Teenagers’ Mall Habits Keep the Los Angeles Apparel Industry Fashionably Healthy

The traditional apparel manufacturing industry of Southern California has lost 35% of its jobs since 1996, and the outlook is for the sewing needles to keep on moving to China or Central America. But not every part of the business is unraveling.

“We bring out new products every 30 days,” says Moshe Tsabag, the owner of Hot Kiss Inc., a supplier to stores appealing to girls and young women. Such fast-changing fashions don’t allow for ordering months in advance from across the ocean.

So Hot Kiss, with $50 million a year in revenue, contracts for 70% of its fabrics and garments from local manufacturers, mainly in Los Angeles and Orange counties. Just 30% comes from abroad.

“There is tremendous possibility for doing manufacturing business here in Los Angeles,” Tsabag says. “We have a very vibrant apparel industry.”

To be sure, the trend isn’t new. Los Angeles has been concentrating on quick-turn fashions for many years now, especially for the youth apparel market. Yet it’s easy amid all the talk about Wal-Mart Stores Inc. -- and the retailing giant’s relentless push to find low-price garments in Latin America and Asia -- to forget just how important a player Southern California remains.

“L.A.’s apparel industry is now driven by design talent ... and speed to market,” observes a just-released report from the Los Angeles County Economic Development Corp., which pegs revenue from local clothing companies at more than $24 billion a year -- with “lots of potential” for growth.

And what’s the reason there is so much promise for an industry that many had long ago given up for dead? Look no farther than Moshe Tsabag.

From the late 1990s until last year, he had all of Hot Kiss’ garments made overseas, largely in China. He brought production back to Southern California, he says, because of the need to deliver items swiftly to his customers and to enable his 75-employee design firm to keep up with the latest styles.

“I can go from basic idea to finished garment from a contractor here in five weeks, where ordering overseas would take 120 days,” explains Tsabag, a veteran of 28 years in the business who created apparel maker Yes Inc. in the 1980s and sold it for $6 million in the ‘90s before founding Hot Kiss seven years ago.

He now serves specialty stores, such as Wet Seal Inc. and Gadzooks Inc. Such outlets cater to a market of 15.8 million girls and young women ages 12 to 19 -- each of whom visits the shopping mall five times a month on average, according to the Teen Research Institute. Such chains do not compete directly with Wal-Mart and other mass retailers, which handle mostly basic clothing items.

Indeed, just as the TV and film industries rest on a foundation of enormous creativity, so does Southern California’s fashion business. Many of the region’s most inspired garment designers, in fact, see interest in their work being fueled by the “constant media obsession with Hollywood and entertainment celebrities,” notes the development corporation analysis.

“Our strength is ‘L.A. style,’ ” says Ilse Metchek, who heads the California Fashion Assn., a trade group.

This niche doesn’t generate the large number of jobs that traditional apparel manufacturing does, she acknowledges. But it does sustain something of a manufacturing base, often occupied by immigrant contractors. And firms that focus on design, aided by technology -- the lifeblood of the new industry -- can make particularly good money, and so can their employees.

Especially these days. Tsabag points out that many of his products cost just $1 to $2 more than a comparable import, thanks to the 25% tariff imposed by the U.S. Such a relatively small cost differential, on a garment that Hot Kiss might wholesale for $12 (to be retailed for $45), is easily tolerated by a producer and retailer selling fashion with fat profit margins.

Of course, the tariffs on apparel are scheduled to be lifted in 2005, which could radically change the equation. Expectations are that China will drive most other foreign producers out of the market in no time.

But perhaps not the local industry, which has proved it’s a hardy survivor.

“I will simply have to do more with the Hot Kiss brand,” Tsabag says. To that end, he is selling licenses for use of the Hot Kiss name to makers of girls’ shoes, socks, wristwatches and cellphones.

“It’s creating a lifestyle called Hot Kiss,” he says.

Among those that have secured a license is Zhiejiang Xuege Fashion Co. of China, which plans to open 140 stores dubbed Hot Kiss, targeting that nation’s young girls. “They want the same fashions as Los Angeles,” says Tsabag, who himself emigrated from Israel 34 years ago. “It’s one world.”

In other words, as Hot Kiss shows, this is one industry that nobody should kiss off quite yet.

James Flanigan can be reached at jim.flanigan@latimes.com.