Survey Results: Economic Impact Study

Welcome to visitors from the Wall Street Journal!

Following is a summary analysis of the interim results from the Economic Impact Study collected between 31 Dec 2008 and 10 Jan 2009 which measured the responses of manufacturers, component suppliers and retailers. The cut to the chase summary shows over 70 million dollars worth of inventory must be destroyed on February 10, 2009 (National Bankruptcy Day) and of those enterprises that expect to survive the fall-out (61% will not), over 40 million dollars in lost product sales are anticipated.

The “average” respondent of this survey shares the following characteristics:

80% of their products are children’s goods. They expect to lose their business (61%). If a retailer, they can’t get testing services due to accessibility, logistics or finances (71%). They will have to close their business (34%) and destroy product (28%). If they have any full-time employees, they have 5, and if any part-time employees, they have 3. On average, they spend $112,843 on wages and salaries and $13,366 on contractor services annually. If they are going to destroy goods, they expect to destroy about $7000 worth. Most of them think (51%) it would take over a year to sell off inventory, especially in the current climate. Most of them (66%) think this is the last nail in the coffin, they won’t survive.

Most retailers (66%) think that only 0-30% of their vendors know about the law. Most retailers (64%) report that 0-30% of their vendors think they are exempt. Most manufacturers (66%) think that only 0-30% of their retailers know about the law. Most respondents (56%) believe that 0-30% of their competitors are informed about the law. They also believe (45%) that 0-30% of their competitors intend to continue with business as usual and hope for change or think they won’t get caught.

So something like 0.65 x $71.708M = $46.6 M in lost wages, .65 x $8.824M = $5.6M in lost contracting business, and .65 x $63,242M = $41.1M in lost product sales per year, and about $72.4 M worth of goods that need to be destroyed in the next few weeks.

I will forward more in depth results upon request. Also available is a survey of testing costs which are dramatically costlier than special interest groups claim.

Published by

Kathleen Fasanella

Kathleen started production patternmaking in 1981. Starting in 1993, she began providing consulting and engineering services to manufacturers, small companies, and startups with an emphasis on developing owner-operator domestic cut-and-sew operations. In 2015 she opened a 5,000 sqft. fully equipped sewing factory: The Sewing Factory School. Kathleen is the author of The Entrepreneur’s Guide to Sewn Product Manufacturing, the most highly rated book of any topic in the garment industry. She's been mentioned numerous times in the New York Times, Wall Street Journal, Forbes, National Public Radio, Boston Globe, LA Times, Vogue, French Vogue and has at least 15 Project Runway alums at last count. Kathleen writes nearly all of the articles on Fashion-Incubator.com and hosts its forum, the largest private online community for apparel manufacturers on the web.

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