I try to avoid commenting as best I can online but recently there was a comment on Linkedin I could not refuse to respond to. It came from someone I admire, Luigi Caccia, chairman of Pure Denim and an icon in our industry. He wrote that “…consumer in general, is not interested in buying a product with even the slightest added value. I don’t want to sound classist, but the reality is that many wouldn’t care if the label featured a picture of the underage worker who stitched the garment or a warning saying, ‘seriously harms your health.’”
It was all in reference C&A’s closing its Factory for Innovation in Textiles (FIT) in Mönchengladbach, Germany. I first heard about the idea to build the factory in 2019 and it started in 2021, eventually lasting for 1000 days or so. This news, along with the news of Vidalia Mills being shut down in the USA, is sadly fascinating in context to the US President’s belief that everyone should make products in the USA. So far, I have not heard him or others add the covenant, “except jeans.” The president is not the only one to wistfully lament over the “business” need for consumer products to be made in America. While I am sure it’s a good idea for some, the ”some,” as everyone in our industry knows, is a miniscule group compared to the aggregate American jean consumption.
The discussion of reshoring jeans has gone on since the word “reshoring” entered our lexicon in the early 2000s and became popular around 2010. The concept emerged as companies and policymakers began discussing the reversal of offshoring trends due to rising labor costs overseas, supply chain risks, and economic incentives to bring manufacturing back to America. Okay, it’s 15 years later and how’s that going? Not so great.
If one is interested in the impact on the economy, consider that an estimated 1.5 billion jeans are produced around the world annually. How many does anyone imagine being made in the USA? Many Los Angeles “premium” jeans brands are produced in Turkey. Cone Mills, which first opened in North Carolina in 1891 and which has a legendary reputation as one of the most influential and respected denim manufacturers in the world, closed its “mass” denim production in the USA in 2003, eventually closing its White Oak selvedge facility in 2017.
Meanwhile, there are many successful USA textile firms, some of whom don’t rely on foreign anything, operating in our country. Yet these companies rely on “foreign machines,“ which begs the question, what does “made in America” mean if you use German, Swiss or Japanese equipment? What’s the difference between a foreign machine that spins, weaves or finishes and a worker or chemical that adds value to a product?
There’s a lot of talk about bringing back denim production to the USA, but I’m not sure consumers are looking to buy a US-made jean if the cost price is $50. Were the US administration to cancel the duty concept (they are so messy and complex) and just flat-out place an embargo on all foreign-made jeans, that would do the trick to revive the made-in-the-USA jeans business. No need to worry about overly complicated imports.
What I am saying is that a made-in-the-USA jean is not a good idea for everyone. There are clients for that, of course, and consumers for it. But let’s be clear and honest, those clients and customers are in the minority. The market for made-in-USA jeans cannot possibly be more than 5 million jeans a year, when US jeans consumption is 450 million annually. Wouldn’t it be lovely if people would just admit that?
On the Vidalia front, I had a lot of discussions and meetings with this company when they were planning their enterprise and as it launched. The first meeting was in our office and my former partner, dear Michael Morrell, basically verbally and very articulately dismantled their production plans and strategy and, at no cost to Vidalia, sent them on an alternative direction for making denim. Our takeaway from that first meeting was “how can you talk about making a mill if you have no proper production insight?”
Other meetings occurred where it became clear that the company was not really serious about sustainability saying (I remember the exact words the owner used) that sustainability was the current “play” in our industry at the moment like climate change was a phase the way Cabbage Patch Dolls were popular 40 years ago.
I was never convinced this factory had a chance to survive in the denim industry. They did not dye their yarn; and later there were rumours of them not paying invoices. I’m not being nasty. The news of their troubles almost from the outset (not talking about the marketing) speaks for itself and is listed at the bottom of this article. Vidalia’s owner is incredibly bright, well-read and funny, but his approach to denim lacked any love for the product or real respect for our industry or the sustainable efforts in our industry.
C&A was another story altogether. Their strategy was to consume the jeans they produced themselves, and, in so doing, take “sales” and “customers” out of any business risk.
They were serious as cancer about making a factory that had purpose — real purpose, to hire German workers, to produce something consumers would buy, not because it was made in Germany but because the price was fine and the product suitable. From what I know, the plan was to use foreign (Bangladeshi or Pakistani) denim, and make a jean of comparable quality to the old Levi Silver Tab label at €18 or €20 per unit and sell it for €39. Normally on imported goods, their markup would be 300%, but they strategized that the German factory would get a 50% markup, which was enough to do something decent for the German nation.
And the investment in the factory was all about sustainability. Unlike Vidalia, which talked about sustainability but in the end used very old dye equipment in someone else’s factory, C&A bought the latest and the best available.
C&A’s attempt at made-in-Europe product was valiant and would have worked had they stuck to the original plan. The original plan was “nearshoring” and that would have worked. When they tried to “reshoring,” it failed. One uses local inputs; one does not. But management changed and the people who were not part of the original strategy insisted to “reshore” in entirety, upgrading the jean quality and using Italian fabrics, German thread and so on, escalating the product cost to around €30 and selling cost to €69.
Needless to say, output dropped (it was a more-complex garment) and more importantly, C&A’s customer wanted a €39 jean — not a higher-priced one, regardless of it being totally reshored.
So there is a model that works! Brands that sell direct to consumers and can accept a lower margin, can own factories and can provide local jobs. That’s the good news. The bad news is all attempts at reshoring keep being either blocked by a fat desire for margin or excellence in manufacturing and production.
Vidalia Mills News Summary
July 2018
August 2018
https://www.natchezdemocrat.com/2018/08/15/welcome-vidalia-denim-hundreds-turn-out-for-event
February 2024
https://www.natchezdemocrat.com/2024/02/01/vidalia-mills-sued-its-a-commercial-dispute-ceo-says
Vidalia Mills Worker Reviews
2022-2025
https://www.indeed.com/cmp/Vidalia-Mills/reviews?fcountry=US&floc=Vidalia%2C+LA
-Andrew Olah
