In recent years, Israel’s apparel industry has fallen on hard times, as company after company has ceased local manufacturing and moved their factories to cheaper shores such China and the QIZ (Qualifying Industrial Zones) in Jordan and Egypt. As in the apparel industry in the US, which has also largely been outsourced to the Far East, it’s a matter of money, as labor costs outside of Israel are lower.
One Israeli company has managed to buck that trend, however; by investing in high-tech research and development to create something that other apparel companies cannot offer, Tefron Industries has managed to not just survive, but thrive, signing deals with top brands around the world. Now, Tefron has announced that it will be producing and distributing apparel in the US under license from Switzerland’s XTS (X-Technology Swiss Research & Development AG), one of the world’s premier names in high-end sports apparel.
Under the QIZ arrangement, goods can be manufactured in Jordan and Egypt and “finished” in Israel, allowing them to be imported into the US without duty or quota restrictions. Many Israeli manufacturers that formerly produced “commodity” goods – low-cost products that compete with goods coming out of the Far East – have taken advantage of the QIZ benefits, among them Delta-Galil, Israel’s largest apparel manufacturer. That company, along with many others, moved manufacturing abroad as part of the worldwide trend in the apparel industry of building factories in regions where workers earn less, are not unionized, and are prepared to do the “dirty work” of assembly-line type work. The alternative for these companies would be to shut down operations completely, as they could not product goods cheap enough to compete with goods from the Far East.
The same thing almost happened to Tefron (established in 1977), which experienced some turbulent years in the 1990s, as it sought to compete with low-cost Far Eastern manufacturers. But in the late 1990s, the company came up with a unique technology that allowed it to become the first, and still currently foremost, producer of seamless garments. The advantage of seamless garments is in their fit and comfort, as well as their sturdiness.
Tefron realized its first successes with seamlessness in the undergarments market, and snagged contracts with dozens of retailers and major brands to produce underwear under license. The company later moved into athletic wear, producing activewear, swimwear, and other sports-related apparel for nearly every activity, even becoming the leading supplier of apparel for Major League Baseball, the NFL, NBA, NCAA, World Cup Soccer, and many others. In 2006, the company entered into a partnership arrangement with Nike, which is one of the premier promoters of Tefron’s seamless technology.
In its latest deal, Tefron recently announced that it has signed a deal with XTS to manufacture, market and distribute XTS sportswear brands in the US. XTS is one of the most innovative — and valuable — sports apparel brands in the world, holding 300 proprietary patents and having received 171 international design awards for their apparel. As such, said Tefron CEO Amit Meridor, his company considers it a great honor to be chosen to represent the XTS name. “We are very pleased that XTS has chosen Tefron to build its remarkable brand of technologically advanced, high-performance sportswear in North America. This agreement is a breakthrough achievement for Tefron based on our success, particularly in the past two years, in establishing efficient world-class manufacturing capabilities and a reputation for strong global marketing and distribution.”
And XTS is just as impressed with Tefron, said CEO Bodo W. Lambertz. “Like XTS, we find Tefron to be among the most technologically advanced companies in the apparel industry. We, therefore, chose Tefron because they have the sophistication in their manufacturing to produce our unique sportswear products and because they have established a reputation for innovative athletic wear that we believe will best serve to develop the North American market” for XTS products, he said.