On July 17th the Wall Street Journal ran an article entitled “How can jeans cost $300?” The writer, Christina Binkley, broke down the cost and margin structure as well as supply chain of True Religion Jeans. The pair of True Religion Jeans in question retail at $300 and are made in the United States.
I was thankful for the article because it comes to my attention frequently when speaking to customers that there isn’t too much thought in to how clothing gets to their local X retailer (J. Crew, H&M, Target fill in any retailer). Unlike food, energy and building where there has been growing awareness for years, not many have been asking questions about clothing. The article is a great read and will give you insight in to how True Religion jeans get to the store and how much things cost. Though there is a significant margin held by the ‘middle man’ even in their supply chain and large executive and marketing budgets, I was a little alarmed about the one sided look at the denim industry.
I wrote to Christina, told her what we do here at SA VA and about our Honest Denim line which is U.S. grown organic cotton, made in America, low impact dyes and washes and retails at $179 but I went beyond and used a far more pertinent example. My question to her was: “How can jeans cost $15.99?”
An average price of Walmart jeans retails at $15.77. Having worked for a garment wholesaler in New York sourcing denim bottoms for the likes of Walmart, Target and more I can tell you that the margin Walmart makes on those jeans is an average of 50%. So, for about $7.77 the following happened in that garments lifecycle:
- Cotton is grown and harvested in country A
- Cotton is transported to Country B
- Cotton is treated with chemicals to purify and spun in to a yarn
- Yarn is spun in to a textiles (possibly at same factory, likely transported to a separate facility)
- Textile is dyed with high impact dyes (possibly at yet another facility if the textile mill is not vertical)
- Textile is shipped to a factory, possibly in Country C
- Textile is cut & sewn in to a garment
- Denim Jeans are washed with high impact washes (they need chemists on staff) and possibly sandblasted or embellished.
- Finished garments are tagged and packed and shipped to port
- Denim jeans are shipped to the United States, cleared through customs and shipped to a distributor
- The distributor will quality control check random boxes and then distribute to a store.
For $7.77, how can any one be paid fairly in this process? There are some important facts about that. According to the Ethical Trading Initiative (ethicaltrade.org) there are 200 million people working in enslaved labor manufacturing in the world today, there are over 20 million children working and over 1,500 people die every day from preventable work related injuries such as sandblasting denim jeans. Beyond the ethical perspective, the apparel industry is a primary polluter of the environment by the use of; harmful textile dyes, washes and process chemicals many of which are improperly disposed of polluting water supplies; transportation and energy use; consumer laundering and dry cleaning; and post consumer disposal of garments in to landfills, over 1 million tons in the US annually.
Something else to consider as we hear the political banter about Main Street vs Wall Street is the economic effect of domestic manufacturing. According to the Business Alliance for Local Living Economies, three times the amount of money spent in an independent, local business stays in the community that it is spent in. If we create manufacturing jobs, those folks spend their money in the local community. If retailers buy from local manufacturers that further expands the reach of the economic sufficiency of a local economy. Creating jobs, the real way, creates prosperity for everyone. Furthering free trade agreements like they did today, the likes of which devastated the struggling industry in the 90’s doesn’t make it easier.
There isn’t an easy answer to any of this. Ceasing the use of all overseas suppliers would devastate the lives of many people but a shift needs to be made. Why can’t there be a global network of local independent apparel economies in which the real connection between culture driven expertise and supply is restored? Where the artisans are treated well and paid fairly and do what they do best and shift some of the cash flow in the apparel industry away from the Wall Street executives and CEO’s and back to the people who make it. It just might be time for people to start asking where their clothing came from.
