Hong Kong Fashion Week Sees a Dip in U.S. Buyers

HONG KONG—Amidst the endless rows of printed dresses, striped shirts, faded blue jeans and fur jackets lined up inside the cavernous exhibition halls of the Hong Kong Convention and Exhibition Centre, something was missing.

Buyers from U.S. retailers and manufacturers were sparser this year at Hong Kong Fashion Week, which was held Jan. 15–18, than they have been in the past.

The trade show is dominated by clothing manufacturers headquartered in Hong Kong or China. Many factory reps were disappointed that quota restrictions on 34 apparel and textile categories were sending many U.S. buyers packing to other countries such as Bangladesh, Vietnam, India and Sri Lanka.

“We’ve seen buyers from Germany, France, Denmark and Poland but not so many from the United States,” said Paul Chan, a department manager for Rontex (Ningbo) Co. Ltd., a 6-yearold Chinese company that makes T-shirts, sweat shirts, polo shirts and hoodies in a factory with 400 workers in the coastal city of Ningbo. European quotas on 10 categories of apparel and textiles expire at the end of 2007.

Chan said other deterrents include the rise in quota prices to export items to the United States. Quota costs are as high as a $1 to $1.20 for something like a sweat shirt. Also, the U.S. dollar has dropped in value recently, making its buying power vis aacute; vis the Chinese yuan not as favorable as before. “The dollar used to buy 8.26 yuan, and now it buys 7.8,” Chan said.

Down the aisle from the Rontex booth, sales reps from Jiaxing Yous Fashion Co. Ltd. were sitting at a portable card table, waiting for customers to drop by. For the past three years, the 5-year-old Chinese company has produced yarn-dyed cotton flowered shirts for the Los Angeles company Johnny Was. Its 400 workers also make cotton flowered dresses, cotton plaid suits, camouflage pants and yarn-dyed cotton jackets for manufacturers around the world. “Business has been really good [at the trade show], but we have seen mostly customers from Italy, Spain, Egypt, but no Americans,” said Nico He, a foreign-sales representative for the factory.

Still, Hong Kong Fashion Week—a 38-year-old event with a dual personality as a fashion-show arena and an apparel trade show in January and July—has grown. In January, attendance was up 8.37 percent over last year, to 25,546 attendees. But attendance by U.S. buyers dropped 12.64 percent during the same time period, dipping to 629 buyers. In comparison, the number of European buyers was up 6.5 percent, to 1,910.

With China turning into the world’s biggest clothing supplier, a number of relatively new Chinese garment factories are flocking to Hong Kong Fashion Week as a prime spot to find buyers from all over the world. At the most recent show, exhibitors increased 13 percent to 1,501, forming an endless line of booths in four huge halls, where the clunk clunk clunk of a pile driver nearby could be heard. A major expansion project is underway at the Hong Kong Convention Centre to add 20,000 square feet by 2009.

At the accompanying World Boutique, a smaller show launched in 2003 by the Hong Kong Trade Development Council for brand-name designers, exhibitors grew just over 7 percent to 24 9booths. Show organizers admit that the growth of this sector has been slower than expected. “Like anywhere else, to start a new exhibition is not an easy task,” said Anne Chick, senior manager of trade exhibitions for the Hong Kong Trade Development Council. “The exhibition is coming up very slowly. We wish it would be quicker.” Designers who want to have a runway show must also take a booth in the World Boutique, which this year was dominated by companies from Hong Kong, South Korea and China.

Americans on board

Despite a dip in U.S. buyers, there was a distinct American presence at the show. Larry Schwartz was making his first trip to Hong Kong Fashion Week in his new job as a factory agent. For years, he had been an apparel executive in Los Angeles. But recently he signed on as a partner with China-Direct, based out of Huntington Beach, Calif.

China-Direct matches Chinese factories with garment makers looking to source their goods. “I’ve come to the show looking for new manufacturing facilities,” he said, striding through the Grand Hall area, where a few booths were set up. His trip had been relatively successful. “I’ve found three factories that will send me samples to check out. If they are good, we’ll visit the factories before we place any goods to see the factory, make sure they have English-speaking people for customer service and that they understand the U.S. market.”

This year, five Los Angeles apparel companies, hoping to develop their international business, set up booths. That’s a record. Normally, there are only one or two U.S. companies that fly the nearly 8,000 miles to Hong Kong to participate in the show.

Ann Kim and her husband, Jay, were testing the Hong Kong waters with a modest booth set up in Hall Two. Their 7-year-old Los Angeles company, called Final Touch Collection Inc., produces almost all of its contemporary women’s blouses, skirts, jackets, dresses and pants in Los Angeles or Garden Grove, Calif. Ann Kim said her business strategy is the reverse of many U.S. companies. She is trying to appeal to international customers with her “Made in U.S.A.” label. “There are some people in China who are looking for ’Made in U.S.A.’ things,” said the entrepreneur and designer, who graduated in 1996 from the Otis College of Art + Design in Los Angeles. She had seen some interested buyers from Japan, Singapore and Malaysia.

Kim heard about the show from fellow Los Angeles designer Renee Song. Song has been at the show five times with the collection of sweaters she designs for her company, So Cool Inc. Song makes her sweaters at her father’s factory in Shanghai, China. While previous shows have been good for business, the Korean-born entrepreneur was disappointed she didn’t see much business activity. “This show is so slow,” she said, surrounded by 250 sweater samples. Last July, she wrote several orders, she said.

Los Angeles designer Christine Phillipe, whose 10-year-old eponymous line consists of glamorous sportswear for the 30- to 50-year-old woman who wants a bit of Hollywood glitz in her life, was testing the Hong Kong waters. She and her partner/husband, Bill, hope to expand their international business by attending several foreign trade shows this year in Paris, Moscow and Dubai. They also show at WWD MAGIC in Las Vegas.

“This is an opportunity to see our suppliers as well as have some exposure to the growing Asian apparel market, make contacts and develop relationships,” said Alex Hodroj, vice president of international marketing for Christine Phillipe, based in the Los Angeles suburb of Rolling Hills Estates. “Before, we counted on the United States for our business, and now we’re expanding to the global market.”

Christine Phillipe exports about 30 percent of her line but aims to make that 50 percent.

But Hong Kong Fashion Week isn’t just about manufacturers searching for new business. A number of seminars on fashion trends and colors, high-tech fabrics, and retailing were held.

Ilse Metchek, executive director of the California Fashion Association in Los Angeles, and Vera Campbell, chief executive of KWDZ Manufacturing LLC, a Los Angeles company that sells sweaters for young girls and children, held a seminar on how to do business with U.S. retailers. They were accompanied by Karen Chen, senior vice president and managing director of GMAC Commercial Finance Ltd.’s commercialservices division in Hong Kong. They covered topics such as chargebacks, distribution methods, retailing channels, financing, factoring and establishing brand identity.

Metchek noted that 6 percent of the world’s population lives in the United States, but that 6 percent makes up 42 percent of the world’s consumption. “There is plenty of room for new brands and companies [in the United States],” she said, showing several lists categorizing the top U.S. retailers. “But it is a maze of retailers.”