VOL. 27, NO. 3 M AY / J U N E 2 0 0 3
IS ‘MADE IN CANADA’
Canadian Publications Mail Product Sales Agreement # 1171828
A BADGE OF HONOR?
THE A TO Z OF IMB
CASUAL, DECONSTRUCTED, SPORTY
MENSWEAR TRENDS FROM CPD
Peter Nygård: 35
years and counting
By Martin Cash His flamboyant lifestyle may get a lot of press but his
company’s stellar growth over the past 35 years proves Peter works
every bit as hard as he plays
But that is logical because Nygård has used
Peter Nygård and Beverly Peele technology, along with a relentless attention
to the needs of his customers, to build his
company into the largest womenswear manu-
facturer in the country and the third largest in
In an interview at the company’s corporate
headquarters in the north end of Winnipeg,
Nygård reflected on 35 years of growth. You can
still detect a trace of a Finnish accent when he
speaks, inherited from his parents who immigrat-
ed to Deloraine, Manitoba when he was a young
boy. And you can still feel his passion for the
clothing business when he talks about his almost
unbelievable good fortune.
Nygård marvels that his company now works
with American retailers like Dillard’s, the US$8
billion Arkansas-based chain where Nygård’s
style, value and selection provide an impor-
tant solution for their 30-plus businesswoman
In May, Bill Dillard and some of his senior
staff flew to Winnipeg to meet with Peter and
tour his design studios and production facilities.
Nygård is already doing millions of dollars worth
of business with the department store chain,
producing four different private label lines. But
there is potential for more.
“A meeting like that with Dillard (who is
Photos: John H. Bartelings/Nygård Int’l
chairman and CEO) is like meeting with The
Bay, Sears and the old Eaton’s combined, in one
shot,” said Nygård. “We have hundred million
dollar meetings now with some of our clients.
Just to think that you could sit down at a meeting
that could end up generating that much sales in a
matter of two years… To us country boys here, it
is mind boggling.”
T here was a pivotal moment, 25 years ago, when Peter Nygård realized
the future of his company could be leveraged by technology. Celebrating 35 years of success
“I had just bought my first Radio Shack computer and I wanted to run Nygård’s family and staff toasted the business icon, who looks much as
the whole company off it,” said the flamboyant entrepreneur, celebrating you would expect Peter Nygård to look — suntan, expensive blue jeans and
35 years in business this year. “I had no idea what I was getting myself cowboy boots, a soft leather jacket over a simple blue sweater, and the fa-
into and, of course, after a while I realized it wasn’t quite as simple as I mous blond locks — at a Winnipeg gala in early April. It was a family affair,
imagined it would be.” with son Kai narrating the audiovisual portion that his eldest daughter, Bi-
More than $50 million later, Nygård operates the most technologically anca, helped produce. Another daughter, Alia, is an up-and-coming member
sophisticated apparel company in the country. He still invests $10 million a of his design and merchandising team. The evening’s festivities featured a
year in IT and the man who once prided himself on his intimate familiarity fashion show of Nygård styles from the ‘60s to the present.
with every one of his company’s 2,800 SKUs now concentrates more of his Nygård’s affinity for celebrity garnered a live performance from ‘70s
energy on designing computer systems. recording artist Freda Payne, runway work from supermodel Beverly Peele
10 canadianapparel M A Y / J U N E 2 0 0 3
and videotaped testimonials and telegrams from cable TV mogul Ted Rog-
ers, novelist Arthur Hailey, Robin Leach of Lifestyles of the Rich and Famous,
Jean Chretien and Jari Kurri.
However you look at it, Nygård is quite a success story. The company has
annual sales approaching $500 million. Nygård himself has a legendary
track record with the ladies, has been called a “hedonistic workaholic” by
no less than Peter C. Newman, chronicler of Canada’s elite, and has been an
outspoken advocate for the industry.
“Say what you want about Peter, but he can always be counted on to
jump on a plane and head to Ottawa to help make the case for the indus-
try,” said one member of the Winnipeg garment industry.
And, while other design houses occasionally veer off message to chase
new and trendy markets, Nygård has remained loyal to his customers — and
they have rewarded him for it.
“They are so focused on their customer and they change with the cus-
tomer and that is very rare in the business,” said Ed Matier, group vice-presi-
dent of apparel for Sears Canada. “They also spend a lot of time listening to «The Board»: Denis LaPointe, Peter Nygård, Jim Bennet, Art Pemberton
both the customer and the retailer. They spend lots of time analyzing sales
data and they are very receptive to retailers’ input.”
tion in Taiwan and Macau. He also has sales offices in Toronto, design studios
Nygård has used technology to cut pennies off unit costs and has led the in New York and a massive new distribution centre in southern California.
way to offshore production, with the result that it can legitimately claim to
“China is big enough to manufacture all the clothing for the whole
be one of the lowest cost producers in the business.
world,” Nygård said. “And with the elimination of quotas every single
“All through history our industry has been protected by quotas and duties developing country in the world is going to be setting up export garment
and then to have them lifted off and have to fend for yourself, that changes businesses. We are rolling the dice and hoping to be on the right side of
everything. It is dramatic,” Nygård said. whatever the situation turns out to be.”
He said the elimination this year of quotas and duties for apparel imports
from the Least Developed Countries and the elimination of all quotas at the
end of 2005 will be significant events for the industry. U.S. sales now exceed Canadian volume
In addition to two production factories and a major distribution centre in Nygård’s U.S. sales, mainly private label for Dillard’s, J.C. Penney, Kohl’s
Winnipeg (with total employment of about 900 people in his home town and and Belks, now exceed the company’s Canadian numbers. In Canada, the
1,500 across Canada), the company has gone overseas with joint venture fac- company operates a chain of 210 stores under the Nygård, Tan Jay, Alia, Tan
tories in China, Indonesia, Sri Lanka and Mexico and a lower level of produc- Jay-Alia, Jay Set Clearance and Jay Set & Co. banners. It plans to open 50 to
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Nygård expects sales to hit the billion-dollar mark within about five
years and, while virtually all of the company’s growth has been organic, it
is likely that the company will make some acquisitions in that time frame.
Most recently the company made a pitch to acquire the Cotton Ginny
chain when it was in receivership. “Not getting Cotton Ginny was a bitter
pill,” Nygård said. “But I am semi-glad it did not happen.”
Not one for false modesty, Nygård’s says the reason his company has
not made many acquisitions is that it always looks so much better than
the prospective purchases.
“I have never found a reason to buy someone else’s problems and over-
pay for their profits,” he said. “We don’t have enough hours in the day to
run our own business, with all its potential. And we are sitting on potential
continued on page 15
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Replenishment program sets up a win-win scenario
By Brian Dunn ARTS2 improves efficiency, lowers costs and keeps the customer happy
N ygård’s current success can be partly attrib-
uted to the high tech reorder and distribu-
tion program, nicknamed ARTS2.
ARTS2 is the company’s ‘Automatic Reorder to
Sales continuous replenishment program’ that
links the manufacturing process to a network of
Nygård stores and major retail accounts in order
to keep customers fully stocked at all times.
ARTS2 is housed in a 60,000-square-foot pants
manufacturing plant in Winnipeg, head office of
the Nygård empire, where 250 people work over
two shifts. The unique modular manufacturing
process, which resembles a car assembly plant
more than a traditional sewing operation, sets
Nygård apart from the competition.
For example, when a store like Dillard’s in
the U.S. sells a Nygård product, the model, size
and color are transmitted to the ARTS2 facility,
which automatically reorders fabric and begins
manufacturing a replacement, which is shipped Ernie Chavess, director of logistics
the same day.
The company, with annual sales of over $500
million, 40 per cent of which is generated in the
U.S., is prepared for any contingency, such as a
shipment of fabric that arrives late. Above the
stockroom door a sign reads: “Go to stock when
the truck gets hit by a moose,” a common excuse
Photos: John H. Bartelings/Nygård Int’l
of late truck drivers.
The way products are made at ARTS2 is also
unique. Computerized spreaders roll the giant
bolts of fabric back and forth along a long table
according to the order size.
“We try to use 100 per cent of the fabric by
inputting information into a computer which
picks out the best pattern before it gets cut,”
explained Ernie Chaves, director of logistics and on the workers. It’s designed to maintain an equal “Like FedEx, we know where the garment is
26-year company employee. “It used to take two production output throughout the entire manu- in transit. But we go a step further because we
weeks to cut for a purchase order. The computer facturing process. And in an incentive- and bonus- know when the shipment will arrive, because
does it in seconds.” based company, nobody wants to fall behind. we build in transit time based on lead time”
The Gerber cutting table is tied into Nygård’s Once the pants are finished, they’re put back said Chaves.
IBM AS/400, which downloads purchase order on the trolley, which takes them to be pressed. If the manufacturers have been certified and
information such as the number of units and the From there, they move on to be inspected and audited by Nygård, their goods are fast-tracked
different elements required for each garment. fitted with hangtags. Everything is individually through the distribution centre. For others, if there
The entire process is designed to eliminate scanned to update its availability for sale. are six or more defects per 80 units randomly
inventory and to speed up the manufactur- In the adjoining shipping department, each rack selected out of a shipment of 1,000 units, the com-
ing process, said Chaves. He added the plant or rail is assigned a SKU and orders are scanned puter sends a 30 per cent charge to the supplier.
produces up to 75,000 pairs of women’s pants a and shipped to customers according to the pur- “It means the entire shipment must be checked,
week. Another, less automated, Nygård plant in chase order. If a rack is empty or almost empty, it’s which compromises the promised delivery date to
Winnipeg manufactures about 10,000 fashion a signal that something is wrong in the reordering the customer. And if we scan the order for the right
items a week for the Tan Jay and Nygård labels. process and the problem is quickly tracked down. quantity and the variant is more than two per cent,
The Gerber cutting table at ARTS2 moves on In 1986, Nygård’s pick, pack and shipping we send another charge,” said Chaves.
a track and the cloth is separated into panels process cost 45 cents per unit. Today it is The company guarantees 100 per cent ship-
and numbered. All components required to down to eight cents and the objective is to get ping accuracy with its electronic failsafe system.
make a pair of pants, including panels, tags and it down to four cents. Each order is picked by store, which is already
zippers, are loaded onto a moving hanger-like The company’s main distribution centre is in the computer system. The computer looks for
trolley and deposited at the appropriate cell or located at head office, about a 10-minute drive the UPC scan and determines if the correct UPC
unit of four or eight sewers. from the ARTS2 plant. Its holding capacity is one has been scanned against the order. If the scan
Above each unit hangs what looks like an million garments and 150,000 are shipped out does not match the UPC, Nygård computers
electronic scoreboard, giving the efficiency rating each week. About 75 per cent of the garments do not allow the shipping label to be printed,
or output of each team of sewers. But this is no arrive on tiered hangers from Nygård operations which guarantees that each shipment will be
Big Brother type of monitoring system that spies around the world, with four garments per hanger. 100 per cent accurate.
14 canadianapparel M A Y / J U N E 2 0 0 3
All pickers are equipped with walkie-talkies for quick response in case
a problem arises. Each problem has to be resolved within a minute or a
deduction is made from the employee’s pay.
“We also videotape each order in case there is a dispute with a cus-
tomer. The order is put in a box and shipped to the retailer. We tell them
not to count the contents manually because that’s when human errors
tend to happen,” said Chaves.
There is also video surveillance at the loading stations to record which
employee did the loading at what time and on what truck as another way
to guarantee accuracy. The system is so efficient that Nygård is exempt
from charge-backs from Dillard’s, The Bay and Sears Canada.
About 25 per cent of goods coming from the Far East are pre-packed by
store by the manufacturers. Chaves visualizes the day when the offshore
manufacturers will do most, if not all distribution, improving lead times
by one to two weeks.
“The process is backing up to the manufacturers. We have the technol-
ogy to enable the manufacturers to pick and pack for individual accounts
and for our dedicated stores, which would reduce our distribution costs by
about 80 per cent.”
Peter Nygård’s vision has earned the praises of his colleagues, including
fellow Winnipegger Bob Silver, president of Western Glove.
“He has done an exceptional job and I would love to emulate him and
I’m trying,” said Silver. “His ARTS2 is indicative of someone who takes a
vision and sees it through to the end.”
Silver said a lot of people were talking about just-in-time delivery in the
early 1990s, but mostly for heavy industry. Nygård was the first to bring it
to the clothing industry, he said.
“We’ve all tried to improve our through-put time, but he put ideas into
action where others would have given up long ago.
“Peter (Nygård) has spent 35 years building his company and it is a
testament to hard work and dedication. After the free trade agreement
was signed, he realized where his future lay and went after it.”
continued from page 13
Nygård has consistently shied away from buying businesses just to
provide greater numbers. Although known for his love of the spotlight,
Nygård said he would never let his ego determine a business deal.
Making IT a priority
Considered one of the most technologically sophisticated and operation-
ally efficient manufacturers in the business, Nygård can beat just about any
competitor on price, which he attributes largely to the company’s commit-
ment to computerization.
“There is no doubt Nygård has spent more money on technology than
any other company in the garment trade in Canada,” said Mike Stevens,
president of the information technology practice of The Exchange Group,
a Winnipeg chartered accounting and consulting firm with a significant
garment industry practice. “Not only has he spent money on technology
when others haven’t but he encourages the rest of the industry to use
technology to increase efficiency and competitiveness.”
Nygård himself makes no bones about the fact that he is much less
involved in the on-going design process (the company generates close to 300
new items every year) and much more involved with the company’s IT needs.
“My contribution to the company now is called ‘systems’,” he said. “For
the past five years I have been designing what is ultimately a new way of
Already, he said, every item made at all the factories around the world
is individually scanned into the system at source. “Our tracking system is
better than Fed-Ex’s in my opinion,” Nygård said.
The stereotypical playboy is probably better known for his jet-set
lifestyle and his 150,000-square-foot Bahamas pleasure palace, but over
three-and-a-half decades of high living his company has developed and
matured into a world-class success that is both stable and poised for
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