Judith Richardson and Charles Le Pierrès have done the math, and they know they can save big bucks by manufacturing their products overseas – perhaps in China or Bangladesh or Vietnam.
But the husband-and-wife owners of Montreal-based Judith & Charles, a high-end clothing manufacturer and retailer, don't give a stitch about this. The company that started 23 years ago as a North American licensee of the French fashion brand Teenflo continues to make its apparel in the same country where it lives.
Even as Canadian clothing manufacturing sales shrank by almost 70 per cent over the last 10 years – to $2.5-billion in 2012 from more than $8-billion in 2002 – and overseas garment factories became the dominant source of clothes sold in Canada and around the world, Ms. Richardson and Mr. Le Pierrès have stuck to their made-in-Canada strategy.
It's an approach that may no longer be fashionable in the apparel industry, but for Judith & Charles, it fits like an impeccably tailored suit.
"With the exception of knitwear, 95 per cent of what we sell is manufactured here in Canada," says Ms. Richardson. "This is something we've done right from the start, and we recognized all the advantages and disadvantages that go along with that."
The disadvantages can easily be summed up in one major drawback: It costs more to make clothing in Canada, where wages and other operating costs are simply higher than they are elsewhere. The advantages, on the other hand, are manifold, says Ms. Richardson.
"I can control my quality to a much greater extent by being here," she says. "In Asia there are standard manufacturing tolerances; if they are within a half-inch of spec, we can't go back to them and say this isn't good enough, and for us a half-inch difference is huge given the quality of product that we have to deliver."
As Teenflo, the company was a wholesaler supplying to department stores. Since it rebranded to Judith & Charles, it has retained only one retail client – Holt Renfrew – and shifted to a vertical business model where it sells directly to consumers through its own boutique stores and, recently, through its e-commerce site.
Along with this new sales strategy, Ms. Richardson and Mr. Le Pierrès began producing clothes in smaller collections, with a new one in stores each month. Manufacturing in Canada makes this possible, says Ms. Richardson.
"We can turn in four weeks – that's very quick in our industry," she says. "Huge companies like the Zaras of the world can achieve those kinds of turns in the Far East but to do that you have to be huge."
At-home manufacturing also allows the company to produce lower-volume runs of special items, says Mr. Le Pierrès. In some cases, the company might make only 100 pieces of a certain item, which would be difficult to do with a manufacturer in Asia, where minimum requirements can be prohibitively expensive for a small business, he adds.
Mr. Le Pierrès points to other benefits of manufacturing in Canada that can't be measured easily in dollars and cents. There's the company's smaller carbon footprint; products don't need to travel too far to get to Judith & Charles boutiques and to Holt Renfrew.
Also, by manufacturing in its own backyard, Judith & Charles is supporting the local economy and helping to provide jobs for people, says Mr. Le Pierrès. "We have two suppliers that have been with us for 20 years," he says. "One has 25 employees and the other has 16."
Ms. Richardson says Judith & Charles invests in its relationships with its suppliers. The company has even flown some suppliers to Paris to train them in how Judith & Charles jackets should be made.
Another big advantage to producing in Canada?
"Our customers appreciate it," says Mr. Le Pierrès, noting that Judith & Charles has not been shy about advertising its made-in-Canada roots. "Customers have actually approached me to say how great it is that we're still producing in Canada."
Mr. Le Pierrès and Ms. Richardson declined to reveal revenue figures for their company, but they say that in-store sales have seen "high single-digit or low double-digit" percentage increases in each of the previous three years. Judith & Charles has also expanded its network of stores over the past five years, to 10 today from just two in 2008. A couple more are scheduled to open next year.
Last month, in something of a role reversal, Judith & Charles also opened two licensee stores in China. The licensee agreement came about after a customer familiar with the Chinese market approached Ms. Richardson and Mr. Le Pierrès.
"She told us that the Chinese would like to wear something that's not made in China, and that she thought millions of Chinese women would love to wear our clothes," recalls Mr. Le Pierrès, adding that three more overseas licensee stores – two in China and one in Qatar – are in the works.
"Everybody dreams about breaking into the Chinese market, and here we are bringing clothes that are made in Canada to a country that manufactures clothes for the rest of the world."