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 14 workers and generates $1-2 million annually.
- The apparel manufacturing industry consists of about 4,100 companies that employ about 57,000 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
Recent Developments
Mar 20, 2024 - Producer Prices Flat, Wages Up
- According to data from the Bureau of Labor Statistics (BLS), employment by apparel manufacturers in 2023 remained below pre-pandemic levels and decreased slightly in December 2023 compared to the previous year. Industry labor costs stayed fairly consistent in 2023, following growth of some 20% compared to before the pandemic. Average hourly wages reached $19.70 in Q4 2023, per the BLS. Producer prices for apparel manufacturers were mostly flat in December 2023 compared to December 2022.
- US textile and garment manufacturers say their industry is being negatively impacted by a trade rule known as de minimis, which they say gives an advantage to foreign producers, according to a recent New York Times article. 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. 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 textile and apparel manufacturing industry has struggled amid the highly competitive marketplace. Between August and December 2023, eight textile plants in the Southern US closed, per NCTO data cited in the article.
- 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.
- US manufacturing activity contracted in February 2024, falling below the baseline for growth for the sixteenth consecutive month, according to the Institute for Supply Management’s Manufacturing ISM Report on Business. The Manufacturing PMI registered 47.8% in February, down 1.3 percentage points from the 49.1% recorded in January. A reading above 50% indicates manufacturing expansion. February’s New Orders Index was in the contraction zone at 40.2%. The February Production Index was 48.4%, a decrease from January’s 50.4%. Eight manufacturing industries tracked by the ISM reported growth in February: Apparel, Leather & Allied Products; Nonmetallic Mineral Products; Primary Metals; Plastics & Rubber Products; Fabricated Metal Products; Chemical Products; Miscellaneous Manufacturing; and Transportation Equipment. The industries reporting contraction in February were Furniture & Related Products; Machinery; Wood Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Paper Products; and Electrical Equipment, Appliances & Components.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.