MELISSA BLOCK, HOST:
We've been reporting this week on the world of fast fashion, companies that sell affordable clothes and are constantly changing their stock to bring you in the door again and again. In fast fashion, two based companies based in Los Angeles loom large. American Apparel makes clothes in-house and boasts that everything it sells is made in the USA. Forever 21 subcontracts and uses factories all over the world.
NPR's Amy Walters asks if it's possible to make clothes in the U.S. and still be profitable.
AMY WALTERS, BYLINE: Let me start by introducing you to Dov Charney, founder and CEO of American Apparel.
DOV CHARNEY: I knew at a very early age, in elementary school, that, you know, I was going to rub some people the wrong way.
WALTERS: Charney is 44, Canadian-American, and he has a reputation for near-naked models , harassment suits - sexual and otherwise - and some serious trouble with Immigration and Customs Enforcement that pushed him to lay off over a third of his staff. And he boasts an entirely made in the USA brand.
Do Won Chang, founder and CEO of Forever 21, is Korean-American, 58 and devoutly Christian. Chang also has his share of legal trouble, though - years of worker disputes over labor conditions and charges of design theft. Here he is interviewed by CNN.
(SOUNDBITE OF CNN INTERVIEW)
UNIDENTIFIED WOMAN: So you had no interest in fashion, no interest in retail, you just got into the business because you wanted to make money?
DO WON CHANG: Yes.
WALTERS: And he has, relying heavily on manufacturing overseas. Chang is projecting $4 billion in sales this year. American Apparel, on the other hand, expects profits around $650 million - with an M - and this is expected to be a very good year for them. Maybe Chang's just a more successful businessman, but its hard to resist the question: Does it actually make sense, financially, to make clothes in America?
CHARNEY: If American Apparel was not made in USA, we would not exist today.
WALTERS: According to Dov Charney, it does. He doesn't pretend to be Forever 21, but he's built and run a successful business, starting with T-shirts.
CHARNEY: It doesn't make sense to drive all the way to Vietnam to pick up a T-shirt.
WALTERS: Even by boat it takes at least a month to get T-shirts shipped in. For Charney, that's too long. So, instead of Vietnam, Charney drives here...
(SOUNDBITE OF TRAFFIC)
WALTERS: ...to the seven-story American Apparel headquarters in downtown LA.
From his office on the top floor, Charney and his staff figure out what's selling well and quickly let the sewing managers know - they're only a floor away. That means the supply has a much better chance of matching demand.
The American Apparel factory is so nimble, it can get 1,000 T-shirts out the door in a day. Remember that: 1,000 T-shirts.
Now lets go back to Forever 21 for a minute. Linda Chang is a daughter of Forever 21's founder and CEO, Do Won Chang. And she - speaking for her father - applauds American Apparel's vertical integration; it's just economic speak for doing everything A to Z, in-house. But Chang explains Forever 21 is different from American Apparel. Their prices are lower and they offer a wider range of garments and styles.
LINDA CHANG: And we use a combination of overseas and local factories to deliver this to our customers.
WALTERS: Why can this only be achieved by manufacturing overseas?
FRANK BOBER: I'll give you the answer to that.
WALTERS: That's Frank Bober, the CEO of Style Site. He keeps fashion companies abreast of trends. Bober has been in the industry for a long time. Long enough to know the difference between knitwear - that's T-shirts, leggings, sweatshirts - and wovens, like dress shirts, blazers, jeans. That, he says, makes all the difference.
BOBER: Knitwear is the only area, 'cause it's so machine driven, that can actually still be made profitably in the U.S.
(SOUNDBITE OF MACHINERY)
WALTERS: Back at the American Apparel factory, you can see why.
EMILY NERAD: The fabric coming off of this machine over here is like tubular fabric.
WALTERS: Emily Nerad, my tour guide, isn't flaunting her cool Southern California vocabulary. The fabric actually comes out shaped like a tube.
NERAD: You'll see, if you took at our T-shirts, a lot of them don't have a seam or they only have one seam. It's because that fabric is, like, already in a tube and then, like, the sleeves and the finishing are sewn on.
(SOUNDBITE OF MACHINERY)
WALTERS: Remember American Apparel can make 1,000 T-shirts a day? That's because it takes less work. The maximum number of dress shirts they can make is a hundred. Sweaters, they subcontract. Bober explains.
BOBER: When you start to get into a women's blazer, as an example, or a cashmere sweater - full fashion cashmere sweater - you just don't have the hands.
WALTERS: American Apparel used to make women's blazers but they stopped. Their secret to profitability is simply more knitwear, meaning more machines, fewer hands. But Dov Charney is expanding his American Apparel product line.
CHARNEY: I've already proven that that's possible.
WALTERS: He has plans for made in the USA military uniforms, doctors' scrubs, hospital gowns. And he has a brand new $5 million warehouse and plans to fill it. But how?
CHARNEY: There could be some products that could be made elsewhere, anywhere in the world and it may come a time when my view of America may include Mexico City or Tokyo or Beijing or Jakarta.
WALTERS: Well, that might be one way to do it, but Charney's view of America is likely a lot more flexible than his customers. Amy Walters, NPR News. Transcript provided by NPR, Copyright NPR.