Statewide: The new old thing

 In 2014-11

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by Alex Granados

While many North Carolina manufacturers end up moving operations overseas, Raleigh Denim Inc. started there, in a small town just north of Donetsk, Ukraine, where Victor Lytvinenko made several trips to visit family from 2004 to 2006. Bored one summer, the Cary native decided to try making a pair of jeans. (A former semipro soccer player in Switzerland, Lytvinenko, 34, has dabbled in everything from photography to winemaking.) He found some fabric, fixed a 19th-century sewing machine and traced a pattern using the pair he was wearing. The result wasn’t good, but when he returned to Raleigh, he and wife Sarah bought industrial sewing machines from a liquidator in Lumberton, got rid of the couch in their living room and began making jeans in the apartment. When friends started popping in to order a pair, they thought they might be on to something. “People said, ‘Don’t you know that all manufacturing has moved overseas?’ And we said, ‘Yeah, but what we’re doing is different.’”

You’ve probably heard about the rebirth of manufacturing in the state — in fact, you’ve read about it here. Two years ago, we wrote about Bruce Cochrane, whose family ran Lincolnton-based Cochrane Furniture Co. from the early 20th century until selling it in 1996. Twelve years later, the new owners closed the factory. In 2012, he started Lincolnton Furniture Co. and reopened it. “Sales,” he told our writer, “have been very, very good — robust, even.” He anticipated employing 130 people by the holidays. That same year, we ran an item on Durham-based School House Inc., which had moved manufacturing of its apparel from Sri Lanka to North Carolina. A year later, we published a photo essay on Stanley Furniture Co.’s plant in Robbinsville, where it had relocated production of its Young America line from Asia.

Lincolnton Furniture closed a year after it opened, School House founder Rachel Weeks now works in marketing for Raleigh-based Bandwidth.com Inc., and High Point-based Stanley announced in April it was shutting down the plant, Graham County’s largest employer. This was the kind of manufacturing that dominated the state’s economy four decades ago, when mills and factories employed one of every four workers, but faded like an old pair of jeans as free-trade pacts made it more economical to make or buy goods produced in low-wage nations. Last year, manufacturing accounted for just 12% of North Carolina jobs. But the industry has never been stronger, according to N.C. State University economist Michael Walden. Industrial output in the state increased 106% from 1977 to 2013. “The current level of manufacturing output is only slightly below the record level set in 2007,” Walden says. “The state will set a new record level of manufacturing output later this year or next.” That’s because the decline in employment has been matched by improved technology, which has bolstered productivity.

A lot of that gain can be attributed to new products — everything from auto parts to computers — and advanced-manufacturing techniques. But many aren’t ready to bury old-school manufacturing yet. Companies throughout the state are using vintage production practices to make products — albeit on a much-smaller scale — for which consumers are willing to pay a premium. “I think that you’re going to see more and more of these boutique manufacturers, particularly for products that are retail- and sort of consumer-oriented,” says Teresa Helmlinger Ratcliff, executive director of N.C. State University Industrial Extension Service, which helps small and midsize manufacturers stay competitive through education and technical assistance. She cites Raleigh Denim and Raleigh-based Holly Aiken Bags Inc., which has been making high-dollar, high-fashion vinyl products — $59 for a wallet, $197 for a diaper tote — in North Carolina since 2004. Cone Denim LLC’s White Oak Plant, which opened in Greensboro in 1905, pulled its vintage shuttle looms out of storage in the early 1990s when demand for selvage denim began to rise (“Gaining an Edge,” May 2012). The mill, owned by Greensboro-based International Textile Group Inc., makes 90% of the denim used by Lytvinenko’s company.

Raleigh Denim eventually moved out of the Lytvinenkos’ apartment into a warehouse with no heat or windows. They bought more sewing machines on eBay and a pingpong table to use as a cutting table and solicited advice from former workers at Levi’s Bakersville factory, which closed in 2005, and at White Oak. Then they got lucky. After seeing a news story on the company, a Durham shoemaker connected the Lytvinenkos with his uncle, who worked in the apparel industry in New York. That led to a meeting with Barneys New York. The posh, Manhattan-based department-store chain became one of Raleigh Denim’s first major retail partners. The jeans are now sold in Saks Fifth Avenue, Nordstrom and Bloomingdale’s stores and in Japan, Canada and Mexico. It also has its own stores in Raleigh and New York City. Workers cut denim, sew on pockets and install buttons by hand. That takes four or five times longer than mass-produced jeans, which explains why its 22 employees make only a few hundred jeans a week and why a pair retails for between $175 and $400. Lytvinenko would not disclose recent sales figures but in 2012 said revenue doubled each year. “I think the future of manufacturing in the U.S. is in that kind of work. Is in higher quality, higher design,” Lytvinenko says. “We’re never going to be able to make it a cheaper product here, but we’re always going to be able to make a better product.”

Even Cochrane, who filed Chapter 7 bankruptcy in October 2013, hasn’t given up. Though he wouldn’t provide details, he says he’s working on a project that could bring 300 to 350 jobs to the state. Lack of capital and unexpected setbacks — including a faulty electrical system — doomed Lincolnton Furniture, he says. “I’m convinced if we hadn’t had some unfortunate things happen, we could have made it work.”

Alex Granados is a Raleigh free-lance writer.

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