Men's suits: Strengthened capability drives high-end shift

	The 8BL09 model chalk-stripe suit from Dongyang Shengbaolong comes in 65:35 polyester-viscose with pure polyester lining. Price is $23 per set.

Many of the enterprises engaged in the manufacture of suits and separates belong to the country's pool of well-established apparel suppliers. In fact, more than half of the 15 publicly listed businesses in China offer the category as their primary line.

Moreover, the majority of these operations have been able to maintain a highly trained workforce. The length of service of these employees means most have acquired technical know-how in designing, fabric sourcing, manufacturing and marketing. To supplement their skill set, factories are now acquiring computerized equipment for production and R&D. These include D¨¹rkopp Adler clothes hanging systems and computerized sewing machines, Brisay ironing equipment, Kannegieser fusing machines, Pfaff stitching units and Strobel sergers from Germany. Companies are also importing Asahi fusing machines from Japan, Macpi ironing equipment from Italy, Gerber CAD systems from the US, and Lectra CAD facilities from France.

China is still not regarded as a source of upscale apparel, including suits and separates. But suppliers' determination to improve the quality of releases and penetrate the high-end line has resulted in gradual market acceptance. This, in fact, has helped companies remain positive despite declining sales figures.

Customs data for the first nine months of 2009 show the country's exports of men's wool suits fell 23 percent to 42.3 million pieces and 19 percent to $2.5 billion. In the same period, outbound shipments of synthetic-fiber fabric models totaled 87.7 million pieces worth $1.8 billion, down 30 and 22 percent year on year.

For the women's line, overseas sales of wool suits slid 33 and 30 percent, reaching only 390,000 pieces at a value of $15.7 million. Synthetic-fiber fabric versions, meanwhile, also dropped 11 and 12 percent to 33.9 million pieces and $457.3 million.

Although clearly affected by the financial downturn, the difference between this line and other apparel categories is that the average export unit value kept climbing even during the difficult months. The mean quote for men's synthetic-fiber fabric styles, for instance, rose 11 percent during the nine-month period. The escalation in export prices averaged 5 percent for all types of suits.

Most companies believe higher quotes are a result of their resolve to concentrate on high-end manufacture. The skills they have cultivated in the decade spent on producing for OEM clients resulted in partnerships with some of the major international brands, including Ermenegildo Zegna and Jhane Barnes. Some upscale models of these labels are now being contracted to China factories.

Currently, high-end designs take up only a third of total output in the line. But this share is expected to grow in the next few months. Because of lower manufacturing inputs, the country's high-end OEM suits have more competitive prices than similar models from traditional hubs such as Italy, the UK and the US.

The cost of labor in Italy, for instance, is twenty times that in China. In addition, production is more efficient and lead times are shorter. While it takes only six weeks for local factories to complete an order, similarly sized plants in Italy need about eight weeks.

These upscale models are typically made from pure wool or blended with silk or cashmere. The suits are designed to follow the contours of the body and retain their shape over time, particularly the sleeves and shoulders.

Many companies are also offering well-constructed designs that use high-end materials but at a better price point. To lower the cost per piece, the jackets are fitted with welt pockets instead of flap versions and narrower lapels. The pants have a slimmer cut and fit. In lieu of patterned or textured fabrics, plain versions woven with premium fibers are incorporated.

Through these methods, the materials normally used for five sets of suits can be adopted for six without sacrificing quality in terms of construction, and fabric composition, weight and yarn count. It is estimated that such models constitute roughly one-fifth of exports in the line.

Despite the strengthened capability to produce upscale suits, most makers continue to prefer concentrating on OEM orders rather than shift to ODM or OBM. OEM transactions currently contribute 70 percent to total exports. OBM makes up less than 10 percent and ODM accounts for the rest.

For the majority of enterprises, contract manufacturing remains the most cost-effective and least risky mode for an export business model. Building, maintaining and promoting a brand overseas requires substantial investment in money, time and energy, but whether such endeavors will prove to be successful is not certain.

OEM, on the other hand, requires minimal expenditure and the returns are guaranteed. In most cases, buyers supply all fabrics and trimmings to be used for their specified design. Some provide a list of material providers and a fixed price point. As such, the cost of textiles and accessories is transparent and often decided by the client. The manufacturer just charges a processing fee to cover labor, overhead, machinery maintenance and miscellaneous expenses. Profit is factored in as well. Many of the smaller OEM operations survive entirely on processing fees.

Presently, China suppliers charge $2 to $38 per set, depending on where their customers are based. Shipments to Japan often carry a $2 to $5 processing fee. Models for export to Europe and the US are charged as much as $28, with several large enterprises asking as high as $38 for each set.

Products & prices
Industry composition
Production hubs

	This wool suit from Shandong Daiyan contains 35 percent polyester. The model 7885 is priced at $42 per set.

Within the category, suits comprise nearly 70 percent of exports because there is less demand for separates.

The best-selling men's models consist of two- or three-button jackets with broad shoulders, notch or peak lapels, tapered waist and side vents, and slim pants. Many come in plain black, gray or blue, although higher-priced versions have chalk, shadow or pinstripes.

While pantsuits are still popular, an increasing number of women's sets now come with skirts. The formfitting styles feature one- or two-button jackets with V-necks or notch lapels, flap pockets, and pencil or A-line skirts. Some versions are fitted with matching belts or turned-up cuffs. Designs are available in black, gray, white, beige and metallic shades.

Blazers, and pants and skirts are contoured at the waist and hips to highlight the feminine figure.

A few jackets come with belts to emphasize the waist. Aside from the basic three-quarter and long sleeves, recent releases include short-sleeved designs.

High-waisted trousers with flared leg openings are available. Some feature wide cuffs at the hem. Zippers, buttons, and hooks and eyes are used for the closure.

Skirts typically come in lengths of 20 to 25 inches to create a leaner and longer look. The classic pencil and A-line versions are the most common types produced. Pull-on styles are also offered. Pencil skirts come with a double-layered pleated panel at the back hem or an all-around pleated hemline for a more feminine appearance. High-waisted models with curved front and back yokes provide a flattering shape as well.

Closures include zippers, which are placed either at the side or at the back, and hooks and eyes.

Embellishments such as embroidery and applique are incorporated in upscale suits and separates for added visual interest.

Aside from monochromatic models, companies are releasing designs with patterns.

In general, men's wool suits are priced between $48 and $63 per set, while women's models are $41 to $53. Synthetic-fiber fabric suits are typically $18 to $26 for men's versions and $13 to $16 for women's styles.

Low-end suits are made entirely from synthetic-fiber fabrics. While most come in pure polyester, some incorporate a 65:35 polyester-viscose blend. The lining is also pure polyester.

Prices are $13.50 to $30 per set.

Midrange versions are up to $50 and feature up to 60 percent wool content. This protein fiber is often blended with polyester or viscose. The lining is in 65:35 polyester-viscose.

High-end designs incorporate more than 60 percent wool with up to 40 percent silk or cashmere. Pure wool versions are also available. The lining can be 65:35 polyester-viscose or pure viscose. Prices start at $51 per set and can be as muchas $1,000 depending on the fabric weight and yarn count.

Worsted wool suits typically come in 70 to 160s yarn count and weigh 225 to 434gsm. Higher-count and heavier fabrics are at the top end of the price scale. Designs in this range are all fully lined. Some also feature intricate detailing such as filigree patterns.

For wool suits, versions made solely from the protein fiber or blended with silk or cashmere account for just about a third of exports.

Models that have synthetic fiber in the mix constitute the bulk of shipments. Apart from the high cost of wool, silk and cashmere, maintenance is easier if the suit has a polyester or viscose blend.

Although there are a few China companies that claim they have been able to release washable wool designs, most manufacturers believe the concept is just a marketing tool and not really a viable product.

Regardless of the price point, export quotes were elevated less than 5 percent during the past three months. This is mainly as result of the rebound in material costs. For instance, a meter of wool is now $0.44 to $0.73 more expensive.

Synthetic-fiber fabrics, likewise, increased $0.22 to $0.29 per meter.

But because the cost of textiles is expected to continue climbing in the months ahead, suppliers are projecting prices to rise 5 to 10 percent.

	Dongyang Shengbaolong is offering the model 8BL11, men's shadow-stripe suit in 65:35 polyester-viscose. Price per set is $22.50.

It is difficult to estimate the total number of China companies specializing in suits. But there are roughly 10,000 businesses engaged in the line. Many of them also offer other types of apparel such as casual and sportswear.

The manufacturing pool for suits and separates shrunk about 10 percent at the height of the economic downturn. But while smaller operations were forced to fold, several large enterprises were able to achieve 20 percent year-on-year growth.

Of the remaining suppliers, 70 percent are private locally owned and the rest have outside participation. At least half are small plants, one-third are midsize and the rest are big businesses.

Factories with fewer than 500 workers are generally considered small. They focus on low-end production and carry out only cut-and-sew processes in-house. Most of their output is exported for less than $30 per set to mass merchandise chain stores.

Companies operating on a medium scale often concentrate on midrange suits and separates for overseas distributors and wholesalers. Some have set up sales offices in their target destinations to boost their presence there and increase market share.

Nearly all of the large enterprises carry ISO 9001:2000 and 1400:2004, and OHSAS18001 certification. They can have as many as 50,000 employees and separate plants for each major production step. One branch may only be handling fabric weaving, dyeing and finishing, while cutting, sewing, setting and ironing are conducted in a separate facility. Some operations even carry out upstream processes such as farming and yarn spinning in-house.

Many of the big manufacturers in China have more than 400 local retail outlets and offices in countries such as Italy, the US, France and Switzerland. They cater not only to distributors but also to high-end department stores and retailers.

While R&D investment at SMEs account for less than 5 percent of annual turnover, large suppliers allocate as much as 8 percent for product development. A few have even set up separate R&D centers not only for suits but also for fabrics, trimming and matching accessories such as ties.

	The model 8047 from Shandong Daiyin is a pure wool pinstripe suit lined in 65:35 polyester-viscose. Price is $60 per set.

Zhejiang, Shandong and Jiangsu are the main export manufacturing centers for men's and women's suits and separates. All of the 10 major suit brands in China for 2009 come from these provinces. Romon, Younger, Firs, Baoxiniao, Judger and Fapai are from Zhejiang. Sinoer, Rcollar and Guoren are made in Shandong, while Hodo is from Jiangsu.

Suppliers in Zhejiang are based mostly in Ningbo and Wenzhou. The industry in the former started in the mid-1980s. Companies there are among the first to establish well-known brands in the country. The city's output of suits and separates contribute 12 percent to total output.

Wenzhou started to engage in the line in the mid-1990s. There are about 2,000 makers there, 200 of which have individual annual output topping 50,000 sets.

Shandong and Jiangsu are among the major emerging hubs for suits and separates. Factories in the former are based mostly in Qingdao and Weifang, while those in Jiangsu are located in Wuxi and Changzhou.

Although the majority of businesses in these two provinces ventured into the line only in the latter part of the 1990s, development has been moving at a fast pace. Both hubs are now home to some of the country's leading brands for men's suits. The biggest manufacturer in China with one of the most well-known labels, Sinoer, is based in Shandong.