Imprint Canada Sept Oct 2013 - Vol 20 issue 5

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IMPRINT CANADA THE MARKETING AND INFORMATION SOURCE FOR IMPRINTABLE PRODUCTS

A Tristan Communications Ltd. Publication

Direct to Garment Printing vs. Submilation: An In-Depth Comparison

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Volume 20, Issue 5

Domestic Manufacturing: Strengths, Weaknesses & Sustainability

By Jimmy Lamb, Sawgrass Technologies

Part five in a six-part series

Which is better for digital apparel printing, direct-to-garment (DTG) or sublimation? It all depends on what your needs are as both systems are capable of producing vibrant graphics quickly, easily and inexpensively, yet there are significant differences between the two. Perhaps the most significant is that DTG is for cotton fabrics and whereas sublimation only works with polyester. (Both will work with blends, though the images may not have the same level of colour vibrancy.) In addition to fabric type, there are some differences in image colour as well. Universally speaking, due to the size and concentration of colouration particles, dyes (sublimation) are more vibrant than pigments (DTG), thus sublimation will deliver a more vibrant image. This gives sublimation the ability to produce high definition (HD) designs at a higher level of quality than DTG. Technically speaking, pigments (DTG) do have better resistance to intense and extended exposure to sunlight (known as UV fastness) than dyes (sublimation), however that generally does not come into play with apparel. In fact, when it comes apparel, a far greater concern is image breakdown during laundering. Sublimation will not fade when washed, whereas DTG inks will. But there is a lot more to consider than simply the type of fabric and colour clarity, as factors such as production costs, printing speeds, equipment costs and ROI need to be carefully considered. To get a better understanding of the differences, let’s take an in-depth look at how the systems work and how they compare.

By Adriano Aldini, Imprint Canada

In our fifth and penultimate instalment of our six part article series examining the topic of direct overseas sourcing, our focus shifts homeland as we look at manufacturing in Canada. For this article, we spoke with domestic manufacturers - on the condition of anonymity - to gauge, firsthand, their thoughts about strengths, weaknesses and misconceptions, as well sustainability in the domestic manufacturing landscape.

Advantages of domestic production

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Get caught up on the latest industry news

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Ash City's Chris Clark outlines essentials for tapping into this lucrative niche market

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We highlight Statistics Canada's Consumer Price Index data and large retailer sales figures 46

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www.ashcity.com Visit us at booth #110 at the Western Imprint show

IMPRINT CANADA September/October 2013 - Volume 20, Number 5

Follow us: twitter.com/imprint_canada

SEPTEMBER/OCTOBER 2013

The Picasso of Deals? Back in the late eighties, I decided to read a hyped bestseller entitled Trump: The Art Of The Deal, by billionaire Donald Trump. I recall being impressed by his confidence and chutzpa in his endeavors of building the Trump Organization from his apartment and background of working with his father in developing middle-class rental housing. The book includes a typical week in Trump's life as he made deals which would change Manhattan's skyline. The manner in which Donald Trump structured and achieved the deals he did has been a been a source of inspiration for me for the past 20 years. The deals themselves could not have been made if there was nothing other than complete respect and honesty on both Trump's side and his adversaries.

The one key understanding of Trump's approach to his successes was how he actually liked handling complexity. What his competitors may have seen as obstacles to making a deal were viewed to be great opportunities for him. The more complex the deal, he noted, the fewer competitors would be interested. While his persona has developed into being one of total and absolute confidence, the book portrayed someone who - in the day - always went into every deal looking at what could possibly go wrong. "Protect the downside and the upside would take care of itself."

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The books message was clear when it came to describing the approach to any deal - every deal must have a fallback position. The deal maker must sacrifice personal preferences to ensure a profitable outcome.

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I didn't realize it at the time of reading but the book was an "ABC" of the managerial skills required to guide a person while making any deal. Thinking big, maximizing options and using leverage are all exemplified in Trump's chronicling of some of his biggest deals. And yet the most impressive of all dealings was the most genuine of all: Never back out of a deal once you have given your word.

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PUBLISHER Tony Muccilli : tony@imprintcanada.com PRODUCTION MANAGEMENT Adriano Aldini : news@imprintcanada.com

MARKETING COORDINATOR Steve Silva: feedback@imprintcanada.com OFFICE ADMINISTRATOR Maria Natale: shows@imprintcanada.com GENERAL INQUIRIES feedback@imprintcanada.com, (905)856-2600 ADVERTISING SALES

Tony Muccilli (Toronto) Tel: (905) 856-2600 Fax: (905) 856-2667

Imprint Canada is published six times per year by Tristan Communications Ltd. The contents of this publication may not be reproduced either in part or in whole without the consent of the copyright owner. The views expressed in this publication are not necessarily those of the publisher. Request for missing issues are not accepted after three months from the date of publication. TRISTAN COMMUNICATIONS LTD. Publications mail agreement no. 40025740 Return undeliverable mail to: 190 Marycroft Avenue, Unit 16, Woodbridge, Ontario, L4L 5Y2 Email: shows@imprintcanada.com ISSN: 1480-1884

GST Registration #: RT892913294

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Industry News Ash City announces the launch of its new 2014 collection

Appoints new sales representative for Southern Alberta and South Eastern BC territory Ash City is pleased to announce the release of its 2014 collection. With over 100 new styles, the new collection encompasses the latest design elements with innovative performance and technology. "The new 2014 collection by Ash City effectively covers multiple price points to meet specific industry markets, while accommodating different industry needs," said Elson Yeung, Product Line Manager, Ash City. "The executive and on-trend looks are achieved by our retail-inspired North End Sport and North End Sport Blue lines, while North ® ® End and Extreme focus on elevating the day-to-day look ® ® with functional elements and practicality. The new catalog is dedicated in featuring solutions for all the industry uses and the layering concept, from the base to outerwear, to provide customers with a variety of options that are both design-driven and comfortable." The 2014 Ash City styles are also accompanied by the latest developments in technology: UTK warm.logik with ™ Heat Reflect Technology, Quick Dry performance and Snag Protection Plus+. Through research using unique lab testing methods, UTK warm.logik with Heat Reflect Technology ™ provides a higher level of thermal comfort and warmth without the bulk, for increased ease of movement. Quick Dry performance takes moisture wicking to the next level, by pulling moisture at an accelerated rate away from the body up to the surface, making it easier and faster to dry, while Snag Protection Plus + offers greater protection against snags, by utilizing heavier fabrics that are sturdier

and provide a more structured drape. To download the latest Ash City catalog, please visit: http://www.ashcity.com.

New Dedicated Sales Representative

Ash City is proud to announce the appointment of Brent Neal as Dedicated Sales Representative for the Southern Alberta and South Eastern BC territory. Brent's role will be responsible for building solid relationships with distributors, supporting and growing sales, and acting as the point of contact for customers in these areas. Brent comes to Ash City with solid apparel industry experience in Sales, where he most recently worked as a Sales Executive at Fashion Biz in Alberta. He has also excelled in other sales roles at both Accolade Reaction Promotion Group and Grand & Toy. "Brent definitely compliments our Dedicated Sales Team at Ash City, and we are delighted to have him on board," said Craig Ryan, VP of Canadian Sales, Ash City. "His unique experience within the industry, from both a sales and distributor perspective, adds great value to our company and customers." "I am absolutely thrilled to take the next step in my career with an industry leader," said Brent Neal. "Ash City truly understands the meaning of delivering exceptional customer service, and by partnering with their key customers, I am looking forward to generating more growth and success for an already outstanding company."

Redwood Classics Apparel Welcomes Simpson Agencies | BrandShakers as New Sales Representative for South Western Ontario Redwood Classics Apparel is happy to welcome Simpson Agencies | BrandShakers to its growing team

of sales representatives throughout Ontario. Thanks to the agreement, all of the province’s geographical areas will now have Redwood Classics' representation. A multi-line agency in the Promotional and Incentive marketplace, Simpson Agencies | BrandShakers has represented premium and established brands in the business. For more than a decade, this savvy team has worked with suppliers like Adidas group, Gemline, Faro,

Victorinox Swiss Army, Sundog Eyewear and Chocolate Chocolate. "We are so excited about this partnership,” says Kathy Cheng, Director of Sales and Marketing at Redwood Classics. “Simpson Agencies | BrandShakers is the best of the best; we’re confident in their ability to grow our brand and develop lasting relationships in this region.” The showroom, located at 5205 Harvester Road, Unit 3B, Burlington ON L7L 6B5, will include samples and a lending library.

Canada Sportswear launches CSW Rewards program Canada Sportswear announces the launch of their CSW Rewards program, commencing September 1st, 2013. This program was designed to celebrate the start of the company's 60th anniversary having been a proud supplier of quality wearables since 1954. This program is to thank its valued customers for their support over the years. Visit www.canadasportswear.com for regular updates and other exciting initiatives. Please ask your sales rep. or call Canada Sportswear's customer service department for further details.

Gildan Activewear announces record results for a fiscal quarter Gildan Activewear Inc. (GIL; TSX and NYSE) announced its results for its third fiscal quarter ended June 30, 2013. Earnings were a record for a fiscal quarter, and were at the top end of the guidance range which Gildan Activewear had most recently updated on May 2, 2013. The Company also further narrowed its earnings guidance for the full fiscal year, and reconfirmed its full year guidance for net sales revenues.

Third Quarter Results

Net earnings were $115.8 million (all figures U.S.) or $0.94 per share on a diluted basis for the quarter , compared with net earnings of $78.6 million or $0.64 per share for the third quarter last year. Net sales in the third quarter amounted to $614.3 million, up 2.3 per cent from $600.2 million in the third quarter of fiscal 2012. Net sales for the Printwear segment amounted to $433.0 million, down 3.6 per cent from the same period last year. In spite of capacity constraints, unit sales volumes increased by 4.1 per cent. Net sales for Branded Apparel were $181.4 million, up 20.1 per cent from the third quarter of last year. The growth in sales for the Branded Apparel segment was due to the impact of new Gildan® branded underwear and activewear programs for retail customers, increased sales to global athletic and lifestyle brands, and slightly higher sock sales compared to the third quarter of last year.

Year-To-Date Sales and Earnings

Net sales revenues for the first nine months of fiscal 2013 amounted to $1,558.1million, up 12.4 per cent from fiscal 2012. The increase in net sales versus fiscal 2012 was due to the acquisition of Anvil, organic growth in Printwear unit sales volumes, and growth in sales of Gildan® branded activewear and underwear to retail customers. These factors were partially offset by lower net selling prices for Printwear and lower sales of socks. Net earnings in the first nine months of fiscal 2013 were $223.4 million or U.S. $1.82 per share on a diluted basis, compared to $59.4 million or U.S. $0.49 per share in the first nine months of fiscal 2012.

Kobe Sportswear introduces new SUB360 sublimation program For 2014, Kobe Sportswear is introducing a new sublimation program that delivers quality sublimation apparel. Premium stock designs with a variety of colour variations are available through this program. Simply choose a design, provide logos/ names/numbers in vector format and the streamlined order processing will immediately begin production after confirmation. For more details, please contact your local Kobe Sportswear representative or visit www.kobesportswear.com Industry News, Continued on Page 6

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IMPRINT CANADA | September/October 2013

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Industry News Biz Collection appoints new sales executive for western Canadian territory Biz Collection is very pleased to announce the appointment of Kyle Doherty as its Sales Executive for the Alberta territory that also includes North Eastern B.C. and the East Kootenays. Doherty brings to the growing brand, eight years of outside and inside sales responsibilities in a similar industry and enjoyed a previous successful sales career in retail

electronics. His outgoing personality coupled with his “go the extra mile� business philosophy has Biz Collection very excited to have Kyle servicing its valued distributors from his base in Edmonton. Doherty may be reached at tel: 587-938-3249 (FBIZ) and by email at kyle@fashionbiz.ca.

American Apparel Inc. reports second quarter financial results American Apparel, Inc. (NYSE MKT: APP) announced results for its second quarter. Financial highlights include: ˆ 2IX WEPIW MRGVIEWIH XS QMPPMSR SR E MRGVIEWI MR GSQTEVEFPI WXSVI WEPIW ERH E MRGVIEWI MR [LSPIWEPI RIX WEPIW ˆ9THEXIH %HNYWXIH )&-8(% SYXPSSO XS E VERKI SJ QMP PMSR XS QMPPMSR

Dov Charney, Chairman and CEO of American Apparel, Inc. stated: "We are pleased with the continued strong sales performance in all three business channels, particularly in light of the sales we believe we lost as a result of the supply chain issues we faced this quarter. While the transition to a new distribution center and other supply chain initiatives negatively impacted the quarter, we are committed to making the necessary investments to reduce costs and improve our operating efficiency over the longer-term." Net sales increased 9 per cent versus the same period last year to $162.2 million on a 7 per cent increase in comparable store sales in the retail and online business and a

16 per cent increase in net sales in the wholesale business. Gross profits for the quarter were $83.9 million, up 6% per cent from $79.0 million. Gross margins equaled 51.7 per cent, down 1.2 per cent from the same period last year. The decrease in the gross margin was primarily due to stronger growth in wholesale business, which has lower margins than the retail and online channels, and transition costs associated with the supply chain improvement efforts as discussed above. Below are increases for the quarterly periods ended June 30, 2013 and as compared to the corresponding quarter of the prior year:Â 4 4 Â

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Trotec Canada Acquires Engraver's Express Trotec Canada, a division of Trodat Marking Canada is pleased to announce that it has acquired the business of Engraver’s Express Inc., Grav-Tech Canada Inc. and Stenlagraph Inc. Engraver’s Express will continue to provide quality products and services from the existing sales and warehouse branches in Langley, BC; Calgary, AB; Mississauga, ON; and Montreal, QC. "The acquisition of the Engraver’s Express group of companies is a tremendous acquisition for Trotec Canada, enabling us to further strengthen our position in the Canadian market.Â

Building on the success of Engraver’s Express and combining their business with the brand leading Trotec lasers will enable us to offer a comprehensive and extended range of products for the benefit of all our customers," said Deborah Smith, President of Trodat Marking Canada and Trotec Canada. Smith added, "We are also very pleased to bring to Trotec Canada, the experience of all the Engraver’s Express employees. Coupled with Trotec Canada’s existing sales, marketing and technical expertise, we will have an extremely talented, capable, professional and committed team."

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Westhall Apparel announces new location, new personnel and a renewed commitment Westhall Apparel has recently moved to a new location to better support their clients with a new "One-Source, One-Price" solution. Everything from design to execution and warehousing is under one roof for improved efficiencies and streamlined turnaround. The new facility of approximately 20,000 square feet houses the latest decorating techniques to meet the growing demand for unique styles. The facility boasts decorating capacity for laser cutting to multi-panel screen printing to high-speed embroidery and more. Apart from the strong in-house sales and design team, Westhall has recently appointed some key people in Customer Service. Their new Customer Service Manager, Edward Del Rosario, comes with years of experience having previously worked for Russell Athletic, T. Litzen Sports and more recently at R.J. McCarthy (R J M Athletics). Del Rosario's deep knowledge of athletic wear and decorated apparel is a definite asset to the company as he will be working closely with the National Sales Manager, Dennis Goodwin and President Gabe Palumbo in implementing new products and programs to help Westhall continue their growth trajectory. Also joining Westhall's customer service team is Patricia DeRooy, a seasoned sales professional with over 15 years of industry experience. DeRooy gained her experience and knowledge at Umbro Canada where she was responsible for National and Key Accounts. "Patricia brings a dynamic personality, work ethic and commitment to excellence to our customer service department and will be a valuable asset to the ever-growing team at Westhall," said Goodwin.

Polyconcept adds two key senior management members Polyconcept North America (PCNA) has announced that Willem van Walt Meijer has joined Polyconcept to lead the newly-created Polyconcept International Markets Division, while Marc L. Brown assumes the role of the company's Interim Global Chief Information Officer. Prior to joining Polyconcept, van Walt Meijer served as CEO of industry supplier Mid Ocean Brands and earlier in his career was responsible for opening and building new businesses on the ground for the multinational consumer good leader, Unilever. Michael Bernstein, Polyconcept Chairman and CEO, noted, "I'm honored to have Willem join the company as he is a real professional and fits well with our team and culture. At the same time I want to recognize Richard Lariby, who will take on the senior sales responsibility for the new division, as he’s successfully pioneered this opportunity for the group." Brown is joining Polyconcept following a successful career as Chief Information Officer for both Heinz North America and Del Monte Foods. He will be responsible for ensuring that Polyconcept's global IT platform supports the long-term strategic initiatives being implemented by the senior leadership team. Says Bernstein, "We're very lucky to have someone of Marc's caliber join our team. Marc is unique in that he brings a perfect combination of business understanding along with global IT solution experience that will be critical to our longer term success."

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Gearing Up For Tailgating? Don’t Forget Your Promo Gear! By: Chris Clark, Ash City

With football season in full swing, tailgaters across the country are breaking out their coolers, grills and tents, in celebration of professional and collegiate football games. According to a Nationwide survey, an estimated 50 million tailgaters exist in the USA, while up to $12 billion is spent on tailgating activities each year. The promotional product industry is no stranger to incorporating tailgating-related items into their catalogues, and many customers oftentimes request their branded logos on apparel as a way to heighten brand recognition and awareness during the season. It’s evident that tailgating is a popular activity, but timing is key in pursuing promotional apparel or business-related accessories to these events. Finding opportunities during this time is optimal as football events are underway. Are you one of those distributors that has jumped on the bandwagon or are you still sitting on the sidelines? Determining which promotional pieces work best with your collection of products is definitely the first step, as there are various examples of clothing and accessories ideal for the occasion:

1. Team-coloured base layer options There’s no better way to show pride for the team you’re cheering for than by sporting their colours in either a T-shirt or polo. Tailgaters might don a comfortable base layer piece underneath their jersey or wear the piece as a standalone item in warmer conditions. Tailgaters can show

their support by sporting shades of Gold, Purple, Forest Green or Burgundy, as an example. Apparel that includes UV protection, moisture wicking properties and antimicrobial can provide the ultimate level of comfort and performance, while shielding against the sun’s rays.

2. Athletic pants Athletic bottoms are sure to be top of mind when participating in sporting activities, especially those that are versatile enough to be worn on their own or paired with a matching jacket/polo. Your customers may be specifically looking for track pants that stand the test of time, while featuring an elasticized waistband for added comfort.

3. Lightweight jackets When the temperature starts dropping, an additional layer such as a lightweight jacket, may be necessary for protection from the elements. Options such as an adjustable roll-away hood, fully-seam sealed waterproof shell, and adjustable shockcords at hood will keep anyone less focused on Mother Nature, and more on the game. Team-coloured jackets are also a great way to maintain the team spirit, while staying both dry and on-trend.

4. Accessories Accessories, such as bags, are perfect for tailgating events, especially when carrying around drinks or other

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1. Find companies/clients that are interested in marketing their products/services at tailgating events. Many companies are starting to set up tents or mini marketing booths at various games. This is an opportune time for the company to provide logo’d accessories or apparel as giveaways to fans to promote their products or services.

2. Uniform programs at stadiums. As more organizations strive to enhance their appearance and style, the use of complementary garments continues to surface as a major trend amongst sport stadiums. Individuals working at the stadium may have different job duties (ie. ticket collectors, concession stand representatives, etc.) and ordering complementary pieces appeals to those who have their staff wear uniforms, either outdoors or inside the stadium. Whether interested in having staff wear a polo or jacket, great suppliers can offer designs with complementing colours and styling, but carry enough unique characteristics to stand out from the crowd.

3. Companies hosting employee appreciation or team building events.

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football paraphernalia. Fans of the game are not just there for a good time, but most likely there for a long time, so they will need to be prepared with a bag that contains different compartments, pockets and comfortable handles, for the ultimate convenience while on-the-go. For chilly weather, tailgaters often bring along blankets while participating in the festivities. You’ll want your customer to have the option of branding their logo on a quick cover-up option when temperatures dip. Once you have selected your tailgating-related items, you need to start thinking of ways to educate your customers on how to utilize them for their programs. There are plenty of creative avenues for selling tailgating-related apparel and accessories, and here are just a few:

As more companies strive to offer innovative incentives to valued employees, bringing them along to a game is not as far-fetched as it seems. Rewarding a group of employees who have hit their sales targets with tickets to a college or professional football game, as an example, may spark up the idea of branding apparel for all employees to wear, with the company name or logo. Not only will employees feel appreciated, but this is yet another avenue to promote the company brand to a large audience.

Chris Clark is the Vice President of Sales, Eastern USA, for Ash City, which provides customizable promotional apparel for corporate and casual markets. The company, an industry leader in quality, design and innovation, staffs over 500 employees worldwide, including Canada, the United States, Malaysia and Bangladesh. Ash City manufactures and distributes apparel under brands North End , North End Ž Sport , North End Sport Blue, Extreme, Core365 , Il Migliore and Ash City. Ž Ž ™

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For the most part, a DTG printer uses a horizontally moving inkjet print head to apply an image directly onto the surface of a garment which is mounted on a platen that gradually feeds the garment through the machine below the print head. Special quick-drying inks designed specifically for the fabric being printed, typically 100% cotton, are used in the process. It should be noted that digital printing inks are engineered to bond with specific surface materials. (There is no ink that works on all surfaces.) Unlike screenprinting, the ink colours are applied continuously in a single plane, rather than sequentially

in layers. Though the inks dry when applied, they will need to be cured through the use of some form of postprinting heat apparatus such as a heat press or garment dryer. Digital garment inks contain “binders� which are adhesive additives that will help bond the ink to the fabric. The heat activates the binders such that the image is “fixated� to the fabric and will not wash off when laundered. Fixation also helps to preserve the colour over an extended period of time. In comparison, sublimation is a digital dye process used for applying graphic and photographic images to

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polymer and polyester surfaces. Inks such as those used by the DTG process apply colour to the surface whereas sublimation dye penetrates the surface to recolour from the inside out. Thus, the chemistry of the two processes is quite different, with sublimation relying on molecular bonding while DTG relies on surface adhesion. The sublimation process utilizes an inkjet printer equipped with sublimation dyes to print an image onto sublimation transfer paper. The printed transfer paper is then applied to the blank substrate using a heat press. The combination of heat and pressure cause the sublimation ink to convert into a gas and at the same time, the polymers of the substrate to open up to receive the gas. (A bit of an over-simplification, but this is a basic outline for our purposes.) After the heat application is completed (after about 1 minute), the transfer paper is removed and discarded. When the product cools down, the sublimation dye is encapsulated within the surface (instead of on top). The result is a high resolution, permanent colouration that won’t peel or crack. And in the case of apparel, sublimation will not fade, even after multiple washings. (Note: Sublimation dye does not contain binders as they are not needed for the process.) Obviously the limitation of sublimation is that it only works on polymer-based surfaces, which in the case of apparel means some form of polyester. But with the surging demand for poly-performance apparel, sublimation is the ideal process for the product. Both methods utilize inkjet print heads to produce a printed image or graphic. In the case of DTG, the printer is either built from the ground up for the specific purpose of surface printing, or created by modifying an existing printer system. With sublimation, off-the-shelf office style printers are used for desktop printing (up to 13� x 19� fields) and industrial printers are used for larger formats.

COLOURS Both printer systems create image colour by mixing base colours (CMYK - Cyan, Magenta, Yellow, Black) following recipes created by the graphics software. Unlike screen printing and embroidery, which used pre-coloured decoration materials (ink and thread, respectively), digital printing allows you to create thousands of custom colour combinations without being limited by stations or needles. Sublimation printers come in 4, 6 and 8 colour models which refers to the number of base colours available for mixing, not the number of colours that can be output. More base colours give you the ability to create more precise colour detail, such as realistic facial skin tones when dealing with photographs. DTG printers are 4 colour units which are fine for most graphical applications, especially apparel. As well, the majority of sublimation shops also use a 4 colour system. With all digital printing, there is a challenge to deliver consistent colour results on the final product. Both DTG and sublimation rely on digital artwork created with standard software programs such as CorelDRAW, Photoshop and Illustrator, but it takes a further level of enhancement to properly deliver accurate colour output at the print head - which is something referred to as colour management. The purpose of colour management is to maintain colour accuracy as an image moves from creation to completion through a chain of electronic devices such as monitors and printers, each of which has a different method of creating and delivering colours. DTG relies on RIP (raster image processor) programs which may not be included in the equipment purchase ,WV\QV]ML WV 9IOM

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for managing colour. Sublimation systems rely on thus not all DTG printers offer it. But before you insist custom printer drivers, colour palettes, and profiles on having white ink capabilities, make sure you balance your desire against your need. White ink does which are usually provided by the manufacturer. Colour management only deals with getting the right have challenges, one of which is the artwork which colour information to the printer, it does not guarantee has to be prepared differently to accommodate white that the correct colour will appear on the garment itself. ink, so know what you are getting into, especially Digital inks are transparent such that when applied since it typically raises the price tag in addition to to a coloured surface, the colours of the background the level of production complexity. can affect the colours of the image. As a result, white What about white ink for sublimation? Not availis the best surface colour to print on for both systems able. There are some alternative methods such as as coloured surfaces may not yield the same results. all-over sublimation where you apply an image that Screen Printers combat this issue by applying a base completely covers the surface of a shirt. You start coat of white ink onto the surface of any coloured with a white shirt and then recolour it while adding garment such that the image itself is actually being graphics all in one step (per side). It of course requires applied to a white background instead of a coloured a wide format printer and heat press, but this is gainone. Some DTG printers also have the capability of ing in popularity. But, even without white ink you applying white ink onto a coloured garment prior to can successfully sublimate light-coloured apparel. Whereas DTG has an advantage over sublimation overlaying it with the inks that create the image. This white layer assures that the image’s colours will not in terms of printing on coloured surfaces, sublimation be altered by the colour of the takes the cake when it comes garment. to the range of products that The second aspect of white can be decorated, plus the level ink is that it gives you the ability of image quality that can be to apply the colour white within produced on those items. an image when it’s printed on Sublimation-ready merchana coloured garment. Because dise includes plaques, awards, there is no combination of colpromotional products, photo ours in the CYMK ink set that panels, memorial products, can create the colour white, signage, mugs, flip-flops, koozgraphics programs typicalies, flags, tiles, cell phone covly leave any white areas in a ers, laptop sleeves, stadium <]JTQUI\QWV 9ZWL]K\QWV 2V *K\QWV design “open� under the assumpseats, acrylics, pet products, tion that they will be applied to a white surface. etc. One machine can produce hundreds of products. In terms of printing costs, DTG ink costs average In that situation, the fabric colour fills in the open area and creates the needed white. But if the same $0.005 square inch (excluding white ink). Sublimation image was applied to a blue shirt, the supposed white ink and paper costs come in well under $0.01 square areas would now be blue, which might not be ideal. inch. Thus an 8x10 image would be around $0.40 By applying a base layer of white ink prior to print- with DTG and $0.56 with sublimation (based on a ing the image, the open areas of a design will appear Ricoh 3110 printer). white in the final design. In regards to production output, sublimation is This sounds easy enough, but in actuality its quite faster providing an average throughput of 6,560 square complex. The only way to print the colour white is to inches per hour whereas DTG averages 5,360 square engineer a specific ink for the purpose that is applied inches per hour. independently of the base colours of the printer. With In actuality both systems are pretty close in terms a white ink system, a command is sent to the printer of operation costs and output, where the real differtelling it to apply the white ink (from an independent ence comes into play is in equipment costs. cartridge) when required. This of course requires that DTG printers start at around $16,000 and rise the printer be designed specifically to support white ink. steeply from there. In contrast, an entry level deskWhite ink for digital printing has to be thick enough top sublimation system starts about $550 and tops to create a decent base, yet thin enough to get through out around $2500. Both systems require a heat press, the ink jet nozzle. In addition, it has to cure quickly so which adds another $1000 or so to the startup cost. that the other inks can be applied on top of it without Some DTG systems actually require a more sophisany quality issues. Furthermore, software must be incor- ticated heat source such as a dryer, which can add porated to interpret the colour and send the appropriate several thousand to the price tag. responses as necessary to apply the white ink. Is one system better than the other? It really comes This is accomplished by a two-pronged approach. down to your needs. Take the time to calculate the The first is that the white ink itself must be engin- ROI for each, which goes well beyond equipment eered to be quick curing. The second is that a special costs, as you also want to take into consideration chemical called a pre-treatment is typically added to versatility – which process will give you the widest the surface of the shirt before printing. When the range of decoration services and product options white ink contacts the pre-treated area, the curing based on the needs of your business, as this is what time is accelerated such that the production proceeds will generate the most business in the long run. uninterrupted (no need to stop and wait for drying Be diverse, be creative and be profitable! to occur). Plus the pre-treatment helps to ensure that the white ink bonds properly to the fabric itself. Early white ink systems developed a reputation for This article was written by Sawgrass Technologies' Jimmy Lamb, an Awardclogging and drying out in the print heads, which in Winning Author and International Speaker who has over twenty-five years turn led to costly repairs. New advances in technology of business and technology experience. Milestones include owning and operhave greatly improved the process, and for the most ating a successful production facility, developing a retail personalization part, if you fully understand how your system works franchise, and production consulting for several Fortune 500 Companies. and follow the instructions provided by the manufac- Consistently ranked as one of the top Decoration Industry Influencers, Mr. turer you shouldn’t experience significant problems. Lamb is a regular contributor to Impressions, Printwear, Awards & Engraving, In reality, white ink is not needed on every job, and and ASI / Stitches magazines. IMPRINT CANADA _ 6HSWHPEHU 2FWREHU

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Lead Times The logistics of overseas supply chain management can be complex, requiring long lead times between design and delivery, not to mention added cash flow pressures as distributors typically are required to pay for products and have to wait months before they can be sold and delivered to end buyers. Domestic manufacturing boasts much more rapid lead times with respect to overseas production. In approximately the same time frame that it takes simply to ship goods from overseas, Canadian manufacturers can design, develop, and produce the same products. This is especially important for distributors that focus on Corporate Fulfillment Programs. If inventory is out of stock, overseas replenishment can take up to several months, compared to its domestic counterparts that can restock in a fraction of that time.

Canada - being a developed, first-world nation - prides itself on its strict, leading labour policies which ensure ethical, safe, fair conditions for workers; employed factory personnel in this country are paid well and given labour benefits deserved to them. These labour policies and ethical standards come at a cost however, for which manufacturers are strictly held accountable for. In some instances, labour cost for a Canadian worker per day can equate to several week's pay for an offshore factory worker. Domestic manufacturers are also subject to strict governance from various levels of government, consumer groups, as well as business groups and associations.

Biggest misconception about domestic manufacturing Cost Comparison

The main disadvantage of domestic production also turns out to be the most common misconception, which Flexibility is that domestically made products are much more Domestic manufacturing, by its very nature, also expensive than their offshore counterparts. benefits from added flexibility with respect to customWhen taking into consideration the risk of hidden costs ization and minimum associated with bringorder requirements. ing a product to the Manufacturers based Canadian marketplace in Canada are able to (which we outlined in develop and offer custhe first instalment tom programs, usualof this article series) ly at a fraction of the the real price gap is quantities required minimal, and in some overseas. This benefits cases, even on par. the buyer greatly, espeFuthermore, the cost cially from an invenof domestically manutory standpoint. factured goods are Instead of having not always compared to order thousands of “apples to apples� with units of one SKU or comparable products @Q\P PQOPMZ XZWL]K\QWV KW[\[ R]`\IXW[ML IOIQV[\ M^MZ QVKZMI[QVO XZM[[]ZM NZWU

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offshore. UIV]NIK\]ZMZ[ NIKM Q[ IV QVKZMI[QVOTa KPITTMVOQVO WVM can fulfill orders conIn the promotional sisting of low minimums and/or a wide product range products industry, when orders are time sensitive and without having to tie up critical cash flow or worry about quantities are normally not too high, domestic producinventory management issues. tion can be better suited, especially when customization The flexible model that domestic manufacturers can and personalization is needed. When factors such as offer also helps provide buyers with the competitive these are taken into account - and time lines are costed advantage of being able to keep up with customers' rapid in - domestic pricing is comparable (and at times are and ever-changing demands and trends. even cheaper) than product sourced directly offshore.

Control / Transparency

Changes in the domestic production landscape

Quality control has always been a critical factor in production, but the tragic events that occurred in Bangladesh have shined an even brighter spotlight on the importance of Corporate Social Responsibility. Distributors have more control when they source locally. With a manufacturing facility based in the same country or province, buyers can see exactly what they are getting and the conditions with which they are being produced. The same cannot always be said of overseas production. While socially-conscious product fulfillment is not a requirement for all programs, the demand from consumers for these products continues to grow. With tragedies like the aforementioned Bangladesh factory collapse, a gradual shift in purchasing attitudes is occurring as the new generation of consumers are becoming more conscious of where the products they purchase are coming from and how their decisions impact their communities, the environment and the economy. Distributors who source ethically-produced goods are giving themselves a strategic advantage, especially among discerning clients.

Over the past decade, manufacturing in Canada - in Ontario, especially - has experienced a notable exodus. Companies shifting production overseas has resulted in a disappearance of manufacturing jobs and with them, the necessary skills that manufacturers require form workers. Affiliate businesses that traditionally have supported and collaborated with Canadian manufacturers have either scaled down operations or closed shop altogether, leaving domestic suppliers with the choice to either pull out of markets or increase exposure in a dwindling manufacturing trade. Relative to the financial burdens that taxes, levies, policy adherance and labour costs that domestic producers must face, margins have dwindled in some cases almost to the point that dollars are simply being traded to keep factories running and Canadians employed. This brings into question the long term sustainability of Canadian manufacturing, which is an ever-critical socioeconomic issue for all Canadians. Increasingly, manufacturers have communicated to us that it is not just whether a domestic producer wants to continue manufacturing on Canadian soil, but rather how profitable it will be to do so. With higher production costs juxtaposed against everincreasing pressure from the market to provide the lowest priced item, the paradox that domestic manufacturers face is an increasingly challenging one.

Disadvantages of domestic production Higher Production Costs The overwhelming disadvantage communicated to us by all manufacturers we spoke with was the same one: that domestic producers are required to deal with much higher production costs. These costs come in a variety of forms - from labour to taxes to levies.

Part six of this series will be published in the November/December 2013 edition of Imprint Canada Magazine.

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or the past 15 years, Big Kahuna ness is fairly seasonal, the majority of our clients Sports Company has been building spend heavily heading into the summer, so we are busy buying product for the 'Back to School' on it's reputation as Canada's premier institutional team dealer, servicing the season and we deliver such an incredible amount needs of athletes, institutions, colleges, universiof product in late August and early September that cash flow becomes tight." ties, schools, organizations and corporations all To address and overcome this challenge, Big across Canada. Kahuna has worked out agreements with their The company was founded in 1998 by Gord suppliers to address the seasonality of their core Querin, who - after almost a decade of working in sales for a competitor decided it was time leverage the valuable relationships he had worked diligently to cultivate and venture off on his own. "We started with no money," says Querin. business, as well as diligently managing cash flow "I had built some loyalties up and was able throughout the year. to do a little bit of business for my clients and Unlike other sectors which are heavily impacted things gradually grew from there." Grow they by recessionary pressures, institutional team certainly did, as Big Kahuna now boasts eight budgets are rarely, if at all, affected by economic offices across the country (including two retail downturns. "Sports and recreation are one of the locations), annual revenues only recession-proof marin the neighbourhood of $20 kets," notes Querin. "Our million, and a client base clients still have to field a that numbers well into the team and kids still need to thousands spanning from play sports. If their budgets B.C. to Nova Scotia. do get cut, they find ways to In 2006, Big Kahuna raise funds to keep spending acquired an existing busiwhat they have in the past." ness to help fuel their growth Currently, 5 per cent of into the Alberta market. the company's business is "It's been a gradual growth generated from servicing cycle for us," notes Querin, the corporate marketplace, explaining that during the however this is one of the decade and a half that the areas that Big Kahuna is company has been in operstrategizing to focus on. ation, year over year growth Querin explains that the =PM +QO 4IP]VI <XWZ\ ,WUXIVa Q[ I XZW]L [XWV[WZ WN has averaged approximately company's current infra=PM ,IVILQIV 5IKZW[[M *[[WKQI\QWV 20 per cent. structure features 25 sales reps across Canada servicing teams and instituThe vast majority of the company's business tions, and is now the process of creating a dedilies in servicing the lucrative niche that is the cated corporate promotional division. institutional team market; this entails providing coaches, athletic directors, schools, colleges and sports organizations with everything they need to run their operations - from uniforms, sideline apparel, equipment, and pretty much any other product that has to do with athletics. When asked how Big Kahuna makes its mark in An ongoing annual challenge for Big Kahuna the industry, Querin doesn't hesitate for a moment Sports Company lies in funding the company's to point to his team. He explains that the company ongoing growth. "Since we've always been in has always had the best people in the business growth mode, we've been undercapitalized since working for them - from sales, marketing and all day one," explains Querin. "Because our busithroughout the company.

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"Anytime we have the opportunity to add a valuable member to our team, we jump at the chance," he says. "We just surpassed the 50 employee mark and they are our number one strength. It's all about our people." The personnel at Big Kahuna are relationship-driven who have worked very hard to earn loyalty with their clients - very much like Querin himself. Loyalty for Big Kahuna means doing exactly what you say your are going to do, delivering on time and dealing with mistakes right away. Just recently in fact, Querin recalls a situation where a large client of theirs brought in quite a bit of product to be decorated that they had purchased elsewhere. The product bled when it was printed and it needed to be replaced; Big Kahuna took care of at their own cost without hesitation. "We could have told them that it wasn't our product, but we replaced it because that relationship we have is the dearest thing to us; without it, our business is not solid." Querin attests that mistakes happen; at Big Kahuna however, errors are seen as perfect opportunities to show clients what kind of company they are and to reinforce core values of integrity, loyalty and respect. One of the most rewarding programs that Big Kahuna has recently taken on is their title sponsorship of the "Athletes Against Bullying" campaign across Canada

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which neatly aligns with the company's values and helps youth deal with and overcome the very important issue of bullying. "We're a solid culture of people on the same page working very hard with passion to put a lot of smiles on athlete's faces."

2WP]VX]V CWT 6P\T Another element which has contributed to the success of Big Kahuna Sports Company was their unique approach to market entry. Early on, the company was able to create a competitive advantage for itself within this niche by partnering closely with big athletic brands at a time when they were not readily available at the institutional level. Big Kahuna was a pioneer in introducing the U.S. model into the Canadian marketplace. For example, the University of Michigan is an Adidas partnered school; Big Kahuna brought that concept to Canada and began marrying these global brands with Canadian institutions and organizations. "We are the largest team dealer for Adidas and Under Armour in Canada," explains Querin, who adds that their strategic partnerships with these brands has afforded them a competitive advantage merited by their volume. Nowadays, these brands have become much more predominant at the educational and club level, and a lot of that can be attributed to Big Kahuna's model.

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So what's next for Big Kahuna Sports Company? Gord Querin hints at something big coming down the pipeline that is part of the company's aggressive, ongoing 12-year plan (which is kept updated at all times). "We do have something up our sleeve that's very big that will probably be revealed a year from now, but I can't (divulge details)," he explains. Enjoying a competitive advantage is something that Big Kahuna Sport Company has become accustomed to, and from the early indications of what the company has coming down the pipeline, it doesn't seem like that will be changing anytime soon.

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VAPOR APPAREL Sublimation Friendly, Screen Printing, Embroidery, Heat Transfer and much more.

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High-quality performance apparel. Manufactured with PURE-tech™ permanent moisture wicking technology. Does not fade or wash away with time. Partnered with Unifi, Inc. to develop the Eco line. Men, Women and Youth lines. Other features include: UV Protection, Microbacterial Resistant, Stain Resistant, Reduced Static and Fast Drying. 9,6,7 86 ,1 %227+ $7 7+( :(67(51 ,035,17 &$1$'$ 6+2:

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THE FLEECE COLLECTION

1574 Full-Zip Hooded Fleece shown in gold and burgundy

1573 Hooded Pullover Fleece shown in navy and charcoal

14.2 oz 80/20 ring-spun cotton/polyester. All-over cover-seamed construction and full generous ďŹ t for comfort. Both styles offered in 9 colors and sizes S-3XL.

Come see us at Western Imprint Canada, October 18-19.

866.275.7860 | Canada Corporate | Toronto 800.353.3470 | A.N. Distributors | Edmonton 800.663.1807 | Budget T-Shirt | Vancouver

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WINNER GARMENT

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Nomex Fleece Nomex Jersey

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Water Resistant Breathable

Modacrylic/ Cotton 100% Polyester High Visibility 100% Cotton Canvas 100% Cotton

Polyester/Cotton

Nylon Fabrics

WINNER GARMENT INDUSTRIES LTD.

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REVOLUTIONARY NEW BOBBIN CASES 1

New Hole-Type thread guide eliminates thread slack caused by friction with thread. 2

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3

3 Bobbin thread guide plate

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Since 1999 Midland Clothing, a Canadian company, has been striving to produce the highest quality apparel at an affordable price. Midlands Yoga wear is made of a perfect blend of 86% Nylon, 14% Spandex. It has fit, fashion and comfort all in one. No matter what your day has planned, our product will fit in and make it just a little bit better. To find out more please visit midlandclothing.com

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IMPRINT CANADA _ 6HSWHPEHU 2FWREHU

NEW on the team! Hockey Hoodies

Hockey season is here and we have the perfect hoodies to make a winning appearance. This sporty pullover scores big on quality and style. Available in men’s and ladies with a range of colour options. In stock! And we’ve made it easy for you to order with our One Source – One Price – in just One Call.

One Source. One Price. Over the years we have listened to you the client and have arrived at the most convenient and reliable system. The one source, one price method! It’s simple we take care of everything from garment to design ideas, decorating methods, and you pay just one single price. Making your life easy.

Call or visit us at Westhallapparel.ca for your one source one price. We truly have made it easy.

to serve you better…

We’ve moved to a bigger and better location with everything from design to production and warehousing under one roof. And we’ve added top-notch customer service staff to our winning team. We look forward to serving you better.

T 905 501 1033 • F 905 501 0398 • westhallapparel.ca

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Large selection of Soccer Kits

Each in a variety of colours

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New in 2014

New in 2014

Kit VITTORIA

100% polyester available in sizes 3XS to 2XL also available in long-sleeve

High quality matching socks

sales@givova.ca

1.416.289.2899

contact us to be a distributor in your community

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IMPRINT CANADA _ 6HSWHPEHU 2FWREHU

SURVEY OF LARGE CANADIAN RETAILERS & CONSUMER PRICE INDEX Statistics Canada recently released its commodity sales data by large retailers for June, as well as its Consumer Price Index (CPI) report for the month of July.

Figure 2 300

Monthly Sales of Clothing, Accessories & Footwear down from June 2012 levels Sales of women’s clothing and accessories across all categories in June were down almost 5 per cent from the same period last Figure 1 Monthly Sales of Clothing & Accessories (survey of large Canadian retailers ) year, and almost 12 per 900 cent from May 2013 (see 800 Figure 1). $770.2 Sales of Men’s clothing million 700 $714.4 and accessories across million $682.2 million all categories were down ($) millions 600 of dollars almost 3 per cent from 500 the same period last year, but up more than 5 per 400 $377 $366 cent from May 2013 (also million million $344.9 300 Figure 1). million Footwear sales in May 200 June 2013 June 2012 May 2013 2013 were up over 13 per Women’s Clothing and Accessories cent from a year ago, before Source: Stats Canada Men’s Clothing and Accessories dropping 16 per cent to $178.6 million in June 2013. This represented a 3 per cent decline from the same period last year (see Figure 2).

Consumer Price Index up 1.3 per cent in July The Consumer Price Index (CPI) in Canada - which measures changes in the price level of a market basket Consumer Price Index of consumer goods and servi- Figure 3 (Jan 2011 - June 2013) ces purchased by households 5 - rose 1.3 per cent in the 12 months to July, following a 4 1.2 per cent increase in June (see Figure 3). The increase in the CPI in 3 July was led by transporta- % Change tion prices, which rose 2.7 2 per cent on a year-over-year basis, following a 2.0 per cent gain in June. 1 Compared with July last year, consumers paid 6.1 0 per cent more for gasoline. 2013 2011 2012 This followed a 4.6 per cent Source: Stats Canada increase in June. IMPRINT CANADA

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Monthly Sales of Footwear (survey of large Canadian retailers )

200

($) millions of dollars 100

0

$184.0 million

June 2012

$212.5 million

May 2013

$178.6 million

June 2013

Source: Stats Canada

Gasoline prices rose in all provinces, with Prince Edward Island (+13.9 per cent) recording the largest gain and Saskatchewan (+2.7 per cent) posting the smallest increase. Prices for the purchase of passenger vehicles rose 2 per cent in the 12 months to July, matching the increase in June. In addition to transportation, the shelter component was a main upward contributor to the increase in the CPI in July.

Cost of clothing & footwear rises in Canada The cost of clothing and footwear rose to 1.5 per cent in July 2013, up almost double from 0.8 per cent in June 2013 (see Figure 4). During this same Consumer Price Index period, the food index Figure 4 (June 2013 vs July 2013) posted its smallest year-over-year increase OVERALL CPI in over three years. The FOOD index for health and SHELTER personal care was the HOUSEHOLD only major compon- FURISHINGS & EQUIPMENT ent to record a decline CLOTHING & FOOTWEAR in July. TRANSPORTATION Shelter costs rose HEALTH & PERSONAL CARE 1.3 per cent in the 12 RECREATION & EDUCATION months to July, after increasing 1.2 per cent ALCOHOL & TOBACCO in June. Compared -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 with July last year, Source: Stats Canada June 2013 July 2013 natural gas prices and rent increased, while mortgage interest cost declined 3.8 per cent. Food prices rose 0.8 per cent in the 12 months to July, following a 1.2 per cent uptick in June. The July increase was the smallest gain in food prices since June 2010. The cost of food purchased from stores rose 0.5 per cent in the 12 months to July, a smaller increase than in June (+1.3 per cent). Prices for fresh fruit, fresh vegetables and meat all increased less in July compared with June. The health and personal care component decreased on a year-over-year basis for the fourth consecutive month in July. These declines followed more than a decade of price increases. The recent declines are mainly attributable to falling prices for prescribed medicines. <W]ZKM# <\I\Q[\QK[ ,IVILI

©2013 Fruit of the Loom, Inc.

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