When OIA told Congress last month that they should suspend duties on certain sleeping bags because there were no commercially viable U.S. manufacturers of such bags, Harry Kazazian was quite surprised. Kazazian is the founder and CEO of Exxel Outdoors Inc., a California company that owns and operates a factory in Alabama, where 98 people crank out 1.4 million sleeping bags a year for Wal-Mart and other discounters and full-line sporting goods stores.
The company opposes one of two bills seeking to suspend duties on sleeping bags and now intends to join OIA to be more proactive in protecting its interests, said Kazazian.
“We figured we might as well join and let them know this is not the case,” he said.
OIA backed House Resolutions 5538 and 5539, which propose suspending the duty on certain sleeping bags from 9% and 4.7% to nothing through Dec. 31, 2008. They are among three duty suspension bills backed by OIA for inclusion in the biennial Miscellaneous Tariff Bill.
In a May 29 letter to Rep. Sander Levin, chairman of the Subcommittee on Trade for the House Ways and Means Committee, OIA President and CEO Frank Hugelmeyer said several dozen OIA member companies would benefit from the bills, including The Coleman Co., Slumberjack, The North Face and REI.
“OIA, in consultation with our member companies and by analyzing our own market research, have determined that there is no commercially viable U.S. domestic manufacturing of these products and that suspension of the duty would not harm any U.S. producer,” the letter stated. The letter then concludes that because there “is no commercially viable domestic production” of the bags, the duty is not serving its intended purpose of protecting U.S. industry and only raised prices for consumers.
Contacted Friday, OIAs Director of Trade Policy Alex Boian said a poll of OIA members and Google search failed to turn up Exxel, which proudly proclaims on its Web site that “we have the only significant sleeping bag factory in America.” Boian said both sleeping bag bills remain alive, but said Exxels opposition will likely kill one. He then welcomed Exxel to the OIA.
“We absolutely need their voice in the trade program,” Boian said, “because OIA policy is to not harm U.S. manufacturers and particular not an OIA a member.”
While Exxel Outdoors makes the bulk of its bags in the U.S, it imports some sleeping bags and virtually all of its tents, water sports vests and air mattresses. With more than $100 million in sales last year, the company is a major supplier of low-end outdoor gear. It has a significant OEM business, but also sells its own brands, which include X20, Suisse Sport, Master Sportsman and some licensed Disney products.
Kazazian said having a domestic plant has given Exxel an advantage in the recent downturn as retailers shift to doing more fill-in orders to mitigate inventory risk.
“Retailers are pushing for flexibility,” he said. “They want a mix of offshore and quick replenishment. Theyd rather not buy as much inventory at once and pay more for the inventory when they buy it.”
First-quarter sales at Exxel exceeded $100 million last year and rose 20% in the first quarter, Kazazian said.