California Apparel News

As the U.S. economy slowly emerged from the crippling recession, business began to pick up and there were small signs of rebound.

To be sure, challenges remain—from skyrocketing cotton prices to upheaval in the trade show sector—but there were also plenty of opportunities for growth—from increased merger-and-acquisition activity to new retailers and new retail channels.

The editors of California Apparel News highlight the newsmakers of 2010.

California Market CenterIn 2010, the California Market Center presented eight runway shows at various building trade events after a long period of serving only as a venue for shows produced by outside organizers.

The first set of shows was produced by Jeffrey Relf of marketing and production events company The Fashion Office. The CMC shows included the FOCUS Designer Launchpad Runway Shows, co-presented by the CMC and Fashion Business Inc.; the F2 Runway Show; and the CMC Contemporary Collection Runway Show. Held in the CMC’s 13th-floor Penthouse, the shows were scheduled at noon during market weeks, and lunches were provided for registered buyers.

The CMC helped present these shows to attract press attention and give retail buyers another way to look at trade show fashions, according to CMC spokesperson Audrey Okulick.

The CMC plans to continue presenting the Designer Launchpad, F2 Runway Shows and CMC Contemporary Collection events in 2011. For the Jan. 18–20 run of the Summer 2011 Los Angeles Fashion Market, the CMC will host three daily runway shows in the building’s Penthouse.—Andrew AschCopyrighting Fashion Designs The effort to extend copyright protection to fashion designs resurfaced in August with the introduction of the Innovative Design Protection and Piracy Prevention Act (Senate Bill 3728), introduced by Sen. Charles Schumer (D–N.Y.).

The new bill is similar to the Design Piracy Protection Act, which was first introduced in 2006 but was never enacted. Like the DPPA, the IDPPPA also seeks to grant copyright protection for three years (to allow time for the originator to “knock off” the design in a diffusion line). But the IDPPPA has several new provisions, including the elimination of the requirement to register a design with the copyright office of the Library of Congress. The new law also includes a home-sewing (or single copy) exemption.

Like the previous incarnation of the bill, the IDPPPA has drawn a sharp divide between those who want to protect original fashion from so-called knockoffs and those who say the bill will halt the spread of trends and stifle business.

On one side is the Council of Fashion Designers of America, which is among the IDPPPA’s supporters. On the other side is the California Fashion Association, which is opposed to the new bill.

The American Apparel and Footwear Association was an opponent of the original Design Piracy Protection Act, but after working with lawmakers to address a few key concerns, the Washington D.C.–based organization, which represents large manufacturers, has come out in support of the IDPPPA.

The proposed bill was adopted by the Senate Judiciary Committee in early December and is now headed to the floor of the Senate, which will vote on it before the bill is introduced in the House.—Alison A. NiederCottonCotton prices rose to new highs in 2010, surging approximately 75 percent and reaching an all-time high of approximately $1.52 per pound in November. Increasing global demand and diminishing supply steadily pushed cotton prices up throughout the year, spurred by a variety of reasons.

When prices were low, farmers planted fewer crops. As prices increased, farmers planted more cotton. But the global demand is outpacing supply, keeping cotton prices inflated. Making matters stickier, there is no stockpile of cotton to be had. The 2009 domestic supply has been depleted.

India, the world’s second-largest grower of cotton, further strained the cotton market when it announced that its cotton yarn shipments will be capped at 720,000 metric tons for the year that started Oct. 1.

Elevated cotton prices push fabric prices up and could lead to pricier garments. Some manufacturers are sidestepping the increased costs by opting for alternative fabrications, including polyester, which has been trading for roughly 40 cents less per pound than cotton.

And while domestic farmers have reportedly planted 21 percent more cotton acreage this season than in the same season last year—something that would be expected to help drive cotton prices back down—a forecasted dry spell could lead to abandoned fields and less-robust crops in 2011.—Erin BarajasDWP vs. City CouncilThings got ugly this spring when the Department of Water and Power and the Los Angeles City Council played a nasty game of chicken.

In late March, despite Mayor Antonio Villaraigosa’s calls for a higher rate hike, the City Council voted to raise DWP energy rates for businesses by approximately 6 percent and those of residents by 4.5 percent. The DWP argued that the proposed rate hikes were too narrow and, along with Villaraigosa, warned that failure to approve a larger rate hike would result in the DWP reneging on a promise to deposit $73.5 million into the city’s “general fund”—something that could push Los Angeles into the red by June 30. (The DWP transfers, on average, $200 million into the general fund every year to pay for police, fire and other city services. The $73.5 million payment was to follow an earlier payment of $147 million The $73.5 million has since been paid.)

The City Council accused the utility of attempting to hold the city hostage and, on March 31, when the DWP countered the City Council’s proposed rate hike with a recommended 5.7 percent rate increase, the City Council promptly vetoed it. The veto resulted in a draw that kept energy rates steady for 90 days—a move that was resoundingly approved by Los Angeles–based business owners who said rate hikes would further hurt their recession-battered businesses.

However, in April, after Villaraigosa announced (and then retracted) a plan to shutter some city departments for two days a week, the City Council and DWP were able to agree on a rate hike of 4.5 percent starting July 1.

The approved rate hike did little to assuage the animosity between the City Council and the DWP. In July, City Controller Wendy Greuel reviewed the DWP’s records and released a report concluding that the utility could have made the $73.5 million deposit to the city fund without first being granted the rate increase. In December, the City Council voted to approve a measure that would give it the right to fire the DWP chief. It passed with 10 votes on Dec. 7, and, despite a veto from Villaraigosa, the measure could go on the March 8 ballot.—E.B.Fashion’s Night Out in Los Angeles This year, Los Angeles joined the lineup of cities “officially” participating in the shopping event spearheaded by Vogue magazine, the Council of Fashion Designers of America, NYC & Co. and the City of New York.

Cynthia Ruiz, commissioner of the city’s Board of Public Works—and the mayor’s fashion ambassador—helped get Los Angeles on the FNO list, then worked tirelessly to get the word out and enlist retailers in the effort.

The party began at the Beverly Center, where Ruiz was joined by Los Angeles Mayor Antonio Villaraigosa, Vogue editor Lisa Love, musician Will.i.am, designer Randolph Duke and actress Anjelica Huston, who kicked off events with a runway show featuring fashions from the upscale center’s retailers. Shoppers then hit the stores, enjoying plenty of free treats and gifts with purchase.

In the end, Fashion’s Night Out featured about 300 parties all over Southern California—including a few Orange County and San Fernando Valley events. Shoppers party-crawled down Melrose Avenue, gathered on Rodeo Drive (where city officials set up a Ferris wheel and called in the gourmet food trucks), and traipsed down Robertson Boulevard enjoying champagne and cupcakes.—A.A.N.Fast Fashion Spins FasterThe world of fast fashion has been around for decades, but this year it seemed to be churning more rapidly.

Retailers such as Forever 21, H&M and Zara populated California with more than 150 stores, which sell trendy items at bargain-basement prices. And new players from overseas began entering California.

Australia’s Cotton On spent the year scouting out new locations and unveiling 10 more new stores in Southern California, including a flagship store on the Third Street Promenade in Santa Monica, Calif.

The retailer carries cheap-cheap T-shirts, blue jeans, cardigans, dresses and a sundry of accessories catering to the 18- to 30-year-old customer.

Right behind Cotton On was Fashion Club, a German-born retail chain that showcased its first U.S. store in mid-November at the upscale Westfield Topanga shopping center in Los Angeles’ San Fernando Valley. The outlet’s prices are surprising even by fast-fashion standards. Where else can you get knee-high boots for $27?

Meanwhile, the fairy godmother of fast fashion, Forever 21 of Los Angeles, took the concept to a higher level by rolling out elephantine outposts the size of traditional department stores. In January, Forever 21 opened an 85,000-square-foot flagship store at the Los Cerritos Center in Cerritos, Calif., and followed it up last summer with a 90,000-square-foot flagship in New York’s Times Square.—Deborah BelgumFlash Sales Continue to GrowSince emerging during the economic downturn, online private-sale sites—or flash sales—have steadily carved out a category in e-commerce that continues to grow.

Private-sale sites—such as Gilt Groupe, HauteLook, Rue La La and ideeli—operate by assisting brands sell excess inventory for a limited time to their members. For brands, flash-sale sites offer a way to sell inventory in an exclusive setting to a fashion-savvy customer base. For the customers, the lure is the brand, the discounted price tag—and the limited time frame.

This year, Los Angeles–based HauteLook raised $31 million in funding while New York–based Gilt Groupe drummed up $35 million in funding.

San Francisco–based Sugar Inc.—which owns several Internet properties devoted to fashion, shopping and women’s interests—purchased high-end designer private-sale site MyPerfectSale. Gilt Groupe made its first acquisition with the purchase of a San Francisco–based local deal site called Bergine. E-commerce behemoth Amazon.com bought BuyVIP, a European online sales community specializing in fashion and lifestyle brands. HauteLook purchased Chicago-based hotel-stay site BonVonyou. Montreal-based private-sale club Beyond the Rack merged with private-sale operator TheTopSecret.com to expand its members’ access to sales.

Fashion flash-sale sites also launched complementary categories such as travel and home decor. In 2010, Gilt Groupe launched Gilt City, which offers deals to local area restaurants, spas and other services in several major cities, including Los Angeles and San Francisco. In December, Gilt Groupe announced plans to expand beyond the discount with the launch of a full-price website devoted to upscale menswear, accessories and gear for men.—Connie Cho Ilse Metchek, President, CFAIlse Metchek has been tracking the comings and goings of the apparel industry for more than 40 years, first as a dress designer, then as an apparel company owner and now as president of the nonprofit California Fashion Association, which she helped form in 1994.

As head of the CFA, Metchek spent the last year picking and choosing her battles to help California apparel makers and retailers thrive. At the top of her to-do list has been her campaign opposing a federal law protecting fashion designers’ creations.

Known as the Innovative Design Protection and Piracy Prevention Act, or Senate Bill 3728, the law would protect, for three years, new, unique and original artwork created by a fashion designer. Metchek has been a vociferous opponent of the law because it is so subjective. She believes it would incite a wave of frivolous lawsuits against many apparel manufacturers and designers for their interpretation of some designs. When the latest version of the bill was introduced in Congress in August, Metchek and the CFA advisory board began educating the industry about the ramifications to their businesses. The law passed the Senate Judiciary Committee in early December and is now on the Senate floor for debate.

Metchek spends a great deal of time keeping industry leaders up to date on the latest changes in labor laws, customs problems and immigration issues.

At the beginning of the year, CFA took over the administration of the Textile Association of Los Angeles, known as TALA, and organized monthly dinners and cocktail events for The Professional Club (TPC).

Metchek’s annual “Crystal Ball” meeting for CFA members is always well attended, with speakers such as Wells Fargo economist Eugenio Aleman, who shared his financial outlook for the coming year.—D.B.Jack Kyser and Nancy SidhuJack Kyser, who died in early December, was often called the guru and the godfather of the Southern California’s business forecasting scene as founding economist of the Kyser Center for Economic Research at the Los Angeles County Economic Development Corp. When Kyser retired from the LAEDC in June to take a new position as chief economic adviser to the Southern California Association of Governments, the big job was given to Dr. Nancy Sidhu.

Sidhu started at LAEDC in 2000 as senior economist. In 2007, when the Kyser Center for Economic Research opened, Sidhu assumed Kyser’s former title, chief economist, and Kyser was named founding economist. The former economics professor and forecaster for Security Pacific Bank embarked on a new role that features being the go-to person to explain Los Angeles County’s complex business scene, which is the 19th-largest economy in the world, according to the Los Angeles County government’s website.

Working for the LAEDC since 2000, Sidhu has been quoted more than 1,000 times in the past year, according to the LAEDC. She also will be directing a multitude of reports and forecasts on Los Angeles County’s economy and the region’s business scene in the coming year.

In February, the LAEDC will release a forecast for 2011 and 2012. “The major message is that things are looking up,” Sidhu said.

“Consumers who have discretionary incomes are spending them this year,” she said. “It is different than a year ago, when they were still afraid and did not want to spend an extra nickel.”

Domestic manufacturing is doing all right too. “The national numbers suggest that apparel production has not declined over this year,” she said. “It would be nice if it carried on into 2011. For manufacturers, [they will have to continue] providing unique goods that consumers want to buy and do it on short lead times with cool styles.”—A.A.L.A. Fashion District’s Showroom Buildings During the worst days of the Great Recession, the showroom vacancy rate was more than 10 percent in the Fashion District showroom buildings in downtown Los Angeles.

A year later, showrooms are returning to the district and a new showroom building debuted, said Kent Smith, executive director of the nonprofit Fashion District Business Improvement District.

The intersection of Ninth and Los Angeles streets serves as the hub of Los Angeles’ fashion showrooms, with the California Market Center, The New Mart, Cooper Design Space and the Gerry Building serving as longtime anchors of the area. Several newer showroom buildings reside just off of the intersection, including the Lady Liberty building, the 824 Building and the Primrose Design Building.

In June, Academy Awards Clothing Showrooms debuted at 821 S. Los Angeles St. The five-story building is still in the process of transforming from its original incarnation as a retail and manufacturing building, but fashion brands Hellz and GPPR are among the handful of labels that have opened a showroom at Academy Awards.

Hellz marketing representative Nicole Phung said it was crucial for any fashion showroom to be as close as it could be to the intersection because buyers won’t venture too far. “Just two blocks is too far away,” Phung said. It also is important for showroom staff to work near a place where buyers, stylists and designers hang out and do business. “We feel more part of a community here,” she said.

In October, the CMC also debuted its highly anticipated Area 4 space. This new section is located on the CMC’s 4B wing and is intended to attract a chic, fashion-forward crowd to the building. The Derelicte showroom, helmed by Class Trade Show co-founder Jason Bates, moved into Area 4 in March.—A.A.Los Angeles Fashion WeekWith a calendar that included more than 70 events in October, Los Angeles Fashion Week continued in its current chaotic form, with far-flung independent runway shows and parties anchored by a handful of multi-designer events. The result was a little of everything—and a fashion week that stretched out to nearly four.

The lineup included longtime Los Angeles Fashion Week show organizer Mikey Kauffman, whose L.A. Fashion Weekend and its eco-focused Green Humanitarian Initiative group fashion show continued at the Sunset Gower Studios. The slickly produced, several-day event included a mix of denim, eco, swimwear and lifestyle brands.

Also returning to the lineup was Jason Peskins’ Project Ethos, the fashion, art and music event that focused on up-and-coming talent and hosted events in Hollywood in March and October.

Among the new events for 2010 was Concept Fashion Week, the indie, edgy multi-designer showcase organized by Brady Westwater and Mike Vensel (who organized L.A. Fashion on Broadway last year), which debuted in March in downtown Los Angeles and returned in October.

The California Market Center reinstated its runway shows (see related item) as did several independent multi-designer events, including Sewdown and Fashion Minga.

For some event organizers, 2010 was a season of change. BOXeight studios reprised its Fashion:Refocus fashion photograph installation concept in March but sat things out in October.

And in November, Downtown L.A. Fashion Week organizers Leanna Lewis and Barbara Graff headed west to launch the Beverly Hills Fashion Festival—an all-day event featuring runway shows and pop-up showrooms.

The Los Angeles chapter of Fashion Group International also shifted gears from its successful Designer & Muse event in downtown Los Angeles in March to a party at the Cabana Club in Hollywood, where singer Faith Evans turned out to help celebrate FGI’s 75th anniversary.

Longtime L.A. Fashion Week anchor Gen Art hosted an event in Hollywood in March to fecirc;te several of its alums. Sadly, it turned out to be the group’s last event, and, by May, the 16-year-old nonprofit was out of business.—A.A.N.Mergers & AcquisitionsThe buying and selling of brands regularly punctuated the news in 2010.

In January, Cypress, Calif.–based women’s swimwear maker Manhattan Beachwear kicked off a slew of mergers and acquisitions when it sold an 80 percent stake to Linsalata Capital Partners, a Cleveland-based private-equity firm. Manhattan Beachwear—which licenses the Kenneth Cole, Hermanny by Vix, Sofia by Vix, Hobie and Split labels—has annual sales of $65 million, according to Linsalata. In October, Manhattan Beachwear turned around and acquired Apparel Ventures, one of its biggest competitors.

One month later, Los Angeles–based premium-denim maker J Brand sold nearly 60 percent of the company for $85 million to Star Avenue Capital, a Los Angeles–based private-equity firm. According to J Brand executives, the deal gives the brand more resources to grow its label beyond high-end blue jeans and expand to more international markets.

That same month, Jones Apparel Group Inc., the huge clothing corporation, acquired Los Angeles womenswear contemporary label Robert Rodriguez for $28 million.

In August, Costa Mesa, Calif.–based Paul Frank Industries was acquired by Saban Brands, a Los Angeles–based investment group. The deal included all of Paul Frank’s assets and intellectual property, including Julius the Monkey and more than 150 characters that populate the brand’s apparel, accessories and other offerings.

And in September, New York–based Authentic Brands Group purchased two California-based mixed martial arts–related brands, Tapout and Silver Star Casting Co.

The surf/skate industry also proved to be fertile ground for mergers and acquisitions.

Billabong International, the Australian biggie surf brand with domestic headquarters in Irvine, Calif., continued to scoop up retailers and brands, including a long-rumored acquisition of Costa Mesa–based cult surf/skate brand RVCA; West 49, a 138-store Canadian retail chain; and Becker Surf & Sport, a five-store core chain based in Hermosa Beach, Calif.

Costa Mesa–based Volcom acquired some of its international licensees and distributors. In January, Irvine-based La Jolla Group—which designs, manufactures and sells licensed apparel and accessories for O’Neill, Rusty, Metal Mulisha and hellip;Lost—acquired True Love & False Idols, a boutique men’s streetwear brand. That same month, San Clemente, Calif.–based Four Star Distribution, maker of the Circa brand of skate apparel and shoes, acquired Copy, a high-end men’s streetwear brand.

In November, J. Crew rounded out the acquisition roundup when it agreed to a $3 billion buyout from private-equity firms Texas Pacific Group and Los Angeles–based Leonard Green & Partners. The acquisition isn’t yet a done deal, however. After the news broke, J. Crew’s stock rallied, but the deal for the preppy retailer was also met with some resistance, including at least two lawsuits alleging breach of fiduciary duty.—E.B.New Projects at the PortsContainer traffic at the ports of Los Angeles and Long Beach, which sit side by side some 25 miles south of downtown Los Angeles, began to rebound after a rough 2009, and port officials are moving forward with several improvement projects.

In 2009, the Port of Los Angeles experienced a 12 percent decline in container traffic over the previous year. The Port of Long Beach fared no better. Last year, cargo-container volumes were off 22 percent over 2008.

But with shoppers returning to the stores, ships are sailing into the ports again. During the first 10 months of this year, cargo volumes at the Port of Los Angeles mushroomed 17 percent. At the Port of Long Beach, they grew 25 percent.

Despite a shrinking revenue stream, the ports have hammered hard at their Clean Air Action Plan, reducing air-polluting emissions by 33 percent to 56 percent in the last five years. Part of that is due to reduced cargo volumes, but the rest comes from putting into place the Clean Trucks Program, which requires truck drivers to use cleaner trucks.

Preparing for the next surge of imports, the two ports have several capital improvement projects underway. The Port of Los Angeles has allocated $40 million to develop and expand the TraPac terminal. This involves a 60-acre expansion and construction of an on-dock rail facility to directly load containers from ships to railroad cars headed east. Another $33 million is being earmarked to expand the China Shipping terminal by 35 acres.

The Port of Long Beach just undertook a $1 billion, five-year project to replace the 42-year-old Gerald Desmond Bridge to allow bigger ships to pass on their way to the docks.—D.B.Santa Monica PlaceSanta Monica Place was the only major mall constructed in the United States in 2010. The beachside property in downtown Santa Monica, Calif., owned and developed by Macerich Co., reopened in August.

Originally an enclosed mall built in 1980, Santa Monica Place closed for a complete renovation in 2008.

The $265 million, three-level, 560,000-square-foot open-air mall offers ocean views and breezes from its third-level deck. The retail center’s third level hosts bars and restaurants and, in April 2011, will debut The Market, a farmer’s market that will sell locally grown produce and artisanal foods.

The new look of Santa Monica Place offered a good venue to experiment with design and new services at the center’s Bloomingdale’s, said Charles Anderson, Bloomingdale’s senior vice president and director of stores. Bloomingdale’s new location has top marquee neighbors, which range from luxury to juniors fashion. Tenants include Barneys New York Co-Op, Nordstrom, Kitson, Louis Vuitton, BCBG Max Azria, Charlotte Russe, Angl, Love Culture, White House/Black Market, G-Star Raw, Ted Baker and WESC.—A.A.Steve Needleman and PassportAfter 14 years on the city’s Westside, Macy’s Passport relocated to downtown Los Angeles to host its fashion fund-raiser at the Orpheum Theatre.

Owned by Anjac Fashion Buildings, the then-75-year-old Orpheum was renovated in 2001 by Anjac President and Chief Executive Officer Steve Needleman, who worked with the Los Angeles Fashion District, local revitalization program Bringing Back Broadway and Los Angeles City Councilmember Jose Huizar to move Passport downtown.

The theater setting was a departure from the event’s previous space—the Barker Hangar at the Santa Monica Airport. The historic theater provided a glamorous setting for the event, which was renamed Macy’s Passport Presents Glamorama—and it was on par with Passport events in other cities. “We wanted to see if we could create that energy in L.A.,” said Milinda Martin, Macy’s vice president of media relations and cause marketing, who added, “We’re excited to be part of downtown fashion and to do what we can to raise the visibility of Los Angeles as a fashion center.”

And Macy’s did, indeed, bring the glamour. Latoya Jackson was a key speaker, and there were performances by Grammy award–winning singer Macy Gray and singer Eric Hutchinson. Organizers put on a full-scale production complete with modern-dance numbers, runway presentations and theatrical effects. Featured designers included Tommy Hilfiger, Calvin Klein, Tracy Reese, Hugo Boss, Versace Collection, Material Girl, I.N.C. International Concepts, Just Cavalli, Marc by Marc Jacobs, Felina/Jezebel and 2(x)_ist.

The city closed Ninth and Main streets so the party could continue on as guests walked over to the California Market Center for a jam-packed after-party featuring plenty of cocktails, tasty hors d’oeuvres, fun giveaways and games to play.

Proceeds from the event benefited AIDS Project Los Angeles and Project Angel Food. Over the past 28 years, Passport has raised more than $28 million to support HIV/AIDS treatment, research and prevention.—A.A.N.Trade Show Shuffle This year was especially dynamic for the trade show sector. Arguably, the biggest news came in November, when the Action Sports Retailer Trade Expo unexpectedly shuttered after nearly 30 years covering the surf, skate and action-sports market. Organizers cited a consolidating retail base and a challenging economy for the demise, but it was not the only show to close in 2010. After seven years in Los Angeles, ENK’s Brighte held its last show in October. And textile newcomer GlobalTex, launched two years ago in Los Angeles, also closed.

For some trade show organizers, 2010’s challenges led to new opportunities for 2010 and the future. Messe Frankfurt scheduled its 7-year-old Techtextil North America to coincide with the SPESA Expo and ATME-I Megatex 2010 in May in Atlanta and launched the International Apparel Sourcing Show and Home Textiles Sourcing Expo in July in New York alongside its Texworld USA. Southern California–based urban and contemporary streetwear show Agenda hosted a New York show in July, Designers and Agents expanded with a Paris edition in October, and the OffPrice show hosted a new Taste of OffPrice show in Los Angeles in October.

There were a handful of newly launched shows as well in 2010, including new swim trade show Salon Allure, which debuted in Miami Beach, Fla., in July, and the Star Show in Los Angeles.

There were also plenty of changes in dates, venues and formats.

The massive MAGIC Marketplace shifted dates from late August to middle of the month, causing its nearly 15 satellite shows to follow suit. MAGIC’s parent company, Advanstar, then opted to cancel its New York Project show, which was set to run in mid-July concurrently with the recently retooled ENKNewYork shows (which includes Designer Collective, Blue, Tomorrow and Clean); upscale men’s show MRket and its show for up-and-comers, Vanguard; contemporary streetwear show Capsule; and Agenda. (Project is scheduled to return to the New York lineup in January.)

In Las Vegas, Advanstar moved Project, Premium @ MAGIC, S.L.A.T.E. and MAGIC Menswear from the Sands Expo and Convention Center to the Mandalay Bay Convention Center in February. Representatives of Project and the Pooltradeshow also launched a small upscale show called Workroom in February, housed in a space next to Project. By August, the trade show giant had also moved Pool from the Las Vegas Convention Center to the Mandalay Bay. The move of Menswear and Pool opened new space for WWDMAGIC and Sourcing at MAGIC at the Las Vegas Convention Center, as well as Advanstar’s new footwear show, FN Platform, which launched in February.—A.A.N.VietnamIn the past year, labor in China’s garment factories became scarcer and more expensive.

Minimum wages grew by as much as 27 percent in 2010, and Chinese workers are drifting away from apparel factories and into other jobs that either pay more or are located closer to their hometowns.

With costs and delivery times rising, many apparel people are shifting their sourcing orders to Vietnam, which has seen its share of the apparel business inch upward ever since it joined the World Trade Organization in 2007. Being part of the WTO eliminates quotas among member trading partners.

Vietnam’s apparel exports in 2010 are expected to have risen 21.3 percent over last year, to more than $11 billion in revenues. The goal of the Vietnam Textile and Apparel Association is to double apparel exports by 2015.

The apparel association is getting some help from Taiwanese and Chinese companies looking to Vietnam, a country of 89 million people, to pick up the slack in China’s apparel production. Many of these investors are building factories in the northern part of the country, where labor is cheaper than in the south.

Eclat Textile Co., based in Taiwan, decided to invest $2.4 million to acquire a Vietnamese garment factory that can manufacture nearly 3.5 million knit garments and T-shirts a year. Eclat also plans to spend $4 million to set up a new facility in Vietnam that can make as many as 2.5 million pieces of clothing a year once it is up and running in April.

Inside the country, many Vietnamese apparel-factory owners are busting at the seams and expanding their businesses. The TNG Trade and Investment Co. recently invested more than $10 million to construct a fourth facility, which will be able to make 10 million garments a year once it opens in the first part of 2011.

Vietnam’s apparel exports to the United States have been on a healthy growth pattern in the past 12 months, jumping 10 percent to $5.6 billion for the one-year period ending in September.—D.B.