Apparel Manufacturers

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 4,600 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.

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.

Demand Driven by Trends

The apparel market is driven by constantly evolving fashion trends and fads, many of which can be short-lived.

Industry size & Structure

A typical apparel manufacturer employs about 12 workers and generates $1-2 million annually.

    • The apparel manufacturing industry consists of about 4,600 companies that employ about 55,800 workers and generate $7.8 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

                            Coronavirus Update

                            Nov 1, 2021 - Asian Factories Begin Reopening
                            • Asia’s factory activity increased in October as COVID-19 infections decreased, but rising input costs, material shortages, and slowing Chinese growth cloud the outlook. China’s factory activity expanded at its fastest pace in four months in October, the private sector Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) showed. A PMI sub-index for output showed, however, that production shrank for the third straight month due to power shortages and rising costs. Factory activity expanded in Vietnam, Indonesia, and Malaysia in October as operations gradually normalized after being hit by shutdowns caused by a spike in COVID-19 infections. Experts note, however that supply/demand equilibrium will not return soon. “While October Manufacturing PMIs point to a strong rise in manufacturing output, industry is likely to be working through huge backlogs of orders for many months to come and resulting supply shortages further afield are set to persist,” said Alex Holmes, emerging Asia economist at Capital Economics.
                            • The Small Business Administration’s (SBA) Paycheck Protection Program (PPP) Loan Forgiveness Portal has accepted one million applications in less than two months since opening. This comes out to over $17 billion of relief money for more than one million of the smallest businesses in the US. Small-business owners who received taxpayer-subsidized PPP loans of $150,000 or less during the coronavirus pandemic can seek forgiveness directly with the government through the online portal that was opened on August 4, allowing them to sidestep the private financial institutions that ran most aspects of the program for 14 months.
                            • Over five million businesses with loans under $150,000 still haven’t submitted their 2021 PPP loan forgiveness applications, according to SBA Administrator Isabella Casillas Guzman. This is not the case for 2020 PPP applicants, as 91% of all loans eligible for direct forgiveness have been submitted.
                            • Some businesses that took PPP loans in 2020 but don't apply for forgiveness soon will need to start making payments on the loan plus interest. The PPP loans will automatically convert to a standard loan at 1% interest if a small business does not apply to the SBA for forgiveness within 10 months of the end of the covered period under which they had to spend the money. For some businesses that received a loan when the PPP launched in April 2020, there was an eight-week covered period, which would put the forgiveness application deadline in the middle of July. For most loans operating under the more popular 24-week covered period, that meant a deadline in September.
                            • The SBA stopped accepting PPP loan guarantee applications on May 31. About 96% of PPP loans made in 2021 went to small businesses with fewer than 20 employees, according to the SBA. The SBA said that it has approved roughly 3.3 million PPP loan forgiveness applications as of late May. That means that roughly 69.5% of the more than 5.2 million PPP loans made in 2020 have been forgiven in whole or in part, according to SBA data. About $69.2 billion in loans over $1 million are “in process,” compared to about $12.3 billion for loans under that amount, suggesting that some larger PPP borrowers are not faring as well in the forgiveness process.
                            • Small business owners seeking funding from the SBA can apply to the Economic Injury Disaster Loan program, the Targeted EIDL Advance grant program, the Supplemental EIDL Advance grant program, and the Debt Relief program.
                            • Rising demand from the health care and electronics manufacturing sectors will boost sales of nonwoven cleanroom apparel, according to the Global Trade news site. Pharmaceutical, medical equipment, and electronics manufacturers use clean rooms to ensure the purity and/or sterility of their products. Nonwoven cleanroom garments are gaining wider popularity in comparison to other materials as they do not necessitate the need for spinning or weaving the fabrics and can be derived from different sources of raw materials according to Global Trade. Activewear manufacturer 99Degrees began making reusable and disposable isolation gowns in 2020 in response to the pandemic-driven demand increase.
                            • Apparel manufacturing employment increased 4.4% year over year in September but was down 14.3% from the pre-pandemic level of September 2019, according to the US Bureau of Labor Statistics.
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