Nine years and nine months ago, after a surprise fuel pump failure in Turn Six dropped me out of second place and kept me from getting the authentic Grand-Am podium at Laguna Seca about which I would no doubt still be talking on approximately am hourly basis to this very day, I didn’t go to Disney World: I went to Betabrand. An unassuming door on San Francisco’s Cesar Chavez Street opened after five minutes of knocking to a whirlwind of activity: people running back and forth with patterns, fabrics, random sheets of paper. The floor was covered in scraps of every clothing material one could imagine. I’d expected a retail store but in fact my girlfriend of the time and I had landed in the beating heart of what was then a relatively fledgling operation.
Somehow, after another ten minutes’ worth of conversation with random passers-by, we got assigned a pair of very stereotypical-looking hipsters to help us find some new clothing. The fellow working with me came up with a set of “Japants” in an olive herringbone cloth that I still wear to this day. No two pairs of Japants ever fit alike, because they were cut and sewn individually in another San Francisco warehouse; these were, and are, the best pair I ever got. My girlfriend, who wore an improbable 32FF bra courtesy of modern medical science, wanted to find a “San Francisco dress”. There were no fitting rooms, so she stripped and stood in the middle of the floor while her new companion attempted to tug various seersuckers and florals around her upper body. At one point, while actively molesting her client to at least second base in the course of a fitting, the impromptu salesgirl yelled to me, “I… just… love… her breasts.”
In the years that followed, I wore Betabrand clothes more often that I didn’t. There was the infamous “Golden Disco Hoodie”, a half-dozen “Sons Of Britches” pants in every fabric from plain denim to salmon canvas, the “Sea Monster Cordarounds” I was sporting in 2014 when I managed to fracture nine bones using one simple trick! I adored the company’s inventiveness, their avant-garde designs, and their small-batch efforts. All made in San Francisco. For a while, anyway. In 2014 they used an overseas supplier for shoes, and by the middle of 2018 some new clothing lines were sourced from China. By and large, however, the important stuff was still sewn and stitched in those chaotic Bay Area offices.
Last week I visited the Betabrand website and was shocked (shocked!) to see that the company as I knew it was dead. In its place was a yoga-pants reseller wearing the Betabrand name like, as they say, a skinsuit. How did this happen? Who was the cretin skulking in the shadows, working secretly to destroy one of my favorite clothes companies? What faceless venture capitalist dragged the Betabrand name through the mud?
Duh! It’s 2021. Evil no longer skulks. It brags.
The article is titled VP of Operations Jim Wilson is steering the crowdfunded apparel pioneer to new manufacturing models.
Manufacturing is a handled by contractors. Initially, Lindland relied on small cut-and-sew operations in the Bay Area. “He became very well-connected in the apparel world in San Francisco,” says Wilson. “For a very long time, all of the manufacturing was done domestically.” Production runs were typically 300 units or fewer.
In 2014, the company started moving manufacturing offshore to facilities in China, Cambodia, and Indonesia. “We started to outgrow our production facilities in San Francisco,” says Wilson. “It was largely based on necessity.”
At the end of 2017, Betabrand migrated from working directly with factories to contracting a pair of trading companies in Hong Kong, Li & Fung and CFL, to manage the entire supply chain. “We were doing everything on our own,” says Wilson. “We were sourcing fabrics on our own, we were sourcing cutters on our own, we were sourcing sew shops on our own. As a result, we weren’t really important to anybody.”
…except the customers, of course, but who cares about them?
Challenges: “Specifically from a manufacturing standpoint, one of the big ones is around the tariff conversation and how it will affect us,” says Wilson. One solution: Betabrand is increasingly shipping directly to consumers from Hong Kong. Individuals can buy $800 duty-free per day, so the strategy avoids the tariffs that could be applied to containers. “We’ve ramped it up substantially,” says Wilson. “I’m moderately to highly confident, the minimum won’t go away.”
Opportunities: As sales are currently 97 percent domestic, “Internationalization is something Betabrand is looking at,” says Wilson. “Now that the majority of our inventory is warehoused in Hong Kong, it opens up shipping lanes dramatically.” The goal? “I could see us operating a business that’s 70 percent domestic and 30 percent international in a relatively short period of time. . . . A lot of time it’s just clicking a button that says target South Africa instead of the United States.”
What’s fascinating to me about this is that it represents a rare opportunity to see the decline of a company in real time, accompanied by fawning press. Guitar collectors like your humble author are well-acquainted with the various “comeback stories” of Gibson (the Henry J buyout, opening the custom shop, and so on) and Fender (leaving CBS, returning production to an all-new American factory), but the original-sin decline and fall of those companies is buried in the mists of time and rumor. With Betabrand, I can actually watch it happen. I’ve been around for almost all of it, from SF cut-and-sew operation to moronic cloaca for Chinese yoga pants. And unlike, say, Mary Barra’s well-intentioned but breathtakingly stupid evisceration of General Motors as part of the electic-toy craze, there’s zero idealism here to muddy the waters. This is pure greed and “growth mindset” at work.
Not that there isn’t the usual lack of self-awareness to go with the big dreams. To begin with, why would anyone in other countries be interested in having a Betabrand logo on their Chinese yoga pants, when they can have the same pants with no logo, or with a regionally popular one, for less? Do you think people in the UK, for instance, will skip the “fast fashion” stores to buy Betabrand? Would a Muscovite ignore the new Lululemon store because she can get Betabrand on the Internet? Of course not. When you sell the same trash as everyone else, you need either killer marketing or killer discounts. Betabrand had killer marketing, because they had unique products. Their new marketing? To use the infamous words of the former Mrs. Lange, that don’t impress me much.
Oh, and Jim Wilson has also managed to convince himself that Betabrand is still a San Francisco company:
Needs: “Space is certainly a big one,” says Wilson. “We are virtually at capacity in our office.” A secondary space near the headquarters houses the customer service team; consolidating customer service and other functions in the East Bay might be in the cards.
“I can’t imagine a scenario where we’d leave the Bay Area,” he adds. “It’s something we’ll need to start thinking about.”
Son, I don’t know how to tell you this, but you already left the Bay Area. The real heart of any company is, very simply, where the product is made. Are there exceptions? Sure. Those factories assembling “CKD” (completely-knocked-down) car kits in the Third World doesn’t exactly represent the heart of Toyota or Mercedes-Benz. Most of the time, however, you can figure out where the company really is by asking the question:
Which parts of the company could you not shut down tomorrow for, say, a year, while still making money?
You could close the Betabrand offices in San Francisco, fulfill the orders directly from Hong Kong per Jim Wilson’s wishes, and nobody would notice for quite some time. Should “Li & Fung” turn off the sewing machines, however, Betabrand would effectively cease to exist. Therefore, Betabrand is nothing more than a branch office for Li & Fung.
(Anecdote: Twenty years ago, Borders Bookstores was given the chance to buy Ingram, which was the big dog in the book-warehouse game. It was also the primary supplier to Amazon. A fellow who wrote for PC Magazine suggested that Borders make that purchase and immediately turn Amazon’s business off. Can you imagine how different, and how much better, the world would be now had the people at Borders possessed the guts to do that? Because at that point Amazon was nothing but a front end.)
The Jim Wilsons of the world think that it doesn’t matter where you make something. They believe that all the value-add, all the mojo, is in the marketing and “leadership”. History has proven them wrong again and again, both in a negative sense — have you looked at the brands of televisions lately? — and in the positive sense — Honda’s decision to make United States manufacturing a priority would eventually see them overtake Nissan on the world stage. Oh, and sometimes the consequences verge on the horrifying; as Cisco has turned into a skinsuit shop run by Indian H1-Bs, it has sought to support bringing the caste discrimination practiced in India to our shores. And why not? Why should a company staffed by Indians and owned by a rootless global elite have to pay attention to something as parochial as American discrimination law?
Well, I’m proud to announce that Riverside Green is not only made in Ohio, it’s been hosted in Ohio for the better part of a year after a six-year stretch in a San Antonio datacenter. No, we don’t have Sea Monster Cordarounds — but we continue to provide the sharpest insight I can manage while continuing to pay my mortgage and feed my pre-teen son. Come on back whenever you like! We aren’t going to change!