Michael Lode, Bret Schnitker, Emily Lane
May 28, 2024
Michael Lode 00:00
They (China) seemed to just take the information and roll with it. There's not a lot of pushback. So if you know we need samples and we need them by a certain day, in order to make the sale there are almost like partners they want to make the sale with you.
Emily Lane 00:35
Welcome to Clothing Coulture, a fashion industry podcast at the intersection of technology and innovation. I'm Emily lane.
Bret Schnitker 00:42
And I'm Bret Schnitker. We speak with experts and disruptors who are moving the industry forward and discuss solutions to real industry challenges.
Emily Lane 00:51
Clothing Coulture is produced by Stars Design Group, a global design and production house with more than 30 years of experience.
Emily Lane 01:01
Welcome back to another episode of Clothing Coulture. Today, we have another exciting conversation for you. I'm, of course, joined by Bret Schnitker, Hello Bret, and our very own at Stars Design Group, Michael Lode
Michael Lode 01:14
Thanks for having me.
Emily Lane 01:15
So glad you're here. Well, today we're taking on a conversation that we've been kind of thinking about a little bit and Michael just returned from a overdue trip to China. And so we thought this is a really good time to tackle some conversations that we're having, almost on a daily basis with many people in the industry.
Bret Schnitker 01:36
Massive flight out of China and no place to go. Yeah, like few places to go. Absolutely.
Emily Lane 01:41
You know, this is a country that has been well set up for manufacturing and especially in our space of apparel, they still manage about 90% of the apparel manufacturing, happening in the world and, you know, political reasons and various various things that are happening in the world, people are making the decision to look beyond. And, you know, there's there's a lot of challenges, of course, beyond what you just mentioned, Bret, nowhere to go, so to speak. But, you know, there's also,
Bret Schnitker 02:16
In Totally of course, there's places to go, but they can never absorb all of China's Manufacuring.
Emily Lane 02:22
But there's also some things that we really need to look at with regards to some of the strengths of this country. So who better to have this conversation with then our very good friend Michael Lode, who you've not only spent a considerable amount of time living in China,
Michael Lode 02:37
10 years.
Emily Lane 02:39
You've been within factories, you currently really play a pivotal role in being our liaison between our clients going through that whole production process and communicating with the factories overseas. So
Bret Schnitker 02:54
Mike's been in the industry almost as long as I have, I think, 30 years, 30 plus years.
Emily Lane 02:59
Right So let's take on this very complicated topic. But I do want to start kind of at the beginning, not you know, the baby years beginning, but let's start at the beginning of you know, what, what brought you into this industry
Michael Lode 03:13
into this industry? Well, first, I started folding sweaters at a chess king.
Emily Lane 03:20
The timestamp
Bret Schnitker 03:22
You said I love this business.
Michael Lode 03:24
I wanted to work on this merry go round. Oh my god, where the wild people were. So I got stuck with the skinny ties. Yeah. So yeah, I started out there. And then like most people worked my way up the ladder to assistant manager, manager, eventually a district sales manager. And at one point, I jumped ship and went into the clothing industry, which was Webster's Menswear. It owns Zeidler and Zeidler at the time. And so I went into men's clothing. And that company was absorbed by Edison brothers.
Emily Lane 03:58
Oh, yes. That Yes. Small multibillion dollar company. Yes.
Michael Lode 04:02
So I was part of the acquisition, I moved to St. Louis at that point. And I was, I guess, kind of a merchandising planner, things were set up a little bit differently, then we'd be in charge of what was allocated to the stores,
Bret Schnitker 04:16
Lots of numbers
Michael Lode 04:17
Lots of numbers, lots of spreadsheets. And I think at that point, we had one computer per floor. Right. And we have to sign in and do our spreadsheets
Bret Schnitker 04:27
Lots of manual reports on Monday. Yeah, make folding sweater some pretty good at that point.
Michael Lode 04:31
You've come in on Sundays just to get ahead of the next guy. So you get your report. So you'd be ready. It was It was exciting. It was fun. I actually really loved it. And fortunately, I had good mentors who had faith in me and brought me into the buying side. So I first bought men's sports coats and dress pants. And then that exposed me to China.
Bret Schnitker 04:54
When was your first trip to China?
Michael Lode 04:56
I'd have to say that was in 1999 probably, 1999 was my first trip.
Bret Schnitker 05:03
What was your first impressions?
Michael Lode 05:05
At that point? Yeah. Oh, it was very gray. Yeah, it was. It wasn't the China of today. It was exciting. It's a little mysterious. But I fell in love immediately. My family will say they knew when I came home from that trip that I would be returning to China on a more permanent basis at a later date
Bret Schnitker 05:25
Pretty exciting.
Emily Lane 05:26
Felt an immediate connection.
Michael Lode 05:28
Yeah, I just I loved it.
Emily Lane 05:30
So you're definitely like, Bret, a lifer. In this industry, you've worn a lot of hats. And, and I know that you've have a lot of really close relationships with in China, and we have many partners there that that you communicate regularly with? What are some of the things that you love most about working with some of these people in the region.
Michael Lode 05:53
They seem to just take the information and roll with it, there's not a lot of pushback. So if you know, we need samples, and we need them by a certain date, in order to make the sale, they're almost like partners, they want to make the sale with you. Yeah. And they will do what they need to do to to turn it around. And they've always been very responsive to our needs. And I say, I think we stay as competitive as we do, is because we have our turnaround. China's very, very quick. And they have a large assortment of fabrics available trims and, and labor. I mean-
Michael Lode 05:54
They've got the best infrastructure in the world for apparel manufacturing.
Michael Lode 06:35
And we were talking earlier about the the hours that are worked in China, you know, I was going through some of the BSCI reports and so forth on social compliance. And on average, every factory I had visited works, the average employee puts in 14 hours of overtime per week. Yeah, you know, which is voluntary. It's not mandatory overtime. It's voluntary overtime, because they're there to make a product make their money and eventually, you know, retire, buy a home and open up a flower shop or what have you.
Emily Lane 07:07
That kind of reminds me of my early days in retail because of the hours.
Michael Lode 07:11
Especially around the holidays. Yeah, don't miss those Christmas Eve.
Emily Lane 07:14
We've really noticed that trend globally, you know, that that a lot of countries their commitment to to their their work and their career is it's a different it's a different expectation overseas than domestically here in the United States.
Emily Lane 07:37
What do you think, are some particular strengths that they they hold within this industry? Is it you know, specific category or just in in qualities? Or what are-
Michael Lode 07:51
Quality, and in your earlier comment about the flight from from China and really nowhere to- I don't know where that comes from? I I don't know if it's trendy to say that or if it's political, because I look at my life. And I was thinking about it, because we were preparing for the podcast over the weekend. And I got this Makita drill. Yes. And I've had it for 11, 12, 13 years, and it's made in China. And it has dropped 10 feet, 15 feet, it has built multiple decks, fences, or whatever. And it's solid, Dyson vacuum cleaners. Move production there in 2021. You've got the Tesla batteries, and we're gonna say they're Tesla's junk, right? 40% of the components are coming from China. Yeah. So you look at things like that. I think it's very naive to say, I'm not gonna buy China, because you look at your iPhone or your MacBook Pro. Now, some of this is moving to Vietnam, but still assembly in certain parts are coming from China. So I think it's very narrow minded to think that way,
Emily Lane 08:51
Right.
Bret Schnitker 08:52
Not even narrow minded. It's kind of short sighted. There's no infrastructure built in the rest of the world, to be able to pick up where China would be eliminated. They've we've, we've embraced China's industrial revolution years ago. They've embraced it internally. They've built the infrastructure to a level that certainly our country couldn't. India is the only other country that rivals I mean, they're the number one population in the world today. But China and India around 1.4 point 5 billion people. And there's no other place that kind of has that, you know, entire focus on production to the level that China's developed today in a you know, I would go further to say, it is politics, that it's getting in the place, there are certainly some things that that we may differ on the point of view from the Chinese government. But it's so funny over the years that I've traveled, politics kind of sits up here, and everyone plays the game, the whole tariff game that you know, China's going to pay for the tariff that's installed. And as I've said in previous episodes, ask any right mind either economist and tariffs have never worked, our trade balance is higher in China than it was before tariffs. And the only person that pays the tariff cost is the US customer. China's not paying it. And so, you know, there's other ways to manage politics in a different world. But when you pull all of that back, my experience in Ethiopia, my experience in India, and China, and Vietnam, and all these areas, is on the ground past all the politics. These are human beings like us that are trying to earn a living. And they're really diligent people, the ones that, you know, there's always good, bad and ugly, and every country, including ours, but the ones that we've had the luxury and the opportunity to work with, have really over the years helped us be who we are today, because they are passionate about their business. Generally, they're passionate about quality. And they really do want to be partners.
Michael Lode 10:49
Absolutely.
Emily Lane 10:51
You mentioned the ground, Bret. So Michael, you had not been to China, since before COVID.
Michael Lode 10:58
October 2019. Was my last trip there before last month.
Emily Lane 11:02
So what are some changes or evolution that you've seen since your their previous trip and now in the post COVID Age and where we are today?
Michael Lode 11:14
Very clean.
Emily Lane 11:15
Okay.
Michael Lode 11:16
They have taken COVID very seriously in the aspect that you have somebody in the mall with a sanitary rag, holding it on the banister of the escalators, you know, attendance and all the bathrooms just mopping, right? You know, it's just clean. It's they're very adamant about stopping the virus is from what I've seen,
Bret Schnitker 11:41
Even today, you see this, you know, where we have kind of all of a sudden said, Oh, well, it exists, but it's not a big deal anymore. And we kind of ignore it as a US population. Some people go further to try to say it was never existed, which is kind of crazy. But, you know, we just walk around and just kind of we don't do anything different anymore. Today, you're saying they're being really still very, very careful.
Michael Lode 12:02
Yeah they're still being very diligent about it.
Emily Lane 12:05
What about from a manufacturing standpoint? What evolutions have you seen since your first trip in the late 90s, to today?
Michael Lode 12:12
A lot of automated machinery, you know, you've got the automated rack systems, for knits and so forth, now that were all bundled before and pushed on a cart to the next. So are laser cutting, pocket cutting and bag inserts. You've got us collar, sewing, it's all automated. Now, socks are completely knitted, pulled over a toe sewn and comes out complete. And then set on a conveyor belt where it's set in the heat. You know, I mean, you just have one person now can run 20 machines.
Bret Schnitker 12:51
And that's China's ingenuity. You know, as labor costs increase every, every industrialization, every industrial nation that moves from agrarian to industrialization, goes through those periods of lower labor costs, better increased labor rates, you know, increased labor rates, and you have to do something. Either you change from, let's say, apparel, to appliances and appliances to technology to keep up with those increased labor costs, or you apply technology. And we always talk a lot about how technology is influencing this fashion industry even more on a daily basis than ever before it continues to do and even when you look at China, which has had the highest productivity rates in the world still today, on particular line systems, when you add in that hanging system, and you add into some of these other robotic mechanized elements, that increases on that even more productivity, which helps offset some of those higher labor costs.
Michael Lode 13:48
Well absolutely I saw a yoga mat manufacturing facility that was ran by two people
Emily Lane 13:49
What kind of volume are they?
Michael Lode 13:50
8000 mats a day? Wow. Yeah, and just this is one guy's little business. He makes yoga mats.
Bret Schnitker 14:03
One guy makes the mats and the other guy does the product.
Michael Lode 14:05
You have a guy in the front who's pouring the the rubber and he feeds the mesh. So it goes in this machine and the rubber bonds to the mash goes through just like your normal machines. It gets set and heat sealed, comes out the other side. It goes through a giant razor blade where it's cut in half. So let's say it's 54 inches wide and you've got a 24 inch wide matte. So it cuts it right down the center. Okay, then it goes through another aspect where it trims the sides, the salvage off the sides and then goes to the end and is set for 48 inches or 54 inches, whatever your length is, and is cut and then you have one person at the end who pulls the mat up rolls that puts it in the in the mesh carrier puts it in the box. One person at the end one person at the beginning and it's it's pretty amazing. 8000 pieces The day And you know, the owner who walks around.
Bret Schnitker 15:05
So three people run that factory and there's 1.4 billion people going, what do we do? Right? Robotics is taking their jobs.
Michael Lode 15:12
Yeah They're rubbing the banister.
Bret Schnitker 15:16
Or stuck in traffic. Yeah.
Michael Lode 15:18
So no, it's, it's, I just find that people very warm, very friendly. You know, it's I've had factories visit me here. And it's not often like that come to my house for dinner. You know, but I always been very warm and welcoming, and very kind.
Emily Lane 15:43
So we talked a little bit about, you know, their, their really developed skill set and their ingenuity. You know, aren't there? Are there challenges that they they recognize in this apparel space that they're looking to solve? Or do-Where do we see evolution coming, in addition to increased automation in this space?
Michael Lode 16:06
Where I see them aggressively. addressing our needs right now is in the lower minimums. I mean, Bret and I have talked, go to Cambodia and go to Vietnam, are you ready to place 200,000 units and guarantee the factory 10,000 pieces a month? You know, we have partners right now that are helping us help smaller companies grow to big companies by doing 250 pieces of a style per colorway. And to me that's helping the lower rung of businesses here in America grow.
Emily Lane 16:41
Absolutely. And you know, it is a it is a growing trend, people recognize that there's a lot of product out there in the world, that they have a lot of product. And people are wanting to be more intentional about the product that they bring into their home. So I think it's smart to be looking at a model that can can can do better, with less, right.
Michael Lode 17:02
So in approaching, you know, the factories with smaller, you know, minimums and smaller quantities and die and so forth, they're really aggressively figuring out ways to address that
Bret Schnitker 17:13
Kind of becoming more of a complication, you know, a number of years ago, I think it was pretty COVID, there was a big issue out there still a big issue there in terms of pollution controls and economics. And they're going, they're making inroads, right. But at one point, the number one thing that they did in our industry in general, is they eliminated all these real small dying houses, you know, because the effluence that were going into the rivers and causing all these issues, and what remained were the larger dying houses with the larger dying tanks. How are they managing these smaller minimums with the absence of literally 1000s of smaller dying companies that closed the workforce close to the pollution controls? Do you? Did you see any way
Michael Lode 17:53
I didn't, but from my understanding, a lot of that is moving up north. Okay, you know, areas like Ningbo now that it was Anhui. We talked about, oh,
Bret Schnitker 17:53
On my God, I remember Anhui, all fields. Yeah. And agriculture. And now we're just done Anhui. Right. And you showed me a picture, and I could not believe that was Anhui.
Michael Lode 18:13
right, right, right. And I talked to them about that. And they told me, I went to a completely vertical mill, factory, you know, they spend their own yards bringing their own the cotton, spin their own yarns,
Bret Schnitker 18:26
and grow it out in the field.
Michael Lode 18:27
Stay away from this place. So anyhow, they're completely vertical except for dying. They said that they cannot die in their province, or in their particular municipal city.
Bret Schnitker 18:42
They have to ship that out
Michael Lode 18:44
They're able to do every part of the process except for dying. And that's evidently been addressed. So they're figuring out how to do that.
Bret Schnitker 18:52
You know, I give you a lot of credit. You know, I've said for years, as much as I've tried when I've traveled, it's speaking the language of the country, you speak the heart language, you get to know the people better. And Mandarin is the Everest of languages, I guess, maybe they think English is but I would tell you my experience and Mandarin, saying everything wrong. That's the Everest of languages. And you went into immersive language learning when you're in the country, right?
Michael Lode 19:15
I studied an offshoot of Qingdao University, it was a kind of an off campus location, where I studied, you know, a little bit of writing and reading and language, the writing has been tremendously tough. Yeah, becauase you can't sound out of character, no, cat. No, it's a character.
Bret Schnitker 19:34
I would draw a cat.
Michael Lode 19:35
So what I do now is I actually, you know, is to kind of release attentions at night and so forth. I practice my Hansa, which is the technical term for writing. And I do about 200 characters a night.
Bret Schnitker 19:51
And how many characters are there something like 10,000 or something
Michael Lode 19:53
50,000. But they say you can read a newspaper if you can get your arms around about 2000.
Bret Schnitker 20:00
Seriously.
Michael Lode 20:01
About 2000 are used daily. That's pretty wild. Yeah,
Bret Schnitker 20:05
I got as far as learning all the bad words, because that's the first thing they teach you for. And then like every buyer needs to learn Tai Chi law, because that's too expensive, right? Something like that. So those are the things that's the extent of 谢谢 , you know, right.
Michael Lode 20:20
No, it's like, I was telling Emily after not being there for four years, I was pretty much throwing out a word salad throwing it out there. And they'd be like, No, you don't need to get a deposit from the hospital. I think he meant to say bank. Yeah. Go to the bank. So it's, it's a tough language. But, you know, it's, it's, they're very good about correcting you.
Bret Schnitker 20:44
And they feel like you get credit for that, that you're really trying.
Michael Lode 20:47
Oh, yeah, they lie to me a lot. Oh, you're Chinese is so good. You know, you must be local. I was I said was 你好 oh you're Chinese is great.
Emily Lane 20:57
Oh That's so sweet. Are there any other kind of cultural insights that you've found to be helpful in practice as you've done business?
Michael Lode 21:07
At one point, you always gave a business card with two hands and accepted it with two hands? I don't see as much of that anymore.
Bret Schnitker 21:16
Drinking copious amounts of Mo Maotai.
Michael Lode 21:20
And smoking numerous cigarettes. I hear hear every guy in the restaurant. So just wants to say hi to the foreigner in the way to break the ice is hey, here have this or have a shot.
Bret Schnitker 21:32
So I remember that for years. I thought it was my obligation to drink that stuff. Yeah, no offense to those that love Maotai. The recovery was tough.
Michael Lode 21:43
yeah. I had dated a girl whose, whose family had the licensee to Maotai in a small province in gray Joe. Wow. Yeah. So was really good for my travels.
Emily Lane 21:58
Just circling back one. One final question I have for you with regards to the apparel manufacturing side of things. You know, you started talking about dying, and so forth. The comments. And I, you know, when we were in India, a couple of times over the last year, we saw a lot of strides happening with regards to sustainability. And I'm curious what what is happening in China with regards to sustainability is, is it a focus? Is it an initiative.
Michael Lode 22:29
It's - when I worked in the factories, very little was wasted. I mean, when our fabric rolls would be taken off the truck, and they're wrapped in plastic, or could be cardboard, and you have the binding and so forth. We'd have piles of plastic and cardboard, and we'd save everything, whether it was from lunch boxes, you know, lunch, and they'd have some guy come up in a truck every, you know, two weeks with a scale, and they'd weigh the plastic, and they'd weigh the paper and he buy it.
Bret Schnitker 23:02
Okay, for sampling?
Michael Lode 23:03
Yeah, they were reading. This was 10 years ago, they were recycling everything that came through that factory.
Emily Lane 23:10
That's great.
Michael Lode 23:11
Yeah. So even the fabric that was leftover at the end of a cutting or something, you got 33, 50 yards leftover, you know, they tell that to a consignment shop, or whatever that would use it for their manufacturing or selling them in a store for family members to make clothes for their children. So that was even rolled up and saved and labeled is how many yards?
Emily Lane 23:35
it's not necessarily a hang tag, it really is a whole philosophy there.
Michael Lode 23:39
Yeah.
Emily Lane 23:39
No, it's isn't that great?
Michael Lode 23:41
Everything? Yeah.
Emily Lane 23:43
Well, thank you for your insights, is there anything else you think that everybody should, should learn from our conversation from your recent visit?
Bret Schnitker 23:51
Especially to that, you know, we get caught up in the politics and the news every day about China. And literally every week, we get conversations about people like I want to, I want to bail from China, and I want to move elsewhere. You know, these are real human beings with lives that depend on this that have invested in in the apparel game, this isn't a government engine. These are lives and human lives, being someone that's an advocate of China, and that's lived there for a long time and understanding what's happening on the ground. Now, what should people know about the real people of China and the real manufacturing in China, you know, and take with them in their consideration of life is a balance, right?
Michael Lode 24:30
People are people they want respect, they want to make friends. They want a good life like you do. And basically, they're just people.
Bret Schnitker 24:43
And they care. And we're finding that a lot of these groups really do care they do a great job. You know, as we have those dialogues about people wanting to wholesale abdicate China, I'm always reticent to to support the function because one it doesn't really make a lot of sense. So, life is about a portfolio. And while there are issues literally in every country, including ours, you know, there are other ways to solve the issues that impact the economy, the economy of the everyday person, you know, we're not a, you know, the apparel industry, I would say, Isn't the wealthiest industry in the world overall, there's some, there's some people in the industry that that certainly do enjoy the luxury of, you know, fine, fine, higher level stuff. But the majority of our industry is pretty basic. I mean, we're average working people trying to get things done, overcome insurmountable issues in the world. And they're no different. And so, you know, I, I'm thankful that you're on the program today. And we certainly solicit more information or questions about this. But life is a balance, don't try to just jump wholesale into one thing. It's about making methodical moves and making sure that the decisions that you make, there are ramifications everywhere. And so, you know, don't knee jerk, care about people get over the politics part of it.
Michael Lode 26:08
Absolutely, and then look at your everyday life things that the products, you use the products you love, and they you shouldn't love things, but people are attached to their iPhones or their Dyson vacuums or their TV, you know, and, and just don't jump on that bandwagon, say no, I don't have a problem with the quality. It's, you know, it's served me well.
Bret Schnitker 26:28
And realize that we don't have an infrastructure, there's a bit there's been a big push in general to, like, build America by America. And that all makes sense. If you have an infrastructure for it. I remember talking with a, you know, a senior member of a large organization and a lot of what they do these tiny little fasteners, these metal fasteners that connect the world. And one night, we were dialoguing about that. And they bring all those in from China. And he said, you know, what, how much time it would take to replace the demand we have on this little tiny fastener that connects literally all sorts of objects in our world. And I didn't have an idea, I had a few guesses. And he said, eight to 10 years, and it would be 10 times the cost. Right, you know, to do that.
Emily Lane 27:07
And the investment to build
Bret Schnitker 27:08
and investment. There's just no infrastructure. So we have to be really careful about decisions we make that have much larger impacts in our economy and the global economy. Yeah,
Michael Lode 27:20
Absolutely.
Emily Lane 27:20
Yeah. Well, I am going to drop a little note to share with people you know, one of the many talents that you have, in addition to being very well versed in the in Mandarin is Michael is an extraordinary photographer. And in fact at Stars Design Group we feature a lot of his photography taken on the ground while spending time in China in so I think it's a we'll make sure to share some of those photo in our socials as a result of of this recording today, but definitely take a look at it. You'll you'll you'll see a little bit about what we're talking about the human side of the world. So thank you. Thank you for joining us today. Make sure to subscribe to stay apprised of upcoming episodes of Clothing Coulture.
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