By Maureen Flanagan
FMI International, Inc. excels in providing import logistics services to the apparel industry. The company seamlessly moves products from an international overseas port to a customer's distribution center in the United States. A one-stop provider, FMI ensures a more timely and cost-efficient service than is possible with a combination of multiple vendors or in-house logistics departments.
FMI has been family-owned since its founding in 1979 and has shown consistent and stable growth. Its services encompass the entire supply chain and include a highly specialized expertise in the handling of garments on hangers. Numbered among its customers are leading U.S. apparel designers, manufacturers and retailers such as Jones Apparel Group, Inc., Liz Claiborne, Inc., Polo Ralph Lauren Corp. and Federated Department Stores. BB&T Capital Markets represented FMI in this transaction.
On April 15, 2003, KRG Capital Partners LLC, a Colorado-based private equity firm focused on middle-market buyouts, led a recapitalization of the company. FMI management invested in the transaction, retaining significant ownership in the company. American Capital Strategies, Ltd. (Nasdaq: ACAS) provided a financing package of $49 million. In addition, Credit Agricole Indosuez provided $20 million in financing.
Since 1997, American Capital has invested some $1.7 billion in more than 70 middle-market companies.
For more information about American Capital's portfolio click here.
"American Capital is backing a unique, leading company that has captured market share through its distinct strategic advantage of providing its customers with a full line of logistics and inventory management services," said American Capital Principal and Managing Director Darin Winn. "With a strong presence at three major U.S. ports, New York, Los Angeles and Miami, a strong customer base and a complete line of integrated transportation services, the company's experienced management team is in an excellent position to capitalize on the expected continued growth of the U.S. import apparel industry as more apparel companies utilize overseas manufacturing, resulting in an increased need for import logistics services. In addition, FMI is expanding its markets to include footwear and household goods."
The company's services begin with freight forwarding from the country where garments are manufactured, primarily in Asia. They continue after arrival in the U.S. by boat or plane with services that include transloading, warehousing, distribution, and local and long distance ground transportation. FMI has over one million square feet of warehouse space in the three largest U.S. import gateways - New York/New Jersey, Los Angeles, and Miami. The company also provides ground transportation services to customer distribution centers and retail stores.
Along the entire transport route, FMI offers a comprehensive inventory tracking system that enables customers to locate their merchandise at any point on the supply chain. The company's third-party and proprietary systems link with customers' systems to provide complete up-to-date information that can be sorted and tracked based on ocean container, carton, style, and even SKU.
FMI's fully integrated service, incorporating intermodal flow of freight, is unparalleled in the apparel industry. The company is also one of the few transportation companies offering an expertise in "GOH" (garment-on-hanger), a shipping method in which the apparel is hung on slick rails throughout the entire course of its transport. GOH rack-ready merchandise reaches the sales floor in less time than garments transported in flat packs, a benefit increasingly valued by retailers pushing for floor-ready deliveries.
FMI has maintained a long-standing customer base by successfully lowering customer transportation costs, reducing transport time, and improving supply chain visibility and reliability. The company is unique in its flexibility and willingness to adapt to customer specifications.
The apparel industry relies on outsourced logistics services to efficiently and cost-effectively manage overseas transportation operations. From 1994 to 2002, imports for the U.S. apparel market grew from 43% to 72%, driving the demand for logistics services. This trend is expected to continue as apparel companies outsource their manufacturing to countries with lower labor costs, primarily the Far East and Central and South America. Moreover, as international regulatory quotas are phased out on textile and apparel products, the trend will likely accelerate.
FMI's fully integrated services and unique systems capabilities give the company a distinct competitive edge. The company has proved successful at continuing to expand its customer base and cross-marketing additional services to its existing clients.
As the $166 billion apparel industry continues to look for ways to cost-effectively manage manufacturing, the demand for import logistics services will only increase. FMI's experienced management team, strong, long-standing customer relationships and coordinated network of third-party providers give apparel manufacturers a great place to hang their hats - and coats.
