How Homeshoring Dresses Up Profits

Like so many other aspiring designers, Meg Kinney went to New York with a dream and gumption. As it turned out, she had more gumption than most, and in 1994 - just four years after graduating - she opened a retail store in New York's East Village.

As Megshops grew to four shops, Kinney assumed that she'd move manufacturing overseas. Here's what happened when she did.

When you first set up shop, you made everything yourself, right?
I opened in the East village at a time just before New York decided that the East Village was the hottest place to be. New York is very territorial...other neighborhoods wouldn't take your line if it was too close. I built a loft in the back and a shop in the front and sold dresses. My aesthetic is very clean lined, classic with a twist, and it's investment clothing, not throwaway clothing. And it stands the test of time. My goal is to get affordable clothing that women love to wear all the time.

At what point did you realize you had enough volume to formalize your supply chain?
I sold $12,000 worth of my first line, spring and summer clothes made of cotton gauze.

I went to my parents and they lent me $6,000 and I got started. So I grew the wholesale business, little by little and almost lost my shirt a couple hundred times. But once I opened the stores, I could balance things. This was a very normal thing to do manufacturing in New York in 1998. There were thousands of factories. I was doing 60 pieces per style, times ten styles per season.

When I got big enough, I thought, well, I'll just start manufacturing overseas. I have had four runs done in India, through an agent, but if a dress costs $25 to sew and there is $16 worth of fabric in it, when you do the math, it's not cost effective. You pay for those interim services, and the shipping. The quality was disappointing. Now I work with a factory in Canada and one in New York. The people here know my patterns. They are very conscientious about what they do.

The irony is that once you consolidated manufacturing back in New York, the manufacturing base had shrunk.
Literally, it has been disappearing in front of my eyes. Even looking for buttons in this town, it's impossible. Now I'm big enough to be worthwhile for the few manufacturers left. Local businesses, they want you to succeed. Overseas feels pretty impersonal. One agent is just like another.

Are you worried that the garment district will no longer exist, and that you will be forced back to overseas suppliers?
A little, but now there's legislation that the garment center will always be a garment center.

Kind of like a manufacturing historic district. I'd think that the fact that your clothes are actually designed and made in America would actually have become a big selling point.
It is. I just did a trunk show in San Francisco, and the woman who hosted it, that was a big reason why she likes my product. Some people like the quaintness,the small run of it. others like that it's not slave labor. This is where the business is going. We can all go to H&M and big malls, but the idea that someone who's made it makes sure it fits you properly, is a special way to purchase your clothes.

Edited and condensed from the original interview. Image courtesy of Megshops.