Apparel Manufacturers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 4,100 apparel manufacturers in the US transform fabrics into clothing and accessories. The companies described in this report are known as “cut-and-sew” apparel manufacturers, and produce items such as dresses, suits, shirts, and pants. “Cut-and-sew” manufacturers differ from apparel knitting mills, which produce knit products, such as hosiery, socks, and underwear. Apparel firms design and market apparel, but may outsource their entire manufacturing operations to firms outside the US.
Demand Driven by Trends
The apparel market is driven by constantly evolving fashion trends and fads, many of which can be short-lived.
Complications from Foreign Production
Apparel companies that rely on foreign firms for any part of production are more vulnerable to remote management problems, increases in transportation expenses, and trade-related issues.
Industry size & Structure
A typical apparel manufacturer employs about 12 workers and generates $1-2 million annually.
- The apparel manufacturing industry consists of about 4,000 companies that employ about 48,100 workers and generate $7.4 billion annually.
- The industry is fragmented - the 20 largest companies account for 22% of industry sales.
- Most large apparel companies, such as VF Corporation, PVH Corp., Levi Strauss, and Ralph Lauren, outsource the production of garments to low-cost manufacturers located abroad. Gildan, a large Canadian apparel manufacturer, owns American Apparel, Comfort Colors, and other brands, with manufacturing facilities in the US and overseas.
Industry Forecast
Apparel Manufacturers Industry Growth
Recent Developments
Nov 19, 2024 - Employment, Wages Down
- Employment and wages at apparel manufacturers declined in October 2024 compared to a year ago, according to the US Bureau of Labor Statistics (BLS). Employment by apparel manufacturers was nearly 6% lower in October 2024 compared to a year ago. The BLS reports that wages for nonsupervisory employees at apparel manufacturers fell 3.9% in October 2024, reaching $18.73 per hour. Producer prices for apparel manufacturers rose 4.7% in September 2024 compared to a year ago. Sales for apparel and leather products were $21.9 billion in Q2 2024, an increase of 1.2% compared to a year ago and 2.2% growth compared to the previous quarter, according to the Census Bureau.
- Apparel costs are expected to increase according to a new study by the National Retail Federation (NRF) of the estimated impact of president-elect Donald Trump’s tariff proposals. The study looked at the effect of tariffs on prices of major consumer product categories including apparel, toys, furniture, household appliances, footwear and travel goods. Trump has proposed a universal 10-20% tariff on imports from all countries and an additional tax on imports from China. Per the NRF study, consumers would pay $13.9 billion to $24 billion more for apparel, $8.8 billion to $14.2 billion more for toys, $8.5 billion to $13.1 more for furniture, and $6.4 billion to $10.9 billion more for household appliances with the proposed tariffs in place. The study showed the tariffs would have a “significant and detrimental impact” on the costs of a wide range of consumer products, in particular those products supplied primarily by China. According to Jonathan Gold, NRF vice president of supply chain and customs policy, “Retailers rely heavily on imported products and manufacturing components so that they can offer their customers a variety of products at affordable prices. A tariff is a tax paid by the U.S. importer, not a foreign country or the exporter. This tax ultimately comes out of consumers’ pockets through higher prices.”
- According to a mid-year analysis from Just Style, US fashion companies are increasingly sourcing apparel from India, Cambodia, Pakistan, Jordan, and Guatemala, which all gained additional market share in the first half of 2024 compared to a year ago. Dr. Sheng Lu, a professor of apparel studies at the University of Delaware, said there are several reasons the countries are gaining new momentum as emerging sourcing destinations. “In addition to production capacity, these countries seem to benefit from their perceived relatively lower social and environmental compliance risks and lesser involvement in geopolitical tensions at this moment,” he said. In the first half of the year, China accounted for 33.2% of US apparel imports, Vietnam accounted for 16.7%, and Bangladesh accounted for 9.6%. Year over year during the period, China and Vietnam increased share while Bangladesh lost share, which Lu said pointed to stronger demand for more personalized, customized, and value-added items.
- While overall US manufacturing activity contracted in October 2024, the apparel industry was one of the five industries experiencing growth during the period, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 46.5% in October, down 0.7 percentage points from the 47.2% recorded in September. A reading above 50% indicates manufacturing expansion. Five manufacturing industries reported growth in October: Apparel, Leather & Allied Products; Food, Beverage & Tobacco Products; Petroleum & Coal Products; Computer & Electronic Products; and Miscellaneous Manufacturing. Eleven industries reported contraction in October including Textile Mills; Printing & Related Support Activities; Transportation Equipment; Chemical Products; and Electrical Equipment. According to the report, the apparel industry was one of three industries reporting growth in new orders and one of six industries reporting increases in production in October compared to September.
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