Adventures in the Rag Trade : Apparel: As in show business, garment makers are only as good as their last act. The chairman of Chorus Line Inc., Barry Sacks, illustrates how raw emotion fuels the industry.

By mid-morning, Barry Sacks already was steaming.

A merchandise manager for a big department store chain--a major customer for Sacks’ dress company--was on the line, demanding a price concession. She got a quick reply.

“No! No! No! No! “ said Sacks, his temper barely in check. “You can’t get one penny more!”

Cocked back in his chair with a phone jammed against his ear, Sacks hammered away: “I’m only a manufacturer, I don’t create the market. You’re being unreasonable. We can have this conversation till I’m blue in the face. It’s a physical impossibility. I can’t afford it!”

For Sacks, chairman and chief executive of the bustling Los Angeles apparel firm Chorus Line Inc., and for his partners, it was a day like almost any other. Sure, some of the exchanges with customers and sales people may have gotten fiery, but raw emotion--blended with healthy doses of guile and horse sense--fuels the rag trade.

Contentious, and sometimes vicious, the apparel industry reigns as the second-largest manufacturing employer in Southern California. It’s an industry of strong passions and contradictions, powered both by scrappy entrepreneurs and an army of poorly paid immigrant laborers.

For those at the bottom--the thousands of legal and illegal Latin American and Asian immigrants who sew fabrics at small contractors’ shops--apparel manufacturing can provide a desperately needed source of jobs, an entryway into the U.S. economy. Yet these sewing shops dotting Southern California often are guilty of severe labor abuses, with workers toiling long hours on piecework for less than the minimum wage.

At the same time, apparel manufacturing can be glamorous, part of the world of fashion. The garment industry is probably second only to Hollywood as a vehicle for exporting breezy images of Southern California. “It’s another form of show business,” Sacks said.

And for those at the top, far removed from the contractors’ sweatshops, it’s also a volatile business where fortunes can be made or lost and where people who have failed or struggled before can get a second chance at success.

Take Sacks, for example. Born in the Bronx, Sacks joined the army of ex-New Yorkers in the Los Angeles area’s apparel trade in the mid-1970s after the textile firm back East where he was executive vice president began lurching toward bankruptcy.

The move worked out extraordinarily well for Sacks, who as a teen-ager quit high school to join the Navy. Today, at age 50, he is a multimillionaire, with an 8,000-square-foot house nestled high in the Santa Monica Mountains. He keeps a Jaguar and a Mercedes in the garage, collects fine art and dabbles in movie deals.

“There’s a saying in New York that if you can’t make it in New York, you can make it in California,” wisecracked Sacks, a fast-talking, charismatic man with a wiry build.

Still, in a business as cutthroat as the fashion industry, anyone who rests on his laurels can be devoured. The constant influx of new competitors and the need to anticipate fast-changing styles have long made this a tough business; the recent recession has made things tougher.

Consequently, the negotiating almost never stops. Neither does the skulduggery. Retailers, manufacturers and their contractors often seem to put more energy and creativity into chiseling each other than into their fashion designs.

“The retailers have problems, so they squeeze the apparel manufacturers. The apparel manufacturers squeeze the contractors. The contractors, I suppose, squeeze the labor,” said Gary Freedman, a lawyer with clients in the apparel business.

Chorus Line is one of the fortunate firms big enough to be able to throw its weight around with suppliers and customers. Best known for its All That Jazz label, the company reported sales of $112 million last year.

It bills itself as the nation’s leading maker of moderately priced junior dresses, mainly designed for women in their teens and 20s but often worn by customers into their 30s and even 40s who want a youthful look.

Over the last decade, the Southland has bred several other big players in the U.S. fashion industry. Among them are Guess?, the fashion jeans innovator; L.A. Gear, which has relied on a Southern California image to rise to the No. 3 spot among U.S. sneaker firms; Cherokee, a maker of casual sportswear, and Bugle Boy, which specializes in boys clothes.

Beneath them are hundreds of smaller apparel marketers, or manufacturers. (In the apparel industry, the firms that sell clothing to retailers usually are called apparel “manufacturers” even though they mainly just buy fabrics and design and market garments; the actual manufacturing is done by little-known and usually small sewing contractors.)

Most of these firms, where open-collar shirts are the rule even in the chairman’s office, are far from the cutting edge of sophisticated fashion. The typical apparel maker here specializes in moderately priced, colorful young women’s clothing, particularly sportswear.

For a long time, Southern California’s apparel firms were regarded in some circles as kooky, bit players in the fashion industry. That image stemmed from, among other things, the topless bathing suits designed in the 1960s by Los Angeles’ Rudi Gernreich and the similarly outlandish, skimpy outfits made for actress Cher by Bob Mackie, a Hollywood costumer who later migrated to the New York fashion scene.

“Everyone would say, ‘There go those Californians again,’ ” said Alan Millstein, publisher of Fashion Network Report.

Today, however, apparel manufacturing is a huge economic force here, a $7-billion-a-year industry. Until the current consumer spending slump struck, apparel employment climbed for years in Southern California, bucking the long-term national downturn in an industry hurt by lower-cost foreign competition.

With estimated employment of 111,000, the Southland’s clothing and textile industry is close to overtaking the New York area--the longtime center of the U.S. apparel industry--in jobs. And with so much of the physical labor supplied by illegal immigrants through the underground economy, the impact of the apparel industry on Southern California’s economy is probably far greater than the official statistics suggest.

The U.S.-Mexico free-trade pact under negotiation could eventually shift some apparel production south of the border, but for now at least, the legion of immigrant workers in Southern California willing to work for low pay remains a strong lure for entrepreneurs.

To be sure, New York remains the nation’s fashion capital. With Women’s Wear Daily and the influential fashion magazines all based in the Big Apple, 7th Avenue remains the place where hot new designers are anointed and where major retailers tend to do most of their shopping for fresh merchandise.

Consequently, even some mainstream Los Angeles firms such as Chorus Line maintain showrooms in New York, in addition to their sales offices here. On top of that, Sacks spends a week in New York every month but July to promote Chorus Line’s merchandise.

Still, manufacturers have migrated to Los Angeles for years. Some are New Yorkers that came looking for relief from unions and transportation problems, while many others are immigrants from places such as Iran, Israel, South Korea and South Africa.

For merchandise buyers, no market outside of New York is more alluring than Los Angeles. Buyers pour into California Mart, a bustling 3-million-square-foot complex of four buildings covering a full block in downtown Los Angeles’ Garment District.

It is a huge enterprise: An estimated 8,000 people work in the mart and as many as 10,000 more visit the showrooms every day; it houses offices for more than 1,500 apparel, textile and sales firms, along with 11 restaurants, five banks and a dentist’s office. It even has its own ZIP Code.

Perhaps most important, the 27-year-old California Mart is the world’s biggest single apparel market, a giant bazaar where manufacturers and retail buyers haggle over deals. It was launched as a family business by brothers Harvey and Barney Morse, a pair of lingerie makers who recognized how much more inviting the sprawling Southern California market would be for retail merchandise buyers if they could do all of their shopping under one roof.

When it’s going well, the apparel business produces tremendous profits for the manufacturers. The rule of thumb is that if it costs a manufacturer $10 to make a blouse, the firm will sell it to a retailer for $20, who in turn will charge consumers $40.

“One item--one good idea--can make you a fortune,” said Freedman, a lawyer whose family was in the apparel business.

Moreover, one-time failures have a way of resurfacing with new firms. If someone is willing to give you enough credit to buy some fabric and to pay for some garments to be sewn, you’re back in business.

“In my 40 years in banking, it’s the only industry I’ve seen where someone can go into business, not be successful and perhaps go into bankruptcy, and then go back into business six months later with no stigma attached--so long as it’s an honest bust,” said Bruce H. Corbin, a regional vice president with Union Bank and the dean of the Los Angeles lenders to the apparel industry.

Sacks himself escaped from an unraveling fabric firm when he launched Chorus Line in December, 1975, with Mark Steinman, who now is the company’s president, and a third partner. The firm’s name was inspired by the fact that the founders’ wives were all studying dance.

In the early years, Chorus Line struggled. When the original third partner departed after a year with Chorus Line, the firm was left without anyone who knew the ins and outs of the dress business.

Before teaming up, Steinman, 48, and Sacks both sold fabric, and neither had ever been directly involved in apparel manufacturing.

Initially, they relied more on survival instincts and their fabric-buying skills than on a sense of what niche their firm could fill. If a customer “didn’t want dresses that day but was buying blouses, we made blouses,” Sacks said.

By 1981, though, Steinman and Sacks discovered a dress maven on their sales staff, Jay Balaban, and brought him in as their new third partner. At 36, he is the youngest partner and the only one with a college degree. As Sacks once explained it to a trade publication: “Jay is a dress man, which means he understands why, when and who you make dresses for.”

Still, manufacturers routinely clone each other’s styles and mimic what they see everywhere from Europe’s fashion capitals to Melrose Avenue, so it doesn’t take a design genius to develop a successful dress business. “We’ll take a little bit of this and a little bit of that, and then put it together,” Sacks said. “We’re adapters.”

“We’re making very affordable clothes for working women age 15 to 50 who have an appetite for fashion but not the pocketbook for high prices,” added Sacks, whose main line of dresses retail for $40 to $60.

While Balaban supervises daily sales and watches out for fashion trends, Sacks and Steinman serve as the firm’s chief trouble-shooters.

Sacks negotiates the major deals with Chorus Line’s retailers and handles administration and finance. Steinman, the self-taught production chief, is in charge of fabric-buying and oversees the work done by the company’s contractors.

In that role, Steinman is well aware of the most sensitive issue in apparel manufacturing: The existence of shabby, poorly ventilated and low-paying sweatshops, a problem that has persisted for generations in the industry.

State and federal authorities in Southern California say most of the area’s sewing contractors are breaking labor law. In fact, labor officials say, apparel contractors as a group are far worse than any other offender.

“Conditions are abusive and the pay is horrible. (Workers) can’t make a living on what they get,” said Rolene Otero, the enforcement chief in Los Angeles for the Labor Department.

The biggest problem, government officials say, stems from piecework pay rates that are so low that only the fastest sewers can earn the minimum wage or more. Also, the rates aren’t adjusted upward for overtime work.

Roger Miller, the state’s labor standards enforcement chief in Los Angeles, said apparel firms faced with hard times find it difficult to reduce their spending on such things as supplies or rent. “So what do you cut? You cut labor costs,” he said.

“And a lot of people need jobs, they can’t say, ‘If you don’t pay me $10 an hour, I’ll walk down the street.’ . . . There aren’t a lot of jobs around for people who are unskilled.”

Steinman says he does what he can to make sure Chorus Line’s work isn’t given to abusive contractors. He says he sends his staff of 25 quality control inspectors to the shops to make sure that, among other things, piecework isn’t being done illegally at workers’ homes or in ramshackle shops.

In addition, Steinman says Chorus Line pays contractors the going rate or better for its work.

Still, Steinman argues that firms such as his have a limited ability to police their contractors. “We can’t open somebody else’s books and see what they pay somebody,” he said.

Like many other apparel manufacturers, Steinman expresses few qualms about his industry’s practices, maintaining that low pay for unskilled work is an inevitable fact of life in American capitalism.

When his grandparents came to this country early this century, Steinman said, they had to take low-paying jobs too. “The world is what the world is,” he said.

Others in the apparel industry sometimes wonder why Sacks, Steinman and Balaban bother with the headaches of the business any longer. Financially, they already are set.

To cash in on Chorus Line’s success, the three partners in 1987 sold roughly half of the business to Wall Street’s Merrill Lynch & Co. and another investor, Ira J. Hechler & Associates. The financial details were never disclosed, but apparel industry sources estimate that the three received a total of around $30 million--a juicy deal envied by many.

But the three partners talk and act like businessmen who plan to stick around. They are looking for a new headquarters to replace their current cluster of four drab warehouse buildings on West 31st Street, just southwest of downtown.

The firm has also diversified recently by developing a sportswear label and a line of special occasion dresses generally retailing in the $120 to $200 range, a higher-price category for the company.

What keeps them going? Like many apparel manufacturers, Chorus Line’s principals say they are hooked on the industry’s electricity.

The apparel industry, as Sacks is fond of saying, is “just like show business. You’re only as good as your last act.”

Big Names In Apparel The following are some of the biggest apparel marketing firms based in Southern California. Sales figures are low-end estimates for the past fiscal year unless otherwise noted. Sources: Fabric Marketing Research of New York; company reports. (Sales are in millions of dollars.) L.A. Gear (Marina del Rey): $902* Guess? (Los Angeles): $575 Bugle Boy Industries (Simi Valley): $300 Cherokee Group (Sunland): $237** Paul Davril Inc. (Los Angeles): $200 Carol Little Inc. (Los Angeles): $180 Cal-Togs/Breton Industries (Los Angeles): $150 Jonathan Martin (Los Angeles): $130 E-Z Sportswear (Chatsworth): $125 Catalina Cole (Los Angeles): $120 Chorus Line (Los Angeles): $112 Quicksilver (Costa Mesa): $100 Pacific Outlook Sportswear (Anaheim): $100 Note: * Figure mainly reflects sneaker sales. U.S. clothing sales amounted to $81.2 million. ** Figure includes shoe sales. Clothing sales amounted to $202 million.

Ranking the Rag Trade Largest manufacturing employers* in Los Angeles County.

Industry Employment Aircraft equipment 110,600 Apparel and textile products 96,400 Instruments 83,300 Electronic equipment 62,600 Fabricated metal products 61,900 Printing, publishing 61,600 Industrial machinery 55,600 Food products 48,700 Rubber and plastics 34,300 Furniture, fixtures 32,100

* All figures are for April 1991. Source: California Employment Development Department.