Well, this post has aged poorly. Just two months after we published a story on how Hertling is still going strong, it looks like they may close their factory in Greenpoint, Brooklyn within the next few weeks.
Hertling, for those unfamiliar, is a legendary trouser manufacturer. Having started in 1925, they’ve been doing private label work for some of the clothing industry’s best names – Paul Stuart, Orvis, Sid Mashburn, and Billy Reid, along with many others. For value-minded shoppers, nothing really beats a pair of Hertling-made pants. J. Crew’s wool trousers run for $225, but they’re made in China and often constructed from mediocre materials. Hertling’s pants are made in New York City, of exceptional quality, and come in a variety of fits. Traditional clothiers such as Ben Silver offer them in fuller cuts; niche retailers such as Epaulet and Dapper Classics sell them in slimmer, more contemporary styles. For comparison, the next most popular option is Rota’s Italian-made trousers, but those cost $400 per pair – nearly twice the price of Hertling’s.
Much of the company’s success can be credited to Julius Hertling, who’s affectionately known to many in the trade as Julie. He’s been managing the family business since 1946, when he returned home after having served in WWII (he was in the US Army). His father, Morris, started the business.
Julie fought for his company during a time of tremendous change in the US. Americans now import most of their wardrobe from overseas. Fast fashion retailers have streamlined the production process and driven down costs, making it possible to buy pants for as little as $20. And it’s never been easier to comparison shop. Just open an Internet tab and you can find a million options for flat front chinos or simple button-ups. It’s been hard for domestic producers to compete in that environment – even top-end brands have shifted their production overseas in order to be price competitive – but the Hertling company has miraculously survived and even thrived for almost a hundred years.
Towards the end of Julie’s life, however, the factory started struggling. And when the new investors took over in the winter of 2016 – about a year before Julie’s death – they hoped to revive the plant and expand into direct sales. It’s hard to say for certain what’s happened (Hertling is, after all, still a private company), but the new owners have faced some important headwinds.
For one, Julie and his landlord were personal friends, so Julie was able to secure a particularly good lease for the factory. When he passed away, the landlord raised the rent. It’s still well below the neigborhood’s market rate, but about 25% higher than what Hertling was paying under Julie’s tenure.
Second, New York raised its minimum wage from $11/ hour to $13/ hour in 2017, and has plans to raise it again to $15/ hour by the end of this year. Justin Christensen, one of Hertling’s new owners, tells me this has cost the company an additional $100,000 a year in labor.
Third, Hertling may have been buoyed for a while by the revival of Americana and heritage-styled clothing. Back in the early aughts, consumers cared more about where their clothes were made. And as those fashion trends have waned, so has consumer loyalty. People are savvier now about comparison-shopping and they use the internet to find the best deals possible.
In some ways, this may be connected to the broader story about how the middle of the fashion market is collapsing – those brands that sit somewhere between the uber-luxury labels sold at Mr. Porter and fast fashion retailers such as Zara. As mid-tier brands struggle to survive, so have the factories that support them. Bill’s Khakis, who used to be admired for their $150 American made chinos, shut down their domestic production not too long ago and the company has been since restructured by a private equity firm. International Textile Group recently closed their Cone Mills White Oak plant in North Carolina, as they found the denim production there couldn’t be sustained in the face of increasing imports. And some of Hertling’s partners, such as Haberdash in Chicago, are no longer in business.
Lastly, the end of Hertling may just be a story about poor management. Justin Christensen admits that he’s learned a lot about business in the last eighteen months, particularly with regard to things such as managing cash flow and keeping a factory as lean as possible. In the next few weeks, he and his investors will be deciding on the factory’s future. They may close the Brooklyn factory; they may not. They may just turn the Hertling name into a clothing line, with the production done elsewhere. If that’s the case, the Greenpoint factory will close, but the Hertling name will remain as a ready-to-wear label.
Christensen tells me he’s still hopeful about American manufacturing, but only on the higher-end of the market. “I don’t think this is about the death of American manufacturing,” he says. “I’m confident you can still have US clothing factories, but they have to produce for the luxury-end of the market, where you see Italian factories currently operating. $200 for a pair of US-made trousers simply isn’t sustainable. The real price has to be closer to $300 to $350. That gives you enough room to pay for costs – labor, materials, and the bare basics of doing business – as well as give your retail partners some margins so they can eat.”
I talked to Epaulet and our sponsor Dapper Classics about what they plan to do if Hertling actually closes. Epaulet has already made plans to switch their trouser production to Southwick; Dapper Classics says they’re still waiting to see what happens. I also asked Mike Kuhle, co-founder of Epaulet, what he remembers most from his long-time friendship with Julie himself.
“Our weekly lunches at Peter Luger. It’s a Brooklyn steakhouse that sits right under Williamsburg Bridge. Julie and I went there every Tuesday to have lunch. It’s super expensive, very traditional, and extremely popular. But when Julie walked into the place, it was always like that scene from Goodfellas – everyone made way for him. It was always like ‘Hello, Mr. Hertling! Right this way, Mr. Hertling!’ The man had been going there every Tuesday for lunch for almost forty years. He had the same waiter; he always ordered the same food. We’d eat a heavy meal together, have some drinks, and talk. Sometimes he told old war stories, but he mostly loved talking about pants – Julie could talk to you forever about pants. He loved his work. He was an old-school garmento.”
Maybe one upside to this whole story: had Christensen and his investors not taken over the factory, Hertling as a company would have likely closed with Julie’s passing. At the time, no Hertling family members or outside parties were interested in taking it over. Everyone I talked to for this story agreed that, at least, the employees have been able to get another eighteen months of wages – and someone made a go at trying to keep a piece of American manufacturing still going.
In the meantime, readers can buy Hertling’s new old-stock through LuxeSwap. There are about 750 pants on sale right now, some for as little as $50 to $75, in a mix of about a hundred styles (many were originally produced as samples for tradeshows and come in old cuts). We’re told everything is first-quality, but all sales are final. There are some posts about it on Reddit and Ask Andy About Clothes.
