Why has clothing quality gone down?

Many people have noticed and commented that clothing quality is increasingly getting worse. It’s something I’ve noticed myself. I have shirts from college that have held up just fine, and even some socks from middle school (American Eagle!) that are perfectly good.

And then I have a pair of chinos from Gap that I just washed for the first time. There are now vertical white lines all down both pant legs, where the dye got washed out unevenly (see photos below). They’ve also stretched out a full size since I bought them.

DON’T BUY THESE. Image from Gap

 

 

After one wash… 🙁

The general consensus is that clothing quality has gone down sharply in recent years. To figure out why, let’s discuss the fashion industry in recent years, and the pressure faced by manufacturers to implement cost cutting measures that affect the quality of our clothing.

Pressure on manufacturer to cut costs results in worse quality

One thing to realize is that almost no large retailers make their own clothes. Instead, they contract with outside vendors who work with garment manufacturers to make clothes. Retailers make orders with vendors, the ordered garments are made by the factories vendors work with, then the items are shipped to the retailer to be sold in stores.

There are a few exceptions like brands that sell only very simple styles, such as t-shirts. Large companies like Gildan and Champion that sell a huge amount of t-shirts might make their own. But in general, retail companies don’t make their own products, letting contracted manufacturers do that part.

So there are two distinct, unrelated parties involved in making the product: the retailer and the vendor. They are at odds with each other, where the retailer will try to get the lowest price for the item, with the vendor on the other side wanting the highest price. Basic capitalism.

Just like fashion retail, fashion manufacturing is a very competitive field. There are factories all over the world competing globally for orders, though quality obviously varies, just like in any other industry. And because of the competition, many retailers feel entitled to place endless pressure on vendors to offer a lower price for the product. Vendors are constantly told by retailers that “we can just go elsewhere” if they don’t do so.

So there’s often a big power imbalance between retailers and manufacturers, especially if a vendor depends on only one retailer for most or all of its orders. Sometimes a vendor might accept orders from only one retailer, or even specialize to make only one style for the retailer, if there’s enough demand for the single style. A vendor who has been getting a steady revenue source from a large retailer, and has a well-developed process to manufacture one million units of the same style annually, will be highly motivated to keep getting that business.

This will often result in the manufacturer being forced to give a lower price to the retailer, then making up the loss of revenue with cost-cutting measures including:

  • using loosely knit or woven fabrics to use less thread, resulting in sheer fabric or fabric that shrinks
  • using fabrics that fail quality control tests
  • using less dye chemicals than recommended
  • shortening dyeing time to speed production
  • employing cheaper, less skilled sewers, technicians, and other individuals involved in manufacturing

The above are just a few cost-cutting methods a vendor might implement to lower operating costs. Lowered cost is the main reason for lower quality, but there are also other factors that result in worse quality in clothes, discussed below.

 

Retailer changes supplier to lower-quality manufacturer

Garment making is a very tech-heavy industry. It involves large factories, complicated assembly lines, and sensitive chemistry in the dyeing and fabric-finishing process. Finishing is the part of fabric production done after dyeing, and is the most technically challenging part of creating fabric.

While there are many factories worldwide, the quality of factories varies widely–depending on the skill level of the factories and the people who work there. The barrier to entry is relatively low to start a factory, and there are no ways to guarantee the skill level of the workers.

With the variation in quality, there’s a corresponding variation in price. High-quality vendors that work with smoothly-running factories are more expensive. While this is not always true, the better quality vendors tend to operate in countries with higher operating costs (real estate, wages). There is a competitive market for highly-skilled technicians who work at factories, and good vendors and manufacturers who employ such individuals will charge retailers more for the products.

Why your favorite item at that store is suddenly different

Have you ever noticed that you’ve been buying the same item from a retailer for years, but suddenly the exact same style seems worse in quality? Something just seems off–the fabric might feel different, stretch out or shrink, colors may run. Here’s what might’ve happened.

What can happen is that a high-quality vendor might have been creating a style that’s been a bestseller for the retailer for years, with high fabric quality fabric and construction. Then a retailer might demand a lower price from the vendor, but the vendor may be unable or unwilling to offer the lower prices. The retailer might then choose to change to a cheaper vendor offering a lower price, so the retailer can increase its profits. The cheaper vendor may then create products at a reduced cost, generally at the expense of quality.

This switch to a cheaper vendor might mean that even though the exact style that has been sold for years is still being offered as the same item, the quality is not the same. A vicious cycle might then begin. Because of the worsened quality, a previously well-selling item that it could depend on for revenues is not performing as well as before. Then the retailer panics and tries to increase revenues by forcing the vendor to offer lower and lower prices. This results in even lower quality for the item, and consumers complaining more or simply not purchasing the item, with continued lowered profits for the item. The cycle continues until the retailer decides the style is not selling enough to offer on the market, and drops the style from its lineup altogether.

Like with many things in life, you get what you pay for. Retailers’ demands for lower prices is likely to result in a lower quality item for sale, even though we as consumers are still paying the same amount as before.

Or are we?

 

E-commerce places more pressure to lower prices

Are retailers just being greedy? Why are they demanding lower prices from their vendors while charging us the same? You could easily argue that the retail industry has always been very competitive and retailers have faced price pressures for a long time. What’s going on in more recent years?

Retailers aren’t entirely to blame–some of it could be placed on us as consumers (though retailers have had no small part in this). Consumers, American ones in particular, have been trained to never buy anything for full price. At stores like Ann Taylor, it would be madness to pay full price for anything, when they seem have 30-40% off sales every two weeks.

E-commerce has had an impact, too. Online shopping makes it really easy to do price-comparison shopping, and Amazon is doing its best to drive competitors out of business with low prices. And while in the brick-and-mortar days, consumers used to see and physically touch and feel the product before seeing the price, and then decide if the garment was worth the price.

It’s the other way now. With online shopping, consumers see the prices first, can filter and sort by price, and won’t be convinced to buy an item by how it looks on them in person. So today the main factor for a customer in purchasing garments is the price–and often, how much of a discount she can get–instead of the quality of the garment. Obviously not true for every consumer out there, but online shopping encourages this behavior. It’s one of the reasons I don’t like online shopping, which I’ll write more about in a separate post.

The result for retailers is that they have to price match and offer lower prices than competitors, and/or constantly have massive sales. In addition, most places now offer free shipping, including on returns for unwanted items. Shipping costs eat into retailers’ margins, which must be made up for by either raising prices or lowering the cost for sourcing the item. Since raising prices is frowned upon, retailers try to find vendors who will offer the lowest possible price for their items. This, as discussed above, is likely to result in lower quality clothes.

 

Private equity-owned retailers ignore quality altogether

Private equity (PE) has had a big impact on the fashion retail industry in recent years. PE firms work by purchasing companies, often ones not doing well. They leverage buyouts of these companies, load them up with massive debt, and then play spreadsheet games to maximize profits. They use tricks like mass layoffs, store closings, selling off the company’s capital, and other cost-cutting measures that cannibalize the business without actually raising revenue.

But on paper, these measures result in short periods of increased net profitability, because operating costs are slashed. On top of that, the PE firms collect dividends on the debt they loaded on the company (using borrowed funds), along with management fees, to maximize their payout. Then they sell off what’s left to the next PE firm to repeat the cycle.

This has been going on especially more in the past 10 years or so with big fashion retailers, such as J.Crew, Sears, and Payless, and many other American retailers large and small. Since it is under strict orders to lower operating costs, the retailer places even more pressure on vendors to reduce prices for manufacturing. And as discussed earlier, this results in the manufacturers employing cost-cutting measures that impact the quality of clothing.

PE firms don’t care, though. PE firms are comprised of financiers who generally have no retail sector experience or any history of operating a company long-term. All they know and care about are numbers and statistics, not the realities of a company that makes goods sold to the general public. They have no concept of customer satisfaction, quality control of physical goods, successful long-term health of a company, or anything that relates to us as customers–all they are there to do is maximize short-term profits using any means (or simply take cash out of the company’s reserves to pay itself).

They’re not necessarily bad people, and the PE model is not necessarily a bad thing–it’s that there’s no intention to improve the company and raise it out of debt. Sometimes this kind of transaction can result in a distressed company getting back on its feet using the infusion of cash, and getting outside direction and resources. I’m not sure how often that happens these days, but it’s possible.

But in the meantime, it’s almost inevitable that once a PE firm buys a retailer, that quality of the goods sold will drop. Even if there are clear issues with quality, and even if the people in charge at the retailer are concerned and want to do something about it, they’re often powerless. The PE firm in charge won’t let them do anything that would increase operating costs, i.e. pay more money for vendors who can deliver better quality goods.

It would be difficult, anyway, even if the retailer wanted to do. Once a PE firm buys a retail company, no reputable vendor wants to work with it. As soon as vendors learn of the buyout, most quickly transition out of any relationship with the retailer. Continuing such a relationship would be very difficult, with constant requests to reduce prices. And the relationship could very likely be a very short-term one, as the retailer (at the direction of the PE firm) may move production to a cheaper vendor or eliminate product lines altogether. Any initial investment to develop new styles and a process to make them might not be worth the brief period of sales before the retailer shifts to a cheaper vendor.

 

What do we do, then?

There’s no easy answer. I suppose all you can do is to look for and shop at places known to have good quality, for now anyway. It’s hard to do that, especially at lower-priced retailers (Old Navy and the like). Of course, even at the same retailer quality can vary–a retailer could be using dozens of vendors to create its styles, so you can always try to shop around even in the same store.

Here’s some other suggestions, which apply to shopping in general but especially when durability and quality is a concern:

  • Get woven clothes over knits. It’s difficult to find good quality for items like sweaters and t-shirts at lower-priced stores. They’re inherently a weaker fabric than wovens (the kind used for dress shirts, etc), especially when they’re often made using really thin fabric. See my post on tissue tees for how to shop for knits when you do need them.
  • Buy sturdier clothes in thicker fabrics. Don’t buy tissue tees, thin shirts and sweaters, and other items made in thin fabric. Thin = weak in fabrics. A soft fabric means it’s thin, which means it’s weak. It will break down in your washer, if it’s not snagged in a zipper or rubbed down by your purse straps. Clothes are meant to protect your skin and a thin fabric can’t do that very well (won’t block sunlight, bugs can bite through soft fabric, etc).
  • Flip your clothes inside out before washing. This reduces physical agitation of the fabric on the outside part. So what happened to my pants above, where the dye washes out unevenly, would happen only on the inside part of the pants where you can’t see.
  • Don’t machine dry your clothes. Machine drying is terrible for all clothes, good quality or bad. Heat, twisting and physical agitation are bad for fabrics. And when a fabric contains spandex, heat makes the fabric stretch out and stay stretched out (i.e. your sweatshirt sleeve hem will be overstretched). But a weak, badly made garment will fare even worse, easily getting holes (especially if the fabric is thin) and tearing at the seams. Machine washing isn’t ideal but it would be insane to request people to hand wash all their garments, and I don’t do that either. Air drying your clothes will make them last longer, and is also better for the environment.
    • On that note here’s a drying rack recommendation – I hate the multi-tier ones available that force you to bend down low to get access to different levels of the rack. Here‘s what I use–all one level, plus the red clips are good for hanging socks, headbands and other smaller items that might slip off.

It’s not a great situation for any participant in the fashion retail sector (well, maybe the PE guys). It’s so hard for consumers to find good quality item, retailers are struggling with creating revenue while handling the pressures of the current economy, vendors want to deliver quality goods but it’s difficult to do so when retailers demand such low prices.

We’re not totally powerless as consumers, though. We can step up and refuse to buy bad quality clothing, and be willing to pay a little more money for durable, quality clothes. It’ll be more economical for us too if we buy clothes that don’t have to be replaced in six months. Put a little more care and thought into the clothes you buy, don’t rush into purchases, and good luck out there.

 

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6 thoughts on “Why has clothing quality gone down?

  1. This was SO INTERESTING!

    -I am totally an online-only shopper, but hopefully a more thoughtful one… but probably not. I’m the worst
    -How do you define a “woven” or “knit” or know if something is a knit vs. a woven?
    -The background on the PE influence is really important, but never talked about!
    -This explains a lot why some of the styles I’ve liked before at places like BR/Gap all of a sudden change (with new item numbers but same item names) and everyone in the comments rages haha
    -and YES to air drying! I love this and try to do it, but you’re encouraging me to do it more.

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