This article was published in Forbes September 1, 2021. While the article breaks a few of our rules (it is a first person narrative and written by someone with biased industry interest, the President of North America & Europe at Alibaba.com), we are sharing because it provides insight into the opportunities for small companies and manufacturers in the United States.
In the heart of Midtown Manhattan, New York City’s famous Garment District is home to the greatest concentration of fashion designers and manufacturers in America. Spanning just about 20 square blocks between Times Square and Penn Station along Seventh Avenue (also known as “Fashion Avenue”), the vibrant and always-busy neighborhood has a long and rich history that has become synonymous with American fashion since its inception more than a century ago. These buildings aren’t the glamorous part of the fashion industry imagination – they are where the hard work, making, and selling take place. This is where real entrepreneurship happens. And “Made in NY” is rebounding with bold and creative local leadership.
I’ve called NYC home since I was born, and I’ve been spending time with owners of small- and medium-sized businesses (SMBs) in this area, witnessing how the close-knit community of business owners—including designers and specialty manufacturers, some of whom have been working here for 50 years—are managing to recover through the pandemic, and I am honored to share their insights and plans for the future.
The Impacts of Covid-19 on NYC’s Garment District
“Right before Covid, the Garment District was on an upswing,” said Barbara Blair, President of Garment District Alliance, a not-for-profit that works to improve the economic vitality of the neighborhood. “People were interested in exploring the neighborhood and ground floor retail was improving.” But much like other industries, the garment industry was hit early and hard by the pandemic: orders were cancelled, supply chains were disrupted, and, as retail stores closed, designers and manufacturers were left with inventory that is now more than a year and a half old. As if that weren’t enough to contend with, SMBs in the Garment District found themselves in the center of the initial epicenter of Covid-19 in the U.S., giving business owners no time to prepare for the crisis.
I spoke with Lisa Sun, owner and CEO of Gravitas New York, a NYC-based women’s workwear brand and manufacturer, about her experience during that time. After designing for her first New York Fashion Week in the fall of 2019, Sun was preparing to debut runway collection styles in March 2020, but orders quickly trended downward.
We’ve all heard these horror stories. “Customers who recently made purchases were returning items when they realized they had nowhere to go,” said Sun “As a result, our sales were negative between March 13-20. Then, in late March, our building was shut down just as DHL was trying to deliver millions of dollar’s worth of our runway collection pieces.” Sun describes three other ways the pandemic impacted the Garment District, specifically:
In-person work was halted. “Ours is a physical business, and people buying a garment may not realize that it passes through six or seven hands first. When shelter-in-place orders took effect, it wasn’t like our factory workers could work from home as workers can do in some other industries, and that became a huge hurdle to manage.”
Design trends changed overnight. “The demand for tailored, ready-to-wear garments dropped when people stopped going to the office and to events. As an entrepreneur, even if you overcame the obstacle of bringing back workers, there wasn’t much work for them to do. When fashion week events around the world were canceled, that compounded the problem.”
Above average labor costs drove prices up. “Wages in NYC range from $15 to $18 per hour, which is higher than in competing markets. As a result, the cost to produce garments made here are higher. In my case, I had to figure out if I could get workers to return, and then how to generate demand at a high enough price point to cover the cost of making a face mask, hospital gown, and athleisure locally.”
To adapt to changing consumer needs, Sun’s team, which was accustomed to making $300 dresses, did what lots of other businesses in the Garment District did and began sewing hospital gowns and other personal protective equipment (PPE) to survive. Similarly, Veronica Kim, CEO of Panda International, a Garment District staple since it was founded by Kim’s father in 1993, said: “Making PPE helped us stay afloat when everything shut down. Once we were able to reopen, we were surprised and heartened by how many people came back. There are still businesses making PPE today, but a lot of the manufacturing and designers came back to make activewear.”
Where Does the Garment District Go from Here?
Looking ahead, SMBs plan to drive profits and resiliency by establishing their digital presence—exploring opportunities in ecommerce and social media—and playing up the District’s association with luxury goods. For inspiration, they are looking to Europe.
European clothing brands command a premium because of their history, and the notion of artisanal craftsmanship associated with them. But according to Sun, this is largely about branding. “Garments with ‘Made in Italy’ labels are desirable among consumers, but if you compare the stitching of our garments made here in NYC to theirs, it’s the same. There is an exciting opportunity for the ‘Made in NY’ label to be as strong as the ‘Made in Italy’ label and to command a premium.”
A common theme in my conversations with Garment District SMBs was the importance of the neighborhood and the connections and community that drive the NYC economy. “There’s an opportunity to define what it means to be Made in NY,” continues Sun. “It means paying a living wage, which is then funneled back into the local economy. Purchasing a local garment or item is part of a beautiful butterfly effect.”
As with the popular “farm to table” movement in the food industry, customers can feel more comfortable paying for locally made garments, knowing that their dollars are directly and positively impacting the lives of other people within a 20-block radius. When a SMB makes something in NYC, they’re purchasing supplies—hardware, zippers, tape, and more—from other local vendors, like Panda Trim, and that impact of the dollar is real and immediate.
What’s more, SMBs believe that the Garment District has an opportunity to become a leader in on-demand manufacturing as a complement to their overseas sourcing. After locally producing pieces during the pandemic, many business owners realized they could transform the garment industry from a slow-moving supply chain into a fast one—a phenomenon that Sun calls “the reinvention of fast fashion, in a sustainable way.” The idea is to make smaller batch quantities on demand and turn working capital faster, with minimal waste. “Here, I can take more fun and experimental bets and do it in a way that lowers risk,” said Sun.
But perhaps the District’s strongest asset is its sense of community and pride in being a creative center. “This is the home of American fashion and the Garment District is the first stop for young people who want to break into the industry,” said Blair. “They come here for design school or to get jobs in showrooms, and they mingle with creatives from other industries, like actors, singers, and dancers, finding opportunities to create for each other.”
Or as Kim puts it: “Everyone knows each other. Everyone helps each other. We’re all connected. And together, we’re all responsible for figuring out its future.” With its rich history and visionary plans for growth, strong impact on the local economy, and nationwide and global draw as a hub for aspiring fashion designers to live out their dreams, I have no doubt that NYC’s Garment District will continue to recover. And those I spoke with shared that sentiment: Made in NY is here to stay.