Ragtrader founder Fraser McEwing offers his thoughts on the future of locally produced apparel.
Not so long ago, the idea of Australian-made clothing as a growing, viable production source was almost laughable. The price of imports had plummeted, shipping was cheap, and China had grown into an accessible and inexhaustible supplier – with minimum production runs that moved right into Australia’s capability zone. The big question is whether Australian-made is now becoming competitive enough against imports to change the direction of the tide.
Although the viability of apparel made in Australia is a moving target, Melbourne services provider Julia Van Der Sommen keeps it in the cross hairs so she can advise her customers of the opportunities and traps of local sewing versus imports. She provides regular reports and seminars to update them and believes that made in Australia has a bright future – as long as you take into account costs and savings which are too often hidden or ignored.
Her company, The Sample Room, is ideally placed to take a snapshot of Australian-made possibilities. Started in 2009 and still run by Julia and husband Daniel Watts, The Sample Room offers a full development service which includes computer pattern making, grading, specification and sample machining for women’s, men’s and children’s wear as well as non-wearable textile products.
Garment types range over lingerie, swimwear, activewear, through to formal wear. It is, in fact, the small fashion company or start-up’s dream, since it picks up the technical and practical sides of production that worry the life out of young designers and niche garment suppliers.
While The Sample Room suggests suitable local factories to its clients, it has a small factory of its own which concentrates on short production runs and enables it to keep a check on the manufacturing pulse. The Sample Room also provides its clients with lists of the most suitable accessory and textile suppliers. When you put this picture together, The Sample Room is positioned to assess the entire process of Australian-made.
Fundamentally, the demand for local manufacture is determined by the performance of overseas suppliers. China is becoming increasingly difficult to deal with and importers are looking to other resource countries, mostly still in Asia. Although countries such as Bangladesh, Vietnam, Korea and India can produce the goods, they have yet to match China’s benchmark in quality, reliability, price and manageable minimum quantities. But rather than expanding its leadership role, China is turning away from clothing exports and repurposing its factories.
The value of the Australian dollar is also pivotal in the price of imported apparel. Its recent decline has had the effect of making local production more competitive.
The answer to local versus import has a lot to do with placing values on components that are difficult to calculate and usually end up in the too-hard basket. How do you value comparative freight costs, quick turnaround, small production runs and flexibility – all of which win points for local manufacture. ‘Too often businesses just look at the quoted overseas factory price for making a garment without taking the whole picture into account,’ Julia says.
Another factor that counts against imports, but is hardly ever mentioned, is the fault rate that is part of every production run. Through rigorous inspection, the moderate to up market labels accept up to a 2.5 percent fault rate but the budget sector, in its headlong pursuit of price, can suffer horrendous fault rates. ‘I see it as their dirty little secret,’ Julia says. ‘I am told that one of our major importers throws away two containers a week because of mistakes which make the garments unsaleable – and they then become an environmental hazard.’
Whatever the potential for growth in local manufacture, there are limiting factors apart from demand. Australian machinists are in short supply and expensive to train. Moreover, other industries, like sign making, offer sewing machinists more money for simpler work. And then there is a lack of specialist skill continuity. ‘For instance,’ Julia says, ‘I worry about where the next generation of buttonholers is going to come from. Right now, we are facing a retirement bubble in many specialist categories with very few replacements.’
While Australian-made could not compete in the cotton t-shirt or budget dress market, the higher you go in styling detail the more Australian-made comes into focus. As Cue has demonstrated in Sydney, there is a sweet spot where styling complexity, short production runs, quick repeats and logistics combine to beat imports. Going on the making price of Melbourne factories, the rule of thumb Julia uses is that a dress retailing around $400 or upwards can be competitively produced in Australia.
‘One of the myths we have to put up with is that Australian factories make a lot of money,’ Julia adds with some passion. ‘They don’t. And I should know, because Daniel and I have one. If we can achieve a 10 percent margin we’re doing well. Some months we run at a loss.’ She laments the prevailing public and trade attitude that clothing factories are bottom feeders. ‘They are dazzled by designers and retailers without acknowledging who makes the goods. Our clothing factories should be celebrated, not denigrated and ground down to the breadline.’
There is another reason why Australian clothing factories are a force for good, apart from an economic one. After the Second World War they were significant employers of Greek and Italian migrants, mostly women. As they moved out and up in their assimilation journey they were replaced largely by Asian women. Now the prevailing background of machinists has changed again. While still providing employment opportunities they now come from Syria, Afghanistan, Iran, India, Pakistan and Sri Lanka.
Julia Van Der Sommen makes the point that some migrants from these courtiers already have garment making experience and can go straight into production work – but overall, you have allow up to six months for a machinist to be productive. One reason is that the small factories you find in Australia need their machinists to be multi-skilled – and that takes extra training.
Under the protection of stringent import restrictions brought about by the Second World War, textile and clothing factories in Australia became a major employer. We grew and extruded textile fibres, we spun, we wove, we knitted, we printed, we cut, and we sewed. But although the virtual removal of import restrictions decimated the local industry, the survival of some sectors remains.
The Australian Fashion Council estimates that 489,000 workers are currently employed in the broad category of the fashion and textile industry. However, the vast majority of those are employed in retail. Just how many Australian clothing factories there are, how many people they employ, or where they are located is much harder to determine. For various compelling reasons they have flown under the radar. Suffice to say that local sewing only accounts for around five percent of clothing sold in Australia.
Whether Australia can ever again be a significant clothing supplier to its home market has more to do with overseas economic and political conditions than those in Australia. But if, for any reason, demand suddenly boomed, we could handle it. We’ve been there before.