SARS Doesn't Scare Away California Cos.
Despite the reappearance of a new confirmed case of severe acute respiratory syndrome, West Coast apparel companies are not curtailing their plans to travel to Asia.
The news for apparel industry manufacturers was not good: Chinese officials confirmed recently that a 32-year-old television producer in southern China did indeed have SARS, the virus that put the brakes on China’s economic engine last year.
Last year, the virus started in southern China and then spread to Hong Kong and overseas, creating panic among business travelers after it killed 774 people and infected more than 8,000. Many manufacturers and designers stopped traveling to Asia until the area was declared SARS-free last summer.
But the newest SARS case, the first confirmed case in China this season, is not creating the panic that SARS did last year. The 32- year-old TV producer was released from the hospital last week. California apparel manufacturers and designers, many of whom travel to China on a regular basis to oversee production of their goods, are sticking firm with their travel plans to Asia while keeping a wary eye on the virus’ development.
Many believe that China seems to be extremely vigilant about monitoring SARS and taking immediate steps to eradicate it. Last year, Chinese officials dragged their feet in notifying World Health Organization personnel about the disease, which apparently started in Guangdong province in November 2002 but was not reported to the WHO until months later.
“I’m going over in a couple of weeks, and I’m not concerned at this point,” said Ed Redding, executive vice president in charge of importing and sourcing for misses manufacturer John Paul Richard Inc. in Calabasas, Calif. He will be traveling to Hong Kong and Shanghai. “I think there is a wait-and-see attitude by most people. If people start falling, we are obviously going to be changing our plans.”
The discovery of a new SARS case in Guangdong province, just over the border from Hong Kong and one of China’s main apparel manufacturing centers, comes just before the start of Hong Kong Fashion Week on Jan. 13. Last summer, Hong Kong Fashion Week, held July 8–11, saw a major downturn in business after many overseas buyers stayed away.
Officials in New York from the Hong Kong Trade Development Council, which organizes the fashion week, said they have not received any phone calls about the virus. “We haven’t received any questions,” said Elsweet Rufino, the council’s corporate communication officer.
Los Angeles designer Sue Wong, known for elegant day and evening dresses that are now manufactured almost exclusively overseas, is already in China for two weeks, said her son, Josh Homann, chief operating officer of Sue Wong. “This is the first time she has been back since June,” Homann said.
Confidence replaces concern
Those who were extremely cautious about traveling to Asia last year are not batting an eyelash about getting on a plane now.
One of those is John Inn, co-founder of Los Angeles juniors manufacturer Bubblegum USA. Last year, Inn set up a teleconferencing system with 42-inch flat-screen monitors to link his offices in Los Angeles, New York, Seoul, Hong Kong and Shanghai at a cost of more than $60,000 to avoid traveling overseas.
But this year, he is sticking with his travel itinerary.
“I’m not afraid,” he said. “I’ve been back to Guangdong [province], Shanghai and Hong Kong. They have really modernized their system to check everyone’s temperatures when you are coming through customs. If they see a slight temperature, they will send you to another place to check to see if you have a high fever. They know they took a hard hit last time. So they have improved a lot and are taking this very seriously.”
Cherokee Inc. executives, who travel often to Asia and brokered a deal last year for Hot Kiss Inc. to license its name in 140 retail stores in China, are closely monitoring the SARS situation. When the Van Nuys, Calif.–based company found out about SARS in February 2003, its executives curtailed traveling for three months, which delayed the Hot Kiss deal.
“So far there is only one confirmed case of SARS, and we are watching it, but we are not stopping our plans right now,” said Larry Sass, Cherokee’s senior vice president of business development. “We have trips planned for February and still plan to go.”
The same goes for Leonard Rabinowitz, president of StudioCL Corp., the apparel company he formed last year with designer Carole Little.
“We have plans for a late January trip,” he said from his Los Angeles office. “But we are obviously watching the status of the SARS case.”
Many manufacturers emphasize that just one SARS case is not enough to interfere with business. “Unfortunately, we still have to make our living,” said Uri Harkham, chief executive of Harkham Industries Inc., a Southern California company that has been manufacturing Jonathan Martin dresses for decades. Now a $100 million business, the company conducts about 98 percent of its production in Asia or Israel.
“We have to make sure our deliveries come through,” Harkham said. “We can’t tell the department stores we couldn’t deliver your goods because of SARS.”
