On the supply side: clothing supplier Walmart lands clothing production
Jordanian company Classic Fashion has opened its first US production facility in Santa Ana, California to cut and sew garments for Walmart. This commitment is part of Walmart’s efforts to expand manufacturing jobs in the United States by purchasing $350 billion worth of goods manufactured, grown or assembled in the United States by 2031.
“Classic Fashion is proud to be a supplier to Walmart as we strengthen our manufacturing presence in the United States,” said Sanal Kumar, President and CEO of Classic Fashion. “I’m proud to recognize our incredible US-based manufacturing staff and the Santa Ana community as we continue to build on Classic Fashion’s 20 years of success.”
Kumar and Walmart have worked for several years to try to produce clothes on land and participate in the retail giant’s American Lighthouse program which shines a light on industries in the most difficult to relocate sectors, such as textiles.
Deanah Baker, former head of apparel at Walmart US, said textiles were one of the hardest categories to land. But that’s where Walmart chose to start. She watched Classic Fashion and sought a partnership and relocation plan as early as 2015. Baker made her comments in June at Walmart’s Open Call event. She has since retired from Walmart.
Classic Fashion has 30,000 employees and 22 locations in Jordan and India. The newest US store adds 125 new jobs and plans to grow to 350 jobs over the next three years. The company has leased a 12,000 square foot manufacturing facility and 7,200 square feet of warehouse space, investing $4 million in the new facility which opened recently and is expected to be in full production by mid-November.
Kumar said that when Walmart asked him in 2015 to consider creating a clothing line in the United States, he knew it would take time, as much of the expertise in textiles had dissipated over the course of his career. of the 50 years since the American garment industry was active. Classic Fashion began by opening a design office in the United States, and the new manufacturing facility in Santa Ana is the next phase of that plan. Kumar said he chose the Santa Ana community for the US facility because of the skilled labor in the area. It is also located near the main seaport of Long Beach.
Baker said in June that the fight to bring textile manufacturing back to the United States was worth it, and she recognized Kumar as a true partner in the process.
American Classic Fashion company The Cut & Sew Co. strives to source materials from countries close to the United States to start and then source materials from the United States, creating a chain closed-loop supply chain for an industry that hasn’t existed on a large scale. for decades in the United States
“Walmart is proud to work with Classic Fashion, which will soon manufacture its great products here in the United States,” said Jason Fremstad, senior vice president of supplier development and sourcing at Walmart. “Investing in local manufacturing creates American jobs, helps small businesses grow, and benefits communities like Santa Ana. We are excited to present Classic Fashion’s USA-made apparel exclusively in our stores.
Kumar said that since he started selling at Walmart in 2005, his business has grown to more than $300 million last year. Up to 45% of Classic Fashion’s revenue comes from Walmart sales. Classic Fashion manufactures the majority of retail clothing items, including swimwear, sportswear, jackets, casual wear and jeans that are marketed under its customers’ private label. While the California plant will manufacture specifically for Walmart for the first five years, the company also manufactures apparel for Sam’s Club, Target, JCPenney, Academy Sports + Outdoors, Hollister, Adidas, American Eagle, Hanes, Calvin Klein and Reebok.
The apparel industry has had its ups and downs amid the pandemic and supply chain disruptions. At the same time, Walmart expanded its apparel offering by adding more private labels like the Love & Sports activewear line for women and Athletic Works for men. Classic Fashion manufactures both brands for Walmart.
Marketing firm Statista surveyed fashion executives earlier this year and found that rising raw material costs would impact their supply chain throughout the year, and 85% said that they expected inflationary pressures to persist through 2023.
The survey found that 87% of respondents were concerned about rising shipping costs, 79% worried about port delays and disruptions, and 78% said temporary supplier closures had affected them. Other major concerns related to the availability of raw materials, the volatility of consumer demand, international trade tensions and changes in consumer preferences.
Harry Moser, the founder of the Reshoring Initiative, said supply chain disruptions over the past two years have helped attract more support for job relocation. Moser estimates that 260,000 new manufacturing jobs will return to the United States in various industries this year, from microchip makers and diaper makers to steel production and even apparel manufacturing.
He said the math made sense for many manufacturers to relocate at least 20-30% of their production to begin with. Given the ongoing supply chain challenges of the past two years, Moser said more and more manufacturers are now seeing the need to consider relocation if they intend to have adequate inventory and just in time.
The relocation initiative found that private and federal push for a national supply of essential goods has led to approximately 230,000 new manufacturing jobs in the United States in 2021. This brings the total number of relocation jobs announced since 2010 to 1 .3 million.
Editor’s note: The Supply side section of Talk Business & Politics focuses on the businesses, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by Talk Business & Politics and sponsored by Propak Logistics.