Fashion District Reaches an All-Time Low in Sales as 400 Korean Businesses Have Closed

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The clothing industry in Downtown L.A., known to Koreans as the “jobber market,” is in a steep decline. Ever since the federal raid against alleged money laundering operations in September 2014, the economic downturn of the jobber market has been palpable.

Amid those difficulties, even the tradition of “key money” has disappeared from the San Pedro Wholesale Mart. While it is true that key money has not been as prominent in recent years, it has still been used frequently at the biggest wholesale property in Downtown, but that is no longer the case.

The Korean businesses, which have originally been seeking relocation of their manufacturing base, seemed to have given up on the idea. Instead, the businesses are now busy as they are simply trying to make ends meet for survival.

In the phonebook published biannually by the Korean American Apparel Manufacturers Association, about 1,800 Korean businesses were listed two years ago. The new edition, set to publish later in the year, only 1,400 businesses have remained.

The atmosphere around the jobber market was frosty at best during Chuseok, the biggest Korean holiday of the year that is equivalent to the American Thanksgiving.

“Until last year, businesses often sent boxes of fruits and rice cakes to celebrate Chuseok together,” said one business owner. “There was nothing this year. In my 30 years in this business, I’ve never seen it getting to this point.”

Obviously, not all jobber businesses are struggling. Some of them still remain as vibrant as ever after investing in digital sales and expanding their reach to various trade shows.

On the other hand, those who simply focused on traditional sales targeted to South American buyers have been hit the hardest. Many South American buyers are avoiding the jobber market as the federal raid from two years ago began requiring them to report cash transactions as well.

“The South American buyers also seem to be preferring online purchases or importing directly from China,” said another jobber business owner.

Additionally, the sewing factories are also in deep trouble, as they are running out of ideas to survive amid the minimum wage rise and the clampdown on labor laws. Many factories began considering relocation to other states, such as Texas and Nevada.

“Big decisions should have been made in advance,” said one sewing factory owner. “We don’t have many options at this point. Employees are concerned about not getting paid on time. Banks aren’t providing any more line of credit. We’re in war for survival.”

By Moon Ho Kim