Dollars+Sense: Fine China?

You can drop big fashionista bucks on a Coach handbag, a St. John dress or an Armani jacket, but the label (usually hidden) reads "Made in China."

By John Ewoldt, Star Tribune

Last update: August 30, 2007 – 12:36 AM
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Gail Simons of Edina remembers when the leather signature tag dangling from the strap on her Coach handbag said "Made in the U.S.A." But as she digs to find her car keys, she'll have to dig deeper still to find the "Made in China" label. Nearly all of Coach's handbags, including pricier bags costing more than $800, are manufactured in the country whose exports of toys and food have recently been the subject of safety scandals.

Coach is hardly alone. A random check of clothing racks at some of the Twin Cities' finest clothiers easily produced garment after garment made in China -- a Dana Buchman jacket for $500 at Macy's, a St. John Couture dress for $1,145 at Saks, and a $595 men's Armani corduroy sport coat at Neiman Marcus (Corduroy Armani? Now there's an oxymoron).

It's no surprise that much of the clothing we buy is made by cheap labor in China. Many luxury brands are contemplating building factories in China, if they don't already have them there. In fact, 50 percent of the world's textiles are produced there, from top-designer wear to dollar-store duds. Exporting is continuing at a rapid pace, a 43 percent increase in the past year, despite trade limits, according to the Office of Textiles and Apparel in the U.S. Department of Commerce.

Does it matter?

Simons is still a Coach fan. Style, quality and feel are more important to her than country of origin. She hasn't noticed a decline in the quality of Coach handbags, which she's been buying since the 1970s.

Customers such as Simons are loyal to their brand, said Rohini Ahluwalia, associate professor of marketing at the University of Minnesota's Carlson School of Management. "If past experience is good, where an item is made may not matter if it still seems well-made."

To consumers such as Rich Bonnin of Golden Valley, it does matter where a garment is made. "I actually look at that," said the architect, who buys John Varvatos, Armani and Prada. If a manufacturer is choosing to make something in China because of cheaper labor costs, that's fine for regular household items, he said. "But when I purchase a very expensive luxury item, I have an expectation that it will be made by the most talented, highest-quality workers for that particular piece. The Chinese may be masters at copying good designs, but I still question the quality."

Is a piece of clothing made in China of lesser quality? Not necessarily.

In fact, China may be the only place in the world right now that can produce large orders of high-quality hand-knit products, said Julia Hughes of the U.S. Association of Importers of Textiles and Apparel in Washington, D.C. China specializes in silk and cashmere, with the quality ranging from high to low.

Even if a garment is well made, will shoppers drop four figures on a Gucci handbag made in China? Ed Nakfoor, a Detroit retail consultant, said he doubts it. He worries that a China label might damage some brands. It might even make some shoppers wonder if the item is a fake, he said.

How will customers react?

Designers whose clothes are made in Italy or France nearly always display the country of origin prominently. The "Made in Italy" label oozes quality, snob appeal and lofty prices. Buyers have interpreted high prices to mean centuries of artisanship. In fact, one pair of Donald Pliner shoes at Macy's had the words "Made in the mountains of Italy" embossed on the sole. The words suggest an image of happy artisans pausing occasionally at their open-air workbenches to listen to the bleating of a mountain goat.

Even in Italy, that perception is not based in reality, Nakfoor said. More likely the artisans are in a factory setting -- not the hills of Tuscany, where everyone is smiling. Still, labor rates in Italy for textile workers can be as much as $18 an hour, whereas Chinese workers might be working for a tenth of that, according to Women's Wear Daily.

But for many American buyers, perception is reality. A "Made in Italy" label trumps a "Made in China" label. Designers are very aware of that, too. Shoppers checking country-of-origin labels will soon notice that a "Made in Italy" label is displayed conspicuously at the neckline or waistline but a "Made in China" label is usually hidden behind other labels or tucked discreetly under the tongue of a shoe.

One way for manufacturers to avoid the China stigma and still save on labor costs is to hire Chinese workers in Italy, according to Newsweek International. Luxury designers believe that some consumers, especially Asians, would not buy if the clothes aren't made in Italy, said Michela Pellicelli, a professor of economics at the University of Pavia in Italy. More than half of the 4,275 textile factories in Prato, Italy, are owned by Chinese who tend to employ only Chinese workers. Most of Italy's dominant designers -- such as Prada, Versace and Armani -- rely on Chinese-owned suppliers in Prato.

For high-end customers like Beth Roberts of Minneapolis, all of this is irrelevant. The Oval Room shopper said only one thing matters to her -- the label, not the origin. That's consistent with what Gretchen Weisman, co-owner of Fashion Avenue in Edina, has found. "I never hear anyone complain that something is made in China," she said. The only issue it raises for her customers is authenticity, especially with handbags. As for Simons, she knows her handbags are made in China and she's confident they're authentic. "At least for now," she said.

John Ewoldt •612-673-7633 or jewoldt@startribune.com. His articles are online at www.startribune.com/dollars.

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