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Tailor Made in America
Author: Joel Kotkin (more by this author)
Source: Inc. magazine (details), August 01, 1996

Urban policy guru, Joel Kotkin, describes how a small-scale production of handicraft-style products can be employed as a strategy for economic development. Sohodojo's Advisory Board member Jim Schneider provides the most up-to-date news and insights into urban economic development stimulated by the evolving Enterprise Community and Empowerment Zone federal programs. Check out the on-line archive of his provocative The Taxman86 Speaks... newsletter to keep up on the small business development opportunities provided under the forthcoming Distressed Communities legislation.

With painstaking precision, craftspeople are shaping clay and then hand-painting and finishing pieces of pottery that will soon be shipped to markets from Beverly Hills to Berlin and Tokyo. Most of the artisans come from the villages of Central America, where such crafts as pottery making, weaving, and leather working have long been a prime source of income.

That scene is taking place not in some steamy Third World country, however, but amid the sleek high-rise towers of West Los Angeles. In that highly modern city and in others around the country, "craftories" like Laurie Gates Design are springing up and flourishing.

"There's a new breed of company that is combining a craft-based industry with a factory setting," observes Julian Tomchin, senior vice-president for special merchandising projects at Macy's West in San Francisco. "There are more and more people in pottery, jewelry, and gifts doing this kind of handicraft work."

The companies cultivated by retail mavens like Tomchin have been dubbed "craftories" by Brenda French, founder and president of French Rags (see From Rags to Riches in Inc. Technology, Summer 1995), a successful knitwear company that's only a short drive from Laurie Gates Design. Although craftories sometimes are aided by new technology -- such as the specialized equipment French Rags uses to make customized knitwear -- their recent growth is due largely to increasing demand for individualized craft products.

Until recently, the demand for such mass-customized products was met mainly by companies in such countries as Italy, Portugal, and Japan. But increasingly, buyers are cultivating a growing number of smaller, highly specialized suppliers in the United States, ranging from Watermark Association of Artisans, a Camden, N.C., company that makes quilts, Christmas ornaments, and other gift items, to ceramists such as Essex Collection, in Beverly Farms, Mass.

One of the great advantages of craftory production lies in its ability not only to produce distinct lines but also to respond quickly to the specific needs of retailers. Unlike large producers, who generally ship the same product to all their customers, smaller, specialized companies like Laurie Gates Design often produce entirely different lines for different stores, allowing the retailers to remain distinct from their competitors.

"Stores are sick of dealing with big companies that are not responsive," says Amy Stavis, publisher of New Jersey-based Tableware Today. Customers' desire for more individualized products and retailers' desire for friendlier business dealings are creating opportunities for craftory entrepreneurs not just in ceramics and knitwear but also in a host of other industries. While many furniture makers left Southern California in recent years, for example, the companies that follow a craftory model continued to expand. As a result, according to Steve Herman, deputy director of economic development at Rebuild LA, the Los Angeles furniture industry, which lost 11,000 jobs from 1981 to 1991, is now beginning to stabilize and even add jobs. "We're finally beginning to see increases," says Herman.

Or take Continental-Anchor, a printing business in a revitalized industrial area in Long Island City, just across the East River from Manhattan. Rather than rely on mass printing work, the company has built its business through customized engraved invitations and other stationery that combine high-tech printing with old-fashioned artisanal skill.

With roots in New York dating back to 1890, Continental-Anchor has a long-standing expertise in the hand-engraving of invitations, business cards, and stationery. For years, notes Ellen Van Zandt, the company's marketing manager, demand for that kind of product was declining because even the most elite companies were looking for low-cost, mass-produced products. "Everybody was trying to out-cheap each other," she says.

Today Continental-Anchor is benefiting from renewed interest in customized products. Although hand-engraving is an increasingly rare skill among native-born Americans, the company, which now has 90 employees, has been able to find craftspeople in New York's immigrant communities. According to executive vice-president and co-owner Gerry Schneiderman, engravers at the company hail from a dozen different countries, including Russia and Guyana.

Few craftories have seized the trend toward specialized products more effectively than Laurie Gates Design. As founder Laurie Gates inspects his shop, he recalls how many people told him that foreign competition and mass production ultimately would drive small American ceramics businesses out of existence.

But Gates, a former cattle rancher from northern Alberta, found a way. Using $400,000 he had saved, he designed a line of "fresh, California" pottery, hired a few craftspeople, and made the rounds of tableware trade shows. The response from customers, including leading retailers, convinced him there was a strong market. "I tried to create something that couldn't be duplicated," Gates explains.

Within six months, Gates not only had recouped his original investment but also had begun earning profits and hiring new people. Today the company employs 70 workers, up from 18 four years ago. Building on his pottery, which has grown from 20 to 50 lines, Gates is now expanding into other areas, including custom-made glassware and outdoor furniture.

Gates's expansion plans are based on assumptions much like those of Tomchin and other experts about the buying habits of increasingly individualistic consumers and the ability of small, craft-based factories to fuel them. "Each piece we create is different. It's a work of art that many people can afford to have in their homes," explains Gates. "It's that touch of design that opens so many doors."

Joel Kotkin is a senior fellow with the Pepperdine Institute for Public Policy, in Malibu, Calif. He is also a fellow in urban studies at the Pacific Research Institute, in San Francisco.

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