(Filed Under wholesale Lingerie News). Barry Revzen, CEO of Dreamgirl, recently visited a number of intimate apparel factories in China, and returned with a lot to say about the effects of president Trump’s policy of taxing that country’s imports. A manufacturing and importing specialist, with decades of experience, Revzen lived in China for years and has traveled there repeatedly. He has visited hundreds of factories during his career. BODY publisher Nick Monjo interviewed him just after he returned from his latest trip, and on the day before Trump announced he would extend (on September 1st) the tariffs to cover another $300 billion of imports, a move that will expand taxes to cover almost everything shipped from China to the U.S.
MONJO: What is the general situation at China intimates factories right now?
REVZEN: This trip to China was an eye opener. The factories all over the country are empty. With the pending threat of additional tariff’s, anyone who has any buying power at all has moved all or most of their production out of China. It is heartbreaking to see good solid factories without work. I guess over the next short time many garment factories in China will end up closing down for lack of work. I find this a shameful and unnecessary situation. But this is reality now in China. Unfortunately this is not only for intimates factories but for all garment factories except those producing mostly for Europe or for the booming domestic China market.
MONJO: I understand you visited many factories in many cities.
REVZEN: I was in China for business and some pleasure and during the start of my trip I did go to many different cities. We went to 17 cities in the first six days we were traveling. It was a difficult trip but a great trip. I saw many new and really nice factories but all without enough work to fill the machines and all had let sewers go.
MONJO: Some of these factories were top level.
REVZEN: I visited with many new bra and panty factories that were originally 100-200 sewers and now they were with little to no work. These are factories with amazing equipment such as transportation equipment to take the unfinished garments to the sewers so that they do not have to get up to get the next bundle. And auto cutting and spreading. Most use Juki sewing machines and all these new factories were really nice, capable factories. One of the factories I went to see made all kinds of lingerie, clothing and bathing suits. They have three big factories in China with about 2,200 sewers. And they have a factory in Ethiopia with 3,000 sewers but will expand to 5,000 sewers by the end of the year. And even they will take small quantities now and are competitive price wise.
MONJO: What about minimums? You noted that factories that would never do small runs are now accepting that work.
REVZEN: It was really shocking when I started asking about the MOQ’s at these factories. Whereby the factories, especially around Shantou and Gurao, always had very high MOQ’s on bra’s and panties, now they will take any orders offered to them. Once upon a time the MOQ’s on panties ranged anywhere from 4,000 pieces of a style/color to 10,000 pieces and bra’s around 5,000 to 6,000 pieces. Now they will be happy with 1,500 pieces and the prices are lower. In fact as long as they are not losing money, most factories will take any price offered to them within reason. So, for me, I see prices coming down as well as the MOQ’s, and that presents opportunities. Having said that it will be interesting to see the end result and what will happen once the tariff issue is ended. I am not sure if the production will ever go back to China.
MONJO: You mentioned a panty program you were on the verge of signing with one store that blew up
REVZEN: As we have been trying to get into the private label business I have had many issues with customers on price and of course on quality. But this issue was over the country of origin. We had made samples for a big customer of a panty they were running. My price was the best by far. And my quality was also the best. But when push came to shove the customer told us we could not get the orders because our country of origin was China and they took that order to another company who was working in Vietnam. I was also in Vietnam in March and the factories were full to the rafters. I feel that the Vietnamese factories are very good but cannot compare to the Chinese who have so much knowledge and so many years of perfecting their productions. It is very different in Vietnam than in China.
MONJO: What were the dates of your latest trip to China?
REVZEN: I left June 28th and returned July 27th. It was a great trip and I was all over China. I did get a chance to go to so many new factories and to see what they could offer.
MONJO: On the positive side it sounds like you were able to find production in some top level factories that might have been unable to give you production in the past.
REVZEN: Since I met with several of these new factories I have had samples sent to them and they have confirmed our target prices and quantities and we have placed orders. It is a great opportunity for us as long as the tariffs don’t come into effect.
MONJO: Are there now opportunities for other manufacturers in China?
REVZEN: Now due to the situation with the pending tariffs there are fantastic opportunities for importers willing to risk making their goods in China. For those of us whose quantities are not big enough to move to other countries it is a good time to place orders with great prices and lower MOQ’s. Having said that there is also a risk factor.
MONJO: Do you have any comment on the situation in neighboring countries?
REVZEN: I was in Vietnam and Cambodia in March and all the factories I went to see where packed with goods. The tariff issue has now made Vietnam the second largest exporter of garments to America, only next to China, and my feeling is that they cannot handle so much product and there will be delivery problems in the near future. The other issue is that the lead times from Vietnam are longer than from China and generally the prices are about the same or a little higher than China, seeing as everything must be imported from the mainland. Although their needle work is good, in my opinion it is not as good as in China. The Chinese workers are there to work and earn money. But in Vietnam, where most sewers are hourly and not on piece work, the productivity is much lower than China. Other countries generally do not have the skill or needle work that the China factories do.
MONJO: Do you have any other comments about the China factory situation?
REVZEN: I feel that trade wars and trade tariffs help no one. And what this matter has created is shameful. I understand protectionism and the trade imbalance but putting tariffs on imports from China has created a situation whereby China is in trouble. And why do we want to do that to anyone? In fact, now that Americans are importing so much from Vietnam, which imports so little from America, the trade imbalance is going to be far greater than that with China. So are we soon going to do the same thing to Vietnam and put tariffs on Vietnamese goods? This is a big question that we are all faced with. Other countries may eventually fall into the same situation whereby there might be additional countries with trade imbalances. Will we do the same to them or is that strictly for China? Only time will tell.
In Cambodia the MOQ’s are huge. All factories I visited were busy but I think that not so much of the China product has moved there. Mostly they deal with the Europeans as Cambodia is duty free for Europe but not for the U.S. And due to the incredibly huge MOQ’s not as many companies can place production there.
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