Guatemalan Show Draws Local Retailers, Manufacturers

For years, Los Angeles–based Forever 21 Inc. has manufactured most of its private labels in Southern California.

But Forever 21, which has more than 145 stores in its chain and which pulled in more than $305 million in revenues last year, is considering manufacturing some of its goods in Latin America. The retailer plans to attend the 12th annual Apparel Sourcing Show in Guatemala City, Guatemala, May 7–9, sources said.

The annual event showcases apparel factories and textile mills in Guatemala and neighboring countries that are part of the Caribbean Basin Initiative, a trade agreement that eliminates duties on goods imported to the United States from Caribbean countries—provided those goods are made from U.S. yarn and U.S. fabric.

Last year, the trade show drew about 4,130 visitors as international manufacturers checked out Latin American contractors and mills occupying nearly 200 booths. The same number of booths will be filled this year, show organizers said.

In recent years, apparel manufacturers such as Los Angelesbased Rampage Clothing Co. have attended the show. Now that Rampage Clothing is entrenched in Guatemala, where many of its goods are manufactured, Larry Hansel, the company’s president, said he no longer has to attend the show in search of new sources.

But it is a different story for Forever 21, which is looking to reduce costs by examining options south of the U.S. border.

That’s good news for apparel manufacturers in Latin America, who would like to compete more aggressively with Mexico and Asia. Even though the Caribbean Basin Initiative was amended three years ago to provide companies with incentives to manufacture in the region, several countries, including Guatemala, have not yet realized a major economic gain from the trade agreement.

Guatemala has more than 228 apparel factories that employ more than 97,000 people. In addition, it has 36 textile mills that primarily produce woven and knit fabrics. Most of the factories and mills are located around Guatemala City, the country’s capital.

“The retail business in the U.S. has been so slow that it has resulted in slower production in apparel worldwide, including Guatemala,” said German Cerezo, trade commissioner in Los Angeles for the Guatemala Trade & Investment Office. —Deborah Belgum