(Filed Under wholesale Lingerie News). Last summer, Barry Revzen, CEO of Dreamgirl, visited a number of intimate apparel and costume factories in China and provided his observations in an interview with BODY publisher Nick Monjo. Revzen was back in China in November and here provides an updated report.
(Note: shortly after this interview was conducted, the U.S. and China agreed on a deal to stop new tariffs from going into effect in December, and reduce some existing levies. This should provide some, but not complete, relief to China factories according to Revzen).
MONJO: I understand the conditions in China factories are even more serious than you found on your last visit.
REVZEN: The factories are really empty. They will take any work they can get. Europe and Canada are relatively small markets for them compared to the U.S., and the big wholesalers and retailers from America have moved production out of China. It is increasingly more difficult to find goods in stores that were made in China. A sad situation as this is only hurting the American people as well as the Chinese factories.
MONJO: You mentioned that some China intimates factories have already closed.
REVZEN: There were so many intimates factories all over China but mostly in the South. And now when you go there many of them have closed and others are a shadow of what they once were. Intimates in China was a huge business but it is pretty much gone now. Many people started moving to places like Bangladesh for their intimate production and now with the tariffs that production from China has all but disappeared. We recently opened two new factories both of which are just great facilities with great, equipment, production and quality. These factories are now willing to work with small MOQ’s and will accept almost any price just to keep the machines running. One of our factories is a sizable plant who had upwards of 200 sewers and now they have about 60 sewers left. My production is absolutely gorgeous, but I feel so bad for the factory as they have so little work. Such a skilled factory and little to do. It is a shame to see such amazing factories empty.
MONJO: If the tariffs are removed, do you think that China intimates production will return to previous levels?
REVZEN: My personal opinion is that even if the tariffs are removed that the production is never going to return to China in the same proportions it was in the past. Too many of the big retailers and wholesalers have moved to other countries. And these moves are not cheap, nor are they easy. So now that they have established themselves elsewhere I feel they will never go back to China in the same way that they once supported the country.
MONJO: Do you have any more comments about your latest visit to Chinese factories?
REVZEN: China is a great country and they have established themselves as the only country in the world that has everything needed to make any kind of product, not just garments. And even though most have left China and sought out other countries for their production, those countries must still import the majority of the raw materials from China. Without China these other countries cannot produce goods. As long as they bring the raw materials in from China they can make the production. But they become no more than a labor force, which is totally different in China. China is equipped to handle almost anything and make it with a skill that is unlike any other country in the world.
What will the world and the retailers do if China puts a tax or tariff on raw materials leaving China? I believe it is coming. And if it does, what will happen to those who took their production to countries like Vietnam, Cambodia, Bangladesh, India, Tanzania, Honduras and so many other countries when China puts a hefty tax or tariff on all raw materials leaving the country? I think there is another shake up coming in the near future. What will this do to the price of things being made in other countries, and how will all those who left China react?
MONJO: I understand your sales are up this year at your company, Dreamgirl?
REVZEN: Sales are up for the year in both lingerie and costumes. Our lines are truly great and our customers recognize that we are on top and have shown us how much they like what they are seeing by giving us more and more volume. So far we are up more than 10% for the year, which is a huge increase for us. We are very happy with what is happening and with the great lines our designers have been turning out.
MONJO: How about profitability?
REVZEN: We will have the best profit year in the 30 year history of the company. Since I took over I have cut costs. And we are lean now, allowing us to make more money than ever before. We have never been so strong financially than we are now.
MONJO: What were the top three “highlights” for Dreamgirl this year?
REVZEN: With the growing trend of “meant to be seen” lingerie, our marketing and design teams worked together to create an exciting set of tools, from videos to lifestyle shots. We share them all with our customers, giving them the ability to create a visually exciting presentation for their customers, either in store or on the web. This trend has really expanded our lingerie sales for 2019.
This is our second year since the launch of our Dreamgirl wig line. Our sales have more than doubled as our customers respond to the excellent success they have had with our product line at retail. Our unique packaging, with a “film strip” of photos, which give the consumer additional ideas of other wigs to buy and how to accessorize them, is an eye catcher. Our full line of character wigs, on trend fashion wigs and naturals have helped us expand our customer base into retail outlets we have never sold to prior to our wig launch.
Our Simply Sexy spring book continues to build a following among retailers – both brick and mortar and E-commerce, with our array of seasonal, vibrant colors that immediately freshens the look on the floor or website. Our styling captures the latest runway trends that translates beautifully into lingerie for the bedroom and boardroom. It has been very surprising to me how hungry the consumer is for the fresh vibrancy of our color palette and the romantic yet sexy touches we focus on in this line.
MONJO: What about your private label efforts? What happened this year to make DG attractive as a private label provider?
REVZEN: Knowing China as well as I do, I have the best possible prices for private label goods. But we have lost several big orders due to the CO (country of origin). And the customers didn’t mind telling us directly. There are still some things that are difficult at best to make outside of China. but even those garments have gone to Vietnam or put on hold with the hope that the tariffs will be dropped. We are waiting for our turn at the plate and it will come in the near future, especially if China puts tariffs on all raw materials leaving China. Then we will be in a good place. I can’t wait to see what the future holds for us in private label, but I feel it is going to be just great in the near future.
MONJO: How was your Halloween this year?
REVZEN: We started the Halloween season very worried about the tariff’s and how it might affect us. But thankfully the tariffs came into effect only September 1st so we could bring in our goods without the additional 15% on FOB that we now have. In the end our Halloween was strong and well up over last year.
MONJO: Can you discuss some of the ups and downs of the Halloween business in 2019, for the industry as a whole?
REVZEN: I would have to say that the biggest issue for Halloween in 2019 was the pending tariffs, which in the end did not happen before the season got shipped. So it turned out great. Halloween has been challenging for several years now and with brick and mortar shrinking there are less and less customers to sell goods to. The big box stores and customers like Walmart and Target have taken over that business and the small retailers have suffered. Not to mention that the online retailers have taken the lion’s share of the Halloween business. I would say that the shrinking customer base is the biggest issue we have to deal with.
MONJO: What about Halloween 2020?
REVZEN: I feel that all Halloween suppliers and retailers are counting on a great Halloween for 2020. It is a Saturday night and the best Halloween is always done on Saturdays. No school for the kids so they can stay up later and more parties for the adults. I think it is going to be a great Halloween season. I feel that sales will be up at least 15% over other years. As I said above, the kids can stay out later and the adults will have more parties. Besides that, the schools will do Halloween on the Friday so kids and adults will get to enjoy the holiday for two days instead of one.
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