This apparel manufacturing opportunity provides the acquirer the ability to the dominant market leader in this highly attractive segment. The entity likely represents 60% of its type of production on the West Coast, while it has the capacity to fulfill perhaps 90% of domestic demand within its market segment. The factory has a comprehensive cut and sew department onsite and has the ability to shift some production offshore as customer price sensitivities product demand merits.
This sale includes its tremendous goodwill, as well as its furniture, fixtures and over $4.0 ml in specialty manufacturing equipment. The production facility property is available for an additional $13.0 ml. or it may be leased back from the seller.
The specialty apparel segment is dominated by two international conglomerates. This company, however, is the largest U.S. owned and operated manufacturing of its kind in this specialty niche segment. With its unique ability to take garments from concept stage to design and production within 3-4 weeks, as opposed to the 3-4 months involved with manufacturing in Asia, the company has a distinct competitive advantage. This equates to far quicker 1/2 1/2turns' of its numerous styles that are not otherwise feasible. The company is also to engage in shorter production runs and apply Made in U.S.A. labeling to its products. With the proposed 25% tariff on clothing imports, the company's numerous local production advantages may become price based as well.
This acquisition, which is enormous in its segment of apparel manufacturing, will be an industry game changer since with a new balance sheet there will be a more favorable expense structure, less competition and improved manufacturing efficiencies. As a result, more attractive pricing and streamlined processes can be passed on to customers resulting in higher revenues, increased leverage and a strong bottom-line. This will further reduce turn times which will bolster the firm's advantage over offshore production (particularly from Asia), while making "Made in U.S.A." production more affordable. One of the property's parcels has sewer rights that allow it to be converted to a dye house. Such vertical integration may result in further time and cost savings.