Apparel Manufacturing Industry Profile

Companies in this industry manufacture garments made from purchased fabric and from fabric they produce themselves. Major companies include Levi Strauss, PVH, Ralph Lauren, VF Corporation, and Warnaco(all based in the US), along with Armani (Italy) and Youngor Group (China).

Global revenue from apparel manufacturing is about $490 billion, according to MarketLine. China controls more than a third of the world export market. The European Union, Japan, and the US are the largest importers of apparel, together accounting for 90 percent of all imported apparel.

The US apparel manufacturing industry includes about 7,000 companies with combined annual revenue of about $13 billion and is expected to see slow growth in the next two years. Growth will likely be driven by introduction of new product lines and improvements in efficiency via outsourcing and automation.

COMPETITIVE LANDSCAPE

Demand is largely determined by consumer tastes and the comparative costs of manufacture in the US and overseas. The profitability of individual companies depends on efficient operations and the ability to secure contracts with clothing marketers. Small companies can compete effectively with large ones by specializing in a particular type of apparel manufacture. There are few economies of scale in manufacture, because of the high labor content of most apparel. The US industry is fragmented: the 50 largest companies generate less than 40 percent of revenue.

Because of the lower costs to manufacture apparel abroad, the US imports more clothes ...