Arbor's Koa-Lition Line Aims at Ecology-Minded
Wednesday, February 14, 2007

By Khanh T.L. Tran

MARINA DEL REY, Calif. — Chris Jensen wants consumers to wear eco-friendly politics on their sleeves.
Combining the popularity of T-shirts with growing demand for clothes using environmentally sustainable fabrics, Jensen is trying to make the startup Koa-Lition the go-to provider of blank T-shirts, waffle-knit thermal tops and hoodies made of bamboo and organic cotton. Set to make its first shipment in March, Koa-Lition plans to sell to companies that will screen-print their own graphics and logos on the shirts. It is a spin-off of Arbor, a 12-year-old board sport company based here that tallied more than $5 million in sales last year. Koa-Lition's sales goal is one million units in the first year.

Jensen is already in talks with music festivals such as Lollapalooza and Austin City Limits, action sports companies like Sector 9 and philanthropic-minded labels including San Diego's Quiet Hero, which promises to donate 10 percent of profits to help children in war-torn countries come to the U.S. for surgery. "This is a viable business," said Jensen, 38, who is a vice president of Arbor.

Global sales of organic cotton products increased to $583 million in 2005 from $245 million in 2001, and are projected to jump to $2.6 billion by the end of 2008, according to Organic Exchange, an Oakland, Calif., nonprofit promoting organic agriculture. In addition, The NPD Group, a market research firm based in Port Washington, N.Y., said sales of women's T-shirts increased 11 percent, to $11.06 billion last year from $9.97 billion in 2005, when sales were also up 11 percent, from $9 billion in 2004. And, indicating the appeal of blank T-shirts, Endeavor Acquisition Corp. paid $385 million in December to buy American Apparel, the Los Angeles manufacturer that sells plain Ts, tank tops and other clothing in its 150 stores as well as to other companies.
To be sure, organic cotton T-shirts constitute a fraction of the blank T-shirt market. At American Apparel, the organic cotton line accounted for $2 million, or 2.5 percent, of the company's wholesale and retail business in 2006, said Erika Martinez, the company's sustainable programs representative. Article 1, a two-year-old manufacturer that counts environmentally aware companies such as Patagonia Inc. among its customers, said organic cotton products made up 10 percent of its styles and 15 to 20 percent of total sales. Still, expanding its organic cotton portfolio with more fashionable items, Article 1 will begin shipping a thigh-length ribbed tank top in April.

"I'd like to see at least 50 percent of the line be organic cotton," said Gianna Giannulli, design and merchandising director for the Santa Ana, Calif., company.

Koa-Lition is carving a niche in the blank T-shirt industry by dedicating its entire stock to sustainable fibers. Under development for two years, the T-shirts and waffle-knit thermal tops will be made of a blend of 70 percent bamboo and 30 percent organic cotton, and the hoodies will feature an equal blend of bamboo and organic cotton. Produced in China, the yarn is scoured in Tennessee and knitted, cut and sewn in South Carolina. Drapey and sheer, the bamboo-organic cotton blend can withstand flocking, burnout and other treatments for decorating T-shirts, Jensen said.

Still, prices are lofty. Based on a minimum order of 1,200 units, Koa-Lition charges $7.25 for a women's short-sleeved T-shirt that is prepared for dye. In comparison, Article 1 wholesales a white T-shirt made of combed, ring-spun, organic cotton for $3.25, based on 72 units in a case.

Jensen said Koa-Lition's prices were higher because bamboo isn't as commonly used as organic cotton, which itself is as much as 30 percent more expensive than conventional cotton. "As [demand for bamboo] grows, the pricing will come down," he said.

Still, Steve Lake, president of San Diego's Sector 9, said he isn't afraid that consumers will get sticker shock with the bamboo-organic cotton shirts. Two years ago, when Sector 9 switched completely to organic cotton and raised T-shirt retail prices by $5 to $25, it didn't meet resistance on the sales floor, Lake recalled. Now using Article 1 as a supplier of blank Ts, Lake said he will add Koa-Lition's wares to his apparel line, which makes up 10 percent of his business, and charge $8 to $10 more for the bamboo-organic cotton shirts. "Consumers are looking for something different," he said.

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