Federal Trade Commission Recieved Documents Jan. 11, 1996 January 11, 1996 P894219 B18354900035 Office of the Secretary Federal Trade Commission Room 159 6th Street and Pennsylvania Avenue, N.W. Washington, D.C. 20580 Re: Robert E. Swift Executive Director Tel: 212-819-4397 Fax: 212-819-4493 "Made in USA Workshop - Request to Participate," FTC File No. P894219 Thank you for the opportunity to participate in the review being conducted by the Federal Trade Commission of what a "Made in USA" label means to the American consumer. I am Robert E. Swift, the Executive Director of the Crafted with Pride in U.S.A. Council, which is a non-profit organization incorporated on April 4, 1984 under IRS Section #501-C6. The enclosed brochure labeled Exhibit 1 describes the Council's mission, strategies, membership and a summary of research conducted by independent organizations as of the early 1990s. As will be noted in the brochure, one of the key strategies of the Council has been to reinforce the positively perceived value of Made in U.S.A. apparel and home furnishings. Consequently, the Council has conducted extensive reviews of all available research studies on the attitudes of American consumers toward Made in U.S.A. products, particularly apparel and home furnishings. In my forty years experience in the U.S. fiber, textile and apparel industry, I have never observed such consistent and corroborative research confirming the consumer's very positive perception of the quality of Made in U.S.A. apparel and home textiles. There is no question that a Made in U.S.A. label is an extremely powerful selling aid on these products as well as, to varying degrees, on others. A Made in U.S.A. label must be preserved only for products that are made in the U.S.A. containing 100% U.S. components. In 1984, Congress amended the Wool and Textile Fiber Products Identification Acts, which required the labeling of apparel and home textile products made in the U.S.A. to be so identified, but only if the fabric component was also produced in the U.S. By virtue of these statutes, the consumer has subsequently been able to exercise a choice based on the role that country-of-origin plays in their purchase decision criteria. I would urge that the Commission dismiss any proposals to change the labeling requirements mandated by these two federal statutes. Furthermore, I would suggest that the use of a Made in U.S.A. description should be restricted to products produced in the U.S. of components that are all made in the U.S.A. I would like to elaborate on this point shortly. Also, I would propose that the Commission adopt guidelines for products that are produced in the U.S.A. containing some imported components. These products should not be permitted to be identified as Made in the U.S.A, but rather should be described as assembled in the U.S.A. of the percentage of U.S. components. The use of the words "Made" or "Crafted" should not be allowed in this case because such terms are powerful selling aids and would lead to deceitful and deceptive identification when in fact the products were not entirely produced in the U.S. The percentage value of the U.S. components must be identified on the label based on the materials and labor costs as a percentage of the total cost or wholesale price of the product, not the retail price which reflects a substantial markup. Much of the remainder of my testimony will summarize the extensive independent research that documents the consumer's positive perception of a Made in U.S.A. label, which is the basis of my claim that such a label is a powerful selling assist. First, I would like to explain why, in the case of textile and apparel products, the current content provision of the existing statutes should be maintained. As noted in Exhibit 2A, the well-recognized market research organization, R.H. Bruskin Associates, conducted research on the consumer's preference for U.S.-made clothing on two occasions. You will note that in both cases the preference for U.S. - made clothing based on overall quality was 70 and 71% in the two separate studies. It also should be noted that the other predominant reasons for preferring U.S.-made clothing were long lasting (durability), best material (fabric), variety of sizes, better workmanship, best value for money and variety of materials heading the preference criteria. In other words, the consumer's favorable perception of the quality of apparel produced in the U.S. is highly dependent upon and due to the quality of the fabric component. If the dyestuffs used to color the fabric were to fade, the appearance of the garment suffers. If the construction of the fabric, that is its weight, yarn sizes, and yarns per inch, etc., is inadequate such that seams slip or durability is limited, the garment's usefulness is of short duration. The inter-relationship of garment and fabric quality is evident in this study and is documentation of the importance of a content specification for not only apparel and home textiles, but should be a key criteria for other product categories as well. To permit the use of a Made in U.S.A. identification when the components are not 100% produced in the U.S.A. would permit deceitful and deceptive marketing practices because of the strong appeal of a Made in U.S.A. identification. As an indication of manufacturers' recognition of the appeal of such a label, the most frequently requested item of the Crafted with Pride in U.S.A. Council is the reproduction proofs of the Council's Crafted with Pride in U.S.A. certification mark. If I may, I would like to summarize some of the extensive research, much of it done by other independent groups, that documents the appeal of a Made in U.S.A. label as I have referred to earlier. As you will note in Exhibit 1, a number of the studies conducted prior to the early 1990s have been highlighted in the section headed "Consumer Studies." In addition, you will note that in Exhibit 2A there is a summary of research conducted by Hanover House in one of their Spring catalogs that confirmed the selling appeal, just from the super-imposing a prominent Made in U.S.A. identification on the merchandise being featured, i.e., a 10% increase in the identified items versus those that carried just the minimum country-of-origin identification. The two versions of the catalog pages are in Exhibit 2B. In Exhibit 3 you will note a survey conducted by Roper Reports on the consumer's attitude toward American-made clothing and various labels. The results indicate that a Made in U.S.A. label was considered superior or fairly good by 95% of the respondents versus 38% for a Made in Taiwan label. This study was done at the time the Wool and Textile Fiber Product Identification Acts were amended. Please note pages 3 and 4 of Exhibit 4, a survey by the Good Housekeeping Institute on CLOTHING FOR THE WAY WOMEN LIVE. When asked to rate the quality of clothing made in the U.S.A. on a 1 to 10 scale with 10 being the highest quality, 78.4% of the women rated Made in the U.S.A. at a level of "7" or above versus 48.4% for clothing imported from Europe at "7" or above, and only 30.4% rated clothing imported from the Far East at "7" or above. In Exhibit 5, a research study reported in CHAIN STORE AGE that was conducted by Leo J. Shapiro & Associates has several important findings. On page 14 in the graph at the top of the page, it can be noted that 68.7% of those surveyed reported checking for country-of-origin, and the primary reason was "tells the quality" at 34.2%. Furthermore as can be seen in the bottom graph, apparel was the most scrutinized product category of those listed at 40.1%. As the article further indicates, on page 15, third column, a "Made in U.S.A. label relieves the consumer, not of some burden to support her motherland, but instead relieves her from taking extra precautions to check on quality. A foreign-made label is more likely to put a customer on guard to assure that a product is of acceptable quality." In Exhibit 6, an article that appeared in TIME magazine, November 13, 1989 summarized a survey conducted by Yankelovich, Clancy & Shulman indicating "a majority of respondents said U.S. companies are making better clothing, appliances and telephones than their foreign rivals." In fact, for clothing 82% of the respondents indicated that the U.S. makes better quality clothing versus 11% for other countries. The results of four, 12-week retail tests conducted in the early 1990s are summarized in Exhibit 7 that revealed a net 24% increase in sales of U.S. - made items when they were identified with Made in U.S.A. tags. Many retailers resist the use of hangtags becuase of tangling when garments are moved on displays or racks. In spite of this disadvantage, you will note in Exhibit 8 the use or desire to use prominent Crafted with Pride in the U.S.A. or Made in the U.S.A. identification by retailers such as Hills Department Store, the Mercantile Store group, Wal-Mart Stores and Venture. Such major retailers would not seek to emphasize their Made in U.S.A. apparel and home textile products if it did not make good business sense. Since the Council's formation in 1984, tens of millions of dollars have been expended on radio and television advertising to encourage Americans to look for and buy Made in U.S.A. apparel and home fashions. In addition, an extensive number of retail promotions featuring Made in U.S.A. merchandise have been conducted with leading retailers nationwide, usually in conjunction with the appearance of celebrities. These have proven consistently to stimulate significant retail sales increases. The awareness created by these promotions and advertising and the attitude of various age groups toward U.S. - made apparel and home fashions is highlighted in Exhibit 9. Detailed reports from the independent research company who conducted these studies are available if desired. Another in-depth study conducted by the Gallup Organization for the International Mass Retail Association in 1994 is included in Exhibit 10. It may be noted that 84% of Americans are more likely to buy American products versus imported versions (Figure 1-1), and that the two types of products that receive the greatest scrutiny for their country-of-origin were automobiles (54%) and clothing (51%) with the latter being three to four times the percentage attention paid to country-of-origin for small appliances (15%) or tools (12%) (Figure 1-6). Lastly, in Exhibit 11 there is a copy of a fax received by the Crafted with Pride in U.S.A. Council that is an indication of the appeal of the Crafted with Pride in U.S.A. certification mark, and the illegal and deceptive practices that any dilution of the content provision for a Made in U.S.A. label will generate. A copy of the ad run by the Council in the textile and apparel trade press is also in Exhibit 11. In summary, I hope that the Commission's findings confirm the positive appeal of a Made in U.S.A. label and that the recommendations of the Council are adopted. Thank you for allowing the Council to participate in your review and we would welcome the opportunity to participate in your workshop on March 26 and 27. Sincerely, Robert E. Swift Executive Director Crafted With Pride in U.S.A. Council, Inc. EXHIBITS EXHIBIT #1 EXHIBIT #2A EXHIBIT #2B EXHIBIT #3 Roper Survey Roper Reports, in a nationwide survey last spring of 2,000 people 18 and over, asked what impression certain labels gave of the quality of a product. This question is particularly pertinent in light of the recent Government ruling that requires all American-made clothing items to be so marked. As Diagram A shows, the label most favored was "Made in USA," which was chosen as "superior" or "fairly good" by 95% of the respondents. The lowest ranked was one marked "Made in Taiwan." When shown this label, 2% thought the product superior, 36% said it was fairly good, 45% judged it not very good and 12% called it poor. The other 10 labels, assessed on the same basis, scored as follows: "100% Cotton" 92%, "100% wool "88%, "Good Housekeeping Seal" 88%, "Made by Union Labor" 84%, "Made by Well-Know Designer" 83%, "Made in Germany" 78%, "100% Polyester" 70%, "Made in Japan" 65%, "Official Product, '84 Olympics" 59%, "Inspected by Inspector 30" 56%. EXHIBIT #3 Diagram A ROPER REPORTS (84-6) 42. There are a number of things that can appear on the labels, tags or packages of various products people buy. We'd like to know what effect some of these things have on your impression of the quality of a product. (Card shown respondent) Would you read down that list and tell me for each one if you saw it on the label or package of a product whether it would make you feel the quality of that product was likely to be superior, fairly good, not very good, or poor? First, made by union labor. Superior and fairly good May/June 1984 combined Not 1984 Fairly very Don't May/ 1983 Superior good good Poor know June April f. Made in the U.S.A. 38% 57% 2 - 3 95% 93% k. 100% cotton 45% 47 4 1 4 92 * j. 100% wool 43% 45 6 1 4 88 82 g. The Good Housekeeping Seal 42% 46 4 1 8 88 88 a. Made by union labor 19% 65 5 1 9 84 80 b. Made by a well-known designer (Dior, Jordache, etc.) 26% 57 7 1 9 83 77 e. Made in Germany 17% 61 11 3 8 78 74 i. 100% polyester 14% 56 17 6 6 70 70 c. Made in Japan 8% 57 24 6 5 65 61 l. Offical product of the 1984 Olympics 10% 49 14 5 23 59 * h. Inspected by Inspector Number 30 8% 48 14 4 26 56 51 d. Made in Taiwan 2% 36 45 12 5 38 29 * Not asked Note: Items are ranked according to "superior" and "fairly good" combined. EXHIBIT #4 EXHIBIT #5 EXHIBIT #6 EXHIBIT #7 NO. 35, APRIL 1993 ANALYSIS RECONFIRMS APPAREL SALES INCREASES WITH PROMINENT "MADE IN U.S.A." IDENTIFICATION Analysis of four 12-week retail sales tests conducted in 1 991 and 1992 again confirms that prominent "Made in U.S.A." identification of apparel can generate substantial sales increases. The tests -- two at Castner Knott stores in Nashville and two at McAlpin's stores in Cincinnati -- showed a net 24% increase in sales of U.S.-made items during the weeks that they were tagged as such. The sales gain was achieved without cannibalizing sales of imports. In fact, sales of similar imported items involved in the tests increased an average of 1% -- indicating that "Made in U.S.A." identification improves sales across-the-board. The U.S.-made versions were prominently identified with "Made in U.S.A." hang-tags during the middle four weeks of each test period. Sales were analyzed weekly throughout the entire 12 week test period. The four tests involved 108 apparel items, or 54 pairs. Fifty-four U.S.-made and 54 imported items were selected to be as closely comparable as possible, including price. The average price of the U.S.-made items was $24.46, while imported items averaged $24.62. A "Low Cost" Sales Increase Frank Schapiro of Demand Factors, Inc., who designed and executed the test analysis, noted that 24% higher net sales were achieved at relatively low cost."Prominent identification' in this experiment involved hang-tags and a few toppers, but no reductions in either consumer price nor any use of valuable display space,* said Schapiro. "Also, this net sales increase largely represents new or incremental volume for the retailers." Pairs of items ranged in price from $2.25 to $44.00, and Shapiro said no relationship between the price level of an Item and the impact of prominent identification emerged. *The addition of a 'Made in U.S.A.'tag is as likely to generate a large impact on an item priced under $10 as on an item over $40,' he said. Prominent identification works equally well across the range from $2 to $44," However, Schapiro said some relationship was indicated between price spread and the. impact of prominent identification. U.S.-made items priced at or near parity with their imported counterparts exhibited the largest average gains (+34%) during the test periods. U.S.-made Items priced $2 or more above or below their imported counterparts exhibited average gains of about 16%. "In other words," said Schapiro, "the effect of prominent identification was most pronounced when the prices were closest." "U.S." Doubled Impact Schapiro further stated that a "Made in U.S.A." tag had twice the impact on increasing the sales of merchandise that was only infrequently price promoted, versus that which was on sale frequently. He added that U.S. made garments sold at approximately a 40% more effective sales rate than imported garments when both were featured at promotional prices. Analysis of the four sales tests at Caster Knott and McAlpin's's was commissioned by the Crafted with Pride in U.S.A. Council. Consumers Respond with Purchases "These tests again show that the simple act of prominently identifying items as 'Made in U.S.A.'can generate significant sales increases," said Robert E. Swift, executive director of the Council. "And these sales increases did not occur by taking sales away from imported items. The message is clear consumers buy more when informed that apparel or home textiles are U.S.-made." Anyone wanting additional information on the use of the Council's *Made in U.S.A." or "Crafted with Pride in U.S.A." marks is urged to contact the Crafted with Pride in U.S.A. Council, 1045 Avenue of the Americas, New York, NY 100 1 8 (Tel. 212/819-4397) 1045 AVENUE OF THE AMERICAS, NEW YORK, NY 10018 (212) 819-4397 EXHIBIT #8 Article from Discount Store News (The International Newspaper of Discount Retailing) October 5, 1992 Hills Rolls Out American Spirit Apparel With patriotic Theme Photograph of store advertisement - See Image Canton, Mass -- Hills, the regional discount chain based here, used its Labor Day circular to unveil a new private label apparel line called American Spirit. With a red, white and blue striped banner and the image of an eagle emblazoned within the stripes, the circular, which broke on Sept. 6, proclaimed "This Labor Day Get The AMERICAN SPIRIT." American Spirit is a line of basics for men, women, boys and girls and makes Hills the most recent addition to the cadre of retailers forwarding private label apparel programs. Hills' star spangled banner approach has a distinct Wal-Mart flavor and, as in WalMart's newest private label, Sam's American Chice, uses the word "American" in the name of a merchandise line. Sam's Choice, however, is not an apparel label. The only other discounter to offer a patriotic theme for apparel is Rose's, which recently introduced its Home Grown Southern Sweats program. A fleece program, Home Grown is made entirely in North Carolina. American Spirit consists of basic, casual merchandise: socks (anklet, fashion, athletic and casual); sweaters (cotton men's and acrylic shaker stitch for women and children); turtleneck shirts (solid colors in a cotton/polyester blend); heavyweight acrylic fleece for boys (long and short bottoms and long and short-sleeved tops); and infant and toddler turtleneck shirts and corduroy pants in a cotton/polyester blend. The Hills circular presents American Spirit as a brand offered exclusively at Hills and not as a private label Hills merchandise. Precise information on American Spirit such as exact sku count, rollout plan and line extensions was not available. Hills executives said they couldn't comment due to Chapter 11 restrictions. Hills filed for Chapter 11 protection in early 1991. What's most interesting about American Spirit is Hills' emphasis on each item's made in America origins. Not only does Hills apply a "Ccrafted With Pride in U.S.A." stamp next to the American Spirit items in the ciruclar, but also notes next to the photos where the items were made and how many Americans are employed at those plants. For example, on the cover of the labor Day ad, Hills wrote: "The American Spirit items on this page are proudly made in 10 American factories, employing over 4,600 American workers." On page 3, which features a gorup of boys in American Spirt fleecewear, the company asserts: "These quality American Spirit fleece and turtlenecks are proudly made at Andover Togs in Scottsboro, Ala., by 1,500 American workers." Next to a photo of two casually clad toddlers, also on page 3, a box reads: "American Spirit corduroy pants are made at Pixie Playmates in Largo, Pla., by 250 workers." On page 2: "Other stores make noise, but Hills really does it ... We have more Made in USA than any discounter! We're committed to our country and its workers. That's why it has always been our policy to Buy American' whenever we can assure high quality at a value price." EXHIBIT #8 MERCANTILE STORE COMPANY, INC. EXECUTIVE OFFICES 9450 SEWARD ROAD FAIRFIELD, OHIO 45014 ROGER D. CISKIE PRESIDENT CHIEF OPERATING OFFICER January 31, 1992 Dear Valued Vendor and Friend on behalf of all of us at Mercantile Stores, I'd like to thank you for the business we have together produced. The future belongs to those retailers and vendors who have both the courage and commitment to develop partnerships that will insure progress for the future. We are also totally committed to source even more merchandise that is made in the U.S.A. Our experience with "Made in the U.S.A" products has been excellent, and clearly the customer continually casts her vote to purchase merchandise made in the U.S.A. whenever possible. In addition, outside research has confirmed that the American consumer responds positively to merchandise identified by labels and hangtags bearing the "Crafted with Pride" and "Made in the U.S.A." marks. We have enclosed examples of both the "Crafted with Pride and It Made in the U.S.A." markings that can be used with your existing labels and hangtags. As you may know, for a merchandise product to carry the "Made in the U.S.A." mark, the item must be assembled in the United States and be made entirely of U.S. produced fabric. To carry the "Crafted with Pride" mark, the item must satisfy the aforementioned and also must be made of U.S. fiber. Please feel free to contact the Crafted with Pride in the U.S.A. office at (212) 819-4398 for further information. Quick Response and Replenishment of desired styles, sizes, and colors can best be achieved with merchandise made in the U.S.A. This fact, along with the potential to create thousands of new jobs in the textile, garment, and home furnishings industry, are ample reasons for all of us to concentrate our efforts in this very worthwhile pursuit. Yours very truly Roger D. Ciskie RDC/gs EXHIBIT #8 WAL-MART STORES INC, BENTOVILLE, ARKANSAS 72714 December 10, 1991 Dear Partner: Wal-Mart world like to take this opportunity to wish you a Happy Holiday Season. We appreciate your recent participation in the Triangular Partnership Symposium and hope that You are constantly searching for new improved ways of doing business, always with the customer in mind, As promised, we are sending a copy of the panel discussion which we video taped during the symposium for you to review and share with your associates. Hopefully there is no doubt in your mind of Wal-Mart's efforts to source more U.S.-Made products. Research has confirmed that American's respond positively to prominent identification of Made in the U.S.A. merchandise. Additional research confirms a growing awareness of the Crafted with Pride certification mark. Enclosed are reproduction proofs of both the Crafted With Pride and Made in the U-S-A marks. Please consider what mark you can use with your existing labels and hangtags to avoid additional tagging of your merchandise. As you are aware, for a garment or home textile product to carry either mark, the item must be assembled in the United States, be made of U.S. fabric, and it must also be made of U.S. fiber. If you have any questions regarding either mark usage, please call Crafted with Pride in U.S.A. office at (212) 819-4398. Please advise me of your plans to more prominently feature Made in U.S.A. identification by sending samples of your next tags, labels, etc. HappyHolidays, Arthur Emmanuel DMM, Ladies Wear Wal-Mart Stores Inc. EXHIBIT #8 Venture 2001 East Terra Lane P.0. Box 110 O'Fallon, MO 633666-0110 (314) 281 5500 CableVentco, St. Louis February 17, 1992 Robert E. Swift Executive Director Crafted With Pride In U.S.A. Council, Inc. 1045 Avenue of the Americas New York, New York 10018 Dear Bob: After receiving a copy of Maxine Clark's note, I wanted to share with you Venture's new Made In U.S.A. graphics. These graphics (attached) will be part of a campaign that we expect to kick-off this April, in our weekly circular and in-store signing. We think this campaign will help Venture and our Made In U.S.A. suppliers re-energize our commitment to develop, purchase and prominently identify Made In U.S.A. merchandise. Thanks for your support and interest in Venture's Made In U.S.A. program. Sincerely, Jim R. Miller Executive Vice President-Marketing cc: Bonnie Bolton George Bruce Maxine Clark Julian Seeherman EXHIBIT #8 BACKED BY POPULAR DEMAND. Recent studies show that most Americans believe that American-made clothes and home fashions have the same, or better, quality than imports. They also believe that they get more for their money when thev buy Amen'can-made products. And they're backing up their convictions at the cash register. Just ask Castner-Knott. When they displayed and identified Made in the U.S.A. clothes and homefashions consumer response was Inspiring. Dollar volume rose a staggering 50% on featured merchandise without a loss of volume on non-featured merchandise. McAlpin's reports similar results with a 26% rise in dollar volume when they featured Made in the U.S.A. goods. so source, promote and display Made in the U.S.A. clothing and home fashions. It's very smart Business. Especially when millions of Americans think our star is rising. A LABEL FOR THE'90s The'90s are quickly becoming the decade when Americans look out for Americans. We saw this trend and decided to make the most of it in our advertising. Our newest television campaign strikes right at the heart of the matter: the damage imports inflict on our country and the need to buy American-made clothing and home fashions. And it hits a nerve. More and more Americans believe that imports have had a negative impact on both their job prospects and their childrews future. This heightened awareness is being translated into action. In fact, half of all men and women in America say they now look specifically for Made in the U.S.A. clothes and home fashions, A substantial gain over a year ago. Play your part. Source, display and promote American-made clothing Get with the program. and home fashions. And label yourself for success. (212)819-4397 F. (212)819-4493 EXHIBIT #9 HIGHLIGHTS OF HOLIDAY 1993 ADVERTISING TRACKING CRAFTED WITH PRIDE IN U.S.A. COUNCIL, INC. METHODOLOGY o Two commercials were aired during the Holiday 1993 flight. One was "Moving" that had first been shown in Fall 1990 through Fall 1991. It had not been shown from Holiday 1991 until the September 1992 flight. The second commercial used this season was "Line" that had been introduced in Holiday 1991. o A nationally representative sample (2/3's women) was asked if they had seen any advertising of Made in U.S.A. clothing or home fashions. If they said yes, they were asked to describe it. RESULTS o Advertising awareness continued at the high plateaus achieved with the job related commercial for all age and gender groups. The tracking research on advertising impact showed the ability to "break through and be noticed" i.e., generate awareness and recognition with 2 out of 3 women age 25-49 who are the target audience. o Of the 43% of the total women who looked for a Made in U.S.A. label, 82% found Made in U.S.A. and 88% bought U.S.-made. o Three times as many women agree that Made in U.S.A. apparel and home textiles are usually better value than imports. (43% agree versus 14% disagree) o Over three times as many women report they can usually find U.S.A. clothing in a style they like than those who disagree. (52% agree vs. 16% disagree) o Five times as many women have more confidence in the consistency of sizing in cloth- ing made in the U.S.A. than foreign-made clothing versus those who favor imported sizing. (60% agree vs. 12% disagree) o Almost five times as many women 25-49 disagree that foreign clothing has more up-to-date fashion than U.S.A. versus those who agree. (54% disagree vs. 11% agree) o More than six times as many women age 25-49 believe the quality of U.S.-made clothing has steadily improved over the past few years versus those who disagree. (60% agree vs. 9% disagree) Among men those who agree are at the highest agreement level to-date. (67% agree vs. 6% disagree) o More than five times as many women 25-49 disagree that clothes made in foreign countries have better workmanship than clothes made in the U.S. versus those who disagree. (59% disagree vs. 11% agree) o Two and one-half times as many women agree that those who buy foreign products are responsible for putting Americans out of work versus those who disagree. (59% vs. 24%) o The responses from all consumers are shown below when asked "American consumers who purchase products made in other countries are responsible for putting their fellow Americans out of work." 1988 1989 1990 1991 1992 1993 Agree 45 47 47 58 54 58 Neutral 25 26 18 22 22 17 Disagree 30 27 35 20 24 25 TOTAL 100 100 100 100 100 100 o Responses from women 35+ were as follows: (%) 1988 1989 1990 1991 1992 1993 Agree 55 51 53 62 60 66 Neutral 21 25 27 20 21 17 Disagree 24 24 20 18 19 17 TOTAL 100 100 100 100 100 100 o Almost twice as many people agree strongly that our country is not doing enough to ensure fairness by foreign manufacturers who import clothes and home fashions into the U.S. versus those who disagree. (41% agree vs. 23% disagree) o The number of total consumers who report that they noticed the country-of-origin of the garment they bought on their last shopping trip was 36%. 78% of all consumers who reported having noticed the country-of-origin, report that they bought a Made in U.S.A. item. o Overall, 73% of those who correctly recalled either current commercial clearly understood that the advertising was trying to get them to buy U.S.-made apparel or home fashions because it supports America and saves jobs. o A new question was added to this tracking wave asking consumers to rate their satisfaction with their recent purchases of apparel and/or home fashions. About half (54%) of all target women rated their purchases as "very satisfactory" for all items, however, for target women who purchased U.S.A.-made items, 74% were "very satisfactory". This pattern of greater satisfaction with U.S.A.-made apparel and home fashions was found among total consumers, all women, and men. o Another new series of questions recently added to the survery involved a rating of the importance of manufacturing jobs to the U.S. economy and should more be done to keep manufacturing jobs in the U.S. It is encouraging that there is virtually no demographic variance with 87% of all interviewees regarding manufacturing as "very important" to the health of the U.S. economy, and a like percentage who believe that the U.S. should do more to keep manufacturing jobs in the U.S. 1/94 EXHIBIT #10 HIGHLIGHTS OF RESEARCH CONDUCTED FOR INTERNATIONAL MASS RETAIL ASSOCIATION BY THE GALLUP ORGANIZATION CONSUMER ATTITUDES TOWARD PRODUCT SOSOURCING"G The Survey results are based on telephone interviews from April 25 to May 5, 1994 with a national random sample Of 1,003 U.S. adults, 18 years of age or older, who identified themselves as being primarily responsible for the clothing and household goods purchased for their households. At 95% confidence levels, sampling error and random effects would be ñ 3%. o Overall, 84% of Americans are more likely to buy American products versus imported versions (32% strongly agree, 52% moderately agree). o A total of 64% are more likely to buy U.S. products even if 10% higher in price. (19% strongly agree, 45% moderately agree). o The Gallup study asked respondents to rate the importance of five factors that influence purchasing decisions on a scale of 1 to 5. Country-of-origin was rated 3.35 versus quality at 4.76, features at 4.38 and price at 4.23. This is consistent with research done by the Council in the mid 1980s when consumers were asked to rate ten factors on a scale of 1 to 10. Interestingly, fit was 9.7, quality was 9.0, brand 5.1, and country of origin 4.5. However, after just one viewing of the Councils prototype television commercials, the rating of the importance of country-oforigin rose 50% to 6.8 versus brand at 5.9, fit at 9.6 and quality at 9.2. ù o When asked how often they would try to determine a product's country-of-origin before purchase, 34% said "always" and another 44% said "sometimes" for a total of 78%. Only 8% responded "never" and 14% said rarely. o Consistent with the Councils research, more mature people try to determine product country-of-origin, i.e., 50% of people 61 or older "always" try. o Of those who say their purchase decision is strongly influenced by the product's country-of-origin, 65% say they "always" try to determine where the product was produced. EXHIBIT #10 -2- o For many people (70%), the country-of-origin is important for some products and not for others. The two types of products that receive the greatest scrutiny for their country-of-origin were automobiles (54%) and clothing (51%), with the latter 3-4 times the percentage who pay attention to country-of-origin for small appliances (15%) or tools (12%). o Since most people in the Gallup study indicated quality is the most important factor that influences their purchasing decision, the respondents were asked if U.S. or foreign products provided the higher quality for a range of products. For clothing, U.S. was favored by 69% versus II% for imports. The only product with a higher preference was tools at 76% for U.S. and 7% for imports. Imported electronics scored 61% versus 21% for domestic versions. o In contrast to NRCA data that since 1985 has revealed the average price of imported apparel paid by the consumer was equal to or exceeded the price of the average domestic product (in 1993 import price was 3.6% higher on average), 52% of the people in the IMRA/Gallup study believe that U.S. clothing is more expensive than imports versus 22% who think imports are more costly. o In 1994 more people think the quality of U.S. products is better than in 1990. Council research results parallel this belief for U.S. clothing, i.e., more than six times as many women age 25-49 believe the quality of U.S.-made clothing has steadily improved over the past few years versus those who disagree (60% agree versus 9% disagree). Among men those who agree are at the highest agreement level to date (67% agree versus 6% disagree). 6/94 EXHIBIT #11 JSTIIF Japan Synthetic Textile Inspection Institute Foundation (Designated by Goveriiiiient of Japan) INTERNATIONAL INSPECTION ORGANIZATION Mitsui 2ND Anncx Building 4-4-20, Hongokucho, Nihonbashi, Chuo-ku Tokyo, Japan Cable: JSTIIF, TOKYO Phone: TOKYO (03)3241-7319 'Ielex: 02222633 Fax: (03)3245-0773 August 4, 1992 Crafted With Pride In USA Council 1046 Ave. of the Americas New York, New York 10018 Telephone - 212/819-4397 Fax - 212/819-4493 Gentlemen: Subject: Symbol Mark "CRAFTED WITH PRIDE" Concerning the above, when we faxed to the AATCC Technical Center on July 28, we were told to get in touch with you, and this is why we are faxing this to you. Lately, there are cases increasing in Japan that, when contracting, American buyers demand Japanese suppliers to affix the symbol mark "CRAFTED WITH PRIDE" on American imports, but none around here is knowledgable more than its existence. In this connection, we would be most happy if you would enlighten us on the procedures, by which we can officially apply this symbol mark to Japanese garments for export to your country, when required. Sorry to cause you much inconvenience, but as we are much interested in it, your early attention and reply, preferably by fax, would be most appreciated. Thank you, and with our best regards, H. Kawanabe, Dy. Director Technical Operation Dept. JSTIIF (FAX No. 03-3245-0773) EXHIBIT #11 Picture of "Made in USA" label - See Image If we can't convince you of its value, maybe the Japanese can. Recently, the Japanese Synthetic Textile Foundation asked to use the Crafted with Pride in the U.S.A. certification mark on their fabrics. Of course, we turned them down. But who can blame them? After all, it is giving Made in the U.S.A. clothing and home fashions a true competitive edge. More than half of all consumers believe that people who purchase products made in other countries are responsible for putting Americans out of work. And they're backing up their convictions at the cash register. Just ask Mercantile Stores, Wal-Mart, Hills, Venture and Sears, stores committed to featuring Made in the U.S.A. clothing and home fashions. If you're manufacturing Made in the U.S.A. clothing and home fashions, or if you're selling them, there's never been a better time to merchandise them. If you're not, it's time you should. But don't take our word for it. Ask the Japanese. Get with the program. For more information, write or phone Crafted with Pride in U.S.A. Council, Inc. 1045 Avenue of the Americas, New York, NY 10018 (212) 819-4397 Fax (212) 819-4493