The Schuman Plan

"In the coat & suit business," said Adolph Schuman, "you either got to think or die." As president of San Francisco's Lilli Ann Corp., 43-year-old Cloak & Suiter Schuman has done plenty of thinking and thus his company is in the best of corporate health. Starting out 18 years ago with $2,000 borrowed from a bank, he has built up his clothing company (named after his wife) to the point where it grossed $7,100,000 last year, selling through 1,400 retail stores. Last week Schuman showed off the results of some of his thinking: he opened a new $2,000,000 three-story plant, and celebrated with a fashion show at San Francisco's Fairmont Hotel. There, amid the popping of champagne corks, models drifted along the runway wearing coats and suits of Schuman's new fall line. But the important part of Schuman's thinking was not only the designs; it was the fact that the clothing was made largely of the materials Manufacturer Schuman is .bringing in from Europe under his own private "Trade, Not Aid" plan.

Three Rules. Schuman got the idea for his plan six years ago, when he astounded Paris dressmakers by putting on a style show right in their midst. He wanted to use fine French, Swiss and Italian cloth in his $120 suits and coats, but found that it was too expensive. Reason for its high price was that European textile mills were accustomed to making a large number of weaves in small quantities at high unit cost. "The high prices," says Lilli Ann's Schuman, "were not caused by high labor costs but by lack of planned, consecutive production and costly distribution methods."

Schuman showed European weavers how to modernize their methods, then placed orders with six mills for their entire output during certain months. The success of the whole plan, he believed, would depend on three rules: 1) buy abroad only what can not be obtained in the U.S.; 2) buy only in areas where the cloth has been made by craftsmen for years (i.e., broadcloth in Normandy, worsteds in northern France); 3) insist that mills pay at least 75-c- an hour to their employees.

Copycats. Under the plan, Schuman has imported $2,225,000 worth of European fabrics in the last 16 months. He estimates that he has created steady employment for 2,400 European textile workers, and has produced a $1,200,000 payroll increase in France alone. It has also paid off in another way. By applying U.S. mass-production methods, Schuman's suppliers are able to weave top-quality cloth for him at $2 to $4 less a yard than the European wholesale price. The plan has also added $3,700,000 in new business to Schuman's gross, and to handle it he has hired 240 more U.S. workers. Impressed with these results, other San Francisco competitors have begun to copy Schuman's methods, and the San Francisco Coat & Suit Association is sending a representative to Paris to study Schuman's plan. Says Adolph Schuman: "It is smart, profitable business on both sides, not philanthropy."

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