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Selling Uniforms in a Down Economy

Late last year, the government confirmed what the rest of the country already knew. The United States was in a recession and, in fact, had been in an economic downturn for quite some time about a year.

Propped up by questionable housing loans and a nation’s thirst to spend its way to the good life without the means, cracks in the economy showed early. But other than a few economists who foresaw the train wreck ahead, most people ignored the warning signs. Throughout last summer, housing prices fell while the number of foreclosures grew. Banks stopped lending to businesses. Retailers struggled while consumer confidence dipped. Yet as late as September, the public was being advised that the “fundamentals of the economy were sound.”

The reality, of course, was in stark contrast. Like a game of dominos, the financial, retail and auto sectors of the market began to fall in mid-September. Major institutions disappeared or hovered on the brink of extinction. The stock market collapsed, taking with it the college and retirement funds of many. Unemployment climbed, with 1.2 million jobs disappearing across the United States through October. And in November, skittish employers slashed another 533,000 jobs, the most in 34 years, catapulting the unemployment rate to 6.7 percent. The unprecedented turn of events was likened by most in the media to another grim period in our nation’s history: the Great Depression.

It is with this backdrop that Made to Measure set out to take the pulse of the North American uniform industry. A microcosm of the overall economy, how were the makers and sellers of the region’s uniforms and career wear faring at the close of 2008? More importantly, what were their plans for economic viability and forward movement in 2009?

The results were somewhat surprising. To be sure, there were signs that all was not right in the uniform marketplace. A handful of companies told us off the record that their survival was questionable past 2009. Others were experiencing the effects of a changing consumer base and were struggling to regain market share. One large, well-established public entity watched its stock price dip to penny status, while another closed factories in response to a decrease in demand.

Yet for the most part, the sector’s retailers and manufacturers were doing remarkably well, considering the circumstances. Those interviewed for this article reported steady, albeit slowing, sales. One even reported a record year. Gloom and doom was rarely expressed. Indeed, the industry as a whole was cautiously optimistic in 2008, acknowledging the challenges of doing business in a down economy but nonetheless seeing opportunities for 2009 and beyond.

Should the responses have been bleaker? After all, many of the companies reporting layoffs through 2008 were in the service industries, a market segment with a heavy reliance on uniformed workers. If the workforce is shrinking, should there not be more cause for alarm?

The answer depends, in part, on the markets and regions served by the business being asked.

“With municipalities, the budgets are set, so we really haven’t seen the full effects of this yet,” says Roger Heldman of Seattle-based Blumenthal Uniforms. “This year should be more challenging.”

Blumenthal, which has accounts in the law enforcement and public safety markets, experienced modest growth in 2008 and says customers are now looking for ways to stretch their limited resources. In response, it is helping departments buy smarter. This means helping agencies buy what they need when they need it, rather than spending a set amount per officer each time. “When you help the customer buy more efficiently, you become a more valued partner,” says Heldman.

Michael Bucks of Red the Uniform Tailor agrees. “The knee-jerk reaction to bad economic times is to cut price or offer an inferior product, but we see this as an excellent time to sell quality,” he says. “Quality garments last longer, which saves the customer money down the line.”

Bucks, who like Heldman sells to police departments, says his company hasn’t had a downturn on the law enforcement side. In fact, Red the Uniform Tailor is coming off a record year. “We’ve grown laterally, and a big reason for this is that we still make our product in the U.S., a fact that appeals to many law enforcement agencies. Our product line includes a variety of colors and styles, as well as the consistency that you just can’t find overseas.”

Demographics, too, can influence sales. While law enforcement ranks across the Northeast are declining, states throughout the South are actually adding to their rolls due to population trends. “A down economy isn’t a down economy for everyone,” notes Bucks. “It really depends on the state in which you do business.”

Nevertheless, departments across the nation are learning to operate on the same or even smaller budgets, and both Heldman and Bucks say they have seen departments ordering fewer items. But customers still expect their suppliers to remain current on the latest product offerings, even if they’re not buying right now. Heldman says, “If you don’t know about a new item that would be perfect for you or your customer, you might not adjust your purchasing decisions.”

If it was hard to find a real downturn in the law enforcement segment of the uniform industry, the same cannot be said of the identity apparel market. At the close of 2008, a number of restaurants and hotels had either gone out of business or scaled back their hiring practices. And the well-touted problems in the airline and banking industry trickled down to those who supply the outfits worn by these employees.

Those who supply these markets were feeling the effects of the slowdown. Tracy Gluck, vice president of hospitality at Red the Uniform Tailor, saw her casino accounts struggle last year, forcing her to rethink the division’s approach.

“We’re picking and choosing opportunities wisely,” says Gluck. “We’ve streamlined the amount of preliminary work and evaluate costs before flying to a customer to determine if it’s worth the effort.” Gluck says now is the time for flexibility. On the custom side of its business, Red has lowered the number of items required for a minimum order.

Yet even within this segment, some markets were affected more than others. The cruise line industry held its own in 2008, despite the fact that many ships are launched from a region with one of the highest foreclosure rates in the country, South Florida.

“The decision to build new ships was made years ago, and if they’re built, they have to be launched, which means a need for uniforms,” says Gary Schultz, president and CEO of Edwards Garment Co.

And private security continues to be identified as a growth industry by both the government and those in the uniform marketplace. “My business was neither flat or down in 2008,” says Dan Mendelson of Unitex Direct, a dealer who specializes in the security market.

Schultz adds, “Even companies that consolidate will need to re-identify their brand, and that means a need for a uniform program.”

Such optimism may fade as the economy worsens. Suppliers across the country are implementing decisions now to prepare for a worsening situation and the recovery that will undoubtedly follow it.

“Being diversified is key to surviving long term,” advises Bucks. “If you’re selling law enforcement, make sure you have federal, state, county and local accounts, for it’s unlikely they’ll all be down at once.”

Taking stock of your business model is also important. “It’s time for firms to evaluate their practices, no matter how they’re doing,” says Heldman. Blumenthal Uniform has taken steps to ensure a more efficient operation, instituting better training practices and procedures designed to cut down on mistakes. “Mistakes cost money and also cost in terms of service, and with an increasingly demanding customer base, you simply can’t allow this to happen.”

Bucks sums it up this way: “Fix what’s wrong, and focus on what you do best.”

That mindset is precisely what Canadian manufacturer Cobmex plans to do in 2009. Cobmex President Phil Newman says, “It’s important to understand what you’re good at. I manufacture sweaters and am quite successful at doing that.” Newman sees tremendous opportunity in the vast American marketplace, even in a protracted recession. Cobmex was still tracking double-digit growth at the end of 2008, but Newman is realistic. “I would be happy with single digits given the economy,” he says.

In hard times, the partnership between supplier and customer becomes more vital, according to those interviewed.

Gluck says, “It’s important to make the client feel as if you’re in this together. Right now, everyone is operating on fear. By making them look good, we offer the customer a way to keep his job, and in turn, we keep ours.”

Mendelson says, “If I work as hard at servicing my customers’ needs as they are at selling their services, ultimately we are all successful. I work best for customers who understand the partnership relationship.”

Fostering relationships in a down economy means ramping up service or providing the customer with incentives designed to keep their business. “You can shave the price a bit or change the fabric of a garment without compromising its integrity, but the important thing is to provide options so that the customer gets what he wants,” says Gluck.

On the manufacturing side, giving the customer what he wants means having it in stock when he needs it. Edwards, for example, keeps enough inventory on hand so that there are no backorders. Mindful that its customers are in savings mode, Edwards absorbs the cost of two-day ground shipping on orders and provides such value-added services as complimentary embroidery and closeouts. Of course, this puts a drain on already slim profit margins but is seen as a necessary byproduct of the industry and recession. “We have to remain competitive,” says Schultz.

How does a business survive a down economy? “It’s not easy,” admits Larry Alpert, owner of fabric manufacturer Metcalf Bros. To help its customers reduce costs, Metcalf assesses their need each quarter. “It’s a cost to us, but it helps build relationships and fosters trust.”

As part of the silver lining, the downturn presents competitive opportunities which many are using to improve their current business design. Across the uniform spectrum, management is learning where to cut, how to grow and where to invest to create value when the economy recovers.

Alpert says, “We communicate more with our customers to determine their needs. Goods that don’t move no longer sit on our floor.”

Many are strengthening their marketing efforts in an attempt to broaden their customer base. “We’re reminding customers that we’re now in the sweater business, as well as promoting our entire product line,” says Schultz.

Some are looking beyond the current situation. “There’s still a $2 billion domestic opportunity in the hospitality industry, which is huge,” adds Gluck.

Companies are turning to the old-fashioned way of doing business. When sales are down, go out and find more customers. This simple credo has been the standard since the dawn of the first sales call. But in an economy that is clearly contracting and with so many jobs disappearing, the question remains: where will these customers come from? For the uniform industry, they will come from what’s left of its customer base.

“You need to review all your prospects,” says Heldman. “Customers who have not been your customers in the past may be interested now.”

Taking some risk is also important. Gluck says, “You’ve got to try new things. Get out of your comfort zone by going after customers in allied markets. Try selling promotional products. You’re there already, so why not sell them?”

Many are capitalizing from the mistakes of others. “We’ve learned what to do better by studying the competition, which has helped us to grow exponentially” says Alpert. He says that many mills have gotten too big, with the industry’s driver service falling by the wayside. “In a bad economy, comfort becomes more important,” adds Alpert. “My customers know that when they need the goods, we have them.”

This sentiment is echoed by many. “When a customer makes a bad purchase because he sought the lowest price or didn’t check to see if the item was in stock, he usually turns to me next time,” says Newman.

Schultz says, “The grim reality is, if you’re going to grow, you have to take business from someone else. That’s capitalism.”

This helps to explain, in part, the paranoia that is often associated with the uniform industry, a suspicion that is all the more evident in a down economy. As a dealer who declined to be interviewed for this article bluntly stated, “I don’t want my competitors to know how well I’m doing. If they did, they’d come after my business.”

Above story first appeared in MADE TO MEASURE Magazine, Spring & Summer 2009 issue. All rights reserved. Photos appear by special permission.
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