April 29, 2025 • 23 mins
Terry Trofholz takes host Deanah Baker on a fascinating journey through five decades of retail evolution, offering rare insights from both sides of the desk—as buyer and seller—during some of the most transformative periods in American commerce.
Beginning in 1973 as a buyer's assistant in Omaha, Terry's career trajectory mirrors the massive shifts that reshaped how Americans shop and how products reach consumers.
He vividly recalls when iconic brands like HealthTex and Levi's manufactured entirely within the United States, witnessing firsthand as globalization gradually decimated domestic production until less than 2% of apparel remained American-made.
As he explains the complex factors behind this shift—from labor costs to government subsidies—Terry offers nuanced perspective on whether reshoring is feasible and what a "Western Hemisphere" approach to manufacturing might look like.
The conversation provides an insider's view of how mass merchants revolutionized retail through everyday low pricing strategies, with Terry recounting candid conversations from the 1980s when suppliers first grappled with Walmart's disruptive business model.
Equally illuminating are his reflections on sustainability innovations at Interdeco, where cutting-edge technologies now transform manufacturing waste into new products through regenerated cotton processes and facilities powered by renewable energy.
Perhaps most valuable is Terry's account of the COVID-19 pandemic's impact on retail, delivering a masterclass in how the industry navigated unprecedented challenges. He details the overnight acceleration of e-commerce adoption, growing approximately 50% between 2019-2021, and the subsequent scramble as companies adapted distribution systems designed for truckload shipments to handle individual orders.
The resulting omnichannel transformation forever changed merchant roles, requiring them to simultaneously manage exponentially more SKUs across multiple platforms.
Want to understand how American retail reached its current state and where it might be heading next? Listen to this conversation with someone who didn't just witness the evolution—he helped shape it.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:07):
Well, hi, viewers, welcome to Doing Business in
Bentonville.
My name is Deanna Baker and I'mthrilled to be here.
I am going to be a limitedseries contributor to Doing
Business in Bentonville and Ihope to bring topics that I've
been having in my circle offriends and colleagues to you
all, and I would love feedback.
Make sure that we're talkingabout the things that you find
(00:28):
value in and kind of further thediscussion around evolving
Omnichannel for our mutualcustomers.
So thanks for joining us today.
I want to introduce you to afriend of mine that I've known
Well.
He'll date us both, I'm sure,through conversation, but Terry
Truffles, and so let me justtell you a little bit about
(00:50):
Terry and then I want him tofill in some gaps.
But here's the cut and dry ofTerry.
Terry brings over five decadesof experience in both wholesale
and retail.
Okay, check, check ofexperience in both wholesale and
retail.
Okay, check, check brands andprivate brands, both boxes, and
knowledge of working withspecialty stores, department
(01:12):
stores, discounters, mass ande-com only companies.
So he has spread out andsurrounded everything in retail.
I do believe Terry began hiscareer 1973, he already said it
1973 in Omaha, nebraska, and hewas an associate buyer or
buyer's assistant not quite sureTerry, but Gopher.
(01:35):
Gopher bottom of the ladderright For a retailer called
Richard Gordman, which you mayrealize more as Gordman's I
think they went on later.
That's where they are now To beGordman, which you may realize
more as Gordmans I think theywent on later.
That's where they are now To beGordmans.
You did transition fromretailer side of the desk to
supplier side of the desk.
You joined HealthTex, which isa brand I remember wearing as a
(01:59):
kid.
Sure, right, it was verypopular.
They were the biggest.
They were the biggestchildren's wear manufacturer in
the US at that time.
A few years later, you went onto join Levi Strauss, right as a
district sales manager Fiveyears there, awesome.
And then you ventured intoprivate label yes, the private
label business with a companycalled Stone.
Speaker 2 (02:20):
Manufacturing.
Yeah, you know, if you're abranded salesperson then you
kind of get the line that theygive you and you're just kind of
told to go out and sell it, andI always wanted to have more
input into what was going intothe product and I had a friend
that was in the private labelbusiness and that sounded really
interesting to me, so I left.
Speaker 1 (02:42):
You're like me, I like to have control of the
reins.
Can't help it.
It's a control thing, I guess,but okay.
So then you sold to Sears andTarget there, right, so going
into bigger mass retailers.
Next you joined Reitz Knitwearand that's where you and I met.
You were the sales exec toWalmart and Target at the time,
(03:03):
and then, lastly, terry becamean associate at Interdeco when
Rights was acquired by Interdecoin 2000.
And you were there for awonderful 25 years as EVP of
sales and merchandising.
Yes, I was and you did recentlyBest thing that ever happened to
me Fantastic.
And you recently retired yes, Idid, which is awesome.
(03:24):
So welcome to you to doingbusiness in Bentonville and
we're so happy to have you.
Well, thanks very much, deanna.
Speaker 2 (03:31):
You know I'm honored to be your first guest and
you're taking a big chance here.
I mean, this is my firstpodcast and really the first
thing that since I've retired.
It's the first time that I setmy alarm this morning.
Speaker 1 (03:45):
Thank you, I appreciate being worthy, that's
right.
Speaker 2 (03:49):
And it's the first time I've had a chance to really
kind of prepare for something,which was fun.
And in preparing for thispodcast it kind of gave me a
chance to really reflect on mycareer.
And I did my first job was in1973, and I was 22 years old, so
(04:17):
didn't know anything aboutanything.
And I spent four years at thisretailer and then decided that
it looked like everybody thatwas coming in to call on me was
making more money, having morefun and just enjoying life.
And I was lucky enough that Ihad some really good
relationships with my suppliersand I went to work for health
techs and it's the first timethat I'd ever moved out of Omaha
Nebraska or not out of Omaha,but I'd lived in Nebraska all my
life.
So my wife and I we moved toIndianapolis.
(04:39):
We didn't know a soul and Ispent time there.
And then I spent time at thoseother jobs and I think about
that and what's remarkable aboutthat is that those other
manufacturers all of theclothing was made in the USA and
I can remember visiting thefactories and the distribution
(05:02):
centers and, yeah, health techsall made in the USA.
Same thing with even LeviStrauss back then Wow, and my
last job before being acquiredby Intradeco was at Wrights
Knitwear and we had facilitiesin throughout Pennsylvania.
We had a dye house in Allentownand a knitting house in
(05:22):
Orwigsburg in Allentown and aknitting house in Orwigsburg.
And you know what kind of struckme was how all things seem to
kind of go full circle in theapparel world.
You know I mean trendsobviously, but now by full
circle I mean now we're lookingat that US manufacturing stuck
(05:43):
around till about the late 1990sand then imports from China
kind of started pouring in andyou know that had to do with
World Trade Organization, theentrance by China into that, and
(06:07):
all of a sudden that are thelargest exporters to the world
and the largest importers forthe USA in terms of apparel and
that's, you know, with the hopesand wishes.
I think that maybe some of thatmanufacturing can be restored
in the USA and that's asignificant challenge, as
(06:28):
everyone knows, and Walmart iscertainly making strides to try
to return manufacturing in allindustries, I think, to the USA.
Apparel is definitelychallenging because just the
labor differences in laborcharges between the USA and
China or Bangladesh or Vietnamor any of those countries is
(06:50):
significant.
Now the administration doesmake a point, which I think is
well taken, that it's not justthe tariffs, it's the unfair
trade practices as well.
And you know, we used to look ata garment when we were getting
beat.
The US facilities were gettingbeat in pricing by garments
(07:11):
coming in from Asia.
We would look at the garment orwe would look at a yarn price
and the inputs that went intothat garment or that yarn price
were more than what they werecharging for it.
Meaning the fabric?
Yeah.
Meaning the cotton, the pricefor cotton, the fabric, any kind
of labor, yeah.
So we go.
What they can't and what wefinally figured out was is that
(07:36):
the Chinese government wassubsidizing the apparel industry
over there and so obviously theUS makers were really put a
significant disadvantage, andthat happened for a long, long
time until almost all of themwent out of business.
I think there's less than 2% ofthe apparel that is made in the
USA today.
Anyway, we can debate whetherit really makes sense to return
(08:03):
apparel manufacturing to the USAor not, but certainly it would
make sense.
You know, I think it would makea lot of sense to maybe have a
Western hemisphere that wouldhave a greater influence and
ability to produce just from anonshoring standpoint.
Speaker 1 (08:20):
If you can't get it in the US, at least get it
closer If everything that goeswith that.
Speaker 2 (08:25):
So certainly Mexico, canada and Central America could
be a huge could help replacesome of that.
You won't be able to replaceall of it just simply because of
the workforce, the number ofworkers that's required.
When you look at the populationof China, india, these other
places, there's just not enoughpopulation, not enough people to
(08:45):
put to work, to sew garments.
Speaker 1 (08:47):
Well, and if people aren't in the apparel industry,
you know you also have to thinkabout all the components that go
in.
It's not just a facility to sewthe garments.
Where does the fabric come from?
No, you're right, right.
So you've got to think about itfrom the very beginning.
All the way through thatprocess, supply chains, through
everything it has to be thoughtthrough it's fabrics, it's
buttons, it's zippers, it'severything.
(09:08):
It's all of it yes, andtechnology is going to have to
step up right, at least for thiscategory.
Speaker 2 (09:14):
Yeah, without a doubt .
And robotics would have to stepup significantly, and
automation.
So not sure how many realapparel jobs that you would
return, but anyway.
So that kind of struck me.
You know the.
The other thing that I got towitness through the time span
that I worked was the incrediblerise of mass merchants in the
(09:37):
USA.
You know, walmart was in the inthe the 70s and the 80s.
Walmart was building stores inthe 90s like crazy, and so was
Target, and how that changed theretail landscape.
I can remember working for asupplier and we were having a
sales meeting and this wasprobably in the early 1980s, and
(09:58):
one of the salesmen in themeeting said are you sure we
should really be devoting thatmuch production to Walmart
stores?
You know it's upsetting myother customers and they're
selling it for less.
And the salesman that wasselling Walmart said well, why
wouldn't we?
I mean what?
What?
They're not doing anythingwrong, they're not doing
anything illegal.
They're simply buying theproduct from us at the same
(10:20):
price.
We sell it to everybody elseand they're selling it for less.
So you know, long ago the EDLP,edlc strategy of Walmart was
starting to pay off and I got tosee that.
Speaker 1 (10:32):
Yeah, I was thinking about as you were saying that.
You know, I joined 1990 and we,Walmart, had under 2000 stores.
Speaker 2 (10:39):
Yeah.
Speaker 1 (10:39):
And then, you know, when I retired from Walmart, it
was over 4,500.
Yeah, so just incredible growth.
You know, and I can't say that,I thought about that every day,
you know doing the job, but itdid, it happened.
And we would say to suppliersall the time give us your best
cost, Let me worry about theretail Right.
And so we were able to deliverthat to your point and growth
(11:03):
happened.
Speaker 2 (11:03):
Yeah, you know, and then you know, and then I saw
the onset of e-com start andwell, I mean Amazon.
It was only 2004 when theyactually started business and
they didn't really startdisrupting apparel initially,
and then they got, as withAmazon and just about any
(11:25):
business they got into, theystarted to have a significant
effect.
And so that you know, to have afront row seat to see all of
that was really amazing.
Some of the things that I'mmost proud of, I guess of in my
career we were Intradeco was thesupplier of the year at Walmart
(11:48):
in.
It was either 2012 or 2013.
And that was for the entirestore.
That wasn't just You're on thebig stage.
Speaker 1 (11:55):
That's what you're saying.
Speaker 2 (11:55):
Yes, we were on the big stage and to be the supplier
of the year for the entirestore and we were competing for
that award with people likeJohnson Johnson Coca-Cola.
To win that award from thelargest retailer in the world
was humbling and extremelysatisfying.
(12:16):
I mean that was wonderful.
I mean we fed off that forquite a while.
Speaker 1 (12:23):
Well, and you should, because as a merchant team we
didn't take those decisionslightly.
Oh.
Speaker 2 (12:31):
I know.
Speaker 1 (12:32):
And I mean almost.
I won't say we got into anyfistfights or anything like that
or hair pulling, but there wasa considerable amount of review.
Speaker 2 (12:39):
Oh, I'm sure I'm sure everybody had another
well-deserved supplier that wecould have lost that to.
So we also won a number ofsustainability awards and we
were a really early adapter ofand believer in the sustainable
effort.
Our founder was a believer inthe sustainability that we
(13:00):
should bring to our products andI'm sure your viewers probably
know that.
You know landfills get hundredsof thousands of pounds of
apparel every year and you knowthere's apparel actually has
gone through deflation for abouttwo or three decades.
I can tell you that the thingsthat I sold in 1990 are cheaper
(13:24):
today than they were, than theywere in 1990.
I mean it's just because ofeverything obviously, production
moving to the cheapest countryand efficiencies really in the
apparel process.
So a T-shirt now.
You know, with fast fashion, youknow we all buy probably a lot
(13:45):
more clothes than we ever needbecause we can.
It takes a smaller percentageof the consumer's wallet than it
did years and years and yearsago.
But Interdeco has invested inmachinery in Central America
(14:09):
where you take the cutting roomscraps.
You know when you're going tomake a garment, you've got a
marker that sits out there andyou cut around that and if
you're lucky you get 85%efficiency.
It could be less.
So that means you've got 15% ofthat fabric that is just waste
and we can now take that fabricas well as other finished
(14:30):
products.
We've also bought a sortingmachine to bring in old garments
from people and we put theminto the machine and it turns
them into yarn which can be thenturned into products again.
So it's a regenerated cottonprocess and I'm sure they will
continue to make efforts in thatrange.
Speaker 1 (14:49):
So I was so, in my mind, Interdeco is always at the
forefront of really challengingthemselves on.
You know what's the next step,what's the next thing?
In fact, I can't remember theyear we went, but there was one
tour in Central America that wewent and we saw some of your
factories at Interdeco and thefact that they were run off king
(15:09):
grass.
Speaker 2 (15:10):
Yes, yeah, that's exactly right.
That's in our, that was in ourbiofuels.
Yes, yeah, that's right.
Speaker 1 (15:15):
Yeah, so so you know the efficiency of the factory
and now what you're talkingabout is, you know, efficiency
and regeneration of productsthat have served their time.
So you know I look forward andin fact, on LinkedIn, every post
I make about some newdevelopment, you know, catches
my attention because I would sayyou all challenge yourself
harder than we, as partners,challenge you.
Speaker 2 (15:39):
Well, if you saw our factories today, or if you took
a tour of our factories in ElSalvador and Honduras, you would
see the roofs filled with solarpanels and you would actually
see a solar farm.
Just because that was the rightthing to do.
And, you know, I mean quitehonestly, all of these
investments in sustainabilityalso had a business side to them
(16:01):
.
That made sense, but we werereally happy to be able to join
the two together.
Yeah, very cool.
Uh, lastly, you know, I thinkmaybe the thing that I'm most
proud of in my career is, um,what Interdeco was able to
contribute during the COVIDcrisis.
You know, all of a sudden, uh,in late 2019 in China, you just
(16:24):
heard some things and then, inMarch of and I know that it was
March in 2020, because I canremember, coming home from a
trip from New York, that weweren't really sure that we
wanted to go on, but this tripwas really triggered by, quite
honestly, a meeting that we hadhad with you and Andy.
(16:46):
Anyway, on the way home, we'reglad to get out of there and my
son is on the trip with me.
He works at Interdeco and he'ssitting in his seat and he pulls
out latex gloves to put on andwipes down his tray.
I mean, this was, you know,covid.
It was only five years ago, butit seems like it's been forever
(17:08):
.
We didn't know how the diseasewas spread, we didn't have a
cure for it and it was killingpeople, and so business fell off
the charts for about threeweeks and then it came back
instantly when the essentialretailers like Walmart, target,
could open up again, becauseobviously you start to run out
(17:31):
of things and you needed to havea retail place to be able to go
get them.
I mean, we needed groceries, weneeded food, we needed toilet
paper Remember the toilet?
Speaker 1 (17:41):
paper crisis.
Yes, I think we may havefinished the last roll at our
house.
I'm not sure.
Yes, we all stocked havefinished the last roll at our
house.
Speaker 2 (17:46):
So I'm not sure.
Yes, we all stopped for a longtime.
Anyway, I'm going to.
Then a technology rescued usfrom a meeting standpoint,
because we were franticallytrying to get things up and
running again in retail and onthe supplier side.
So Zoom meetings, teams wecould start to meet again and I
think we were all pretty happywith that because it also meant
(18:08):
we didn't have to travel andmeet in person.
So the other thing we figuredout was OK, well, you know, we
don't really want to go to thestore.
I can remember for a while beingafraid to even go outside
because you just didn't know howit was spread.
So we started to order thingsonline.
(18:28):
And we had been we'd allprobably had been ordering some
things from Amazon prior to that, but now all of a sudden,
retailers like Walmart, targetall retailers that had a website
found their website floodedwith orders.
I think I saw.
You know the numbers vary froma couple of different sites that
I looked at, but I know thate-com in total grew about 50%
(18:53):
from 2019 to 2021.
So it was a huge leap.
Up to that point, ecom had beengrowing at about a 12% to 15%
rate a year, starting back in2012 or 2013.
And we knew that it wasimportant, but it was not
something that we were focusingon, because, even though it was
(19:13):
growing at 12% to 15%, it wasstill a small percentage of what
everybody was doing, right?
And now, all of a sudden, itdemanded your attention and you
didn't have a choice.
You needed to figure out retail.
You know, all of the retailersneeded to figure out how to fill
these orders and suppliersneeded to figure out how.
(19:34):
All of a sudden, we went fromokay, well, we're used to
shipping a five to 10,000 unituh order, or a whole truckload
of something Uh, but now how doyou ship 48 units of something
in the same distribution centerthat you're doing this in?
So investments were made, butbeyond investments, you had to
find personnel that knew how tomake this happen, because you
(19:56):
were, you know, from ourstandpoint, we said, okay, we
know how to manage a businesswhere we're filling a round rack
and we're keeping that in stock, but how do you sell something
that shows up as a and I know itsounds stupid now, but back
then how do you sell somethingthat shows up as a picture on a
(20:16):
website and how much of it, doyou make you know, and so?
Speaker 1 (20:22):
It was a whole new formula.
Yeah, that you had to reallystart from the foundation.
Yes, of how to build it.
You know what's the demandgoing to be, which is what
you're articulating and,literally, how do you sell it in
this medium versus what, up toyour career, at this point, had
been a physical responsibility.
Speaker 2 (20:42):
Yeah, no, that's exactly right.
So I know that both thesuppliers and retailers were
going out and hiring experts orpeople that had a lot more
experience in e-com, fulfillmentand digital marketing.
Then you're putting these twoteams together.
So now you have competinginterests in one business where
(21:05):
you know some of the visionaryleaders.
I would say like Doug McMillanand like the founder of our
company, felix Amon, saw that.
You know e-com is definitelythe future.
I know we're losing money oneverything we ship and I know
it's a small portion of thebusiness and I know it's easier
to do the brick and mortarbusiness, but we have to address
this.
So that caused suppliers tolook for innovative ways in
(21:29):
their supply chain and theirdistribution networks.
We went to robotics and someother thing in fulfillment and
we hired people and Walmart didthe same thing.
But for these people to worktogether took a little while
because they were competinginterests for the resources of
the company.
Where we're at today inOmnichannel, now you've got
(21:54):
people that are managing two tothree times the SKUs that they
used to manage, and that giveseverybody less time and not as
much time to maybe spend on someof what used to be the softer
skills of retail.
Speaker 1 (22:14):
Well, it's true, and from a merchant's chair they
were very busy just managing abrick and mortar.
Speaker 2 (22:20):
Oh, it's not like that.
Speaker 1 (22:22):
If you were e-comm only, you were very busy
managing many SKUs, right, yeah.
And suddenly, congratulations,you're now an Omni merchant.
Okay, you get both.
Well, thank you.
What takes priority, you know,and, and depending on which side
you came from, right, you hadto learn the whole other
discipline and what it took tomake it successful, cause what
(22:45):
you just articulated was thatthey're very different things,
right, and so you have to be oftwo mindsets you want to nurture
and grow this, you want to keepthe volume going with this, and
how do you devote enough time,which is the limited resource,
(23:05):
right, to make it all cometogether?
Well, and omni-channel, and it'snot just Walmart that's doing
that, right, it's every retailerout there that's trying to find
their way and learn those samethings in real time as during
COVID.
It's ramping up, right, so nopressure or anything else to add
to it.
It's not like you didn't have afull-time job, exactly exactly.
So it's just.
It's amazing, and I hope youviewers, you might want to just
(23:28):
rewatch the first part of thispodcast, because he just dropped
a lot of knowledge on all of usand you know what a front row
seat you have had to be able tosay you've been there and done
it and maybe you should write abook.
Speaker 2 (23:47):
Well, I just feel very fortunate that I had that
opportunity.
Well, hi, viewers, welcome to Doing Business in
Bentonville.
My name is Deanna Baker and I'mthrilled to be here.
I am going to be a limitedseries contributor to Doing
Business in Bentonville and Ihope to bring topics that I've
been having in my circle offriends and colleagues to you
all, and I would love feedback.
Make sure that we're talkingabout the things that you find
(00:28):
value in and kind of further thediscussion around evolving
Omnichannel for our mutualcustomers.
So thanks for joining us today.
I want to introduce you to afriend of mine that I've known
Well.
He'll date us both, I'm sure,through conversation, but Terry
Truffles, and so let me justtell you a little bit about
(00:50):
Terry and then I want him tofill in some gaps.
But here's the cut and dry ofTerry.
Terry brings over five decadesof experience in both wholesale
and retail.
Okay, check, check ofexperience in both wholesale and
retail.
Okay, check, check brands andprivate brands, both boxes, and
knowledge of working withspecialty stores, department
(01:12):
stores, discounters, mass ande-com only companies.
So he has spread out andsurrounded everything in retail.
I do believe Terry began hiscareer 1973, he already said it
1973 in Omaha, nebraska, and hewas an associate buyer or
buyer's assistant not quite sureTerry, but Gopher.
(01:35):
Gopher bottom of the ladderright For a retailer called
Richard Gordman, which you mayrealize more as Gordman's I
think they went on later.
That's where they are now To beGordman, which you may realize
more as Gordmans I think theywent on later.
That's where they are now To beGordmans.
You did transition fromretailer side of the desk to
supplier side of the desk.
You joined HealthTex, which isa brand I remember wearing as a
(01:59):
kid.
Sure, right, it was verypopular.
They were the biggest.
They were the biggestchildren's wear manufacturer in
the US at that time.
A few years later, you went onto join Levi Strauss, right as a
district sales manager Fiveyears there, awesome.
And then you ventured intoprivate label yes, the private
label business with a companycalled Stone.
Speaker 2 (02:20):
Manufacturing.
Yeah, you know, if you're abranded salesperson then you
kind of get the line that theygive you and you're just kind of
told to go out and sell it, andI always wanted to have more
input into what was going intothe product and I had a friend
that was in the private labelbusiness and that sounded really
interesting to me, so I left.
Speaker 1 (02:42):
You're like me, I like to have control of the
reins.
Can't help it.
It's a control thing, I guess,but okay.
So then you sold to Sears andTarget there, right, so going
into bigger mass retailers.
Next you joined Reitz Knitwearand that's where you and I met.
You were the sales exec toWalmart and Target at the time,
(03:03):
and then, lastly, terry becamean associate at Interdeco when
Rights was acquired by Interdecoin 2000.
And you were there for awonderful 25 years as EVP of
sales and merchandising.
Yes, I was and you did recentlyBest thing that ever happened to
me Fantastic.
And you recently retired yes, Idid, which is awesome.
(03:24):
So welcome to you to doingbusiness in Bentonville and
we're so happy to have you.
Well, thanks very much, deanna.
Speaker 2 (03:31):
You know I'm honored to be your first guest and
you're taking a big chance here.
I mean, this is my firstpodcast and really the first
thing that since I've retired.
It's the first time that I setmy alarm this morning.
Speaker 1 (03:45):
Thank you, I appreciate being worthy, that's
right.
Speaker 2 (03:49):
And it's the first time I've had a chance to really
kind of prepare for something,which was fun.
And in preparing for thispodcast it kind of gave me a
chance to really reflect on mycareer.
And I did my first job was in1973, and I was 22 years old, so
(04:17):
didn't know anything aboutanything.
And I spent four years at thisretailer and then decided that
it looked like everybody thatwas coming in to call on me was
making more money, having morefun and just enjoying life.
And I was lucky enough that Ihad some really good
relationships with my suppliersand I went to work for health
techs and it's the first timethat I'd ever moved out of Omaha
Nebraska or not out of Omaha,but I'd lived in Nebraska all my
life.
So my wife and I we moved toIndianapolis.
(04:39):
We didn't know a soul and Ispent time there.
And then I spent time at thoseother jobs and I think about
that and what's remarkable aboutthat is that those other
manufacturers all of theclothing was made in the USA and
I can remember visiting thefactories and the distribution
(05:02):
centers and, yeah, health techsall made in the USA.
Same thing with even LeviStrauss back then Wow, and my
last job before being acquiredby Intradeco was at Wrights
Knitwear and we had facilitiesin throughout Pennsylvania.
We had a dye house in Allentownand a knitting house in
(05:22):
Orwigsburg in Allentown and aknitting house in Orwigsburg.
And you know what kind of struckme was how all things seem to
kind of go full circle in theapparel world.
You know I mean trendsobviously, but now by full
circle I mean now we're lookingat that US manufacturing stuck
(05:43):
around till about the late 1990sand then imports from China
kind of started pouring in andyou know that had to do with
World Trade Organization, theentrance by China into that, and
(06:07):
all of a sudden that are thelargest exporters to the world
and the largest importers forthe USA in terms of apparel and
that's, you know, with the hopesand wishes.
I think that maybe some of thatmanufacturing can be restored
in the USA and that's asignificant challenge, as
(06:28):
everyone knows, and Walmart iscertainly making strides to try
to return manufacturing in allindustries, I think, to the USA.
Apparel is definitelychallenging because just the
labor differences in laborcharges between the USA and
China or Bangladesh or Vietnamor any of those countries is
(06:50):
significant.
Now the administration doesmake a point, which I think is
well taken, that it's not justthe tariffs, it's the unfair
trade practices as well.
And you know, we used to look ata garment when we were getting
beat.
The US facilities were gettingbeat in pricing by garments
(07:11):
coming in from Asia.
We would look at the garment orwe would look at a yarn price
and the inputs that went intothat garment or that yarn price
were more than what they werecharging for it.
Meaning the fabric?
Yeah.
Meaning the cotton, the pricefor cotton, the fabric, any kind
of labor, yeah.
So we go.
What they can't and what wefinally figured out was is that
(07:36):
the Chinese government wassubsidizing the apparel industry
over there and so obviously theUS makers were really put a
significant disadvantage, andthat happened for a long, long
time until almost all of themwent out of business.
I think there's less than 2% ofthe apparel that is made in the
USA today.
Anyway, we can debate whetherit really makes sense to return
(08:03):
apparel manufacturing to the USAor not, but certainly it would
make sense.
You know, I think it would makea lot of sense to maybe have a
Western hemisphere that wouldhave a greater influence and
ability to produce just from anonshoring standpoint.
Speaker 1 (08:20):
If you can't get it in the US, at least get it
closer If everything that goeswith that.
Speaker 2 (08:25):
So certainly Mexico, canada and Central America could
be a huge could help replacesome of that.
You won't be able to replaceall of it just simply because of
the workforce, the number ofworkers that's required.
When you look at the populationof China, india, these other
places, there's just not enoughpopulation, not enough people to
(08:45):
put to work, to sew garments.
Speaker 1 (08:47):
Well, and if people aren't in the apparel industry,
you know you also have to thinkabout all the components that go
in.
It's not just a facility to sewthe garments.
Where does the fabric come from?
No, you're right, right.
So you've got to think about itfrom the very beginning.
All the way through thatprocess, supply chains, through
everything it has to be thoughtthrough it's fabrics, it's
buttons, it's zippers, it'severything.
(09:08):
It's all of it yes, andtechnology is going to have to
step up right, at least for thiscategory.
Speaker 2 (09:14):
Yeah, without a doubt .
And robotics would have to stepup significantly, and
automation.
So not sure how many realapparel jobs that you would
return, but anyway.
So that kind of struck me.
You know the.
The other thing that I got towitness through the time span
that I worked was the incrediblerise of mass merchants in the
(09:37):
USA.
You know, walmart was in the inthe the 70s and the 80s.
Walmart was building stores inthe 90s like crazy, and so was
Target, and how that changed theretail landscape.
I can remember working for asupplier and we were having a
sales meeting and this wasprobably in the early 1980s, and
(09:58):
one of the salesmen in themeeting said are you sure we
should really be devoting thatmuch production to Walmart
stores?
You know it's upsetting myother customers and they're
selling it for less.
And the salesman that wasselling Walmart said well, why
wouldn't we?
I mean what?
What?
They're not doing anythingwrong, they're not doing
anything illegal.
They're simply buying theproduct from us at the same
(10:20):
price.
We sell it to everybody elseand they're selling it for less.
So you know, long ago the EDLP,edlc strategy of Walmart was
starting to pay off and I got tosee that.
Speaker 1 (10:32):
Yeah, I was thinking about as you were saying that.
You know, I joined 1990 and we,Walmart, had under 2000 stores.
Speaker 2 (10:39):
Yeah.
Speaker 1 (10:39):
And then, you know, when I retired from Walmart, it
was over 4,500.
Yeah, so just incredible growth.
You know, and I can't say that,I thought about that every day,
you know doing the job, but itdid, it happened.
And we would say to suppliersall the time give us your best
cost, Let me worry about theretail Right.
And so we were able to deliverthat to your point and growth
(11:03):
happened.
Speaker 2 (11:03):
Yeah, you know, and then you know, and then I saw
the onset of e-com start andwell, I mean Amazon.
It was only 2004 when theyactually started business and
they didn't really startdisrupting apparel initially,
and then they got, as withAmazon and just about any
(11:25):
business they got into, theystarted to have a significant
effect.
And so that you know, to have afront row seat to see all of
that was really amazing.
Some of the things that I'mmost proud of, I guess of in my
career we were Intradeco was thesupplier of the year at Walmart
(11:48):
in.
It was either 2012 or 2013.
And that was for the entirestore.
That wasn't just You're on thebig stage.
Speaker 1 (11:55):
That's what you're saying.
Speaker 2 (11:55):
Yes, we were on the big stage and to be the supplier
of the year for the entirestore and we were competing for
that award with people likeJohnson Johnson Coca-Cola.
To win that award from thelargest retailer in the world
was humbling and extremelysatisfying.
(12:16):
I mean that was wonderful.
I mean we fed off that forquite a while.
Speaker 1 (12:23):
Well, and you should, because as a merchant team we
didn't take those decisionslightly.
Oh.
Speaker 2 (12:31):
I know.
Speaker 1 (12:32):
And I mean almost.
I won't say we got into anyfistfights or anything like that
or hair pulling, but there wasa considerable amount of review.
Speaker 2 (12:39):
Oh, I'm sure I'm sure everybody had another
well-deserved supplier that wecould have lost that to.
So we also won a number ofsustainability awards and we
were a really early adapter ofand believer in the sustainable
effort.
Our founder was a believer inthe sustainability that we
(13:00):
should bring to our products andI'm sure your viewers probably
know that.
You know landfills get hundredsof thousands of pounds of
apparel every year and you knowthere's apparel actually has
gone through deflation for abouttwo or three decades.
I can tell you that the thingsthat I sold in 1990 are cheaper
(13:24):
today than they were, than theywere in 1990.
I mean it's just because ofeverything obviously, production
moving to the cheapest countryand efficiencies really in the
apparel process.
So a T-shirt now.
You know, with fast fashion, youknow we all buy probably a lot
(13:45):
more clothes than we ever needbecause we can.
It takes a smaller percentageof the consumer's wallet than it
did years and years and yearsago.
But Interdeco has invested inmachinery in Central America
(14:09):
where you take the cutting roomscraps.
You know when you're going tomake a garment, you've got a
marker that sits out there andyou cut around that and if
you're lucky you get 85%efficiency.
It could be less.
So that means you've got 15% ofthat fabric that is just waste
and we can now take that fabricas well as other finished
(14:30):
products.
We've also bought a sortingmachine to bring in old garments
from people and we put theminto the machine and it turns
them into yarn which can be thenturned into products again.
So it's a regenerated cottonprocess and I'm sure they will
continue to make efforts in thatrange.
Speaker 1 (14:49):
So I was so, in my mind, Interdeco is always at the
forefront of really challengingthemselves on.
You know what's the next step,what's the next thing?
In fact, I can't remember theyear we went, but there was one
tour in Central America that wewent and we saw some of your
factories at Interdeco and thefact that they were run off king
(15:09):
grass.
Speaker 2 (15:10):
Yes, yeah, that's exactly right.
That's in our, that was in ourbiofuels.
Yes, yeah, that's right.
Speaker 1 (15:15):
Yeah, so so you know the efficiency of the factory
and now what you're talkingabout is, you know, efficiency
and regeneration of productsthat have served their time.
So you know I look forward andin fact, on LinkedIn, every post
I make about some newdevelopment, you know, catches
my attention because I would sayyou all challenge yourself
harder than we, as partners,challenge you.
Speaker 2 (15:39):
Well, if you saw our factories today, or if you took
a tour of our factories in ElSalvador and Honduras, you would
see the roofs filled with solarpanels and you would actually
see a solar farm.
Just because that was the rightthing to do.
And, you know, I mean quitehonestly, all of these
investments in sustainabilityalso had a business side to them
(16:01):
.
That made sense, but we werereally happy to be able to join
the two together.
Yeah, very cool.
Uh, lastly, you know, I thinkmaybe the thing that I'm most
proud of in my career is, um,what Interdeco was able to
contribute during the COVIDcrisis.
You know, all of a sudden, uh,in late 2019 in China, you just
(16:24):
heard some things and then, inMarch of and I know that it was
March in 2020, because I canremember, coming home from a
trip from New York, that weweren't really sure that we
wanted to go on, but this tripwas really triggered by, quite
honestly, a meeting that we hadhad with you and Andy.
(16:46):
Anyway, on the way home, we'reglad to get out of there and my
son is on the trip with me.
He works at Interdeco and he'ssitting in his seat and he pulls
out latex gloves to put on andwipes down his tray.
I mean, this was, you know,covid.
It was only five years ago, butit seems like it's been forever
(17:08):
.
We didn't know how the diseasewas spread, we didn't have a
cure for it and it was killingpeople, and so business fell off
the charts for about threeweeks and then it came back
instantly when the essentialretailers like Walmart, target,
could open up again, becauseobviously you start to run out
(17:31):
of things and you needed to havea retail place to be able to go
get them.
I mean, we needed groceries, weneeded food, we needed toilet
paper Remember the toilet?
Speaker 1 (17:41):
paper crisis.
Yes, I think we may havefinished the last roll at our
house.
I'm not sure.
Yes, we all stocked havefinished the last roll at our
house.
Speaker 2 (17:46):
So I'm not sure.
Yes, we all stopped for a longtime.
Anyway, I'm going to.
Then a technology rescued usfrom a meeting standpoint,
because we were franticallytrying to get things up and
running again in retail and onthe supplier side.
So Zoom meetings, teams wecould start to meet again and I
think we were all pretty happywith that because it also meant
(18:08):
we didn't have to travel andmeet in person.
So the other thing we figuredout was OK, well, you know, we
don't really want to go to thestore.
I can remember for a while beingafraid to even go outside
because you just didn't know howit was spread.
So we started to order thingsonline.
(18:28):
And we had been we'd allprobably had been ordering some
things from Amazon prior to that, but now all of a sudden,
retailers like Walmart, targetall retailers that had a website
found their website floodedwith orders.
I think I saw.
You know the numbers vary froma couple of different sites that
I looked at, but I know thate-com in total grew about 50%
(18:53):
from 2019 to 2021.
So it was a huge leap.
Up to that point, ecom had beengrowing at about a 12% to 15%
rate a year, starting back in2012 or 2013.
And we knew that it wasimportant, but it was not
something that we were focusingon, because, even though it was
(19:13):
growing at 12% to 15%, it wasstill a small percentage of what
everybody was doing, right?
And now, all of a sudden, itdemanded your attention and you
didn't have a choice.
You needed to figure out retail.
You know, all of the retailersneeded to figure out how to fill
these orders and suppliersneeded to figure out how.
(19:34):
All of a sudden, we went fromokay, well, we're used to
shipping a five to 10,000 unituh order, or a whole truckload
of something Uh, but now how doyou ship 48 units of something
in the same distribution centerthat you're doing this in?
So investments were made, butbeyond investments, you had to
find personnel that knew how tomake this happen, because you
(19:56):
were, you know, from ourstandpoint, we said, okay, we
know how to manage a businesswhere we're filling a round rack
and we're keeping that in stock, but how do you sell something
that shows up as a and I know itsounds stupid now, but back
then how do you sell somethingthat shows up as a picture on a
(20:16):
website and how much of it, doyou make you know, and so?
Speaker 1 (20:22):
It was a whole new formula.
Yeah, that you had to reallystart from the foundation.
Yes, of how to build it.
You know what's the demandgoing to be, which is what
you're articulating and,literally, how do you sell it in
this medium versus what, up toyour career, at this point, had
been a physical responsibility.
Speaker 2 (20:42):
Yeah, no, that's exactly right.
So I know that both thesuppliers and retailers were
going out and hiring experts orpeople that had a lot more
experience in e-com, fulfillmentand digital marketing.
Then you're putting these twoteams together.
So now you have competinginterests in one business where
(21:05):
you know some of the visionaryleaders.
I would say like Doug McMillanand like the founder of our
company, felix Amon, saw that.
You know e-com is definitelythe future.
I know we're losing money oneverything we ship and I know
it's a small portion of thebusiness and I know it's easier
to do the brick and mortarbusiness, but we have to address
this.
So that caused suppliers tolook for innovative ways in
(21:29):
their supply chain and theirdistribution networks.
We went to robotics and someother thing in fulfillment and
we hired people and Walmart didthe same thing.
But for these people to worktogether took a little while
because they were competinginterests for the resources of
the company.
Where we're at today inOmnichannel, now you've got
(21:54):
people that are managing two tothree times the SKUs that they
used to manage, and that giveseverybody less time and not as
much time to maybe spend on someof what used to be the softer
skills of retail.
Speaker 1 (22:14):
Well, it's true, and from a merchant's chair they
were very busy just managing abrick and mortar.
Speaker 2 (22:20):
Oh, it's not like that.
Speaker 1 (22:22):
If you were e-comm only, you were very busy
managing many SKUs, right, yeah.
And suddenly, congratulations,you're now an Omni merchant.
Okay, you get both.
Well, thank you.
What takes priority, you know,and, and depending on which side
you came from, right, you hadto learn the whole other
discipline and what it took tomake it successful, cause what
(22:45):
you just articulated was thatthey're very different things,
right, and so you have to be oftwo mindsets you want to nurture
and grow this, you want to keepthe volume going with this, and
how do you devote enough time,which is the limited resource,
(23:05):
right, to make it all cometogether?
Well, and omni-channel, and it'snot just Walmart that's doing
that, right, it's every retailerout there that's trying to find
their way and learn those samethings in real time as during
COVID.
It's ramping up, right, so nopressure or anything else to add
to it.
It's not like you didn't have afull-time job, exactly exactly.
So it's just.
It's amazing, and I hope youviewers, you might want to just
(23:28):
rewatch the first part of thispodcast, because he just dropped
a lot of knowledge on all of usand you know what a front row
seat you have had to be able tosay you've been there and done
it and maybe you should write abook.
Speaker 2 (23:47):
Well, I just feel very fortunate that I had that
opportunity.
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