Tough strut from world's factory to fashion empire

NANCHANG - Che Yong wants to build his garment factory into a fashion empire like H&M, the Swedish clothing chain that has dominated China's young fashion street, but so far his designs have only gathered dust.

Che's company, Wansi Garment, produces thousands of shirts every year for overseas buyers, including a recent order which featured Disney cartoons.

Wansi is one of the 700-strong garment exporters at Luojiaji, a district in Nanchang city and a famous T-shirt export base in Central China. Luojiaji produces a third of China's exported T-shirts. It is little known to the Chinese public but is well-known among foreign buyers. Customers include Walmart, Starbucks and NBA-franchised firms.

In the past two years, factories at Luojiaji have been forced to reinvent themselves as profits were squeezed by soaring costs, few tax incentives, loss of orders, and appreciation of the Chinese currency yuan.

Che Yong also tried remodeling by building his own brand, but his decision has been met with challenges.

"No one knows my brand and no one comes to buy them," Che said, with a bitter smile. At least two million yuan (about $310,000) worth of clothes are stashed in storage.

"Luojiaji is very strong in manufacturing, but we have little experience in design and sales," he said. Last year, Luojiaji churned out 650 million pieces of clothes and hired about 70,000 workers.

"Most firms have started to sell clothes under their own brands, but no one is strong enough to establish itself in the market," he said.

Nonetheless, Che remains committed to his dream of a fashion empire. Swedish H&M has fared well in Chinese market thanks to its concept of fast changing collections of affordable clothes. Buyers queue up to pay at downtown H&M stores in Beijing. Other fashion brands like Spanish Zara and Japan's Uniqlo are also popular in China.

Che Yong is seeking partnership to build a chain like H&M in smaller cities. At Luojiaji, some firms specialize making round-neck shirt, some have original design in floral print, and some are good at making sturdy collars. "We shall pool our strength together, and build a chain like H&M or Uniqlo," he said.