“From the mill perspective, quality is defects and physical standards,” he said. “From a retailer’s perspective, it’s their perceived value of your product. And price comes into play after delivery and quality.”

 

Wagner, who is based in Miami, offered an insightful overview of brand retailing, the supply chain and Levi Strauss’s relationship with U.S. suppliers. Retailers, he said, operate under two Golden Rules:

 

• You will not sell product with an empty shelf; and

• Overstocks will kill your margins.

 

These Golden Rules are violated for a number of reasons, he said, including bad forecasting; assortment (wrong sizes, wrong colors); changing trends; issues at the mill, CMT (cut, make and trim) or laundry during manufacturing; or shipping disruptions as a result of bad weather, political unrest, stolen shipments, credit issues or Customs issues.

 

A better way to operate is with a good, quick replenishment program, Wagner said. He compared the Asia replenishment sourcing model with a similar U.S. model. Head to head, the U.S. model from the time the order is made to the time the product is placed on the floor is 8 to 12 weeks compared to 9 to 15 weeks for the Asia model.

 

The U.S. textile supply chain has several key ingredients it can provide apparel retailers, Wagner said, including natural and manmade fiber, spinning mills and fabric mills operating within regional proximity to each other. However, garment manufacturing and laundries are sparse and are not strategically located, he added.

 

As such, for a Made in the USA strategy to be more successful, shorter lead times are needed, along with and more CMT facilities and laundries that are closer to the mills, he said. So he posited that U.S. textile manufacturers adopt new ways of thinking.

 

“Full package, partnerships and manufacturing clusters are things to consider,” he said.

 

Revisiting the quality issue, Wagner said that physical requirements are the same no matter where they come from. So he recommended that yarn and fabric producers don’t over-spec and don’t over-test.

 

“Stress your normal quality procedures and look at how they will save the retailer money,” he said. “Have some predictability – and trust your product.”

 

Wagner defined price as perceived value vs. actual value.

 

“Why do some people perceive European fabric as a more premium quality?” he asked. “And why do some people mistakenly think Egyptian cotton fibers in towels and sheets are better than other cotton fibers? Is it perception vs. reality? If perception is the reality in the eyes of the consumer, it will also be in the eyes of the retailer.”

 

“In the race to the lowest fabric or garment price, it’s tough to compete head to head on worldwide commodity fabrics,” he added. “So what do you do? First, meet the specifications required. Second, use program mixes to keep looms running at break even. And take the cost out as much as possible, whether it’s through raw material or labor.”

 

Wagner offered several examples of U.S. mills that have increased their perceived value by going “a different road” in creating value-add products. Among them: Cone Denim, Patrick Yarns, Tuscarora Yarns, Palmetto Synthetics, Tentoria Piani, Unifi, Supima and Faribault Mills.
 

He suggested mills should rethink the way they work.

 

“Don’t try to make everything a 1 million-yard order of basic products,” he said. “Think more like a craftsman and less like a cookie cutter. Think premium and vintage, not high volume, but good margins.”

 

Time is money, he added, so take advantage of key input in the supply chain. He suggested suppliers come to the retailer with the right product, first and foremost. And partner with the entire supply chain to come with complete garments, he said, because “retailers buy garments.”

 

“Everyone is looking for higher sley and cut products from the U.S.,” he said, submitting as examples finer yarn counts, plied yarns, lighter-weight fabrics, better finishing, yarn dyes, corduroy and shirting.

 

Wagner also reminded attendees that the demographics today are different than they were in the ‘60s and ‘70s, when the average retail merchant and developer was 30-50 years old; were male and female; had a college degree and 10 to 15 years of experience in the business; worked eight to 10 hours a day and made decisions based on knowledge; and knew all the mills.

 

Today, he said, they are 80 percent to 90 percent female; are 21 to 30 years old; have a college degree but most likely not in textiles or apparel; have an MBA or are in the process of receiving one; get 100 to 200 emails a day; work at least 10 to 12 hours a day and check email nightly; and know only the mills with which they currently work.

 

“And a good number of decisions are made by committees,” he said.

 

So when reaching out to retailers, he said, “don’t waste their time. Come with a good story about who you are, your history, your thoughts on market trends, how you can add value to their product and how you can save them time and money.”

 

Wagner concluded by saying that suppliers must understand their customer – and retailers need to understand suppliers’ brands.

 

U.S. retailers need U.S. mills and garment manufacturers for several reasons, he said, including: replenishment programs; innovation; premium products made well; and a reduced carbon footprint due to reduced transportation.

“And we need customers with jobs who are able to afford our products,” he said.

 

Other speakers

 

Under the theme, “Sustaining the Resurgence of U.S. Textile Manufacturing,” STA and Fiber Buyers members also heard from:

 

• Anthony Tancredi, president of Allenberg Cotton Company, who spoke on cotton trading;

• Dr. Bruce Yandle, professor of Economics Emeritus at Clemson University, who offered an economics overview;

• Auggie Tantillo, president of the National Council of Textile Organizations, who provided an update on the Trans-Pacific Partnership (TPP) agreement and other trade matters;

• Clark S. Gillespy, president, Duke Energy Carolinas, who covered energy policy;

• Ned Monroe, senior vice president, External Relations, National Association of Manufacturers, who went over legislation, the economy and the political landscape; and

• James Webb, a cotton, peanut and corn producer with Harvey Jordan Farms, who gave a Georgia grower’s perspective on cotton issues.