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 and hosts its forum, the largest private online community for apparel manufacturers on the web.

7 thoughts on “Survey Results: Economic Impact Study”

  1. Quote:
    updated 4:45 p.m. ET, Thurs., Feb. 5, 2009

    LOUISVILLE, Ky. – A new law aimed at keeping lead-tainted products from children is facing stiff opposition from business owners and charities that say it’ll put them out of business.

    i’ve been trying for weeks now to put into words the thoughts that run through my head concerning this law.

    words are extremely important when trying to make an impact.
    choosing the most effective words is, to say the least, challenging.

    good. mainstream finally decides it’s time to report something. but the report is weak at best. and the argument against the law is weaker still.

    let’s face it, if someone is selling dangerous products that could kill or poison children (up to 99 years old), i could not care less if they go out of business because they have to stop. make it as safe and healthy as possible or don’t make it, right?

    if a restaurant has potatoes laced with arsenic, is a loss of inventory and income a valid reason to continue to serve them?

    of course not! the “going out of business” argument just isn’t an argument at all.

    Now, if we find that a restaurant has arsenic as an ingredient among their special herbs and spices do we make a law that all restaurants dispose of every item in their walk in refrigerators and shelves intended for human consumption as of February 10, 2009 even though there is NO evidence of stomach pains, sickness, or death amongst its patrons?

    do we then add to that law that from February 10, 2009 every restaurant be subject (and pay for) extensive arsenic detecting tests that certify that the salt and pepper are INDEED arsenic free?

    although i do not wish to suffer the agony of arsenic poisoning personally, and i surely do not want my children to either, these types of protective procedures are both extreme and unnecessary.

    a more valid law would be to simply forbid the poisoning of food. those who violate that law can be investigated and prosecuted. and past offenders (the particular restaurateur – not all the poor potatoes) should be scrutinized.

    not every manufacturer of every button to bunk bed for children 12 and under uses lead as an active ingredient, nor is every manufacturer in violation.

    all should not be made to pay the price of one rotten potato.Report

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