US cap maker New Era doubles sourcing from Mainland Headwear

New Era Cap, the New York-based maker of Major League Baseball hats, will more than double its sourcing of products from China this year despite soaring costs and the potential appreciation of the yuan.

The group signed contracts with Hong Kong-listed manufacturer Mainland Headwear Holdings, which will source US$15 million worth of caps this year and US$17.5 million next year following a US$7 million order last year.

The caps will be sold mostly outside the United States, where last year's recession forced New Era to shut down a factory and a distribution centre in Alabama, keeping only one factory in the US, in Derby, New York, in a restructuring that cost about 350 jobs.

'The consumer market in the US will certainly be better this year,' said New Era chief executive Christopher Koch. 'But it will be five years down the road before rebounding to where we were.'

The 90-year-old headwear firm is finalising plans to expand its retail presence in the Asia Pacific region, particularly in China, he said.

It planned to penetrate further into the Hong Kong and China markets through Mainland Headwear's 46-strong Lids chain stores, he said.

'Nobody wears caps yet in China,' Koch said. 'If you take Europe as an example, there were not many caps being worn eight years ago, but now many wear them.'