SIC 2325
MEN'S AND BOYS' SEPARATE TROUSERS AND SLACKS



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.

NAICS Code(s)

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

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

Industry Snapshot

During the late 1990s, 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. At the start of the twenty-first century, the marketplace was overrun with men's casual pants, and it appeared that American men had completed their casual work wardrobes.

Concentration in the U.S. retail industry throughout the 1990s meant that manufacturers of pants had fewer potential retailers with whom to deal, and this process, consequently, gave greater leverage to those powerful chains that remained. In response to retailers' demands for cheaper goods and faster replenishment, manufacturers invested in new communications technologies and developed new methods of production. Finally, U.S. manufacturers had to compete for space on retailers' shelves with cheaply produced imported pants—a trend that intensified in the aftermath of the implementation of new international trade agreements in the mid-1990s. One response to pressure from foreign competitors was to downsize domestic production and base an increasing share of production offshore.

Organization and Structure

In the 1990s some 400 establishments owned by 278 companies were engaged in the production of men's and boys' trousers and slacks. Despite the large number of enterprises, this was a relatively highly concentrated industry, as the four largest manufacturers produced 60 percent of industry shipments. The industry was concentrated geographically in the south and southeast of the United States. Texas led the way with almost 20 percent of all industry employment, followed by Tennessee, Georgia, and Alabama, each with just more than 10 percent.

Men's and boys' jeans (including jean-cut casual slacks) was the most important major product class for this industry, accounting for 64 percent of the value of industry shipments; men's and boys' separate dress and sport trousers, pants, and slacks accounted for 26 percent; and about 10 percent was accounted for by contract or commission work on various product categories. By far the most important material used in this industry was broadwoven fabric; this fabric made up 78 percent ($1.539 billion) of total material costs for the industry.

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 last two decades of the twentieth century, there was substantial concentration among U.S. apparel retailers as a result of bankruptcies and consolidation. These remaining retail chains controlled a larger 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 of fabrics and decorated with ornaments of distinction.

The outcome of the American Revolution thrust an emergent and growing middle class, 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 one of the regional hotbeds of the American Revolution—Worcester, Massachusetts.

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 was also 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 stood 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 one-half a century of protection had 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 semiskilled employees, whose wages gravitated towards 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 semiskilled workers grew, and working conditions became more miserable with each successive wave of immigration. It was not until the formation of apparel-based trade unions that such conditions began to be combated.

Until the outbreak of the Civil War, manufacturers and retailers of ready-made pants confronted a persistent problem—the absence of any reliable sizing standards to assure that mass-produced clothing would fit properly. The solution arrived from a study performed by the U.S. Army's Philadelphia Quartermaster Depot, which had collected body size measurement data on over a million recruits and conscripts. The depot organized these measurements into tables of standard body proportions and thus created a set of data that could be readily applied to the standardization of manufactured civilian garments.

Body sizing standards, coupled with the diffusion 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 on to the next station of workers performing another distinct operation. This process would continue until the entire trouser garment was completed. The bundle system proved to be an enduring and flexible method of production, capable of undergoing refinement, modification, and integration with new technologies. It was still in widespread use throughout the apparel industry in the mid-1990s.

The 1880s witnessed the first major improvement in the nonsewing processes, when the sword knife and slotted table were introduced into cutting rooms. Later came the electrically operated knife, which, though immobile, proved to be the forerunner of the more modern, portable, electrically driven assortment of cutting tools. In turn, 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 the steam pressing machine.

New technological developments late in the 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 American pants manufacturers to adapt to the shifting clothing habits of American men, in a society where informal dress was increasingly common in both business and leisure contexts. This was a trend that showed every sign of continuing—a Levi Strauss survey showed that by the year 2000, one-half of all U.S. corporations would no longer require formal dress at all and that 75 percent of U.S. workers would be wearing casual clothes to the office. In order to capitalize, major manufacturers like Levi Strauss and Haggar Corp. introduced new lines of pants in the mid-1990s that would straddle 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, treated with a chemical finish to prevent wrinkling, were first marketed in 1989 by Farah Inc. By the mid-1990s all other major manufacturers had introduced their own wrinkle-free products that represented the fastest growing segment of the domestic men's apparel market.

U.S. manufacturers strived 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 (HTSUS). This provision allowed U.S manufacturers to ship cut pieces offshore to Caribbean Basin countries, where they are sewn, either by outside contractors or in company-owned factories, and then re-imported to the United States with duty assessed only upon the value added outside the United States. The other side of this process, of course, was the downsizing of U.S. manufacturing, involving closure of assembly plants and layoffs of workers. This trend was more pronounced for manufacturing of formal pants, which require considerably more labor than jeans. One major manufacturer, Farah Inc., had shifted all sewing and finishing operations offshore by 1996.

Some of the same manufacturers, however, also developed strategies that pointed in the direction of increasing the competitiveness of domestic manufacturing operations. Known as quick response, these strategies were aimed at enhancing the flexibility of manufacturers in responding to changing buying habits of consumers and changing demands of retailers. The most widely adopted quick response 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 in order 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 multi-skilled 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, giving incentive for team members 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 as far back as 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 the modular production with enthusiasm in the mid-1990s.

Current Conditions

After growing steadily through the last decade of the twentieth century, sales of casual pants began to level off in 2000. The value of industry shipments in 2000 totaled $6.05 billion, compared to $7.15 billion in 1997. The number of industry employees declined from 45,219 to 37,684 over the same time period. Industry analysts credited this downward trend to a glut in the khaki market as well as 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.

Industry Leaders

The leading U.S. manufacturers of men's and boys' trousers and slacks in the mid-1990s were Levi Strauss Associates (with its Levis and Dockers brand names),V.F. Corporation (Wrangler, Rustler, and Lee), Haggar Corp. (Haggar and St. James), and Farah Inc. (Savane, Farah, and John Henry). V.F. Corp. had the largest share of the domestic jeans market, with 30 percent. Levi Strauss was second overall in jeans, although its Levis brand was the best-selling individual brand. Levi Strauss led in casual pants, with its Dockers brand, followed by Haggar, which led in domestic sales of formal pants.

Levi Strauss, still owned by the descendants of its founder, was the largest brand-name apparel manufacturer in the world in the 1990s. The company complemented its extremely successful Levis and Dockers brand names by introducing a third major line of pants in late 1996, Slates, designed to compete in the corporate casual market. Levi Strauss was clearly in a position to benefit from the turn towards more casual business clothing in the 1990s and successfully pressed its advantage by aggressively marketing its products via fashion shows, seminars, and videotapes targeted at thousands of corporate employers. Another strong aspect of the company was the prestige of its Levis brand name among foreign consumers, which enabled it to sell blue jeans as a fashion item at considerably higher prices than domestically. As a result of these factors, Levi Strauss' sales were strong throughout the 1990s, posting between $6.6 and $6.7 billion in sales worldwide in each of the last five years of the decade. Sales in the Americas alone were $3.9 billion in 1998.

Levi Strauss also earned notoriety in the 1990s for its values-based approach to management, based on encouraging employee input indecision-making, diversifying management personnel, and applying ethical standards in foreign sourcing operations.

In January of 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.

Both V.F. and Haggar also enjoyed strong sales in the 1990s. A key to V.F.'s success was the performance of its quick response computer links to major retailers, such as J.C. Penney and Wal-Mart. V.F.'s computer center received nightly data from these retailers about the days sales and immediately set the process in motion to replenish the sold products. Replacements for a pair of jeans sold on a Tuesday were thus often on the retailers shelf by Thursday. The effectiveness of this system was seen by some analysts as the cause of V.F.'s growing edge in domestic jeans sales over Levi Strauss, which had begun implementing plans to emulate its competitor by the mid-1990s. Haggar's success in the first half of the 1990s was at least partly due to its aggressive marketing of wrinkle-free cotton pants. Both V.F. and Haggar, despite their strong sales, were in the process of downsizing domestic production in the 1990s.

Workforce

The vast majority of the employees in the men's and boys' trousers and slacks industry were production workers. Wages were $9.26 per hour in 2000. Major employers in this industry reported that only small minorities of their workers were covered by collective bargaining agreements. However, in 1996, the Amalgamated Clothing and Textile Workers Union merged with the International Ladies Garment Union to form the Union of Needletrades, Industrial and Textile Employees (UNITE). UNITE's strong organizing efforts caused Guess jeans to move 40 percent of its manufacturing operations to Mexico and South America by 1997.

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 were likely to increase. 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 and for the eventual elimination of quotas by the year 2005.

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 their economies of scale and access to internally generated funds, the larger 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.

Further Reading

Canedy, Dana. "Struggling to Duplicate a Success." New York Times, 9 October 1996.

Dunlop, John T., and David Weil. "Diffusion and Performance of Modular Production in the U.S. Apparel Industry." Industrial Relations, July 1996.

Himmelstein, Linda, and Nancy Walser. "Levi's Versus the Dress Code." Business Week, 1 April 1996.

Hornblower, Margot. "Guess Gets Out." Time, 27 January 1997.

Lenzner, Robert, and Stephen S. Johnson. "A Few Yards of Denim and Five Copper Rivets." Forbes, 26 February 1996.

Rublin, Lauren R. "Go Short." Barron's, 17 August 1998.

United States Census Bureau. Current Industrial Reports: Apparel. Available from http://www.census.gov/cir/www/mq23a.html .

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 and Trade Summary. Washington, D.C.: GPO, 1995. Available from http://www.usitc.gov/ittr.htm .



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