Dagne Dover Is Moving Production to Asia. Why?

In my perfect world–and many others’–we could get all of our clothing and accessories made right here in New York City.

Not only would it bring jobs back to the beleaguered Garment District, it would also preserve sewing and leather-working skills, ensure workplace protections and fair wages for workers, and cut down drastically on the amount of carbon expended in service of getting our It Bag in our stylish little paws.

And these are all reasons that you can hear an almost universal lament among conscious consumers and New Yorkers about the factory closures on the west side of Manhattan. Why, oh why can’t we get our bags manufactured here?

“It must be greed,” is the sometimes not-so-subtly implied conclusion of observers. “Businesses, stockholders and consumers are just too cheap to pay for skilled labor to make beautiful, lifetime pieces,” is the common reasoning.

But there’s another reason. A reason that I’ve heard murmurs about over the past couple of years. A reason that you’ll only hear from fashion insiders, as they impart it with a immensely jaded shrug of their shoulders. It’s not that brands–and especially accessories and handbag brands–don’t want to manufacture here in the United States. It’s that they just can’t. It isn’t feasible. It’s quite unrealistic, expensive, and even detrimental to a brand–and not just for profits.

So when Melissa Shin Mash, sister of a friend, incredibly sweet and conscious person, seasoned fashion insider, and CEO of the handbag line Dagne Dover, reached out to me to tell me that they were moving production from our fair city to Vietnam, I wanted to hear more about her decision.

Dagne Dover is a line of practical yet beautiful totes and purses, the kind that has all the right pockets for storing what a working professional needs as she flits about the city. It’s not a sustainable brand, per say, but Mash originally thought it just made sense to manufacture here in New York. Now, she wants to explain why Dagne Dover is making this controversial move. She connected me with Dagne Dover’s COO and CFO Deepa Gandhi, who forthrightly answered all my questions.

Alden: Do tell me why you’re moving production to Asia. I am all ears.

Deepa Gandhi: Of course, we would love to work in New York, it’s the lack of capacity and lack of skilled labor that really affects us. The lack of skilled labor comes from wages. [We want] to make a product for which you can charge $245, which is what the customers are asking for these days–paying $2,000 for a handbag isn’t really market rate. There’s nothing machine-made about handbags, they’re all completely handmade.

When it comes to fashion in New York, some of the best sample makers out there are in New York. In terms of bringing concepts to fruition, New York is fantastic. But the production options you have are just larger-sized sample rooms, so there’s a limit on how much they can produce. We can only make 40 to 50 units a week, and there’s no football field-sized factories in New York.

When you look at the cost action between providing it at a salable price point to the consumer and paying a fair wage, you’re forced to move abroad. That’s why nobody is building those large scale factories, because the overhead is so big, if you think just about supply and demand, there isn’t enough demand on the brand side to validate opening up one of these factories, because of the price point designers would need to charge.

Jessy Dover, Artistic Director at Dagne and Dover, at the Vietnam factory where the next run of handbags is being made

Jessy Dover, Artistic Director at Dagne Dover, at the Vietnam factory where the next run of handbags is being made

A: But I can go on Etsy and find a handmade leather purse for less than $150.

DG: That’s certainly one way to do it for the kind of smaller brands that sell a few handmade items on Etsy, but we are aiming to build a large brand that sells hundreds of bags. We just can’t do it that way.

A: So where are you manufacturing?

DG: We’re moving our operations to Vietnam.

One of the reasons it’s great to work in New York, there’s a lot more transparency. You can pop into your factory any time of the day. There’s a lot more comfort with the craftsmen making the handbags being compensated fairly. We went in saying, “Lets find the best possible alternative.” China did not make sense. We did visit factories there, but as everyone knows, they’re not the greatest when it comes to being an ethically run, healthy environment. Vietnam is socialist, which helps in the government enforcing certain standards. The factory we found in Vietnam–at this one the workers are actually happy and excited to be there. They take pride in what they’ve built, which to us is directly correlated to their workplace happiness.

A: What was the factory like?

DG: The height of ceilings, air conditioning, windows … I know it sounds like no brainer parts, but not all factories have that. It was little things. During lunch time, we would walk around campus and the girls would be on the equivalent of Instagram taking and sharing pictures. The men would be playing soccer and badminton. Also, the way that senior management communicated with workers, it’s very positive and collaborative. They want them to feel like they are part of something, instead of just making something to ship to the U.S.

It’s the best I’ve seen in terms of large-scale factories. It has really modern facilities. It’s clean. They have these pathways between the different buildings with mini seating areas with palm trees and flowers, and during lunch everyone will sit in these areas and sit and chat and go back to work.

When we visited, Jessy [Dover, Creative Director at Dagne Dover] and I were like,”We want to sit here and hang out. It’s really nice!”

A: I’ve heard that some factories will contract out work to other factories behind brands’ backs, or fix themselves up for inspections. Does that worry you?

DG: We’re going to be going out there for most of our initial production line to oversee it, so we’ll be there as they’re working on it. That’s the only way to really know that [a poor working condition] doesn’t happen. On the side of launching a brand and starting a brand, you have to be out there–it’s the only way to know. We’re not letting an agent vet our factories for us; we’re vetting the factories.

For us, being a smaller company, one of the ways we vet factories is in terms of other brands that use them. There are certain brand that are known for their ethical fashion standards. Things that you’ve seen happen in Bangladesh doesn’t happen in their factories. We don’t have as much capital to do the vetting ourselves, so we follow them. Coming from the industry, Melissa [Shin Mash] and I [have insider info on who really cares.]

A: What are some of the brands that are recognized among industry insiders for good working conditions and high quality?

DG: Well, we can’t reveal who else uses our factory, but in general, I can say Melissa worked at Coach before business school. Having worked at Coach, she knows that their standards are pretty high. Ralph Lauren is very selective about what they use. They won’t do certain types of fur that aren’t animal rights-friendly. They won’t produce it and they won’t work with it. A lot of the higher-end brands are have high standards for working conditions.

A Dagne and Dover tote

A Dagne Dover tote. (Please ignore the water bottle, dear readers. I know you would have a reusable one in there.)

A: You also mentioned quality as a factor in moving your manufacturing.

DG: Yeah. The quality, the output of the craftsmen in general in Asia is just far superior to the quality you get here. For example, our tote being made in the U.S. weighs five pounds, which is really heavy. It was a big complaint from our customers. We went to our factory in the garment district, and they had no suggestions on how to fix it. We went to Asia and before we even asked, they shaved a pound off. In Vietnam, instead of one or two ways to construct a bag, they have ten. Of course in New York City, you’re still paying ten times more. We’re actually really excited to work with this factory in Vietnam, because we’ve been testing the product for two months and the quality is far superior.

Asian factories make it their job to know what is best in class. The level of detail in the specifications they asked for from us was astounding. They asked, “How many stitches per inch are you allowed to have? Here’s nine stitches per inch. Here’s eight. Here’s seven. We recommend this many for this material. What’s the thickness of the edge paint?” Our factories in New York, we are trying to give them our standards, and sometimes they follow it, and sometimes they don’t.

A: You talk about your particular factory, but does this apply to other NYC factories?

DG: Oh yeah. This definitely runs across all factories in New York.

A: Speaking to you, I’m realizing that conscious consumers really fetishize “artisans” in developing countries, like female co-ops in Uganda, but villainize factories, even though you might need them to manufacture larger runs. Do you think that these artisan co-ops are just for small, niche brands?

DG: Yes, I would say. I think Maiyet is probably the best at doing this. They found a way to make it a much larger conversation. It depends on how you build it out. Is it one community, or like Maiyet, who partners with many of these communities? We’re just at the beginning of what artisan made goods can be. I would love to see it improving. With us, it’s building a large business, and fitting it in where it makes sense.

If you care as a brand, which we do, we don’t have a problem taking a video crew with us the next time we visit the factory. We want to educate the customer. I think the brands that care about it, you know they care about it. They will tell the world about it. When I can’t find anything about ethicality or sustainability with a brand, I worry about it. It’s the brand’s job to educate the customer about what they are doing.

A: There are a lot of clothing companies that manufacture in the U.S. in New York and Los Angeles. Is apparel different?

DG:  Handbags in particular are very difficult to scale in the U.S. Apparel is totally different. You see brands like rag & bone that are able to scale much farther. The skilled labor on the apparel side is much larger than on the handbag side. Theory still makes some of their stuff in the Garment District, and that’s a huge brand.

A: Zara is considered fast fashion, and they have vertically integrated manufacturing in Spain.

DG: I think you have to be a Zara to achieve that. I’ve visited Zara factories in Spain, because they own the entire process, and because they have parts of their factory next to their corporate headquarters. They have this high level of control. They are extremely vertically integrated, they are allowed to produce their products, from what I saw, pretty ethically, and provide it at a much lower cost to the consumer.

I do truly believe it comes down to how much the brand and the team that manages the brand cares about this. I think a lot of the newer brands out there have this perspective, because it’s such a touch point for our generation. It’s kind of a given that you should care about it. Then again, let’s see what happens when all these companies grow into being the size of Gap.

A: What would have to change to improve the quality of manufacturing in New York?

DG: I don’t know. NYC is trying to do a lot more, they just launched a grant program to help. But we told one of our factories about this, and he didn’t know what to do with it.

What do you think about Dagne Dover’s decision?