Can Fashion Help Detroit Make a Comeback?

DETROIT — In 1915, as demand for the Model T was booming, Henry Ford came up with a plan. He bought land to build a complex that would include all aspects of car production, starting with raw materials such as iron ore and coal, producing glass and steel, and culminating in car parts and ultimately, automobiles. His vision led to Ford’s giant Rouge Complex in Dearborn, Michigan, which employed 100,000 people at its peak, and is still in use today.

Jeffry M. Aronsson has a similar idea for Detroit, only for fashion.

Aronsson, a lawyer and turnaround specialist whose résumé includes executive positions at Oscar de la Renta and the luxury conglomerate LVMH, calls his idea Project Treadwing.

The name is a combination of tire tread — to give Detroit traction in fashion — and a nod to the Detroit Red Wings hockey team. It would create a fashion hub where every element of fashion design, manufacturing and marketing would take place in a single location, rather than being spread around the world.

If the idea works in Detroit (and that’s a big “if”), Aronsson wants to take it to other American cities, just like Ford put factories everywhere from small towns to big cities.

“What we’re doing is trying to look around the corner and see what’s coming and to anticipate it,” Aronsson said.

The idea was inspired by a return visit Aronsson made to his hometown in 2014 (he was born here in 1953), when he was one of 150 high-profile former Detroiters invited to the inaugural “Detroit Homecoming,” an event organized by Crain’s Detroit Business.

Participants heard presentations by the city’s entrepreneurs and government leaders about their plans for reviving the city, just then emerging from the largest Chapter 9 bankruptcy in the country’s history.

They also were asked to write their wishes for the city on a chalkboard. Passing by, Aronsson spotted the words “Bring back Carl’s Chop House” — the steakhouse founded by his grandfather, Carl Rosenfield, a World War I veteran, in 1932.

Long a haunt for politicians, athletes, executives and locals, Carl’s closed in 2008 and was demolished in 2010. Aronsson says he was so excited by the shout-out that he called his sister, who lives north of the city.

Likewise, he was impressed by the enthusiasm of the entrepreneurs taking a chance on the long-derelict city.

“I thought, ‘Boy, if I were 30 years younger, I wouldn’t even need any change in my pocket, I’d be here in a New York second figuring out what to do next,'” Aronsson said.

But he went back to New York, and his investment firm, Aronsson Group Capital, which advises apparel and luxury goods companies. Aronsson says he didn’t give a Detroit project any serious thought until a meeting with the city’s mayor, Michael Duggan, last June.

Duggan, he said, asked him whether Detroit could become home to a garment district like the one that once dominated the West Side of Midtown Manhattan.

Almost without thinking, Aronsson presented an alternative. Rather than an old-school fashion district, he foresaw a center that could capitalize on technology and the latest retail trends. He proposed creating a campus to teach and execute every aspect of the fashion process, from fabric production and embroidery to garment and luxury goods design.

There would be jobs for both skilled and unskilled workers, from engineers to designers to sewers, with a training center to teach employees various tasks, and a manufacturing plant to produce the items, which then could be sold directly to consumers. Duggan asked Aronsson to start work on a proposal. The pair announced the project at the 2017 Detroit Homecoming in September, while the city formed a task force to look at its feasibility and location.

Aronsson declined to discuss the financial scope of the project, but said he would invest his own resources and hoped to obtain capital from public and private sources.

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Aronsson excitedly recalls his memories about the city, especially the jobs he held at Carl’s Chop House, where he was warned by family members that if he couldn’t keep up, “I would not remain,” he recalls.

He worked 12- to 16-hour days every summer and on weekends while earning his undergraduate degree at the University of Michigan, and again while he was in law school at Wayne State University in Detroit.

After earning his law degree, he headed to New York University for a master’s in tax accounting, and stayed in Manhattan, filling in back home at the restaurant only upon urgent requests from family members.

His entry into the fashion world came when the designer Oscar de la Renta was looking for legal help. Aronsson worked for the Dominican-born designer as outside counsel from 1988 to 1993, then as the company’s chief executive from 1994 until 2003.

De La Renta, who died in 2014, was clearly an important influence on his career. Aronsson, who is stocky with bright brown eyes and an enthusiastic manner, speaks affectionately of the debonair designer, who he says encouraged him to break traditional fashion boundaries.

Aronsson admittedly knew nothing about clothing when he began working at the fashion house. (He said bought his first copy of Women’s Wear Daily, the industry trade publication, after he landed the consulting job.)

But, he said, he saw it was “incredibly inefficient and dysfunctional to get a design produced and developed and delivered to a customer.”

Tasked with regular calls to the label’s key accounts, he visited Dawn Mello, the influential fashion director of Bergdorf Goodman, to ask what kind of clothing she would like to see the line produce.

Mello gave him a long wish list, Aronsson recalled, which he conveyed to de la Renta. Two weeks later, the designer produced a capsule collection that was exclusive to Bergdorf’s, and the line’s sales there quintupled.

After leaving Oscar de la Renta in 2004, Aronsson spent three years with the fashion giant LVMH, where he oversaw the Marc Jacobs and Donna Karan brands, and then led the troubled fashion house Ungaro for little more than six months in 2011, before returning to his investment firm.

Given his past experience in the fashion ranks, Aronsson believes Detroit has assets that can make his project successful.

One is the city’s vast expanse of empty land. Aronsson has taken a look at the city’s map of available tracts, and is trying to pick a campus location that would be easy for employees to reach, and for goods to be delivered and shipped from.

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The city’s labor pool is another key factor. In September, Detroit’s unemployment rate stood at 9.7 percent, according to the Labor Department.

That is nearly 20 percentage points lower than the 28.4 percent rate Detroit experienced in 2009, as the city dealt with the Great Recession, but still more than double the national rate. Aronsson is also intrigued by the exit of people from Puerto Rico since the devastating hurricane last year, and thinks some could be lured north to work. Detroit also has a relatively low cost of living, especially compared with other large cities, although prices have been rising for lofts and homes in the city’s most sought-after neighborhoods.

In recent years, Detroit has attracted a number of high-profile retailers to its urban neighborhoods — most notably Shinola and John Varvatos (another Detroit native who recently returned home, to open a flagship store on Woodward Avenue) — but the city has lost most of its major retailers in recent years.

Other cities have taken steps to expand their fashion presence, with mixed success. Chicago has had a fashion director since 2006, but the focus there has mainly been on supporting designers, rather than creating a manufacturing sector. In Miami, the designer Rene Ruiz opened a 10,000-square-foot factory in 2013, where he produces his high-end evening apparel.

Los Angeles has a sizable fashion district, focused primarily on designers and fast-fashion wholesalers. But it lost its most notable manufacturer in 2017, when American Apparel filed for Chapter 11 bankruptcy and its assets were sold. Some 2,400 workers were laid off.

Possibly the closest thing to what Aronsson envisions is operated by Zara, the global fast-fashion label, at its operations in northwest Spain.

There, Zara designs, manufactures and distributes about 50 percent of the clothing that it sells worldwide. An additional 24 percent is produced in Asia and a similar amount in Europe, according to SMC Globe, a supply chain analysis firm.

Aronsson says fashion production is ripe for disruption. “It’s just going to happen,” he said. “It’s been a matter of chasing cheap labor around the world. We’ve sacrificed core competencies that we’re going to have to re-establish.”

Sheng Lu, an assistant professor of fashion and apparel studies at the University of Delaware, says cheap labor is only part of the equation. “The apparel business is about building and controlling the supply chain,” Lu said, adding that many fashion brands outsource their manufacturing to China and other parts of Asia “because of the efficiency.”

However, Lu does believe there could be room for niche production, like the kind Aronsson may be able to pull off.

“As long as the U.S. keeps growing, and consumers keep spending, it’s not surprising to see companies explore investment opportunities,” Lu said. Aronsson is shying away from retail as part of his project, and little wonder. Thousands of stores have shut and entire shopping malls have closed as the retail industry restructures, while online retailers such as Net-a-Porter have captured customers who used to shop in the upscale boutiques and high-end department stores that Aronsson regularly visited.

New business models, like clothing-in-a-box brands — see Stitch Fix — are canceling out the need for a designer to be a figurehead. Consumers, Aronsson says, are buying looks, rather than labels. So, he reasons, why couldn’t those looks be created in a city like Detroit?

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Despite his enthusiasm and that of the mayor’s office, it can take a long time in Detroit for anything to gain the traction Aronsson hopes for.

It took 20 years for ground to finally be broken for a soaring office tower on the site of the J.L. Hudson’s department store, which closed in 1981 and was torn down in 1997. And the abandoned Michigan Central railroad station, which was vacant for nearly 30 years before finally getting a partial refurbishment in 2015, remains a largely empty shell, used only occasionally as a party space. (In 2017, it was the site of the Detroit Homecoming where Aronsson and Mayor Duggan announced Project Treadwing.)

The project is still very much in its nascent stage. According to documents the city submitted to the state of Michigan in September, a request was made for a $150,000 grant to the Wilson Foundation and the New Economy Initiative; its status is listed as “awaiting decision.” And while Aronsson has not yet moved to Detroit full time, the city has helped arrange meetings with potential investors at which Aronsson has made his PowerPoint sales pitch. (City officials declined several requests for comment on the proposal.)

But Mary Kramer, the group publisher for Crain Communications, says she is excited that someone with Aronsson’s roots and experience would want to return from New York to launch the venture.

“That mix of outside and inside, long-term and new can really make a difference,” Kramer said, adding of Aronsson, “His name and reputation and experience put this above other things that have happened.”