Franco Apparel Group: Wear House
Retail
Written by John Zorabedian   
Thursday, 01 May 2008
Franco Apparel Group: Wear House - American Executive - RedCoat Publishing
Ike Franco tells us how this importer of childrenswear works with retailers and offshore manufacturers.
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The offshoring of textile manufacturing dramatically changed the nature of the clothing business in the 1980s, and concerns over labor practices abroad in the industry in the 1990s put clothing importers through the wringer. As an importer of children’s athletic wear and other licensed children’s apparel, New York-based Franco Apparel Group must negotiate partnerships with both Asian manufacturers and domestic retailers to keep its business growing.

Franco Apparel Group: Wear House - American Executive - RedCoat Publishing
Ike Franco, CEO
Ike Franco, CEO of Franco Apparel, said his company has grown into a multi-million-dollar business through established operations abroad, as well as diversification of product categories, private label programs, and nationally recognized brands that span across all channels of distribution. This diversification enables Franco to establish and maintain strong partnerships with every type of retailer—department stores, mass retailers, warehouse clubs, sporting goods stores, sports stadium shops, and specialty retail shops. “The bottom line is that we are a diversified operation with a different business model for each brand we manage,” Franco said.

Franco, who founded the company in 1987, got his education in the apparel business by working for his brother’s domestic factory. “I grew up in my brother’s factory and got the best education I could ask for to be in my business today as I learned how the product was made,” Franco said. “When you understand the manufacturing processes, you are better equipped to sell the product and communicate how and why your product differentiates from the competition.”

Today, much of the industry is based in China and elsewhere in the Far East, where labor is far less expensive. To ensure that factory workers are treated well, retailers, licensors of branded products, and manufacturers alike have initiated a uniform industry standard for legal and social compliance certification. This process ensures that before Franco Apparel will procure an order from a factory, the factory is certified and passed an audited inspection from an accredited third party.

“Before we determine to contract a factory to manufacture our products, we go through an extensive factory evaluation, including an evaluation of the factory’s personnel,” Franco said. “The brands require a lot of detail to be incorporated into the construction of the product, so without proper training, the factory will not be able to manufacture the product in conformity with the standards required by the brands we manage.”

Diverse lines
Franco’s business strategy is to continue to diversify his company’s offerings, becoming a one-stop shop for retailers in multiple product categories. An improved ability to meet his customers’ needs, he said, requires seeking partnerships and opportunities with manufacturers to control price while maintaining quality.

In the end, the business is about long-standing relationships. “Most importantly, we have to be consistent for our retailers with quality, delivery, and price,” Franco said. “Each business is distinct and different. We have to work with each retailer to find out what they are missing in product offerings to provide a need for them to want to buy from us—because each retailer operates differently. They each have their own identity.”

The company’s relationship management extends to the manufacturers in Asia because delivering a product on time is very important. “A lot of companies deliver late, or they deliver on time with a product that is not the right quality,” Franco said. “You have to have the whole package; that is why we control the process of approving every component of the garment and test every style with third-party accredited testing facilities.”

Due to the weak US dollar, exchange rates are not favorable for US importers. Franco said he has pressed his manufacturing partners to ride out the US economic woes. “This is affecting us and the entire US import business in a negative way,” Franco said. “There’s been pushback from the Far East, China especially. We have to rely on our long-term business relationships and ask them to honor our programs at competitive prices for the US market.”

Franco said he appeals to his partners to engage the company with a sense of fair play. He asks that they try to remember that Franco uses their production capacity year round. If that doesn’t work, there are other manufacturers who will snap up Franco Apparel’s business due to the esteem the company holds overseas. “Factories are either true partners or not,” Franco said. “We are not dependent on any one factory for this reason alone.”
 
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