[OUTLOOK]Work, not complaining, worksHong Sung-pyo has been a successful garment wholesaler for more than 30 years, selling hundreds of millions of dollars in Korean-made clothes to upscale American merchandisers such as Saks Fifth Avenue and Liz Claiborne.
Armed with a sunny, soft-sell approach, Mr. Hong has a favorite expression in English when difficulties arise. He says, “No problem.”
Such confidence should be a lesson to Korean businessmen and pundits who moan that the poor economy is the fault of the government.
Even though the abandonment of world trade regulations governing textiles promises to put Korean firms at a disadvantage compared with the low-cost labor producers in India and China, Mr. Hong says, “No problem.”
How can this be?
For decades the international industry was ruled by the Multi-fiber Arrangement, which limited free trade and protected textile manufacturers in rich countries along with their relatively high-paid workers.
Under the World Trade Organization, the gloves ― meaning punitive tariffs, quotas and other restrictions ― came off on Jan. 1. Selling textiles is slowly becoming a free-for-all. Industry report cards are proliferating with predictions of who will be the winners and losers.
The bet is that manufacturers in Bombay and Shanghai ought to be able to corner most of the textile production in the world. The World Trade Organization estimates China alone will absorb half the market for apparel by 2007, tripling its share from last year. Already U.S. merchandisers, such as Gap, are calling garment wholesalers from around the world to meetings in the United States to assess how the market is going to shake out and perhaps seek price concessions from long-time suppliers.
U.S. importers have filed lawsuits, aiming to prevent the Bush administration from limiting ― with what are called “safeguards” ― an expected flood of merchandise from the cheap-labor countries. Uncertainty is rife.
But Mr. Hong, who is 64 and a graduate of esteemed Seoul National University, shows little concern. He has been in the business long enough to know a thing or two about what it takes to sell clothes.
Korea, as it happens, started downhill 15 years ago when it came to producing for the U.S. mass marketers, Wal-Mart, Target, Marshall’s and the like. The days when Korean manufacturers could hire thousands of middle-aged seamstresses at rock- bottom wages to stitch millions of garments had passed. It was because of its earlier success that Korea was no longer a cheap source of labor.
The result was Korean manufacturers began to set up plants in Guatemala, which had preferential trade links with the United States, in the Philippines, Bangladesh and China ― all of them nations with lower labor costs than Korea.
In Korea’s textile sector, Mr. Hong is widely credited with seeing that manufacturers could still do well by accepting relatively small orders that could be sold at higher margins in the United States. The trick was to produce high-quality products and to deliver them fast and reliably.
Speaking of sales to the United States, Mr. Hong says, “Look, there are big fish and small fish in the market. Korea has to go after the small fish, meaning smaller orders to stores like Bloomingdale’s and Nordstrom. We may have to work harder without the quota system, but it doesn’t mean we can’t compete on high-quality goods in smaller quantities.”
American Lon Garwood, who heads the Seoul office of Pacific Buying Marketing Service, a sourcing agent, or middle-man, for fashion apparel and accessories, regards S.P. Hong as a kind of garment guru.
“His positive attitude is the key to his genius,” said Mr. Garwood, a veteran in the textile business who has known Mr. Hong for many years. “S.P.’s vision was: If we can’t do it one way, then let’s do it another way.”
In other words, Mr. Hong knows how to catch a lot of small fish. His ingenuity rests on efficiency, not design. He is not embarrassed to produce knock-offs of items that show up on a Paris runway. He just developed a way to do it faster and better than his competitors at home and abroad.
Ten years ago, Korean garment makers worked with a six-to-nine-month lead time to mass produce for U.S. stores. Because fashion notions can change overnight, that lag presented the risk that a huge order could fall flat with consumers.
“S.P. was the guy who saw you could make money, if you produced high-quality items on a ‘quick- turn’,” said Mr. Garwood. A quick-turn is industry jargon for filling an order in 70 to 80 days.
“He’s got small orders down to an art or a science. A few weeks each to dye, cut, sew and ship,” said Mr. Garwood.
Mr. Hong stepped down last March as president of the mid-sized garment supply house, Choi & Shin’s Co., to become the company’s senior adviser. When his yearlong stint is over in a few weeks, Mr. Hong says he’s heading straight back into the business, believing selling Korean-made clothing will be “no problem.”
Instead of sitting back and complaining that Korea’s economy is preventing him from achieving his goals, Mr. Hong understands that the government is not standing in his way and that success only requires good ideas, a strong will and a positive outlook. In that, he and President Roh Moo-hyun would agree.
* The writer is the editor of the JoongAng Daily.
by Charles D. Sherman