Featured in Fashion Mannuscript 2019 

A Shift in Global Creativity!

No longer the ‘other coast’, the Los Angeles region is now a beacon for designers,

 retailers and global manufacturers

Presently, the biggest “thing” about L.A. is its fashion ‘heat’.

Yes, the region still has the largest cluster for domestic manufacturing facilities (albeit less than there used to be...for various reasons), the U.S.A.’s biggest retail market, the entertainment industry connection, and a vigorous art/cultural scene. That’s led to the growing number of designers proudly saying ‘I am a California designer”.

This sensibility shift to the West Coast has been happening for the past several years – so why does it seem that the fashion media and the financial gurus are just now starting to pay attention? With all the ‘noise’ about the disruption of the century old business model of manufacturer-to-buyer-to consumer, the new mantra of “the right offer for the right consumer in the right channel with the right voice” is in keeping with the type of fashion people want today; in-store and on-line!

New York will always be a corporate home for the monster multi-brand conglomerates and the publishing world, but Los Angeles is currently the eye of the storm for the latest in fashion, food and art.

In 2017, New York’s mayor announced plans to contribute $136 million to the creation of a “Made In New York” campus in Brooklyn to serve as an incubator for local garment production because the NYC garment industry lost 83% of manufacturing jobs in the last 30 years. After that, an alliance of the NY Economic Development Corporation, CFDA and the GDA promised another $51 million toward investments in technology, business development and grants for relocation (source, WWD May 2017). Yet momentum is still weak.

The largest slice of America’s apparel manufacturing is concentrated in Los Angeles, where, according to the latest 2019 Otis Creative Industry Report, over 80,000 people are still employed in the craft of apparel production....and this does not count the ‘other’ uncounted employment due to those new technologies necessary for success.  Niche brands are proliferating and small-batch, vertically integrated, quick-turn production is merrily rolling along; however, large-scale cut-and-sew factories are much harder to find, and there is no government support at the city or state level.

Designers and brand owners realize that they can create a business model from anywhere; the city’s sprawling geography allows for plenty of breathing room, literally and creatively. A transplanted designer said : “Between having palm trees and blue skies and good bookstores and nice galleries, it’s a good place to think over what just happened in Europe or New York and get away from that narrow fashion crowd. The culture of L.A. is open and supportive, not just for a start-up but to commercialize new ideas.” 

Some players see great potential in US garment manufacturing.  How do they compete with off-shore pricing?  There is no elongated complex supply chain that goes through an agent to China or Vietnam, where, by the time less-than-carload product lands at US Customs, it has the equivalent cost of $15 an hour; and yes, that will be the California minimum wage by 2020.

Besides the hip factor, manufacturers and retailers see many good reasons to go west.  As of August 2018, estimates say that Los Angeles County employed 131,800 people directly working in apparel manufacturing, textile mills, and the wholesale business for imported apparel and piece goods (source: NAIC codes, household income data, ’gig’ economy, etc.)   This does not reflect the statistics for the apparel and accessory retailers and their employees.

Retailers from mass market to the luxury world consistently rank L.A. as a top-performing city, and new retail ‘fashion streets’ continue to spring up, with the ‘pop-up’ proliferation everywhere.  While established stretches like Rodeo Drive, Melrose Place and Abbot Kinney Boulevard are still must-sees for brands, there is a resurgence for Robertson Boulevard, Melrose Avenue, Sunset Boulevard, and the Arts District in downtown L.A. 

There certainly are hurdles in the way of Los Angeles becoming the media’s darling as a fashion capital.  The uninspired nature of any Los Angeles Fashion Week is disproportionate to the city’s importance to the retail and wholesale market, and is certainly not representative of the local design and branded talent displayed in the nation’s retail establishments, large and small. 

Just putting the words ‘fashion week’ in the same sentence as ‘Los Angeles’ is the first problem.  Designers don’t want to be forced to show their lines on a runway at the same time, in the same space, one after the other; attempting to emulate other city’s fashion weeks has always been L.A.’s biggest mistake.  Besides, if a ”return-on-investment” is the criteria for success, then existing formulas in New York, Paris and Milan are not working either!

And now.....Los Angeles is a real place to do business;  and not just a set.  Let’s be clear; one of the driving factors is the power of celebrity.  Hollywood and ‘Fashion ‘star power’ creates fashion and consumer interest...not the runway ‘scenes’ of Europe and New York! The economic drivers of American entertainment are now fixated on the opportunity of fashion becoming a real pillar of popular culture. ‘California’ resonates far beyond its borders, and ‘designed in California refers more to inspiration than geography.

March 6, 2019

Ilse Metchek,

President       

California Fashion Association

The California Fashion Association, established 1995 as the ‘voice’ of the California Apparel and Textile industry is a 501(c)(6) industry organization. www.calfashion.org

New Test For Independent Contractors

May 2018  "PROTECT YOURSELF"

Most ‘Contract’ Workers Should Now be Classified as Employees …

A new California High Court mandate!

April 30, 2018.  …..The California Supreme Court reversed a long standing precedent that provided employers with some flexibility in classifying employees as independent contractors versus employees.  Previously, there was some flexibility when determining whether workers should be classified as employees or independent contractors for purposes of California wage orders, and the imposed obligations relating to the minimum wages, maximum hours, and basic working conditions (such as required meal and rest breaks).

Case: Dynamex Operations West, Inc. v. The Superior Court of Los Angeles County, Dynamex offers “on-demand” pickup and delivery services to the public and large business customers. The lawsuit involved two Dynamix delivery drivers, suing on behalf of a class of allegedly similarly situated drivers. The workers filed a complaint against Dynamex alleging that the company had misclassified its delivery drivers as independent contractors rather than employees.

The Court’s ruling effectively adopted the criteria described as the “ABC test.” The “ABC” test is utilized in some jurisdictions and contexts to distinguish employees from independent contractors. This standard’s objective is to create a simpler, clearer test for determining whether the worker is an employee or an independent contractor.

Under the ABC test, the worker is an employee unless the hiring entity (company) establishes each of three factors:

1. that the worker is free from control and direction over performance of the work,
2. that the work provided is outside the usual course of the business for which the work is performed
3. that the worker is customarily engaged in an independently established trade, occupation or business.

Prior to this ruling, California courts used a multi-factored approach, looking at the employer’s control over workers and considers several secondary factors in analyzing a worker’s classification. The ABC test is far stricter than the prior test.  in July 2015, the U.S. Department of Labor issued an Administrator’s Interpretation which concluded that, based on the ABC test, “most workers are employees”

The new ruling presumes that a worker hired by an entity is an employee and places the burden on the employer to establish that the worker is an independent contractor.

If the employer fails to show that the worker satisfies each of the three criteria, the worker should be treated as an employee, not an independent contractor. According to the Court, “The hiring entity’s failure to prove any one of these three prerequisites will be sufficient in itself to establish that the worker is an included employee, rather than an excluded independent contractor, for purposes of the wage order.”

Dynamex drivers were held to be employees even though they provided their own vehicles, paid for all of their transportation expenses among other things.

The Court reasoned:

(i)            that Dynamex could not establish that the drivers performed work outside the usual course of the business as set forth in part (B) above. Dynamex’s entire business was that of a delivery service, unlike other businesses in which the delivery of products is outside the usual course of its business.

(ii)           (ii) Dynamex obtained the customers for its deliveries, sets the rate that the customers would be charged, notified the drivers where to pick up and deliver the packages, and tracked the deliveries.

The Court clarified that a hiring entity cannot satisfy part (B) of the test by merely showing that the worker performs work “physically outside of the employer’s place of business.”

The Court’s ruling raises doubts about existing independent contractor relationships in California, exposes companies to liability, and raises the specter of new wage-hour class actions. Companies with independent contractors in California should immediately reevaluate their independent contractor relationships, adjust as necessary to comply with current law, and evaluate how to ameliorate exposure for prior decisions to classify workers as independent contractors.

Influencers are Stealing Imagery

June 2018  "PROTECT YOURSELF"

....now that Influencers are earning commissions!

          Influencers are Stealing Imagery

Los Angeles-based Nita Batra filed suit in a California federal court this week, alleging that PopSugar “decided to capitalize on the influencers’ social media following by copying and posting thousands of influencers’ Instagram images, as well as their Instagram profile photos and bio line information on its own website without authorization.”

Hundreds of ‘influencers’ may be able to join a new lawsuit filed against PopSugar.

PopSugar, the fashion and celebrity news website, made headlines this spring for allegedly stealing the images of one of the new ‘influencers’, and posting them on its website in furtherance of a “massive infringement” scheme.  

According to her multi-million dollar complaint, Batra, who boasts a following of 215,000 on Instagram, alleges that, in mid-April, PopSugar swiped thousands of influencers’ Instagram imagery to create shoppable pages and individual influencer “subpages” on its own website.

Batra claims that PopSugar also “removed the products’ affiliate links.” Batra has a partnership with content platform/shopping discovery app ‘rewardStyle/LIKEtoKNOW.it.’ This app enables influencers to earn commissions if their followers purchase any of the linked products.

In place of the rewardStyle/LIKEtoKNOW.it affiliate links, PopSugar allegedly inserted its own affiliate links, pointing to ShopStyle, a competing shopping platform that PopSugar previously owned, and was using at the time of the acts alleged.  As a result, PopSugar actively “diverted commissions from the sales of products featured in the influencers’ images to itself … in order to monetize the content for its own benefit.”

“When caught, PopSugar’s co-founder and CEO, Brian Sugar, attempted to minimize PopSugar’s culpability,” Batra’s complaint states, “tweeting on April 17, 2018, that the misappropriated pages were ‘intended for internal use only, but were mistakenly left open, albeit hidden from search engine indexing and social media.’”

                                        

See link for entire article and case study

Protecting Your Brand Is The First Step to Being Successful

The New Order of ‘Shopping the Market’

The New Order of ‘Shopping the Market’
Buyers are now shopping U.S. regional markets for product variety and fashion forward styling!

The road to international buying and selling seems to be paved now through regional markets and industry networks. Retailers are finding that the best way into the U.S. market may be through the discovery of regional preferences, rather than the New York Nerve center.

Regional markets, with temporary leasing deals and special promotions, offer a lucrative toe-hold, especially for international lines. The market groups, such as the Fashion District in Los Angeles, portray themselves as gentler alternative to New York, offering enhanced hospitality, convenience and access. Fashion Market Buildings offer temporary deals, where companies can test markets without committing to a permanent space. Receptions and fashion shows help to introduce them to buyers and sales reps.

Contemporary and international brands, with their distinctive styling, have already been discovered by U.S. buyers. The primary clientele of regional markets are the independent specialty stores, who clamor for lines that set them apart from the competition of the major mall-based retailers and their monthly ‘sales’. Retailers worldwide want direct routes to hot U.S lines to satisfy brand-hungry consumers. Truly, in 2013, retailers (particularly in the U.S.) want constant newness.

Teenage customers are the same all over the world; they want the looks on MTV, in magazines and on the internet. California’s large branded manufacturing sector showcases its strength in juniors, contemporary and denim categories, making it a natural draw for international accounts. Fashion apparel represents the largest manufacturing sector in L.A. and the second largest in California, with annual wholesale volume of more than $25 billion, according to current statistics from the Los Angeles Economic Development Corporation.

Fit, fabric and color differences are apparent in the different market regions. Heavy wools may work for cold climates, but buyers in the Sunbelt regions may never see even the lightest wool. California’s brands show lightweight fabrics, more color, updated styling, and much more variety.

International business has grown significantly for Los Angeles. The Fashion District draws buyers from 34 countries, including Asia, Central, and South America, and works with foreign delegations to bring in more global ‘partners’. The effort has intensified over the years, offering ever more temporary showcases and fashion presentations.

While the potential is undeniable, pitfalls remain. International lines see the U.S. as a pot of gold; they look for the big hit with a large order from major retailers, but do not take the time to establish credibility with independent retailers first. One hurdle they face is the different buying style of U.S. retailers. U.S. buyers, with many choices, initially place relatively small orders with a variety of lines.

Most companies builds their international sales through a network of agents, distributors, and licensing deals, along with e-commerce; also showing at trade shows such as Las Vegas’ MAGIC. Setting up business internationally can be tricky. There are so many issues; sizing, currency, freight, customs, government regulation, trademarks, etc. No one entity can take care of everything; - CFA has a network of people that can.

Part of the mission of the California Fashion Association is to bring international business to California. The CFA membership includes apparel and textile manufacturers, and related services, such as freight forwarders, package developers, marketers, lawyers, accountants, and bankers; all essential to domestic and international retailing.

California Style Doesn't Lend Itself to Easy Definition

Outlook 2013