Hatmaking factory moves to U.S., but struggles to keep a lid on costs

When the famous hat brand worn by celebrities like Samuel L. Jackson, Brad Pitt and Gwen Stefani moved into a Pennsylvania factory last year from China, executives billed it as an effort to create U.S. manufacturing jobs. But as labor costs went up, profits went down.

ADAMSTOWN, Pa. — If home is where you hang your hat, Kangol is struggling to afford its pricey new U.S. digs.

When the famous hat brand worn by celebrities like Samuel L. Jackson, Brad Pitt and Gwen Stefani moved into a Pennsylvania factory last year from China, executives with the Bollman Hat Co. billed it as an effort to create U.S. manufacturing jobs.

But as labor costs went up, profits went down. Way down. The 149-year-old company behind Kangol says it’s losing money on every kangaroo-logo cap knitted at its factory in Adamstown, 60 miles west of Philadelphia.

“It has been certainly a bigger challenge than what we could’ve ever dreamed,” said Don Rongione, Bollman’s fedora-wearing president and CEO.

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The nation’s oldest hatmaker expects a relatively quick turnaround once U.S. workers get better at making the popular Kangol caps. But Bollman’s early struggles with Kangol illustrate why the labor-intensive garment industry left the United States in the first place.

Employment is down 85 percent since 1990 — the biggest decline of any manufacturing sector — as cost-cutting apparel companies shifted production to Asia in search of cheaper labor. Bollman spends about $11 an hour per worker in Pennsylvania versus $2.60 in China.

So why move?

In an industry where trends come and go quickly, “It’s incredibly important to incorporate speed into the delivery of the product,” Rongione said.

Other apparel companies are also trying to be more nimble. U.S. apparel production has increased 50 percent since 2009, according to the American Apparel & Footwear Association, as some footwear…

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