CIT And The California Fashion Association Release L.A. Area Fashion Industry Profile

NEW YORK and LOS ANGELES — March 26, 2014 — While many people are fixated on fashion trends that dominate Hollywood’s red carpets during the annual award season, Los Angeles’ fashion industry has largely been unappreciated as a driving force for the city’s economy, according to the report “Los Angeles Area Fashion Industry Profile and 2014 Outlook. The report was commissioned by CIT Group Inc., a leading provider of financing and advisory services to small businesses and middle market companies, and the California Fashion Association (CFA). In fact, according to the report, local companies capture more than $18 billion in revenues through the fashion industry, and about one-third of that flows through to local workers.

“Los Angeles represents the intersection of innovative design, fashion leadership, commercial transport and production that meet global needs,” said Jon Lucas, President of CIT Commercial Services. “As Los Angeles’ profile in fashion keeps rising, local entrepreneurs and businesses will continue to need financing solutions to get their ideas and projects on to the global market.”  

According to the report, the success of Los Angeles’ apparel industry has long been driven by the pull of design talent, favorable cost economics, the appeal of L.A. fashion and speed to market. However, while the city’s access to seaports and airports provides a strong advantage for imports coming into the United States from East Asia and Central America, the lack of Los Angeles-based fashion shows (typically associated with fashion “meccas” like New York and Paris) limits public awareness of the strength of the industry. What’s more, fashion trends emanating from Los Angeles tend to focus on active wear and not the high-fashion design typically associated with runway shows.

Additionally, the report indicates that Los Angeles needs to do more to develop the employment base and public awareness needed to solidify the city’s position as a true fashion capital. Specifically, the report suggests that additional positive economic impact could be realized by aggressively marketing the “L.A.” and “California” brand in fashion apparel, especially overseas. In addition, training grants and tax incentives for small businesses could help create more job opportunities. Moreover, academic institutions need to go beyond simply offering apparel design classes, and offer apparel-related business management and merchandising studies, too.   

Following are some of the key highlights of the report:

Evidence of Growth

  • Locally, the city’s “Fashion District” is supported and promoted and has its own Business Improvement District (BID).
  • Culturally, there is tremendous interest in “L.A. Style,” which raises Los Angeles’ profile as the fashion capital of trends in the United States, and attracts young designer talent who bring new ideas and innovation.
  • The retail industry is consolidating, and national chains are engaging in “matrix purchasing,” which favors existing, large suppliers. In response, some manufacturers are opening their own retail shops.

Hurdles to Overcome

  • The LAX airport terminal and the Los Angeles Fashion District BID need to be refreshed for out-of-town buyers visiting local apparel companies.
  • Most media coverage focuses on the trendy runway shows that do not showcase well the more mainstream, saleable designs of California’s producer brands.
  • Los Angeles students do not perceive work in the fashion industry as a viable career option.
  • Exporting can be difficult. Easing regulatory barriers is needed to enhance entrepreneurial growth.

Trends to Watch

  • Rising wages across the globe in conjunction with increasing energy prices will drive up transportation and manufacturing costs.
  • Immigration reform regarding temporary immigrant work visas and an I-9 form will be needed to build back apparel and textile manufacturing employment inside the SoCal region.
  • Unnecessary zoning or waste disposal red tape, onerous tax regimes and other regulatory structures are worth a second look.
  • Middle income consumers in Asia, which number in the tens of millions, will offer an opportunity for new markets to sell “Designed in California” apparel.
  • Individuals can download a free copy of the “Los Angeles Area Fashion Industry Profile and 2014 Outlook” and related infographic at

Posted March 31, 2014

Source: CIT Commercial Services