Phil Courtenay is an Operating Partner at TAU Investment, where he assists portfolio companies with a wide range of growth opportunities ranging from manufacturing capabilities to brand relationships. Phil’s expertise builds on 40 years of experience in the apparel industry, where he has worked across different divisions, companies, and countries. We sat down with Phil to hear how the industry has changed over his career, the significant role he played in those changes, and what consistently excites him about fashion.
What are some of the biggest changes you’ve seen in apparel manufacturing throughout your career?
Phil: My first job in the industry was at Marks and Spencer, and back then they prided themselves on 95% of their apparel being UK-made (or at least UK-assembled, sewn, and manufactured).
In the 70s and 80s, the UK was one of the last Western centers of garment making. But China was emerging rapidly on the scene, and we had to figure out how to compete with labor costs in China at a fraction of the cost in the UK. So we made one product type per factory and pushed efficiencies very hard.
I then became a Merchandise Manager. They’re the people that control the financial side of buying. When you have a factory in the same country, you can call them and say, “Stop cutting this fabric into that style, start cutting it into this style that’s selling better. The reaction time is much shorter and delivery times are negligible in the same country.”
I spent just under 15 years with Marks and Spencer before joining one of the big manufacturers, Dewhirst Group. There, I learned a lot more about how to create efficient factories—how to plan a factory, how to manage it, how to organize production.
Eventually, I went to work for Courtaulds Lingerie, but left when they were bought by Sara Lee, and I went to live in China to run a big manufacturing unit there. Then Adidas came calling. I was already 50 and I thought this was my last chance to marry two of my passions—garment making and sport—and to work at one of the companies I respected most.
Initially, I joined as Head of Development. The role of development is to take a design, develop it into a product sample—working with global factories—then return the sample to designers for sign-off. I did that for seven years and made a lot of changes. I updated patterns across the whole company based on 3D body scan, which significantly improved global fit. I also led a global efficiency program that embraced the complete supply chain and reduced complexity and overlaps in workload across different functions.
Then the opportunity to run global apparel sourcing came up, which was around 350 million garments a year with a team of 400 people. We made a lot of changes, including taking what we knew about the UK market and the UK industry in order to make the Asian factories far more efficient than they’d been before.
Could you tell me a bit more about how you brought some principles from UK manufacturing into China and Adidas?
Phil: We introduced a concept called “Manufacturing Excellence” which entails measuring the efficiency of your factories. This is done by applying a measure called General Sewing Data (GSD). If you take the GSD and apply it to your styles, you can measure exactly how quickly you should make a garment.
If you apply this to the whole factory— minutes used vs. garments made—you can determine overall factory efficiency. By doing that, you can start to look at reasons for inefficiency and ways to improve.
Over my seven years in sourcing we improved factory efficiencies by over 50%. This was a win/win for supplier and Adidas: the supplier produced 50% more product with the same direct labor force, dramatically enhancing overhead recovery, while Adidas mitigated the significant wage increases over these years. We primarily improved factory efficiency through the better use of semi-automation and full automation, as well as by encouraging expertise within individual factories.
We also had a small team of industrial engineers who created a library of modules to provide solutions for everything that affected factory efficiency from basic training, staff engagement, line balancing, work flow, small working group sewing, to automated pre-assembly.
Many people think that adjusting the cost of a garment affects the welfare of the laborers or the sustainability of the garment, assuming these factors are mutually exclusive. But you’re saying you were able to increase efficiency without negatively impacting the welfare of the laborers while paying them the same.
Phil: Because we increased the overhead recovery as well, we ensured that the factory was efficient and made more money than they would normally have done. At the same time, Adidas has an exceptional organization that looks after welfare. They pioneered the Higg Index, which is the index of how good your factory is at labor relations. We became not only a founding member of Higg, but also drafted a lot of early Higg standards because our compliance team was probably the best in the industry.
I liked working for Adidas because doing the right thing was written into the DNA of the company. Some outside the company couldn’t understand the fact that Adidas didn’t scream from the rooftops about what it was doing in corporate ethics and sustainability. We didn’t scream it from the rooftops because it was just the right thing to do.
If you had a crystal ball and could look at apparel manufacturing 10 years from now, what do you see as the big trends on the horizon, especially around sustainability, that will change this market again?
Phil: There’s a lot of work and energy going into sustainability at the moment, especially around recycling products. The biggest challenge is with oil based fabrics such as polyester and nylon which simply do not decompose in landfill and are polluting our oceans. Keeping these fabrics out of the landfill via recycling or repurposing is a high priority.
The carbon footprint of any garment is still driven by getting the raw material in the first place, whether it is oil or plant-based, and next by dyeing and finishing the fabric. These two operations contribute 60% of a garment’s carbon footprint.
I think there’s some really interesting new technologies arriving in the market at the moment. CO₂ dyeing is probably one of the most advanced, but the industry is finding it very difficult to make the major step changes now. At TAU we are trying to bring brands and retailers closer to the fabric vendors to embrace and invest in the new technologies for the sake of the planet.
So, change is difficult, and change has to come from brands and retailers. In the EU as well as other parts of the world there will be penalties introduced over the next 5 years penalizing companies who fail to meet carbon reduction targets. From our discussions with the major companies in our industry, we know there is increasing pressure coming from owners and shareholders to the boards of companies to step up their carbon footprint improvements. In many cases this pressure is much greater than that coming from consumers–although this may change.
You worked with the University of Westminster to develop a merchandising course at the London College of Fashion. I was wondering what advice you give to students or young professionals entering the apparel industry today?
Phil: If you want a buzz, if you get excited about things—we’re an emotional bunch, the fashion people. We get excited about things. It’s fantastic to watch the Oscars, and then three days later they’ll be selling that same dress at a store in London. And I think it’s that—the speed and the energy that the industry has—that excites people.
I still get excited at 72 —I still love it. It’s part of me and it’s given me a great life. But it is a dynamic industry and I can’t think of many I’d rather work in. It’s hard work, it’s energy-sapping, and it’s frustrating, but if you’re positive about things, then it’s a great industry. You get up in the morning looking forward to going in and seeing your successes. And you can see your successes very quickly hanging in a store. I usually smile walking around an Adidas store thinking, “Those seams used to be puckered before I started. We taught them how to do it properly.”