China certainly has an impressive garment industry: there are over 10 million workers working in nearly 110,000 garment factories around the country. The added value for the industry, however, is not that impressive.
"China trades 800 million shirts for one Airbus A380," the former commerce minister Bo Xilai once said, emphasizing that the profit margin of China's garment industry is so narrow that one shirt can only make $0.3 when exported.
But it is not that Chinese garments have always been cheap, at least, not all of them. Some of them actually have a glorious past. Baromon, for instance, used to be the most famous tailor shop in Shanghai during the 1930s, making suits for government officials, tycoons, and heads of state.
"During that time, for one liang of gold (31.25 grams), one could merely have two suits at most made at Baromon," writes Muxin, an author recalling the status of Baromon in a book about Shanghai in the 1930s. And Jin Jianhua, chairman of the company now, has a more detailed account.
"At that time, it took seven tailors to finish one suit in Baromon, while in other stores it normally took less than five," said Jin. Jin also recalls that the company's founder later opened branches in Hong Kong and Tokyo. Celebrities that were dressed by Baromon included tycoon Li Ka-shing, former Shanghai mayor Chen Yi and former Japanese prime minister Tsutomu Hata.
Today, however, wealthy Chinese will mostly turn to Armani or Versace, while snubbing local brands. As the current head of the old brand, Jin, 50, is well aware of the challenges and problems it's facing.
"We cannot compete with foreign brands yet, our design is not good enough, nor is our quality," says Jin Jianhua, who started working at Baromon in 1981.
The prestigious tailor Xu Dachang established Baromon in 1928, and it was turned into a State-owned entity after 1949. The name of the company was changed into "China Clothes Shop" during the "cultural revolution" (1966-76). Jin joined the company selling trousers and he has taken various positions in the company ever since.
For a long time following China's reform and opening up, Baromon, like most of the Chinese textile companies, made clothes for foreign brands. Baromon competed with other Chinese factories with low prices. But because of the demands of old customers for tailor-made suits, it also retained part of its tailoring business.
However, the cost of labor and production is much higher in Shanghai than other cities and provinces in southeast China. Compared with garment companies in Jiangsu and Zhejiang, the Shanghai brand has long fallen behind in terms of enterprise scale and sales volume.
"The Chinese textile industry as a whole looks big, but the times are hard for everyone since we are all competing to offer the lowest price and struggle with the narrowest profit margins," says Jin. But while struggling to enlarge the market share, Jin thought of change.
He says he learned about the garment business by going out and seeing how others do things. "A lot of managers will go abroad to visit enterprises with a lot of people, but I prefer to go there alone," he says. He was impressed with Silver Road in London, where there are many tailor shops. Jin says they are small but expensive. "Their customers are the princes of Arabia or royal families in Europe."
The experience in other countries and the competition at home led him to change Baromon's focus from relying on offering large quantities of manufactured clothes to foreign brands to an emphasis on its own design and quality.
"We don't want to be big any more, we are trying to go back to our business 80 years ago when Baromon was famous for its expertise," says Jin.
Jin is aware of the reality of the garment industry in China. "We are still behind in building a world famous brand. Brands from Italy and Britain have taken the majority of China's garment market," he says. "For a long time, we will have to compete with foreign brands both at home and abroad."
Despite all the challenges, he still believes that China's garment industry has advantages. "We still have great tailors, with the heritage of thousands of years," he says. And he says his biggest contribution to the enterprise is that he had tried to keep the company's highly skilled tailors. Baromon used to be famous for its expertise, and Jin said he felt proud that the tradition was maintained despite years of changes.
The offspring of the earliest tailors still make clothes at the company today. And Jin says he always try to keep the design force by enlarging its talent pool. He has employed students from local art schools and sent them abroad for study.
The domestic demand is also a stimulus for the garment industry. Thirty years ago all the people are dressed in blue and black, and now the rising urbanites like to dress smart. Jin hopes that as people want to change the way they dress, some of them would turn to Baromon for tailor-made clothes.
Jin is also encouraged by the overall government policy of encouraging innovation, and he is taking the upcoming Beijing Olympics and the Shanghai World Expo in 2010 as "historic opportunities" for him to further develop self-owned brands and improve innovations.
The road for innovation, however, is not quite smooth. There are several garment brands in China that are similar to Baromon. "Some of them have some connection with us, and some of them are totally trying to mislead customers," says Jin, who added that the protection of intellectual property is also important for the industry.
The final goal for Baromon, according to Jin, is to develop the tailoring business and build it into a brand that last for more than one hundred years. Although tailoring is Baromon's traditional strength, it has only started to make money. Jin has used profits made from other products to develop the tailor-side Baromon. Its 300 million yuan in sales last year were largely from making other clothes such as uniforms and common suits.
"But our focus is not on sales or output, we emphasize core technology and innovation," says Jin. Despite that, Jin believes that the profits will gradually come from tailoring for high-end consumers. "In the long run, the profit margin of the tailoring business is much higher," he says
Today, Baromon is still a State-controlled enterprise, and Jin said the share structure of a company is not as important as it seems to be. "It is the productivity that matters," he said. He is also trying to adopt a different management strategy, himself with a keen interest in the works of the late Austrian management consultant, author and self-described "social ecologist" Peter Drucker.
"I used to take care of everything, now I try to manage as little as possible," Jin says. "A good tailor should devote himself or herself to the enterprise, and to the profession of making great clothes, but there are not many people like that."
