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 and Ralph Lauren, outsource the production of garments to low-cost manufacturers located abroad. American Apparel is one of the largest US clothing manufacturers that produce goods domestically, but has experienced financial difficulties.
                            Industry Forecast
                            Apparel Manufacturers Industry Growth
                            Source: Vertical IQ and Inforum

                            Recent Developments

                            May 20, 2024 - Shipments, Inventories Down
                            • Apparel shipments were 3.5% lower in March 2024 compared to a year ago and 4.2% lower than the previous month, according to data from the Census Bureau. Apparel product inventories were down 0.9% in March 2024 compared to a year ago and 0.3% lower than the previous month, per the Census Bureau. Meanwhile, producer prices for apparel manufacturers went up 3.5% in March 2024 compared to a year ago, according to the Bureau of Labor Statistics.
                            • US manufacturing activity contracted in April 2024 after a brief expansion in March, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 49.2% in April, down 1.1 percentage points from the 50.3% recorded in March. A reading above 50% indicates manufacturing expansion. Prior to March’s expansion, US manufacturing activity had fallen below the baseline for growth for 16 consecutive months. April’s New Orders Index was in the contraction zone at 49.1%. The April Production Index was 51.3%, a decrease from March’s 54.6%. Nine manufacturing industries tracked by the ISM reported growth in April: Nonmetallic Mineral Products; Printing & Related Support Activities; Primary Metals; Textile Mills; Electrical Equipment, Appliances & Components; Petroleum & Coal Products; Transportation Equipment; Chemical Products; and Plastics & Rubber Products. The industries reporting contraction in April were Miscellaneous Manufacturing; Machinery; Furniture & Related Products; Wood Products; Food, Beverage & Tobacco Products; Fabricated Metal Products; and Paper Products.
                            • A new bipartisan coalition has been launched to examine the impact of a trade rule known as the de minimis import loophole, according to Just Style. US textile and garment manufacturers say their industry is being negatively impacted by de minimis, which they say gives an advantage to foreign producers. The provision allows foreign companies to ship goods directly to US customers without paying tariffs if the goods are worth less than $800. The nearly-century-old rule has seen a significant increase in use in recent years. The number of packages entering the US without tariffs under the policy rose from 150 million in the 2016 fiscal year to 1 billion by 2023, according to the New York Times. Half of the packages contain textile and apparel products, with about 30% coming from Chinese fast-fashion retailers Shein and Temu, per the article. The National Council of Textile Organizations (NCTO) supports eliminating the de minimis rule.
                            • The US adaptive clothing market has growth potential if producers can lower production costs and create a wider selection of more fashionable clothes, according to a new study in Just Style. The authors of the study, published in the International Journal of Fashion Design, Technology, and Education Journal, noted that one in four US consumers have experienced at least one type of disability. According to the study, adaptive clothing typically has higher prices, limited choices, and is less stylish than non-adaptive equivalents. Adaptive clothing typically has a more complex development process and may require specialized textiles, additional quality testing, and more time spent on modification. The study suggested producing more adaptive options, such as dresses and outerwear, and adding more clothes for children and teenagers. The study also recommended that manufacturers leverage duty-free tariffs available in the US for adaptive clothing to help lower prices.
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