BREAKFAST WITH THE BOSS: American Apparel & Footwear Association

Kevin Burke – CEO, American Apparel & Footwear Association

Wed July 25, 2012

Key Messages and Notes from Breakfast with Kevin:

• Next time you visit a department store, look at what items are featured in the center of the store. You’ll find that it’s the store’s private label, where they make the highest margins.

• Before the 80s, all the footwear was made in America. Now it’s sourced to countries around the world like China.

• Now, 98% of all clothing is made outside the USA, 40% of which is made in China.

• The US – 5% of the world’s population – wears 25% of the world’s clothes.

• When you give a public presentation, you’re supposed to have butterflies. It means you’re doing it right.

• “You naturally gravitate to doing what you’re good at.”

• “Look to the people above you, and see how they got there.”

• Many factories in China are also part of the AAFA.

• Sometimes legislators are not as informed as we’d like them to be. In fact, when they vote in Congress, many times they have no idea what the vote is about. That is why lobbying is important.

• Charge-backs: when a retailer has bad sales numbers, they can ask the wholesaler to help with margins. If something is wrong with production or delivery, that‘s also on the wholesaler’s bill.

• The hardest part of Kevin’s job is picking the issues most important to the industry. How do you balance what Ralph Lauren wants vs. what The Jones Group wants? How far can you go to please everybody?

• The construction of a garment is a very complex business.

• China wants to develop their own brands for their own people – they are competition but also the customer.

• The US has many duties on some imports that are no longer produced domestically. Everyone agrees the duties should be abolished, but then who will pay for the budget deficit?

• How the textile industry lost: when the apparel companies decided to source off-shore, they did not follow their customer, they did not compete. Vertically integrated “supply-chain cities” in China are hard to compete against.

Notes Compliments of Maggie Jiang


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