New York Threads

December 23, 2011

The upper floors of Building 1165, on 27th and Broadway, have been a hidden hub for wholesale T-shirts for nearly 30 years. Many tenants say high rent, volatile cotton prices and a down economy have threatened business [VIDEO]. / Photo by Teresa Mahoney

Naveed Ahmed adjusted his thick bifocals as he leaned into his lap with an X-acto knife. He was separating the perforated edges of a plastic decal, carefully peeling the excess material around several rows of lettering that read, “Jesus Was a Capricorn.” He placed the completed sheet in a pile on the four-tiered, ceiling-high storage shelf disguised as his desk. He repeated the process—59 times—to fulfill a custom-printed T-shirt order for a small, New York-based clothing company set to launch this holiday season.

Though Ahmed has mastered the detail-oriented process of custom printing—from decal-making to heat-pressing—he didn’t always perform such laborious work.

Ten years ago, he started a wholesale plain T-shirt business, similar to what the nearly 25 other tenants run in this five-story landmark building at 27th and Broadway.

But over the last two years, Ahmed’s sales have fallen about 60 percent. So he decided to downsize from a 1,500-square-foot space to his current one which is a tenth the size. T-shirts on display drape over one another like large shingles, swallowing up the tiny work space.

Ahmed also decided to launch an online store and start printing custom logos on blank shirts. He found a good deal on second-hand printing equipment and thought that offering this service would set him apart from his competitors.

“Since I had to do this business, since I know only this business, this was my only opportunity to specialize in something,” Ahmed said. He believes he can succeed because his custom-printing operation has drawn new clients: emerging designers, family reunions, funerals, restaurants and other small businesses.

He quickly earned a reputation for his fast turn-around time and willingness to print any quirky saying. “I never ask why, I just make it,” he said.

Ahmed is not the only one trying to survive in a business that has traditionally catered to the T-shirt industry’s fringe: tin-roof souvenir retailers, mom-and-pop shops, convenient stores and blue-collar workers who need something to wear on the job. Almost all tenants in the building say business has dropped by about 50 percent in the last two years.

But many are not as flexible as Ahmed: “Other business owners are used to fast transactions without interaction. Not everyone likes working personally with customers,” Ahmed said.

That’s because when these wholesalers entered the business, customer service was secondary to low price.   

In the 1980s, the immigrants who entered the business—most of them from India, Bangladesh or Pakistan—discovered a simple, vertically-integrated business model: They capitalized on home-country ties to cut costs. A successful wholesaler in this business negotiates cotton prices in Pakistan (currently, the world’s fourth-largest cotton producer), and manufactures the T-shirts in Bangladesh, the cheap labor source. For a low-margin commodity business, this tag-team effort is critical to staying competitive.

As word-of-mouth spread among these communities, wholesale T-shirt businesses trickled in over the years, turning Building 1165 into the dingy, yet practical home for a globally recognized T-shirt importing hub.

Graphic by Teresa Mahoney

However, Building 1165 wasn’t always the emporium it is today.

According to the New York City Landmark Association, the building was constructed in 1906 as the Coleman Hotel. This was a period when the area was recognized for its luxurious lodging and entertainment to accommodate city’s growing population and tourism. In 1923, the building evolved into a commercial establishment and by the 1940s was taken over by a community of vendors, most of them Jewish.

In those days, the entire fifth floor sold kitchen appliances to such department stores as Macy’s and Sears, according to Frank Vella, superintendent of 30 years and friend of the third-generation landlord. The rest of the building sold men’s top hats, clothing tags and other sewing notions.

Ornamental crown molding is the only remaining trace of any elegant history.

The center courtyard is littered with loose garbage and blue office water jugs. Large, Sharpie-drawn numbers contrast the peeling, stony-blue paint to identify each level. Stacks of compressed cardboard and garbage bags filled with industrial-quality zip ties sit in neat piles at the base of each fading fluorescent-lit staircase. A half-dozen dusty, steel hand-trucks rest in a single file against each of the narrow hallway walls, dried leaves wound in their wheels. Clear plastic bags of dozen-unit T-shirts fill shelves to the ceiling to create small fortresses within each of the approximately 700-square-foot rooms.

Despite nearly 30 years of success as a T-shirt hub, rising expenses and a poor economy began to hurt business in 2009. And in March 2011, a hard blow knocked these business owners into survival mode as flooding in Pakistan and heavy monsoons in India ruined cotton crops. As a result cotton, prices tripled—reaching their highest price in 30 years.

Graphic by Teresa Mahoney

“It’s very quiet now,” said Mohammad Gazy, owner of Gazy Tees. For much of a business day, he said, “I watch the newspaper.”

He tabs between world news sites and Bengali YouTube videos on his laptop, while reviewing declining sales figures. The high-pitch whistle of the indigenous bamboo flute and equally high-pitched vocals of Bengali folk-star, Momtaz Begum, vibrate from his speakers. His impatiently taping fingers harmonize with the scratching of dulled mice claws between raised ceiling tiles patched by duct tape and cardboard.

The quiet Gazy refers to is the nearly 40% drop in sales he’s experienced over the last two years. Gazy entered the business in 2000 shortly after arriving in the U.S. from Bangladesh. Room 404 has been his storefront ever since.

When he started, Gazy used to see sales of about $6,000 to $7,000 a day, but in the last couple of years, he’s seen lows of $500 to $1,000 per day. 

Gazy said his customer base has not only dropped by about half, but many weekly orders have shrunk to monthly. Quantities have also dropped. Thousand-dollar orders have fallen to $200 to $300. To compensate, he raised prices 25 percent or more, so a dozen white “Mike” brand T-shirts went from $8 to $10, and a single “Skyland” brand sweatshirt went from $20 to $30.

The landlord and superintendent understand the difficulties, and some months they offer a 10% discount. But rent continues to rise. Everyone in the building has a one-year lease, and when it expires most tenants can expect about a six percent increase every year. When Gazi entered the building 11 years ago, he paid $3,000 a month for his space—the room with the mice in the ceiling. Now he pays twice that.

He earns about 10 percent profit per sale, which means he needs about $60,000 a month in sales to make rent every month—a challenging goal when facing $500 daily gross sales.

Like many wholesalers, Gazy has a warehouse in New Jersey where he keeps most of his back stock (and pays significantly cheaper rent—$1,500 for 2,500 square feet). However, his current location in the center of the city draws the walk-in customers a warehouse wouldn’t.

Mohammad Gazy, owner of Gazy Tees, has been a T-shirt wholesaler for almost ten years. He said next summer’s sales will determine whether he will keep his business. / Photo by Teresa Mahoney

“I will wait one year,” he said, explaining that the summer months are historically the best time for sales. If he doesn’t see improvement, Gazy said he’ll give the business up and get a job. “It’s very sad, I never worked for nobody.” 

Kamal Ahmed, owner of Rafia International in 504, also feels the strain. “Two or three years ago, there was no time to breathe,” speaking of the orders he filled all day long. “We’re just surviving right now.”

Ahmed has been in the U.S. since 1994. He spent 10 years working at a pancake house, never earning more than $400 a week, but was able to save $15,000 to start his business.

Ahmed feels how price-sensitive customers are: “If I rise one penny today, they buy somewhere else. The item is cheap, the customer is cheap.” Instead of lowering prices and forgoing margins, he acquired a license in 2008 to sell New York’s iconic “I Love New York” logo T-shirt (a tedious, paper-work heavy process). About 10 percent of his business now comes from these T-shirts, and 90 percent comes from plain T-shirts.

“A business is better than a job…you’re always working harder when you’re working for someone else,” he said.

Abdul Sakho is one of the small-scale resellers who quit his job to enter the business. He came to the U.S. from Senegal in 2002 and worked as a cook at Popeye’s until about year ago. Tired of the long hours and low pay, he now sells belts, thermal underwear and t-shirts at a weekend flea market in New Haven, Conn.

“A friend from Canal Street told me, ‘Come to Building 1165,’” he said, and now comes to the building about twice a week, buying a dozen shirts at a time. Sakho said this business offers him something his old job did not: “It’s about freedom. Nobody can say, ‘Go take that food over there.’”

However, for some tenants, the liberty that came with being their own boss is in jeopardy. Five years ago, aspiring T-shirt wholesalers struggled to find an open room in Building 1165; this year, three tenants decided not to renew their leases. “In this type of business, people don’t leave very easily. If they do, it means they’re really struck hard [by declining sales],” said Ahmed, the T-shirt printer.

He explained that for the past three decades these businesses have succeeded by catering primarily to a niche market that includes low-income, minority shoppers.

The storefronts in Building 1165 are filled with enough T-shirts to serve local, walk-in customers. However, many tenants store their back stock in large warehouses in New Jersey to save on rent. / Photo by Teresa Mahoney

“A T-shirt is poor man’s dress,” said Ahmed, “If you work in a kitchen or you’re a painter, your clothes get dirty quickly so you wear a cheap T-shirt once and throw it away. It’s more economical buying [a T-shirt] here for $2 and throwing it away than even doing laundry.”

The days are over when a steady flow of immigrants left the building, tossing bulging black plastic bags over their shoulders for their Canal Street souvenir store, bodega or personal use.  

As the not-so-silent eyes and ears of the building three decades, Vella notes that he’s witnessed four recessions. He said the issues his tenants face are just part of business. He then set down his leather tobacco pouch and pipe to illustrate his point on the door.

“The business goes in cycles,” he said, sketching an abstract bar chart, marking shorter and longer lines on one of the fifth-floor storage rooms. “Some days you sell nothing, other days you sell $1,000. Don’t listen to them. You see those empty boxes? That means business.”