TAL: Question 1

Q1. Company Background of TAL

Type	Private
Industry	Textile / Garment
Founded	1947 in Hong Kong
Headquarters	Tsim Sha Tsui, Kowloon, Hong Kong
Area served	North America, Europe and Asia
Key people	Mr. Harry Lee (Managing Director)
Products	Apparel (shirts, blouses, trousers, men's tailoring suits and outerwear)
Revenue	US$750 million(2011)
Employees	25,000(2011)
Website	www.talgroup.com

Company Overview

TAL Apparel Limited (also called The Innofacturer) is a garment manufacturer headquartered in Hong Kong. It is one of the world’s largest apparel manufacturers in the production of innovative clothes that combine style, comfort and functionality for over 60 years. Its products include shirts, blouses, trousers, tailored suits and outerwear. The origin of company started in 1947 when Lee family set up the very first spinning mill in Hong Kong for producing yarn. In 1962, Textile Alliance Limited (TAL) was formed by combining all the family’s textile mills combined together.

In fiscal year 2011, TAL had annual turnover of US$750 million and over 25,000 workers were employed in factories located in China, Indonesia, Thailand, Malaysia and Vietnam. TAL currently produces over 55 million pieces of apparel annually and supplies to markets in North America, Europe and Asia which 1 out of 6 dress shirts sold in the US was made by TAL. Nowadays, TAL not merely manufactures high quality garments, but also designs advanced supply chain solutions to provide a low cost, efficient and effective inventory management to customers.

Customers

The major customers of TAL mainly in US since US market accounted for 78 percent of TAL’s sales revenue. Still, the company supplies different apparels to different popular brands in Asia and Europe.

North America

• Brooks Brothers: American men's clothing chain
• Banana Republic: American clothing and accessories retailer
• Ashworth: American golf-apparel company
• Callaway: American golf-apparel company
• Chico’s: American women's clothing chain
• Coldwater Creek: American women's clothing and accessories retailer
• Dillard’s: American department store
• Dockers: American garments and other accessories brand
• Eddie Bauer: American clothing store chain
• Express: American specialty fashion retailer
• Foxcroft: American women’s apparel retailer
• J.Crew: American multi-brand, multi-channel, specialty retailer
• J.C Penney: American department store
• JoS.A.Bank: American men’s clothing retailer
• L.L.Bean: American retailer
• Nordstorm: American department store
• Mark’s Work Warehouse: Canadian clothing retailer
• Paperwhite: American women’s clothing chain
• Serfontaine: American women’s clothing chain
• Tommy Hilfiger: American apparel retailer
• Talbots: American women’s classic clothing retailer

Europe

• Burberry: British accessories and clothing store chain
• Givenchy: French accessories and clothing store chain
• Thomas Pink: British clothing store chain

Asia

• Giordano: Hong Kong-based apparel retailer
• Septwolves: Chinese clothing brand
• Toray: Japanese clothing brand

History

The origin of company was founded in 1947 when Lee family built the first spinning mill in Hong Kong.

In 1962, Textile Alliance Limited (TAL) was set up by combining all the family’s textile mills combined together.

In the early 1980s, TAL started investment in IT infrastructure to support its operations. The company firstly provided automation only for its financial transactions including order entry and basic accounting functions. Later, these were expanded to fuller automation of individual activities except for communications among the various departments and factories.

In 1983, Textile Apparel Limited, the garment division of the company, was established as a subsidiary of the parent company.

In 1988, TAL move into its own brand and wholesale business by acquiring a US wholesaler, Damon Holding Inc. Unfortunately, this new business had resulted in a US$50 million loss because of excessive material procurement and poor inventory control.

Starting in the 1990s, the Company developed the Electronic Data Interchange (EDI) standard for trade document dealing with its customers and suppliers.

On June 20, 1997, TAL started using VMI program with single J.C. Penney store after several testing.

In 1999, TAL began employing an outsourced ERP solution (Movex Fashion Solution) developed by a Sweden-based IT solutions provider to integrate and support its internal operation and also external activities to keep a close relationship with retailers across the supply chain.

In 2001, owing to increasing scale and pressure of TAL’s international business, TAL Global Alliance Limited (TGA) was formed to manage its global sales and marketing business activities.

In 2002, an annual turnover of US$590 million has been recorded. In the same year, TAL continued to consolidate its supply chain capabilities by adopting the TradeCard’s suite of web-based financial solution10. This system integrated into Movex ERP system to enhance the automation for TAL’s financial transactions with suppliers and customers.

By September 2002, TAL became the contract manufacturer for Lands’ End’s custom apparel products by using Made to Measure system.

In 2012, TAL received the Sustainability All Star Awards from Apparel Magazine for best practice in waste recycling, exhaust emission management and energy-efficient facilities and procedures.

Reference:

Bloomberg Businessweek, n.d..Company Overview of TAL Apparel Limited. Available from: <http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=4959449 >[7 Feb 2014]

Phoebe Ho (2005), TAL APPAREL LIMITED: STEPPING UP THE VALUE CHAIN, retrieved from: Asia Case Research Centre, The University of Hong Kong.

HKTDC, 2011.Hong Kong-grown green textiles. Available from: <http://wpc.32bf.edgecastcdn.net/0032BF/en/docs/20110610HKTDC.pdf> [7 Feb 2014]

TAL Group, n.d.. ABOUTTAL. Available from: <http://www.talgroup.com/en/about_tal.html> [7 Feb 2014]

TAL Group, n.d..PARTNERS. Available from: <http://www.talgroup.com/en/tal_partners.html> [7 Feb 2014]

China News Service Hong Kong Branch Ltd, 2011. 香港TAL服裝集團經營發展策略. Available from: <http://wpc.32bf.edgecastcdn.net/0032BF/en/docs/20110826ChinaNewsService.pdf> [7 Feb 2014]

Apparel Magazine, 2012. Apparel Companies Invest for Sustained Success. Available from: <http://wpc.32bf.edgecastcdn.net/0032BF/en/docs/Apparel%20Salutes%20Its%20Sustainability%20All-Star%20Award%20Winners%20-%20and%20How%20Retailers%20Sell%20-%20Apparel.pdf> [7 Feb 2014]