North Carolina Garment Manufacturer Beats the Odds with Georgia Tech Assistance

The Southeastern Trade Adjustment Assistance Center (SETAAC), based at Georgia Tech’s Enterprise Innovation Institute in Atlanta, helped North Carolina-based Mack and Mack develop and implement turn-around strategies to better compete with imports.

Mack and Mack, a Greensboro, N.C.-based women’s apparel manufacturer, is something of an anomaly. It is a U.S. cut-and-sew manufacturer in a country where nearly 91 percent of the 20.8 billion garments purchased in 2006 were imported. It has increased employment in an industry where employment decreased from 585,700 in 1998 to 204,800 in 2007. And it has managed to do all of this while the U.S. trade deficit soared to $62.2 billion in July 2008.

“We design, cut and sew better women’s wear for distribution to some 65 specialty boutiques throughout the United States. Our entire operation – administration, design, production, shipping, receiving and a retail outlet – is housed in a single, 7,300-square-foot building in downtown Greensboro,” explained John Davis, co-owner (with his wife Robin) of Mack and Mack. “The textile and apparel industry, once prominent elements of our local economy, has moved offshore to take advantage of huge cost savings. We have established a niche market, but until we become a household name we will always work on narrow margins. And that is where the SETAAC program has been a great help.”

The Southeastern Trade Adjustment Assistance Center (SETAAC), based at Georgia Tech’s Enterprise Innovation Institute in Atlanta, helps manufacturers develop and implement turn-around strategies to better compete with imports. SETAAC project manager Mark Hannah conducted an initial review of Mack and Mack and helped the company prepare an application for the U.S. Department of Commerce. Once the company was approved for funding, Hannah developed an adjustment plan that detailed projects to receive funding support, including assistance in marketing and sales, new product development and equipment training.

Firms that are accepted into the SETAAC program pay for 25 percent of the diagnostic visit and report. The Department of Commerce generally pays half of the cost of project implementation for activities to benefit the company. Private sector consultants submit quotes for implementing the identified projects and the company chooses which consultant to hire to execute the outlined changes.

“With SETAAC defraying most of the cost, we were able to have one of our newly-hired designers trained on our pattern digitizing equipment, which would have cost us around $4,000,” Davis said. “Normally, we would have depended on the limited in-house experience available, along with our outdated help manuals. Instead, we were able to have a trainer spend a week at our facility with our designer, giving her invaluable insight into the latest techniques.”

Mack and Mack’s equipment digitizes garment patterns and prints them on perforated paper; sizes can automatically be scaled in the computer. According to Davis, it is not feasible to send the patterns to overseas factories for production because of their strict quality control.

“Admittedly, our business model is unusual. We have a very attractive boutique in the front of our facility and, once you get further in, there are glass doors through which you can see people at sewing machines making the clothes that are on the sales floor,” he said. “Almost all the clothes hanging in the store are made in black – because that’s a color we know we can always sell – and you can try them on. You choose the style and color, and in two weeks you can pick up the clothes that have been made specifically for you. Making one outfit at a time is one of our best selling points and, at the same time, one of the things that is most challenging in terms of growth.”

SETAAC has also helped Mack and Mack upgrade its Web site, a key component of the company’s marketing strategy. Davis notes that having the Web site configured for e-commerce has allowed Mack and Mack to increase its sales and diversify its revenue sources. In fact, the company exceeded $1 million in sales last year for the first time since 2003 and increased its workforce from 12 to 17 during the same time period.

“It’s partly natural business growth, but I do feel the growth was abetted greatly by having the assistance provided by the program,” Davis said. “We have created three jobs – two in production and one in administration – and retained all of the jobs we already had. Having the additional help has allowed my wife and me to focus on the bigger picture.”

Mack and Mack was founded in 1995 by Robin Mack Davis who started out cutting garments on a ping pong table in her parents’ basement. After five years, the firm relocated to its current location in the historic district of downtown Greensboro. The firm has grown over the years, and now sells its original designs in 65 upscale boutique clothing stores nationwide. According to Davis, SETAAC’s assistance will help the small manufacturer continue to grow and compete in a global economy.

“I can think of few other government programs for small businesses where the intended benefits are so well-targeted and so effective,” he said.

About the Southeastern Trade Adjustment Assistance Center:
The Southeastern Trade Adjustment Assistance Center (SETAAC), based at Georgia Tech’s Enterprise Innovation Institute in Atlanta, helps manufacturers develop and implement turn-around strategies to compete better with imports. Last year, SETAAC helped more than 30 companies in Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina and Tennessee. On average, these companies received $42,000 in matching funds. In the last three years, SETAAC’s clients have increased sales by 26 percent and improved productivity by 28 percent.

About the Enterprise Innovation Institute:
The Georgia Tech Enterprise Innovation Institute helps companies, entrepreneurs, economic developers and communities improve their competitiveness through the application of science, technology and innovation. It is one of the most comprehensive university-based programs of business and industry assistance, technology commercialization and economic development in the nation.

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Writer: Nancy Fullbright