New York: Fairchild Publications, Inc., 1998.

OshKosh B'Gosh, Inc. Annual Report. Oshkosh, WI: Oshkosh B'Gosh, 1997.

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .

U.S. International Trade Commission. Industry & Trade Summary: Apparel. Washington, DC: U.S. International Trade Commission, 1999.



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