New York’s fashion industry fears another shift

BY Emma Kazaryan

After decades of production decline, New York City’s garment industry is undergoing another challenge to stay in business. As non-fashion startups move into the neighborhood because of its prime location and suitable infrastructure, fashion companies are being excluded from the district.

The Garment District, which stretches roughly from West 35th to 42nd Streets between Fifth and Ninth Avenues, is home to over 2,500 fashion companies that employ 21,000 people. The neighborhood, which for almost a century has been the epicenter of fashion for designers, manufacturers and suppliers is now under threat of being scattered around the five boroughs due to increasing rents and the transformation of the area.

“There is a chance that in five to seven years the industry is going to shrink,” said Tina Schenk, the owner of the pattern-making company Werkstatt on West 36th Street. “Some factories whose lease is over, the landlords are renewing it at higher rates and this is becoming a very big concern.”

Schenk, whose rent has doubled since 2008, has four years remaining on a new lease she signed in 2014. Besides paying for her company’s square footage, she has to pay for the common hallways, stairways, bathrooms and elevators, which constitute one third of her monthly rent. She is also responsible for annual real estate taxes and electricity bills.

Schenk fears the growing uncertainty as companies are pushed to move to Brooklyn. “Designers and their teams don’t want to commute to Brooklyn,” said Schenk, who has 95 percent of her clientele, including Jason Wu, Coach and Maiyet, located in Manhattan.

“We are here because it is convenient,” said Peter Chan, the managing partner at Sunrise Studio, a sample making company, whose main client, Calvin Klein, is a block away. Chan and his partner Terri Huang established the company in 2008 and since had their rent increased by 30 percent. Although their lease expires next year, they are optimistic about staying in the Garment District. “If that will not happen, we will look for another space in the neighborhood,” said Chan.

Although Brooklyn offers affordable rent and spacious workplaces in Sunset Park, Industry City and the Brooklyn Navy Yard, many companies do not find it an attractive option, because of the lack of sustainable infrastructure to support the industry.

“We moved to Manhattan in 2014, because we needed a showroom and studio that was easily accessible to editors and stylists,” said Brad Schmidt, a co-owner of Cadet, a menswear design company. “From the resource perspective, Brooklyn doesn’t have enough suppliers.”

Schmidt and Raul Arevalo established Cadet in 2011 in Bushwick, Brooklyn, where they ran the whole manufacturing process, from design to production. Three years after owning the factory, they sold their production facility and moved to West 38th Street, sacrificing space for location. “We reduced our rent by reducing space by half,” said Schmidt.

“There is not enough ecosystem in [Brooklyn],” said Amy Fong, the founder of Design Incubator on West 38th Street, who has been in the garment district over 30 years. She admits that the neighborhood has changed a lot during that time: Her rent has gone up 150 percent,  from $12 to $30 per square foot. “When we moved to our building we used to have windows facing west, now we have a brick wall from the newly constructed condominium building.”

According to the New York Department of City Planning, the Special Garment Center District was created in 1987 to preserve apparel production and wholesale east of Eighth Avenue, where hotels are not permitted.

The Garment District Alliance, a non-profit organization created to improve the quality of life and economic development in the neighborhood, released an annual report that showed there was only one hotel in the district in 1996 compared to 30 fully operating ones by 2013. “There used to be only factories in the garment district, now there are more hotel rooms than factories,” said Fong.

In the 1960s, New York City’s Garment District was producing 95 percent of the clothing sold in the United States. Since then,  production has declined to 3 percent. However, New York City is still the country’s largest fashion retail market and considered the world’s fashion capital, generating $10.9 billion in total wages and $2 billion in tax revenue, according to New York City Economic Development Corporation.

“The companies are going to migrate; it’s not going to be a [economic] loss, but a shift per se,” said Michael Londrigan, the dean of academic affairs at Laboratory Institute of Merchandising College, near Bryant Park. “The fashion industry has major impact on job creation. However, the industry is shrinking—it might have an affect in a short term.”

Historically immigrants have been the major labor force in the garment industry, coming to jobs with the required skills. But now the industry is experiencing a lack of skilled workers in manufacturing. “There are no vocational schools that are set up to train people—it becomes the responsibility of the employer,” said Londrigan.

In recent years NYCEDC and the Council of Fashion Designers of America, a non-profit, implemented several initiatives to support and help the fashion industry by offering grant programs to improve machinery, workforce and software. “This year we added the relocation cost to our grant,” said Erin Kent, a program manager at CFDA. “The overall goal is to move the production to Brooklyn and city is very committed by making rents very affordable.”

While many manufacturers feel skeptical about the shift in the industry, city officials and initiative organizers believe that with the advancement and implementation of new technologies in digital manufacturing, distance will not be an obstacle in fashion production.

“It will be a different garment district,” said Debera Johnson, the executive director of Brooklyn Fashion + Design Accelerator, an initiative with over $2 million in funding, created by Pratt Institute to bring designers, manufacturers and technologists to Brooklyn. The initiative works on developing new technologies in digital manufacturing. “It will be the whole new world with fully digital process that can be developed in Brooklyn,” said Johnson.

Chan admits that after receiving a grant from the Fashion Manufacturing Initiative they could renew their machinery, which made work faster and sufficient, but he still sees an advantage to being in the heart of New York’s fashion district. “Whoever is stronger will survive,” said Chan.

This entry was posted on Wednesday, October 21st, 2015 at 9:59 pm. It is filed under Business, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed.