If home is where you hang your hat, Kangol is struggling to afford its pricey new U.S. digs.
The hat brand is favored by numerous celebrities. But even with that free advertising, Kangol has had some high operating costs over the last year.
Previously, Kangol hats were manufactured in China. The brand made a big move last year to a Pennsylvania factory. The Bollman Hat Co. had acquired Kangol in 2001. Executives billed the move as an effort to create more U.S. manufacturing jobs.
But labor costs went up. Profits went down. Way down. Kangol loses money on every kangaroo-logo cap knitted at the factory in Adamstown, near Philadelphia.
Bollman CEO Don Rongione calls the transition “a bigger challenge than what we could’ve ever dreamed.”
But he expects a relatively quick turnaround as workers get better at making the popular caps. Employee Amaryllis Garman is an example.
Inside Bollman’s 19th century, red-brick factory in Pennsylvania Dutch country, Garman carefully places knitted fabric on a machine. The machine joins the ends to form the familiar Kangol flat cap, while Garman ensures a straight seam. The job requires patience and hand-eye coordination.
When Garman started, she could make 10 hats daily. She’s up to about 250 now.
But the early struggles illustrate why the labor-intensive garment industry left the United States in the first place.
Bollman spends about $11 per hour per worker in Pennsylvania. It could do the same work for just $2.60 per hour in China. So why move?
Rongione points first to delivery speed.
Trends come and go in the fashion world. Successful suppliers get product into customers’ hands before they lose interest. Shipping from China can take weeks—potentially costing sales in that time. Time really is money, and lost time is lost money.
But even with some jobs coming back to the Unites States, it will be nearly impossible to reclaim all the manufacturing employment positions of past years. Increased automation makes production cheaper. That offsets some cost of increased wages. But it also means that far fewer people are needed to produce the same volume of clothing.
Steven Frumkin of the Fashion Institute of Technology in New York says, “We’re never going to employ as many people because of efficiencies and equipment.”
Still, Bollman wants to keep its hat in the ring of U.S. workers—and some jobs are better than none.
