SIC 2331
WOMEN'S, MISSES', AND JUNIORS' BLOUSES AND SHIRTS



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.

NAICS Code(s)

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

315232 (Women's and Girls' Cut and Sew Blouse and Shirt Manufacturing)

Industry Snapshot

U.S. Commerce Department figures reported that more than 700 companies made women's and misses' blouses and shirts in the late 1990s. This figure marks a considerable drop in the industry, for in the early 1990s more than 1,800 companies were engaged in this area of manufacturing; much of the drop can be attributed to anemic product demand, and the increased market share of international competitors. In 2000 the value added by manufacture amounted to $1.68 billion with material costs reaching $2.96 billion. The 2000 value of shipments totaled $4.46 billion, compared to $4.66 billion in 1999.

In addition to the loss of market share to foreign companies, the domestic industry also felt the sting of a downward trend in middle class discretionary incomes as the economy weakened in the early 2000s. The decline was particularly important since in former times the personal consumption expenditures of this income strata were a cornerstone of the industry target market, responsible for a major portion of apparel purchases of all types. Other factors contributing to the industry's decline included a decrease in the number of women entering the workforce, as well as a change in consumer buying habits to discounters and off-price stores.

In the late 1990s the women's and misses' blouses and shirts manufacturing industry was led by New York's Cygne Designs, the third-largest women's wear maker in the United States with $516 million in sales and 5,000 employees. Other notable companies included Capucci Creations Internationale of California, Esprit de Corp. of California, and Bernaud Chaus Inc. of New York.

Organization and Structure

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 across the company's factories, the U.S. Census of Manufacturers separates the industry into three broad producer classifications. Just where a company or establishment falls within the classifications depends on the degree of comprehensiveness of its production activities. Producers are classified as manufacturers if they buy fabric and undertake the design, patternmaking, grading, cutting, sewing, and assembling of their garments from 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. Since they require relatively large investment expenditures, 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 minus its sewing and (sometimes) its cutting operations, deciding instead to contract out these operations to independently owned outside firms, is defined as an apparel jobber. Many apparel firms, independent 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 contracting system makes it possible to accommodate seasonal production peaks.

In 1987, when ranked according to their density within census regions, the largest number of establishments engaged in this industry were in the Pacific, Middle Atlantic, and South Atlantic regions. Alternatively, when ranked by the number of establishments per state, California was first with 485 and New York was second with 294, followed by Pennsylvania with 173 and Georgia with 76.

The major economic sectors responsible for the share of the industry's input supply flowed from imports (29.1 percent); broadwoven fabric mills (20.2 percent); apparel made from purchased materials (18.3 percent); and knit fabric mills (8.6 percent). The disaggregated share of the total output identified according to the category of its major product class indicated that women's and misses' knit shirts and blouses accounted for 30.1 percent of total sales, women's and misses' woven shirts and blouses represented 46.7 percent, contract work performed on women's and misses' blouses and shirts accounted for 16.5 percent, and about 6.7 percent went unspecified by kind.

Background and Development

Up until the mid-nineteenth century, women's and misses' ready-made or ready-to-wear blouses and shirts were practically nonexistent. Dating back to early colonial times, U.S. 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-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; 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 permitted the output of women's clothes to increase dramatically while their prices fell. Spurred on by the burgeoning women's movement, women were able to move beyond their traditional confines of home and family and participate more fully in social life. Women increasingly entered the workforce, attended college, and became more active in sports and politics. World War I found many women taking over jobs once performed by men. Given their fuller participation in social affairs outside the home, women found the ready-to-wear clothes for themselves and their families a necessary convenience.

From the 1920s onwards, the women's apparel industry developed along the lines of small, privately-owned, single-product firms. By the late 1950s, things began to change as 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 only 22 publicly owned firms in women's apparel industry in 1959, but by the close of the 1960s their number exceeded 100. The forward march 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 this import deluge through the processes of "outsourcing" and relocation by foreign investment. Beginning around 1982 and still in force in 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. During the recession of 1981 to 1982, the percentage change in producer prices for women's apparel collapsed and then remained more or less flat for most of the period covering 1983 to 1990. Though not as dramatic as the previous recession, disinflationary forces hit once again during the 1990-91 recession, and then, most uncharacteristically, set out along the path of another steep decline despite being some two years into a recovery. During the past decade, capacity utilization fluctuated erratically, moving up and down between the 79 to 83 percent range during the 1981-82 recession. During the early years of the recovery it climbed, peaking at 89 percent in 1984. It then plummeted to settle at 76 percent in 1993, marking a drop of almost 15 percent in capacity utilization in the industry. As a direct consequence of the shakeout working through the industry's manufacturing sector, many traditional wholesale and retail links were sent into disarray or ruptured entirely, spawning a number of mergers and bankruptcy declarations.

During the 1980s another trend arose in the form 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; man-made 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. In keeping with 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 a 1.0 percent growth in 1995.

A new World Trade Organization (WTO) was established in 1995, and the Multifiber Arrangement (MFA), which allowed importing countries to limit the flow of imports from lower cost, developing countries, was replaced by the Agreement on Textiles and Clothing (ATC), which required the phasing out of MFA quotas over a 10-year period. According to Linda Shelton in an Industry, Trade, and Technology Review report, "The elimination of MFA quotas likely will have a significant impact on the U.S. textile and apparel sector given the level of protection that such restrictions have provided domestic producers over the past two decades." Since the United States has until 2005 to implement the ATC, the legislation's impact on the women's apparel industry may not be realized for several years.

Current Conditions

Women's wear at the onset of the twenty-first century saw numerous examples of streamlining in an attempt to calm what had become a capricious area of commerce. A November 1999 issue of Apparel Industry Magazine reported that approaches such as portfolio expansion, information technology applications, and sourcing/distribution channel remodeling not only worked to shape the industry's future but also functioned as a driving force to establish the participant's position within it. In addition, the article noted that diversification was another new aim to regain lost market share. It further reported that executives and shareholders alike recognized that while fashion has always been notoriously fickle, consumer focus must remain at the forefront.

The apparel trade also employed various strategies to avoid further slumps yet still maintain a viable presence. Cost-cutting through the closing of duplicate or unprofitable subsidiaries and moving to offshore sourcing, especially in terms of labor and supply costs, proved to be one of the most economically advantageous tactics used by industry players. Growth through brand acquisitions in an effort to expand and diversify their presence was another measure adopted to remain competitive.

Along these lines, merchandisers and manufacturers worked to make industry processes faster and more efficient, mostly by incorporating smarter uses of 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 into the early 2000s as consumers became increasingly comfortable purchasing items like clothing via the Internet.

Workforce

In 2000 the U.S. Census Bureau reported that 32,015 individuals were employed in the manufacture of women's and misses' shirts and blouses; of these, 21,505 were production workers. This was a precipitous drop from 1991, which showed 55,900 workers in this industry category. Such numbers proved the prevalence of increased U.S. plant closing and overseas assembly operations.

California employed the largest number of workers within this industry segment, followed by New York and Florida. Compared to the measures of employment by gender, race, and Hispanic origin for the U.S. manufacturing sector as a whole, women, black, and Hispanic workers active in the apparel workforce far exceeded their national counterparts. According to American Apparel Manufacturers Association estimates for 1995, women accounted for 70.1 percent of the apparel workforce, a figure considerably higher than the overall manufacturing average of 31.6 percent. Black apparel workers accounted for 15 percent of the work force total—the total manufacturing average is 10.4 percent—and Hispanic workers accounted for 24.0 percent of the employee workforce, compared to the national average of 10.2 percent.

America and the World

Ever 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 they still account for the largest share of U.S. imports, the market share of the "Big Four" countries (the People's Republic of China, Taiwan, Hong Kong, and Korea) actually declined during this period, dropping from 63 percent in 1984 to 41 percent in 1992. Shipments from all of these countries declined with the exception of China, which 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 and represented only 28 percent of apparel imports in 1995. This was due in part to increased implementation of "quick response" and U.S. apparel manufacturers' ability to react more quickly to fluctuating consumer demands. By far the largest gains in import market share were enjoyed by the Caribbean countries and Mexico. These countries increased their market share from 20 percent in 1992 to approximately 54 percent in 1996.

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 ever since 1983 when Congress, fearful that the spread of poverty in the Caribbean would attract large portions 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 then to reenter 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. And, as was often the case, this was set equal to the cost of foreign sewing labor, which was notoriously low when 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. With the passage of NAFTA and GATT, trade relations between the United States and the rest of the world were supposed to be put on a more level playing field. Additional job losses in America, however, may well be one result. In discussing GATT's impact on the textiles and clothing industries, the Christian Science Monitor commented that "the accord puts the textiles sector back under multi-lateral trade rules, after a 20-year hiatus during which bilateral accords reigned under the Multifiber Agreement regime. Most tariffs and quotas in developed countries will be eliminated over the decade. Developing countries will take a growing share of textiles and clothing trade, worth $250 billion in 1992. Consumers should enjoy lower prices, while developed-world manufacturers, such as those in the United States, will continue to feel the heat."

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. New labor saving and lower cost technologies were introduced at larger companies, which widened the competitive cost differentials between themselves and the middle and lower tier firms in the industry. Unless rectified, this situation could also stoke the industry's downsizing trend.

A significant development in recent years between retailers and the industry's manufacturers has been the implementation of the quick response system, a computerized strategy that provides for the quick and precise replenishment of "hot-selling" garments. By means of electronic data interchange, participating apparel producers are privy to an instant and continuous flow of information concerning retail sales by styles, sizes, and colors, along with the level of retail inventory. With this information, manufacturers plan further production rounds on a more precise basis by discarding slow-moving styles and devoting their efforts toward fast selling items. As a result, they avoid costly markdowns and increase turnover.

New 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. New programmable sewing units that use micro-processors were also instrumental in reducing sewing labor costs. Before the units' introduction, the sewing of a garment accounted for the largest portion of an article's labor cost, while anywhere from 70 to 80 percent of its in-process production time was spent handling and positioning a garment. To reduce in-process handling new automatic conveyor systems were being developed, along with robotics systems and automated warehouse facilities.

Research and Technology

Positive in its intent but threatening to those unfamiliar with it, information technology, also called 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, like the smaller, family-owned businesses, chose to abandon their places within the industry.

While the logistics of each area's IT market entry and evolution, as well as the learning curve associated with it, saw various forms of upheaval and transition before the onset of success but the overall benefits stretched industrywide. One apparel group executive noted that having access to IT-generated data not only made instant interpretation and understanding of fashion trends a reality but that it also encouraged cooperation among all the channels toward the seamless flow of goods to meet the demands, if not stay ahead, of those trends. Computer hardware and software, along with the Internet and World Wide Web, facilitated this new infrastructure and introduced systems that improved avenues of sales forecasting, product planning, warehouse management, manufacturing, distribution, order entry, and sales support.

Further Reading

Apparel Import Digest. Arlington, VA: American Apparel Manufacturers Association, 1997.

Apparel Industry Trends. Arlington, VA: American Apparel Manufacturers Association, March 1997.

Focus: An Economic Profile of the Apparel Industry. Arlington, VA: American Apparel Manufacturers Association, 1996.

Hill, Suzette. "Women's Wear Makers Look Ahead to 2005." Apparel Industry Magazine Online, 1999. Available from http://aimagazine.com/nov99stor07.html .

"Import Growth Slowing, AAMA Says." Apparel Industry, June 1996.

Shelton, Linda, and Robert Wallace. "World Textile and Apparel Trade: A New Era." Industry, Trade, and Technology Review, October 1996.

Statistical Abstract of the United States. Washington, D.C.: U.S. Department of Commerce, 1996.

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. Department of Commerce, Economics and Statictics Administration. Annual Survey of Manufacturers: Statistics for Industry Groups and Industries. Bureau of the Census, 1999. Available from http://www.census.gov .



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