Finding a new pattern for success
Scrappy Quebec clothing manufacturers thrive in niches even as needle trade unravels
MARY LAMEY - The Gazette
June 4, 2005
Not every father-daughter pair would be as comfortable admiring ladies underthings together as Eve and Camille Grenier are. But lingerie is something of a family passion at C.J. Grenier Ltee, a business born in the 19th century and still going strong in the 21st.
The Greniers are scrappy competitors in a manufacturing sector fallen on hard times.
The rise of the loonie has made our clothing less competitively priced in the international market, and the lifting of the last trade quotas on Jan. 1 has opened the floodgates to a deluge of inexpensive imports from the developing world, especially China. In the first three months of this year, Chinese imports to Canada rose 36 per cent. Bra imports alone are up 125 per cent.
Domestic firms with deep roots - hosiery makers, knitters, denim and sleepwear manufacturers - are going out of business or abandoning local manufacturing to become importers.
According to Statistics Canada, 23,000 clothing-manufacturing jobs have disappeared since 2002. Quebec, North America's second-largest garment hub, has been hard hit by the changes.
As discouraging as the picture might seem, Quebec has its share of survivors. Count Grenier among them.
"One of the big advantages we have is that we are close to our customers," Eve Grenier said. "When Mme So-and-So who owns a boutique calls to say you need to add a quarter of an inch to a bra strap, you'd better listen."
She walked away from a bankruptcy-law practice 15 years ago to join the family business and is the fourth generation to run C.J. Grenier.
Corsetiere Camille Jerome Grenier opened his first small workshop in the family home near the old Dupuis Freres department store in central Montreal. It was 1860. Over the years, his family has rolled with the times, as the unyielding whalebone corset gave way to the Flex-C-Back, a revolutionary elasticized corset that let its wearer bend and move.
The Greniers have made it all - chest-flattening teddies from the flapper age to the conical bras of the 1940s and the inflatable bras of the Jayne Mansfield 1950s.
"In the 1960s, when women started burning their bras, that's when we got into swimwear," said Camille Grenier, Eve's father, smiling slyly.
The sexual revolution of the 1970s brought the Love Latch, a front-closing brassiere that could be opened with the flick of two fingers. The 1980s was all about bustiers, thanks to Madonna, and the 1990s meant the return of the corset, thanks to Nicole Kidman in Moulin Rouge.
"We've been living off the fat of the land for a long, long time," Grenier pere said with a twinkle.
The company is a compact operation that employs 200, about the same number it had 50 years ago. It continues to design and manufacture at its headquarters on a side street in Plateau Mont Royal, even though the lingerie makers who once shared the neighbourhood have given way to condominium lofts.
The firm also operates a factory in St. Jean sur Richelieu, where it handles every step of production, from molding bra cups to spinning elastic. It has sales representatives across Canada and the United States.
Grenier emphasizes fit, quality and customer service. Every Costco and Wal-Mart in the country has cut-rate deals on imports. Grenier knows she can't compete on volume or price and so she leaves the low-margin end of the business to the importers.
Instead, the company focuses on a network of specialty-boutique clients and national chains that sell Grenier designs under their own private labels. Grenier keeps things lean and can tweak its designs on the fly. A truck leaves the St. Jean plant for Montreal every day at 7 a.m., meaning the company can restock retail racks in a hurry. Forty per cent of its production is shipped south of the border.
"New York is an hour away. If there's a problem, my customers can pick up the phone and talk to me," Grenier said.
Try doing that when working with a Chinese factory, where an order must be placed two to three months in advance. The goods then spend a month crossing the Pacific by boat and another week clearing the Port of Vancouver before being placed on a train to make the cross-country trek. Good luck if there's a production glitch.
"I can take a product from the design stage and have it on store shelves in seven weeks," Eve Grenier said. "The challenge is to persuade the customer to see that as value added."
There is value in proximity, agreed Elliot Lifson, vice-chairperson of Peerless Clothing and president of the Canadian Apparel Federation, an industry group helping its members navigate the choppy waters of change.
"We have to leverage our proximity to our biggest customer. As long as the Chinese don't figure out a way to move closer to New York, we'll always have that advantage," he said.
The United States remains the largest export market for Canadian apparel, with 43 per cent of the clothing manufactured here shipped there. Garment makers, who pay between $8 and $15 an hour, can't compete with China on price. But they can compete by offering better customer service, quicker turnaround times and great marketing.
Canada exported $2.5 billion worth of clothing to the United States last year, but accounts for only one per cent of that country's clothing imports. Doubling that share, while a challenge, is within reach, Lifson said.
Still, Grenier worries about things that are beyond her control. "In our business, a very intimate business, if you change a component in your product, the customer knows it right away," she said. "You have to count on consistency from your suppliers."
With Canadian textile companies also hit hard by the lifting of trade barriers and dropping like flies, that consistency is hard to maintain.
"I worry, because we're seeing an entire supply chain disappear. The technology, the infrastructure, the skilled workers. Once they go, it will be very hard to bring them back," she said.
Not everyone sees things in such stark light. Robert Kirke, executive director of the Canadian Apparel Federation, acknowledges the industry is changing, but he thinks there is a lot of upside to that change.
"Under global free trade, there's no room for companies who are just OK," Kirke said. "If you're in a low end of the market or the middle of the market, you're going to get killed because countries like China or Bangladesh will beat you at that game."
Instead, Canadian manufacturers who want to succeed are picking out niches. They become experts at a building global brands, like Parasuco Jeans, or operate with high efficiency, like Peerless Clothing. Some invest heavily in technology that allows them to track inventory and keep the flow of goods moving, like Doris Hosiery. The tradeoff is fewer but better jobs here at home.
"The question is, how do you define success? Is a company successful because it sells a lot of product, or is it successful because it employs a lot of people?" Kirke asked.
He pointed to Montreal's UTEX Fashion Group as one model of what the modern Canadian apparel company should be.
"UTEX is among the best outerwear developers in the world. Their know-how, the research and development, the design and sales are done here in Montreal. They make coats for designers like Perry Ellis, Jones New York and Hilary Radley. Those are the kinds of jobs we should be focusing on. Let China do the sewing," Kirke said.
Talk like that frustrates Lina Aristeo, Quebec director of UNITE HERE, a union representing 40,000 local garment and textile workers.
To her, too many industry spokespeople are in a conflict of interest because they import clothing and, thus, benefit from free trade. Aristeo thinks Canada should follow the lead of the United States, Peru, Argentina, Turkey and the European Union, which have begun steps to limit Chinese imports.
"When you see the U.S., a country that doesn't generally listen to labour, putting a limit on imports, you wonder why our government doesn't do the same," Aristeo said. She wants the government to impose so-called "safeguard" measures that would limit the growth of Chinese imports to 7.5 per cent a year over three years.
She is the child and grandchild of garment workers, so she knows the effect free trade is having on workers at the bottom of the production chain. "It's not enough to say we're not afraid to compete with China," Aristeo said. "Talk to the workers, they are very afraid. Instead of watching an industry change over a decade or 20 years, we're watching it come apart all at once."
Hermann Gruenwald, president of Reliable Hosiery Mills Inc., sees the industry's problems and solutions from another perspective.
Government, manufacturers and the labour unions were too slow to recognize the challenges of the global economy, he said. "The government should have been offering interest-free loans a decade ago so that the strong companies could invest in technology, especially in automation."
Reliable is one of only a handful of Canadian hosiery manufacturers still standing. Gruenwald's plants in Montreal and St. Jean have survived in part because he has been able to become a supplier to Wal-Mart and other large retailers.
According to Gruenwald, Wal-Mart has said in meetings with suppliers like him that it would like to do more business with Canadian manufacturers and would help them become more competitive. "In my business, if you automate, you can compete with China," he said.
International Trade Minister Jim Peterson has said he is monitoring the import situation closely but is not yet convinced it requires action.
He has has acknowledged soaring Chinese imports, but said that they have come at the expense of other exporters. While Chinese imports to Canada during the first three months of the year were up 36 per cent, to $604 million, overall imports rose only 7.8 per cent. The real losers are countries poorer and less organized than China, he said.
For Eve Grenier, whose sewing-room workers are like members of an extended family, the Chinese threat is always at the back of her mind. "We take it one day at a time and focus, focus, focus on the product and the customer. That's our key to survival. So far, it's working."
There are winners
Innovation is the key to survival for garment manufacturers. Here's how some of them have done it:
UTEX Fashion Group
Founded in 1944 by brothers Irving and Harry Gurberg as Utility Textile Industries, a maker of western-style sports shirts, the company has evolved into a premier maker of men's wear and outerwear for men and women for designers like Perry Ellis and Hilary Radley. At its peak, the company employed as many as 1,200 at a factory in Victoriaville.
In the 1970s, UTEX was among the first clothing companies in Canada to begin manufacturing in China. Today, it employs
between 100 and 200 people in Montreal, depending on the season. "We try to be as lean as we possibly can be," said Marian Gurberg, the company's vice-president.
Claudel Lingerie Inc.
Like many of Canada's lingerie makers, Claudel is feeling pressure from China. The company moved the last of its manufacturing operations offshore when the final trade barriers were lifted on Jan. 1. The Montreal headquarters now focuses on design, sales, merchandising and shipping. The company sells its creations through a chain of 30 Lilianne lingerie boutiques.
Claudel also has a partnership arrangement with several large retailers, placing its clothes on consignment. This reduces the buyer's financial risk, but also means Claudel isn't paid until the garment is sold.
Peerless Clothing
Alvin Segal, chairperson and CEO of Peerless Clothing, has always put his faith in technology and training.
When the Free Trade Agreement opened the U.S. market to Canadian manufacturers in 1989, Segal seized the chance. He mortgaged his home to finance construction of a 500,000-square-foot factory on Pie IX Blvd.
It is the largest and most efficient wool-suit facility in North America, turning out as many as 30,000 fine tailored suits and 40,000 pairs of trousers each week. His clients include Ralph Lauren, Sean John, FUBU and Calvin Klein.
His 3,000 Montreal workers, mostly recent immigrants, are offered paid on-the-job training and language lessons.
"Any piece of machinery you see here, they also have in China," Segal said. "Our advantage is location."
Golden Brand Clothing (Canada) Ltd.
The manufacturing arm of Moores Clothing for Men has been making suits, jackets and pants in Montreal for more than 40 years.
At one time, the company employed 1,100, though that number has dwindled to 850, with sewing jobs moving offshore.
The company continues to make its best-selling basic suit - retail price $239.99 - in Montreal. The suit represents as much as 25 per cent of Moores's sales and so the company can't afford lengthy restocking delays, president
Pat DeMarco said. "You've got to be able to turn that item around quickly."
Reliable Hosiery Mills Inc.
Founded in 1959, this maker of pantyhose, tights and knee-high stockings has survived by investing heavily in automation.
"In the beginning, we needed 45 workers to turn out 500 dozen pairs of pantyhose. With automation, we could turn out 50,000 dozen pairs using only 200 workers," said president Hermann Gruenwald.
There were 100 Canadian hosiery companies when he started, now there are fewer than five.
"I'm here because I have always reinvested my profits to make the operation better," Gruenwald said.
For more information, contact:
Howard Barrett, Director
Marketing Initiatives
Tel: (514) 271-0800
markinit@look.ca
