London Fog adopts 'quick response' to boost sales

September 28, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

After months of labor turmoil and the closing of most of its American plants, London Fog Corp. is betting heavily on a "quick response" strategy of rapidly replenishing retailers' coat racks as the key to the survival of the company's last remaining raincoat plant.

"We're excited about this opportunity," said Edward Frey, vice president for operations for the Darien, Conn.-based raincoat and outerwear company. "Hopefully, this can be one of those U.S. manufacturing success stories."

After six months of on-again, off-again negotiations, members of the Amalgamated Clothing and Textile Workers Union voted Monday to accept a two-year contract that shuts down plants in Hancock and Williamsport, but keeps the Baltimore plant in Park Circle Business Park open.

But when the plant reopens in January after a $2 million retooling effort, it will not be business as usual.

The workers, which had done the sewing of London Fog brand raincoats, also will be cutting the material for the coats -- a job that had been done in Williamsport. They will be handling fewer styles of coats -- eight or 10 types of coats compared to the 15 varieties they had handled.

Also, the coats they will be making will probably be the inexpensive Towne coats, rather than the more upscale London Fog brand.

All this is being done so the plant can become a "quick response" operation, capable of turning out a finished coat in 10 days instead of 18 -- speeding up its trip from cutting floor to selling floor.

Quick response ensures a product is in a store when a customer comes to buy it. Too often, customers go to a store looking for a specific style or size coat only to find it is out of stock -- and a sale is lost.

To prevent this, London Fog plans to form partnerships with retailers. Linked electronically with the businesses, the raincoat company will be able to tell exactly how much a retailer has sold in the last week of specific high-volume coats. London Fog can then ship replacement coats from its Eldersburg distribution center to the retailers and refurbish their stocks in 10 days from the Baltimore plant.

This cannot be done with foreign production, which can take months to resupply inventory.

In experiments in its own 120 company stores, sales were boosted 20 percent with quick response, Mr. Frey said.

But the strategy gets mixed reviews from two retail analysts.

"It's a tremendously important thing from a retailer point of view," said Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting firm. "It cuts to the heart of the issue of being in stock."

With a domestic manufacturing ability, Mr. Davidowitz said, London Fog has an edge over competitors that rely solely on overseas production. "It is one of the things a domestic manufacturer can do to get a strategic advantage."

But Alan G. Millstein, editor and publisher of Fashion Network Report, said it is difficult to make quick response work in fashion goods, compared to commodity goods such as underwear, jeans and socks.

"It's a palliative," Mr. Millstein said about the company keeping the Baltimore plant open. "It's sugar-coating the bad news. . . . They're giving an aspirin to a union that is having a heart attack."

But Mr. Frey said he hopes the leaner, more efficient system will help restore some of pay lost by workers in the new contract and perhaps even boost employment.

"We believe, because of the different mix we'll have in there and the way we're going to set the plant up, we would expect the operators to improve their efficiency," Mr. Frey said.

And since pay is based on output, this could make up for some of the $1 an hour cut in the workers' base rate.

Also employment, which will be cut from 270 to 220 in the new operation, could be increased eventually if the plant is successful in landing contracts from other companies.

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