Full Text of the Excerpt

JM: Tell me about the challenge -- across this span again, backing up and taking the broad sweep of time again -- presented over time by imports in hosiery. SS: Other than the specific period that I mentioned earlier, about a particular foreign manufacturer trying to buy their way into the pantyhose market, if you will, and pantyhose imports only got as high as ten percent -- that was high enough to change the price structure, but it never did take the volume away -- there really has not been much import competition. Though the Far East, low- wage nation countries -- South Korea, Taiwan, many years ago Japan, though not anymore -- had low priced products. But, there were several things that protected the hosiery industry. They were called natural protections. First of all, hosiery is a small ticket item. Under the textile and apparel industry's protectionism, there were quotas in place. If you were a foreign country that had a limited quota in cotton or wool or nylon products, you'd rather fill up that quota with sixty-dollar sweaters or a three hundred-dollar suits than a two-dollar pair of socks. JM: Because the quota went on unit volume, I guess? SS: Some of them do. Every one of them is different. I'm just using a situation, that if you did have a limitation, you'd rather use it with big-ticket items versus a small ticket item. That was a natural protection. Second of all, through this automation that I talked about -- higher speeds and then computerization -- we've been able to get our manufacturing costs down, and particularly the labor portion of it down. Labor is somewhere between seventeen and eighteen percent on the bottom side to twenty-three to twenty-five percent on the topside. Well, if you've got twenty percent labor in a two dollar product and you save half your labor costs by going to a low wage country, you ain't saved a whole lot. I say that for emphasis not for poor grammar. You've haven't saved much. Then, you add on the transportation costs and the insurance, you've more than made that up by the time it gets here. The third thing is, retailers over this period of time want us to carry the inventory. They don't want any inventory. But, when they want those goods, you ship it. So, with “just in time delivery,” electronic data interchange, all of those kinds of linkages with our retailers, our mills generally -- whether it's socks or sheers -- are shipping in forty-eight hours to receipt of order. You can't do that from Taiwan. Proximity, relationship, low ticket item, et cetera have meant that the retailers have not been able to go out on their own, shop the market and buy goods. They can get the highest quality here at commensurate world prices. Right here in the United States.