The United States industry's last big change came nearly 100 years ago when northern manufacturers moved south for cheap labor, cheap power and abundant water. But it still makes roughly 90 percent of its own socks. In an increasingly global economy, socks seem an anomaly. The United States industry's last big change came nearly 100 years ago when northern manufacturers moved south for cheap labor, cheap power and abundant water. The United States socks market was overlooked by foreign producers partly because sales, and profits, are so small.
Profit margins are thin because there are so many scrappy producers of almost identical products.
Gap Inc., like other retailers, relies on several competing mills to make socks with its name. But particulars of production are critical. Neuville Industries Inc. Labor makes up perhaps 20 percent, maybe a bit more, of costs, he estimates. That limits the savings from going abroad for lower wages. At Neuville's Hildebran, N.C., factory, computer-controlled machines whir with little human intervention, pulling yarn off large spools and knitting it into socks.