Bret Schnitker. Emily Lane
November 19, 2024
Bret Schnitker 00:01
A lot of people like, oh, technology takes away our jobs. And the reality, when you look at that, that that one mill there, is that the reality is that automation and technology preserves jobs because those individual workers can be paid more, the output remains high, and you're able to bring it back to the US.
Emily Lane 00:35
Welcome to Clothing Coulture, a fashion industry podcast at the intersection of technology and innovation. I'm Emily Lane.
Bret Schnitker 00:43
And I'm Bret Schnitker. We speak with experts and disruptors who are moving the industry forward and discuss solutions to real industry challenges.
Emily Lane 00:51
Clothing Coulture is produced by Stars Design Group, a global design and production house with more than 30 years of experience.
Emily Lane 01:01
Welcome back to another episode of Clothing Coulture. We are here once again at the bar, this time talking Made in America. *Emily Singing* I've been in, like some I know I've just really been in this, like, singing mode lately, even though most people don't want to hear me sing. We just had a phenomenal visit in North Carolina where we had the opportunity to tour Parkdale Cotton, CiCLO a couple innovation centers, C2 all these amazing companies that are doing incredible things in the apparel industry. And there's this whole ecosystem on the rise. Many of these conversations we are going to bring forward in a longer format on our traditional Clothing Coulture podcast, you know, at the sofa recording. So look for those soon. But because we had the opportunity to see some of this progress that's happening, it really got the conversation stirring on this growing trend that we're hearing everybody's wanting to look at on shoring, near shoring, Made in America. And with that, there's, of course, pros and cons to all these conversations. So we thought we would maybe do a little deeper dive on that.
Bret Schnitker 02:16
That sounds great. I think, you know, it is a it is a continual conversation as long as I've been in the business, about certain factions thinking that made in America is important, and certainly that's ideal. You know, have building, building fantastic, robust economies in the country that you live, hopefully exporting those internationally. Those are all really huge positives.
Emily Lane 02:41
Yeah. I mean, in theory, it sounds wonderful, right? I can get my goods faster and and support our local economy. I totally understand the motivation behind this goal. Let's, let's look at some of the positives that would spin out of a greater effort and in in establishing manufacturing here, obviously there's local economic growth.
Bret Schnitker 03:05
Yeah, job creation, for sure. I mean, if you're building a case study to say, hey, let's build Made in America, the very first thing certainly is job creation, economic growth. I mean, that's, that's going to be, you know, a big conversation. And in the past, apparel business didn't mean lucrative jobs. It was lower paid wages. And so part of a more modern view into this whole, you know, job creation and everything, it would have to include higher paid wages and and in and for all of us that are in the apparel business, we know we are always searching for the last bastion of inexpensive labor, because Apparel has always been challenged because it, you know, we've not had the inflationary rises in costs like other categories have. And so, you know, part of that wrinkle for bringing apparel into the US would be that you you really have got to concentrate on not only job creation, but higher wage job creation. And within that, I think technology could make a play. And there are certain categories that that people are weighing into, like we saw in Carolinas, with whole garment knitting and more elevated product that's doing more than just, you know, covering your body. And so as technology weighs into our category, those more trained and skilled laborers that run machinery that actually makes product could be that solution.
Emily Lane 04:34
So you're also enhancing skill sets within our nation. Yeah, yeah, that's exciting. Let's talk a little bit about supply chain resilience.
Bret Schnitker 04:45
Well, I think everyone wants to be able to deliver a product to a store. Get reads on strength of sales, or they never want to see the reads on poor sales, but you get both. I. But if your if your risk is low in terms of inventory, and you have the ability to react quickly to stronger sales, everyone wants that right fill into demand, fill into demand. And so onshoring and near shoring certainly provide that made in America with technology, with the right process in place would allow you to react to demand in product.
Emily Lane 05:28
There's also sustainability benefits,
Bret Schnitker 05:32
based upon a lot of our conversations that we've had even lately. But we've had more than just the one podcast. We've had a lot of conversations about last mile reducing carbon credits on transportation, you know, to move goods clear across the world into the US that burns a lot of fuel and that burns a lot of carbon credits, and it certainly takes a long time, so having product production close to the area that a customer could buy, it reduces, certainly, carbon footprint, yeah,
Emily Lane 06:07
you know, there's also a lot of consumer appeal. I mean, you you often talk about how all around the world, one of our greatest exports is our our branding abilities, and so, you know, made in America would only further support that, you know, that desire for American products,
Bret Schnitker 06:25
and we have to think globally. I think that you know, you know, just not only the demand that you have in the US, but the demand for exports that you can ship out of the US and drive that business everywhere. Right? The other conversation in terms of, you know, the environmental conversation that we were talking about before, also is that right now transparency and supply chain, transparency, of, you know, tracking minerals and metals and all that stuff is so important, you know, they want To make sure that that, you know your sources is a good source, etc. And when we were just out at Parkdale, what's, what was an amazing conversation, was full transparency to the entire supply chain, from the bail to the finished product, and then even in terms of the recycling efforts they have on waste product and how they're utilizing that. We have the ability to do that when we're controlling all aspects of production in the US here, it gets more murky when you move to other countries.
Emily Lane 07:32
True, yeah, greater transparency,
Bret Schnitker 07:36
yeah, yeah.
Emily Lane 07:37
That's pretty exciting. And we did, I do look forward to our conversation. We're going to have a conversation with the CEO of Parkdale cotton, and that is going to be such a fun conversation, because some of the things that they are doing, I have just outright never seen before, really incredible. What they what they have developed, as far as you know, the negative side of things, you know, it's not just as simple as turning it on. We've talked about in sustainability. It's not like you can just flip that switch and now you're fully sustainable. Yeah, there's challenges, hurdles to climb and mountains to climb, whatever it is, there's challenges, right? So, you know, obviously one of your key points you brought up earlier was higher wages. Well, that tells translate to higher cost, higher cost, exactly,
Bret Schnitker 08:23
and that's always been the conversation stopper. When somebody says, I want Made in America. Like, okay, how do you feel about this MSRP and this margin? And they're like, well, that doesn't sound good. You know, my customer won't pay that, and I need to make money and and that has certainly been the challenge for Made in America, because you're going to have higher costs. That's the whole whole conversation that that, I guess, is not being completely addressed in this whole hey, let's bring everything home. Let's let's not manufacture overseas. We just don't have the cost, the labor, the labors that will work on a particular cost that will meet the value, you know, expectations that our consumer has. And so again, when we, when we look at the reality that we're going to have higher production costs, and that's going to translate to higher overall MSRPs, how is that going to affect this business? And so a couple things can help you there. One is products that have more technology. Two products that last longer, right? If you walk away from the kind of disposable fast fashion world that's always going to be challenged in the US, but building a robust infrastructure upon better product that's an investment in a wardrobe that lasts longer. People think less about that dollar amount if they see value that will come back to them year after year after year, right? The other thing that's going to help in this case, and again, it's a journey, is the Tech. Technology and its help in reducing overall costs. The mill that we visited, it was massive, and it was doing millions of metric tons a month in terms of yarn manufacturing. And was it 18 workers manage the entire facility.
Emily Lane 10:21
They have a lot of technology supporting what they're doing.
Bret Schnitker 10:23
I don't, I don't want to be offer numbers, but I think it was in that range at any one given time. And I mean, you walk around and these kind of robotic things are moving back and forth and and, you know, you had these workers that could manage so many spinning units and, you know, and the movement of bail and the movement of cotton, and, you know, I mean, I just got tired walking under one roof. It was like how it was a hike. And a lot of people like, oh, technology takes away our jobs. And the reality, when you look at that, that that one mill there, is that, the reality is that automation and technology preserves jobs because those individual workers can be paid more, the output remains high, and you're able to bring it back to the US
Emily Lane 11:12
well. And then there's also a different sector of jobs, you know, there's, there's, there are skills needed that can help interact with the technology, develop technology, maintain the technology. You know, there's, it's just a different, it's a different job title, absolutely, but there's still people needed in that sector.
Bret Schnitker 11:33
And again, it's a journey. We're not there yet, right, right, but, you know, Parkdale has managed to find, you know, figure that out for the mill in the US, and it's just an amazing detail. And then as you move down the path in terms of knitting, weaving, cut, make and trim, technology has got to find it ways into those areas.
Emily Lane 12:01
its way into the fact that you're not importing all of your your your your entire collection for a season. Do you think that that equates to a cost savings as well, just, you know, duties and so forth?
Bret Schnitker 12:18
That's a loaded question, and it's a difficult one, because, again, you're looking at raw material costs, even though you're not even though you might have a longer lead time, and you might have transportation costs. You know, we have limitations in the US, one of those things in terms of challenge on, you know, this whole business plan for us made is our real challenge, supply chain challenge for raw materials and trims. We we kind of abdicated in mass the apparel industry years ago. There's we have pockets. We have specialty manufacturing in the US, but we just don't have as robust of an infrastructure as, let's say, apparel manufacturing nations like China, Vietnam, India, do and so we have a very limited supply of raw materials. I would tell you, in the initial stages, we would still have to be importing raw materials from overseas. Okay,
Emily Lane 13:14
you know another limitation that we have in addition to less raw materials and resources are, you know, you talked about it. We abdicated apparel manufacturing decades ago. Therefore, that workforce that really understands the processes and all of the, you know, setting up a production line and the very specific skill sets to sew garments. All of those skill sets aren't here anymore. Nope.
Bret Schnitker 13:45
And you go deeper than that, does anyone want to do it? Right? Right? America is challenged with an entire workforce that doesn't really want to work in many areas, yeah, not saying crowd, you know, wholesale, but you do see a different mentality in America than you do see on a wholesale kind of deal in China or India. People just are working harder because they don't have a choice. Yeah, they've got to do that or they're not going to get fed. You know, we've got a lot of support structures in America. We've got generational wealth. We've got, you know, you know, talking people into getting back into the apparel industry and sitting at a sewing machine eight or 10 hours backwards could be challenging. And when we eliminate a robust immigration policy, we eliminate workers to do that. I mean, they there's a lot of studies that, you know, immigrant labor, we wouldn't have almonds in the US. If we didn't have robust immigrant labor, it would be the same challenge we would have, I think, within the US for apparel manufacturing, even though it presents a higher paid salary if you're importing technology. Technology, you're still going to need workers. And the question is, is, will the average US, you know, non immigrant, somebody who's not trying to establish themselves in the US, would they sit down at a sewing machine and sew eight to 10 hours a day today? There is not a lot of people in the US that are willing to do that. They want to do something different, right?
Emily Lane 15:20
Yeah, and you know that also, that also makes me think of just general output. You know, a lot of factories overseas, you know, they work long days to hit those capacities. And we have a much, we have a very different expectation about what a work day is for United States,
Bret Schnitker 15:43
for sure. And so those are all things that you have to incorporate into this challenge side of the business plan. And again, technology and automation couldhelp along that path.
Emily Lane 15:53
Yeah. What about infrastructure gaps?
Bret Schnitker 16:00
We certainly have, like we talked about, on raw materials. There's certainly infrastructure gaps with that, all the things related to manufacturing that product. I would say that, you know America, when I've seen infrastructure in other countries, on the overall in terms of roads and electricity, we have very affordable electricity. Unlike other countries, we have very established roads, et cetera, things like that. So I would say that dealing with some of the other countries I've dealt with, those are things that we have as an advantage,
Emily Lane 16:32
okay, yeah, and there is kind of a recommitment to refreshing our
Bret Schnitker 16:38
infrastructure, yeah, but even our UN refreshed infrastructure could still look better in some countries I've been in, for sure.
Emily Lane 16:44
Oh, yeah, I've been on some of those little roads that have, you know, half of it missing, and you're taking these big vehicles and on the side of a mountain, you know,
Bret Schnitker 16:56
utilities are expensive in those countries,
Emily Lane 16:59
water, electricity, all those things, yeah. Lastly, I think we've talked a little bit about it, but you know, pricing, you know, what the consumer, consumer sensitivity like, what what they what they think is fair.
Bret Schnitker 17:14
That's singularly the biggest challenge that I see is that it's going to take a pretty good marketing job, because the consumer, as we just talked about in another episode with de minimis imports, and with these large Chinese companies and with fast fashion, they have an expectation about what a garment should cost, right? And that certainly would not be the reality for anything made in America. And so, you know, you're going again. This is a journey you're going to take specialty items and specialty classifications with extreme value, add high quality, really leveraging the path, the part that this, these are investments right in America, to get Americans to buy that and then understand the learnings that we would have about countries like Made in Italy, right? For years, we knew that if we were going to buy a garment, it was made in Italy, oh, we were going to pay more, but, oh, it's made in Italy so exclusive, it's luxury, and Italy did a very good job of creating this infrastructure where everything Italian was just better.
Emily Lane 18:27
They branded it. They branded Italy. Yeah,
Bret Schnitker 18:29
and when you're in Italy, you realize there's a lot of internal challenges within it, within Italy. But they they sat down and said, Look, you know what we do? We do the best. And people always felt like, Oh, if I have a Made in Italy label, that's the best when we think about export, there is still, if we don't continue to make mistakes in this direction, but there is still a large amount of people around the world that look to America as that shining beacon of democracy and that we're a melting part of all cultures. And you know, we, you know we're what different nations hope to grow up to be. And you know we're at risk. There's a lot of challenges internally that are that are putting that at risk. But today, there's still these people that are like Made in America is a great label. And so if we understand and we can market effectively as an export basis that we're doing very, very nice tech, advanced, cool, quality goods, and we're exporting under Made in America label, then I would tell you that our export business could be much stronger than our domestic business if we think globally, we always talk about, you know, talk to clients, small and big, that always think globally. Today, we're in a global economy. We're not just in an American economy. And so I think if we focus on exports as a as a worldwide value, then I think we have a much better. Chance at seeing success.
Bret Schnitker 18:42
That makes a lot of sense. Okay, last question, you know, in your estimation, having been to you know, many countries who have, you know evolved their evolved through the various layers of manufacturing, you always talk about agrarian
Bret Schnitker 20:20
Yes, yes,
Emily Lane 20:22
yes. Okay, so we would be coming back to manufacturing in the sector. How many years do you think it will take in order to regain that infrastructure skill set, productivity, and you know this part of the business, how many years before we could see real, real volume? Yeah,
Bret Schnitker 20:47
again, an interesting question, because technology has a way of changing that dynamic pretty quickly, as people are investing in innovation in our sector. But I would tell you that it would be for us to really see something noticeable. It would be 10 years, you know, I would say that we could make some significant moves and a good direction over five but it's a it would need to be a very large, wholesale effort in all aspects, and we might start to see a nice change over 10 years.
Emily Lane 21:19
Okay, great. So let's see. This is long before your retirement. You'll, you'll, you're gonna get a chance to be a part of that. Oh,
Bret Schnitker 21:26
you know, I'll know whether I was right or wrong
Emily Lane 21:30
full circle back in 10 years. Yeah. Well, thank you for joining us today. Do not forget to subscribe and stay apprised of upcoming episodes of cCothing Coulture, and make note. We've got a couple good ones coming up that spun out of this conversation, our conversation with Parkdale Cotton and CiCLO and C2, all of which are Made in America. So we look forward to joining you. Then take care. Thank you.
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