Posted September 16 2014
Part 3
By Devin Steele
BELMONT, N.C. – During the Southern Textile Association’s annual Summer Marketing Forum here recently, representatives of three brand owners offered a glimpse into their companies’ made in the USA strategies.
Dr. Brian Hamilton, textiles and materials engineer at New Balance Athletic Shoe, Inc., rounded out the trio that also included leaders from Under Armour and PVH Corp. (featured previously). Hamilton, based at the company’s Lawrence, Mass., office, said New Balance is the only U.S. shoe manufacturer with domestic production and noted that changes to the Berry Amendment would help strengthen the company’s commitment to U.S. manufacturing.
“(Domestic manufacturing) is what sets us apart in the world of athletic footwear,” said Hamilton, a graduate of N.C. State’s College of Textiles, during the event at Gaston College’s Textile Technology Center-Kimbrell Campus. “(New Balance Chairman) Jim Davis is a strong advocate for made in America, so we’re always going to make shoes here.”
To qualify for a made in the USA label, shoes must be comprised of at least 70 percent American-made materials, he said. The company uses domestic suppliers for a range of materials, including leathers (synthetic and genuine), meshes, linings, laces, foams, reflectives, molded parts, thread, hangtags, eyelets and more, Hamilton said.
A 108-year-old privately held company based in Boston, New Balance has three production facilities in Maine and two in Massachusetts, along with a sixth plant in England that serves the European market. About 20 percent of the company’s shoes are manufacturing in the U.S. Heading the firm’s U.S.-made activities is an “Enduring Purpose” department that includes pattern makers, designers, purchasing agents and developers, he said.
WHAT'S AFOOT?
New Balance rep discusses sourcing for U.S. footwear production
STA Summer Marketing Forum
New Balance aims to benefit from a recent Department of Defense commitment to require that athletic footwear purchased by the U.S. military be made in America as part of the Berry Amendment. Previously, an exception was made for athletic shoes due to a lack of domestic production. New Balance has led a charge to get this rule changed and, if enacted, promises to be a great opportunity for U.S. footwear makers and suppliers. The measure would take effect only once the Pentagon certifies there are two suppliers capable of producing shoes compliant with Berry Amendment requirements. It would then need to be included in the final version of this year’s defense authorization bill.
“We’re ready – we have a shoe that’s 100 percent made in the USA,” Hamilton said. “This rule might bring more athletic footwear manufacturing to the States as companies open factories to meet the Berry Amendment.”
Challenges and trends
Hamilton also mentioned the challenges of using U.S. suppliers vs. Asian suppliers. For one, he said, U.S.-made items are more expensive. Two, Asian suppliers generally have more inventory on hand. And minimum order quantities for samples, dye lots and production tend to be higher in the U.S., he added.
But U.S. suppliers do have some positives on their side, Hamilton added. Instant communication, lead times and proximity are plusses, in addition to the fact that less competition exists, he said. The quality produced by U.S. suppliers also is typically better. And the 70 percent made in the USA content requirement works in favor of the U.S., he noted.
Hamilton also pointed out a few trends and changes that are affecting business, including the rising demand for made in the U.S. products.
“We’ve seen a lot of made in the USA companies looking to team up with us,” he said. “We don’t try to make a made in the USA version of the shoes we’re making overseas. We want to make shoes of high value that sell from $130 to $350 a pair. We use the best materials regardless of the labor involved, so we get the best craftsmanship and quality possible.
“What’s somewhat surprising,” he added, “is that the popularity of made in the USA is good here, but if you go to a country such as Japan, they love made in the USA shoes even more.”
New Balance also has become more involved in making customized shoes at its Maine factory, he said.
“And that’s something else nobody else can do like we do,” he said. “If you order a custom-made shoe from another company, their facility is overseas and it takes awhile to get it. We can ours get to you the next day.”
The company also has been experimenting with new materials such as digitally printed camouflage along with canvas and denim, he added.
“A lot of our designs are being inspired by the other side of fashion and that opens the door to new suppliers that we’ve never used before,” he said.
And while sustainability is big in the industry and at New Balance, having sustainably made shoes that are domestically produced isn’t a deal-breaker for consumers, he said. “Our customer doesn’t seem to want both made in the USA and sustainability,” he said. “But companywide, we do want everything we do to get greener and greener.”
Other speakers
In addition to the three brand representatives, STA members heard presentations from Bill Jasper, chairman & CEO of Unifi, Inc., who updated members on the status of the Trans-Pacific Partnership (TPP); Dr. Jim Kleckley, director of the Bureau of Business Research at East Carolina’s College of Business, who gave an economic outlook; Lewis Gossett, president & CEO of the South Carolina Manufacturers Alliance (SCMA); and Dr. Patricia Mitchell, assistant secretary of Rural Development at the North Carolina Dept. of Commerce.