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Flaunting Its Fibers

Cashmere House, owner of the Tse label, is helping China evolve from a supplier of the downy raw material to a producer of haute couture

May 28, 2006|Evelyn Iritani | Times Staff Writer

Augustine Tse is on a roll.

His new designer, Tess Giberson, is getting rave reviews. Sales of his cashmere jogging suits and hand-knit sweaters topped $100 million last year. And Tse Cashmere got a prominent mention in writer-director Nicole Holofcener's female-buddy movie "Friends With Money."

But Tse (pronounced "say") isn't satisfied. For centuries, China has provided the bulk of the precious cashmere fiber used by storied brands such as Scotland's Pringle and Italy's Loro Piana to produce the uber-expensive garments coveted by royalty and Hollywood elite. Now, he said, it is time for China to assume its rightful place as heir to the global cashmere throne.

"Over the next 20 years, the designer labels in Europe will continue to prosper but the production in Europe will be very, very minimal," said Tse, whose Chinese-made garments are carried at upscale stores such as Henri Bendel and Fred Segal. "The made-in-France or made-in-Italy label will be gone."

It took decades for Japanese and South Korean automakers and electronics firms to win over America's pickiest consumers. China is hoping to accelerate that timeline, helped along by globe-trotting entrepreneurs who bring a sense of patriotism to their achievements.

But perceptions die hard, particularly in the status-conscious world of luxury commerce. Michelle Dalton Tyree, a former Women's Wear Daily editor who bought her first Tse sweater more than a decade ago, said the shift of the luxury cashmere trade to China was a "dirty little secret" that most designers and their customers preferred not to discuss.

"I hate to say it, but they don't really want to know that," said Dalton Tyree, whose newly opened La Brea boutique, Iconology, will carry several pieces from Tse's fall collection.

Tse's climb from mass to class provides a window into China's transformation from a poor, isolated country to a manufacturing dynamo.

For centuries, China and neighboring Mongolia, which produce nearly three-quarters of the world's cashmere, sold almost all their raw fiber to Europe and the United States. Western mills developed the equipment to process the fragile fibers and the Europeans created the premier cashmere brands.

"China made everyone very, very rich," said Tse, 58, the chief executive of Cashmere House Inc., owner of the Tse Cashmere label.

Kashmir goats thrive in the harsh climate of Xinjiang province, a sparsely populated mountainous region of northwestern China. The hardy goats produce a layer of the downy cashmere as insulation underneath their coarse outer fur, and the fragile fibers are collected by combing the animal. It takes four years for one goat to produce enough cashmere to make a sweater.

Because of its scarcity, the highest-quality white cashmere costs about six times as much as the best wool.

Under the Communists, officials in Beijing controlled the raw cashmere trade, and most of it was sold to foreigners. In the late 1970s, after China began moving toward a market economy, Tse said, Xinjiang provincial officials approached Tang Hsiang Chien, one of Hong Kong's most powerful industrialists, about becoming a partner in a cashmere factory.

China's leaders were anxious to create jobs in Xinjiang, home to more than a dozen ethnic groups and a Muslim separatist movement. The late Deng Xiaoping, who spearheaded China's reforms, gave the green light to the project, which became the country's first foreign joint venture.

The Chinese government promised Tang his factory would get a steady supply of high-quality raw cashmere and some of the coveted quota it needed to export garments to the United States and Europe. In return, Tse said, Tang's company agreed to improve the quality of Chinese cashmere so it could compete with European and American products.

Tse, who worked in one of Tang's Hong Kong companies, was given the daunting task of building the factory in Urumqi, Xinjiang's capital. The factory site was a swampland, and building materials had to be brought in from Beijing, a nearly four-day train ride. Most of the prospective employees were nomadic tribespeople who had never worked in a factory.

The biggest hurdle was acquiring the know-how and equipment to produce the cashmere. Tse traveled more than half a dozen times to Europe, but the mills there refused to join the project, fearful of doing business with a Communist country and arming a potential competitor. Tse finally found a Japanese cashmere company, Toyo Boshi Kogyo Co., willing to provide technology and training.

Xinjiang Tianshan Wooltex Stock Co., which contained one spinning mill and two knitting factories, opened in 1981 with 1,200 employees. Tse started by producing sweaters for local shops and the government-run Friendship Stores that sold to foreigners.

It took more than a year of transpacific trips before Tse landed his first order from a New York retailer. But by the mid-1980s, he said, Xinjiang Tianshan was the largest supplier of low-priced, private-label cashmere sweaters to U.S. retailers.

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