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Client News Blog

As Trump Looks Inward, Luxury Eyes Los Angeles Manufacturing

Adrian C.

BY LAUREN SHERMAN

Monique Lhuillier's factory in Vernon, LA | Source: Courtesy

Monique Lhuillier's factory in Vernon, LA | Source: Courtesy

SAN DIMAS, United States — More than 5,000 miles from the storied ateliers of Paris and about 25 miles east of the City of Los Angeles, in the suburb of San Dimas, Louis Vuitton is making handbags embossed with a “Made in U.S.A.” label. The facility sits in a well-manicured office park; the kind that might just as easily house a technology or financial services firm. As the 3pm shift comes to a close, employees swing through the Louis Vuitton-labeled doors, some still donning the LV-brown smocks worn as they sit at sewing machines and worktables.

The factory’s output — which, over the years, has included a variety of handbags ranging from the “Delightful” carryall to the popular “Speedy” bandoulière — can be found in Louis Vuitton stores, where “Made in U.S.A.” labels are mixed in with those imprinted with other countries of origin, including France, Spain and Italy. (Luggage is also sent to San Dimas for repairs.)

Louis Vuitton could not be reached for comment before press time and declined a request to tour the facilities last year. However, their existence, once only quietly discussed, has made headlines in recent weeks after the topic of the San Dimas factory was raised during a high-profile meeting between LVMH chief executive Bernard Arnault and US President Donald J. Trump in the days before his inauguration.

After the meeting, Arnault underscored the importance of the facility and indicated an eagerness to build more like it in the United States — in Texas or North Carolina — where the new administration is trying to create manufacturing jobs.

In his first days in office, President Trump has laid out a protectionist policy aimed at preserving American manufacturing jobs, signing an order to withdraw from the Trans Pacific Partnership (TPP) and detailing plans to renegotiate the North American Free Trade Agreement (NAFTA). Meanwhile, Taiwanese technology company (and Apple’s biggest manufacturing partner) Foxconn announced that it is considering a $7 billion investment to manufacture flat-panel screens in the US, potentially creating of thousands of jobs along the way.

But as crucial it is for multinational conglomerates like LVMH to play ball with Trump, it still may come as a surprise to some that a brand like Louis Vuitton has been manufacturing products for years in Los Angeles County, even if having local production increases speed-to-market. The area is well-regarded for its denim manufacturing, but not the kind of fine craftsmanship required for more complex garments or luxury leather goods.

Indeed, while luxury brands have long manufactured goods all over the world, there is a certain romance — and respect — that comes with making things in Europe, whether it’s a couture gown stitched in Paris, or a pair of shoes moulded in Florence. Yet Louis Vuitton’s production presence on the West Coast of the US shines light on a growing opportunity in a region where labels are finding new reasons to manufacture luxury-level goods in ways that echo the workshops of Europe.

“There’s definitely a skilled workforce, and factories that want to grow,” says Krisztina "Z" Holly, founder of Make It in LA, an initiative backed by mayor Eric Garcetti. “Part of the challenge is growing… and continuing to fuel the workforce.”

“It’s not just about jeans and t-shirts anymore,” says Katherine Ross, a fashion industry veteran and former senior vice president of public relations and communications for LVMH, who moved to Los Angeles a decade ago and now consults for upstart brands. “I do see the opportunity to encourage more production here; to push, to train, to make the quality better all the time. People in Los Angeles want to figure that out.”

It’s not just about jeans and t-shirts anymore. I do see the opportunity to encourage more production here; to push, to train, to make the quality better.
While the film industry is what makes Los Angeles a “company town,” manufacturing — and fashion manufacturing in particular — is a major contributor to the local economy. “Total direct labor income in the creative industries of the Los Angeles region amounted to $36.1 billion in 2014, or 13.1 percent of the annual private sector wage and salary payroll in the region,” according to a February 2016 report by the Otis College of Art and Design, which counts Rick Owens among its graduates. “Of that total, the entertainment sector contributed $15.1 billion (primarily motion picture and video production) or nearly half of the total (41.7%), followed by the visual and performing arts at $6.0 billion and fashion at $4.2 billion.”

Los Angeles is one of the few areas of the United States where apparel manufacturing still employs tens of thousands of people, though those numbers have decreased significantly as American Apparel — which was, for many years, the region’s largest employer in the category — continues to lay off workers after its sale to Canadian manufacturer Gildan. The local minimum wage, currently $10.50 per hour in Los Angeles County and set to hit $15 per hour by 2020, has also steadily increased. In 2015, businesses in the area employed 40,500 apparel manufacturing workers, according to the Bureau of Labor Statistics, down 8.6 percent from 44,000 in 2014.

Nonetheless, demand for expertly skilled workers continues to rise. Monique Lhuillier, for instance, employs 200 workers in her 65,000-square foot factory in Vernon, just south of downtown LA. When Lhuillier founded her company — which started as a bridal atelier — in 1996, she hired sewers from the likes of Los Angeles-based designers (and red carpet favorites) Richard Tyler and James Galanos.

“We started producing here because we didn’t know any better,” says Lhuillier, whose also manufactures her ready-to-wear in the facility. “I made six wedding dresses, and we were thrilled that we picked up five accounts. We started to put a small team together.” Two decades later, some of Lhuillier's first employees still work with the company on its hand-beaded, hand-appliquéd wedding gowns and eveningwear.

Another Los Angeles-based fashion company, Chrome Hearts, employs more than 600 people on its Hollywood campus, making everything from leather handbags to metal belt buckles. It is also an investor in The Elder Statesman, whose founder, Greg Chait, has trained his employees to knit high-end cashmere garments out of the company’s factory in Culver City, adjacent to Venice Beach.

“I pay salaries, people have health care. That’s pretty enticing,” says Chait. “The good news is that we have a nose for quality when it comes to raw material, and that has always been the backbone of my business.” Many Los Angeles-based designers, like Rodarte and Juan Carlos Obando, make custom garments within their studios, hiring additional sewers to work on an as-needed basis.

Indeed, smaller-scale vertically integrated production is not uncommon in Los Angeles because finding good third-party facilities to manufacture cut-and-sew ready-to-wear, in particular, is a challenge. That’s partly because workers are often paid by the piece, not the hour. A recent investigation by the California Department of Labor found that 85 percent of the 77 independent factories in the region violated labour laws, with some workers earning as little as $4 an hour instead of the mandatory minimum wage in factories that produced goods for the likes of Forever 21 and TJ Maxx.

What’s more, workers in these facilities are often not trained to produce garments worthy of a luxury label. “To elevate production facilities, we’ve had to train in-house,” says Chrome Hearts co-owner Laurie Lynn Stark. “When they make it [through the training], they are dedicated.”

What these ateliers and factories represent, however, is the beginning of an ecosystem of skilled workers who could help fuel more high-quality production in the area. The Los Angeles-based shoe label Newbark, for instance, has recruited other luxury brands — including friends and collaborators Creatures of the Wind — to utilise its manufacturer, which means the owner has more resources to hire and train new employees.

When Los Angeles-based Clare Vivier started her leather goods line in 2008, she struggled to find a factory that could make a quality product. She now employs five factories, some of which the company has “nurtured into being,” Vivier says. “We tried a factory in New York a couple of years ago, but it was just not the best for us logistically. I do love the proximity of producing in Los Angeles. The idea of having to produce somewhere else is discomforting.”

Proximity to their production is an important factor for many made-in-Los Angeles brands, which would rather take a lower margin than risk producing overseas where it’s more difficult to manage the process. “As a mother and a person who is busy to begin with, to be able to have my eyes on it, to have it be this close by to me was one of the main reasons I was able to go through with it,” says fine jewelry designer Sarah Hendler, who launched her line in 2015.

After a few stumbles, Hendler found a manufacturer in LA’s jewelry district that surpassed the level of quality she demanded. “Financially, I’m taking a hit by making jewelry here in the United States,” she says. “But I love being able to drive downtown and see the product for myself.”

While the promise of Los Angeles as a growing high-end manufacturing hub feels real, there are certainly challenges in recruiting, training and then retaining skilled workers. There’s also the reality of local geography and local government Some factories are based in Vernon, while others are across town in Culver City. Still others are north of the city in Burbank. At present, the City of Los Angeles does little to help incentivise many of these factories, some of which are beyond its borders. It also doesn’t help that while manufacturing is a major part of the Southern Californian economy, the state government has been more focused on supporting the entertainment and tech sectors. For a variety of reasons, something like New York’s Fashion Manufacturing Initiative, a partnership with the city’s Economic Development Corporation, would be more difficult to execute in LA.

“We’re really trying to identify how we can duplicate what we’ve done in New York,” says Council of Fashion Designers of America president and chief executive Steven Kolb. “But [the region] is so spread out. If you go to Monique Lhuillier, you’re not in Los Angeles, you’re in Vernon.” Kolb also says that the CFDA, which recently launched designer Greg Lauren’s “designed in LA, made in LA” initiative with Banana Republic, and found it more difficult to find a third-party factory that met the program’s quality standards than it was when the organisation embarked on a similar project with Timo Weiland and Banana Republic in New York.

“Los Angeles is a very complex city with a lot of municipalities,” Holly says. “Of course, businesses in other cities are going to be employing workers. Our goal is to do whatever we can to connect the whole ecosystem across. LA is so big. People don’t realise that.”

But as more and more of the CFDA’s 80-odd Los Angeles-based members choose to manufacture locally, Kolb is hopeful that the organisation will be able to help set up a database so that these designers, despite being in competition, can share information on local production resources. “Who does what and where they are located,” Kolb says. “We think that’s a starting point.”