It isn't falling hemlines but rising prices that have many Seventh Avenue designers and retailers on edge for next fall.
As a result of a recent, sudden crackdown on clothing imports from Hong Kong, Taiwan and Korea, several top manufacturers are predicting price increases of 20 percent higher than last year. Some say the increases could be even double last year's.
"It has created a panic not only here but in Hong Kong," says Albert Nipon, chairman of what is often referred to as the largest designer dress business. Nipon manufactures both here and "offshore," Seventh Avenue lingo for out of the country. "Retailers are used to increases of 5 to 10 percent each year," says Nipon. But he fears for the stores, and consumers, if prices go up as much as 20 percent, which he believes is possible.
"It has created a furor," says Jerry Shaw, of the Miss O division of Oscar de la Renta and head of the New York Fashion Council, which is made up of 170 manufacturers. Many of them, like Shaw, were totally surprised by the crackdown on imports, and were particularly upset by the ban on dresses in synthetic fabrics and wool skirts.
"It's a pain in the a--," says Stuart Kreisler, president of Ralph Lauren Womens Wear, who claims that the effect on his current business is minor. "Only 15,000 dresses are affected by the ban ," he says. "But I'm afraid for the future."
Manufacturers say they also fear for the quality of their merchandise if they are forced to make their clothing here. Says the vice president of a prestigious sportswear company who has been manufacturing in the Far East for five years, "We could do some manufacturing here, but not all. We wouldn't get the same consistent quality."
Stores, too, expect to feel the pinch with delayed deliveries as well as price increases. Woodward & Lothrop already has most of its imports for fall, store officials say, but the current import ban could affect those shopping for clothes for the holidays. James Wells, vice president for marketing, says that if the situation continues, "we could see price increases of 25 to 30 percent." What's more, he says, it is possible that the store will not get delivery on as much as 30 percent of their holiday fashions.
The import ban, says Edward Gottfried, deputy director of the office of textiles and apparel at the Commerce Department, was based on a sudden surge in clothing imports from Hong Kong, Taiwan and Korea. It stems from a promise President Reagan made to the textile and apparel industry before his election and several times since and was implemented by the Commerce Department. "That import growth would be related to domestic consumption," says Gottfried, who says clothing imports got out of hand in the early part of this year. "Imports of textiles and apparel during the first four months of this year increased 22 percent over the year before," he said. "It is as high a growth rate as we have had."
The clothing industry is facing the same problems of other industries, namely cars and shoes, which claim they can produce better quality and lower-priced items out of the country. And the local manufacturers have responded in the same way. In the last year, there was a decrease of 15,000 jobs in the textile industry, says Mark Goodin, an aide to Sen. Strom Thurmond (R-S.C.). "The predominant factor in this is imports," he said.
"It isn't that most of us wouldn't prefer to manufacture here. It is just that we can't get what we need here," says Shaw.
Bernard Chaus, who imports almost 99 percent of his sportswear and dresses, says he was forced to start importing seven years ago to get the consistent quality of fabric and workmanship as well as a competitive price. Chaus says it could cost double to get the same quality for items manufactured here compared with work done in the Far East. He calls the current cut in imports "a total disregard for the total population of working women."
Chaus takes exception to the suggestion by Gottfried that importers are benefiting from extra large markups on clothes made cheaply in the Far East. Quite the opposite, he says. "We are taking a shorter smaller markup than ever before and yet our gross margin dollars earnings have never been stronger. That's because we can offer the consumer better values and she appreciates it," he says. Some items would have to sell for twice their imported price if they were American-made, figures Chaus.
Manufacturers caught with merchandise in the works that they won't be able to deliver are smarting over the way the ban was imposed as much as the final result. The Commerce Department used a mechanism known as a "call," which immediately halts certain imports without any prior warning. "It looks like a railroad job. We're the last to hear of it," says Shaw, who said he was informed of the move by his Hong Kong agent. "Let's face it. It is an election year," says another irate importer. "And we're the scapegoats."
Currently, there's a mad scramble to find other places to produce clothes. Says Albert Nipon: "Now we've got to be creative in more ways than designing clothes."