California Apparel News

In the last three years, apparel exports from the Los Angeles area have climbed 40 percent as manufacturers look to overseas markets to boost sales. And the opportunities are only growing.

In 2007, $465.8 million in apparel, including accessories, left various seaports and airports in the Los Angeles Customs District. That mushroomed to $653.2 million in goods in 2010.

“U.S. trends are clearly passing borders,” said Ilse Metchek, president of the California Fashion Association, which organized a fashion export seminar on April 12 at the Grammy Museumat LA Live. “What you see on the streets of Venice [a Los Angeles neighborhood] or in U.S. colleges you can see on the streets of Shanghai and Mumbai. Hollywood star power is creating the fashion trend, not the Paris runway, and we make it.”

Los Angeles apparel manufacturers with an eye on exporting will find that China and India are the two main markets that show the most promise.

With 10 percent of India’s 1.13 billion people classified as middle-class, that translates into a huge market. “That is 100 million people who can afford product made in the U.S.A.,” Metchek said. “The opportunity is clearly there for U.S.-branded merchandise at moderate or lower prices.”

In China, there are several kinds of new consumers. There is the “aspirationalist,” who is part of the thrifty middle-class and whose favorite brand is Nike. Then there are the “chuppies,” or Chinese yuppies, who are professionals at the forefront of the middle class. Chuppies are interested in Western products, and their favorite brands are Apple and Polo Ralph Lauren. The “big stylers” are the up-and-coming big earners and spenders who are brand-conscious and consume labels such as Prada, Burberry and Chanel. The “parasite singles” live with their parents and have lots of disposable income to spend on brands such as Gucci and Louis Vuitton.

If you took away various non-tariff trade barriers in force around the world, then Brazil, Turkey, Russia, Argentina and the United Arab Emirates would be prime apparel markets, too.

Government help

With the Obama administration pushing to double exports in the next five years, the U.S. Department of Commerce and its U.S. Commercial Service have a panoply of tools available to help companies start an export program. “We assess export readiness and identify key markets, determine sales potential and implement an export plan,” said Julie Anne Hennessy, a Commerce Department director in Los Angeles.

The Commerce Department, which has a fleet of experts based in embassies and consulates around the world, helps exporters identify the various import regulations and trade barriers they need to negotiate. In addition, commerce officials help set up meetings with key buyers and distributors and identify various markets.

“We are doing many, many trade missions to markets around the world, and we encourage you to participate,” Hennessy said. “We do receptions and networking one-on-one.”

The government runs a number of websites that provide export information and help. Those include www.export.gov, www.buyusa.gov and http://otexa.ita.doc.gov, which has an export section under the Office of Textiles and Apparel.

Overcoming non-tariff barriers

Exporting doesn’t mean simply placing a container of goods on a boat and waving them off to their new destination. There is a sheaf of paperwork and regulations as well as logistical problems that can delay shipments or hinder exports.

In 2010, West Coast exporters found there was a shortage in vessel space because ocean carriers took ships off their trans-Pacific routes and diverted them to Europe after U.S. demand for goods slumped in 2009. There was also a shortage of transportation equipment, said Vincent Iacopella, president of the Los Angeles Customs Brokers and Freight Forwarders Association. He is also the managing director of customs brokerage company Janel Group Inc.

U.S. Customs and Border Protection is now taking a new look at export activity and doing random on-dock inspections of cargo containers to improve security, verify that counterfeit goods aren’t destined for overseas markets and apprehend dual-use equipment that could be employed for unauthorized activities such as clandestine weapons programs. However, that customs inspection can cost an exporter, who often doesn’t get the inspection bill until months down the road, Iacopella said.

In addition, the European Union now has a security requirement that manifest papers must be filed before imported goods arrive at their port of entry.

Intellectual property protection

Trademark protection is vital when exporting to new destinations, said Richard Wortman, a Los Angeles attorney with Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt.

Exporters need to shore up protection of trademarks and copyrights before even shipping their first boatload of goods. “Some of the pitfalls [in IPR protection] include believing your mark is selling a gazillion units here and that the protection filed here is helpful anywhere else in the world,” Wortman said. “Second is assuming the laws and procedures for intellectual property rights protection will be the same from country to country.”

Other pitfalls include not checking whether the trademark is already registered in the export country. “I had a client who had a great mark and sold to 500 stores in the United States,” Wortman said. “We were horrified to find out that in most of Europe, that name had been trademarked by someone else 27 years ago, and my client didn’t have the right to bring in their own work.”

Also, exporters need to make sure their trademark and the name is appropriate for a certain market and how it is translated into the local language or slang. “I have had clients who had to change the illustrations in their trademarks when they go abroad because they were not suitable,” Wortman said. “You would think that sending something from California to England would be safe. But we had a label whose name was innocuous here, but in England, the local slang meant to have sexual intercourse. And that seemed very inappropriate for childrenswear.”