Popularity of apparel expands international markets for Alpha IndustriesJanuary 28, 2012 12:12 PM
by Joan Tupponce
Photos courtesy Alpha Industries Inc.
No one at Alpha Industries Inc. ever guessed that the MA-1 flight jackets and M-65 field jackets the company made for the U.S. military would one day be a hot item at retailers such as Nordstrom and Saks Fifth Avenue. Yet that’s exactly what happened for a firm that got its start in a basement and has since grown into “the king of military-inspired apparel and military-style clothing. That is what we are known for internationally and domestically,” says Lee K. Aaron, Alpha’s president of international operations.
Now based in Chantilly, the company started in 1959 in the basement of a rented Knoxville, Tenn., factory as a contract manufacturer, selling military apparel to the U.S. government. “Our specialty was outerwear and pants. We were one of the largest manufacturers of MA-1 flight jackets and M-65 field jackets for the military,” recalls Aaron.
Since its inception, the company has sold items to the surplus market through outlets such as Army-Navy stores. Those items began to gain popularity in the late 1970s and early 1980s, especially in international markets. “People all over the world wanted to be like Americans, and there is nothing more American than wearing a military jacket,” notes Aaron.
Meanwhile, Alpha got a trademark for its name, and began to use it in all labeling, a move that would pay off later as it expanded to overseas markets. Alpha’s business changed significantly in 1992 when U.S. military contracts began to dwindle. That’s when it made the turn to becoming a branded apparel company. “We do very little U.S military anymore, but we are doing business with other foreign militaries, including the Colombian Army, the Air Force of Singapore and the Taiwan and Argentine air forces. All of that is approved and sanctioned by the United States,” says Aaron.
Today, much of the company’s business comes from commercial customers. It sells direct to retailers such as Urban Outfitters, Zappos and Amazon as well as Nordstrom and Saks. “We also sell our clothing on our own website and to centralized retail distributors in other countries,” Aaron says.
Alpha relocated its headquarters from Knoxville to Fairfax County near Vienna 25 years ago. “That is where our business was being done,” Aaron says. It moved to Chantilly eight years ago, because the company needed more space. “Also, Chantilly put us close to [Washington Dulles International Airport,] which would be convenient for people flying in and out of the country.”
The company has 35 employees in Chantilly, which lies in western Fairfax County. Alpha also employs up to 30 employees in its factory/warehouse in Knoxville. It has small offices based in Seoul, South Korea, and Qingdao, China. Because of its global presence, Alpha is committed to understanding its markets. “Each is different,” Aaron says. “What we perceive as correct here doesn’t necessarily transfer to most international markets.”
The company’s largest market is China, followed by Russia, Japan and the European Union. Thirty-five percent of its sales are domestic. The remaining 65 percent are international. “We are growing our domestic business, and our international sales are growing as well,” says Aaron, who travels to Moscow and St. Petersburg two to three times a year. “We have been dealing with Russia on a direct basis for the last six years. We’ve had contacts there for 15 years.”
Aaron has discovered that Russians show more respect for visitors who speak their language and know the culture. “That respect will earn you a much better business relationship,” he says. “Understanding the political nature and the nuances and logistics of how to do business in and out of the country is important. It’s not as simple as taking an order and shipping it. There are many components to it.”
People attempting to speak Russian should do so only if they feel comfortable having a conversation. “You don’t want to mispronounce words because they have multiple meanings,” says Aaron, who also points out the importance of body language. “You don’t want to slouch or nod your head the wrong way. Be as courteous and polite as possible and be mindful of yourself.”
Aaron finds business executives in Russia to be very straightforward. “They can be stubborn,” he says. “They don’t like to negotiate. Communication is of the utmost importance.”
He suggests having someone on staff with cultural as well as language expertise. “If you are really going to make an investment in these markets, you have to have somebody in-house that can walk you through all of the nuances.”
Another crucial tip: Businesses going into a foreign market should ensure all rights to its intellectual property in that market before entering negotiations, sales or business dealings. “That is one of the biggest mistakes that companies make when they expand internationally,” Aaron says. “You need to understand the legal systems and ramifications in each country.”
There is one other skill Aaron says businesspeople need to cultivate when they visit Moscow. “They have to learn how to drink vodka. In Russia, they drink it straight. You will be served it at all meetings — morning, noon and night.”
Aaron suggests that anyone traveling to Moscow visit the Kremlim. It includes four palaces, four cathedrals, the Kremlin Wall and Kremlin towers. It is the residence of the president of the Russian Federation. Other must-sees include Red Square and the ornate Saint Basil’s Cathedral. Moscow also is home to the Bolshoi Ballet and the Moscow International House of Music.
As the capital of Russia, Moscow is a major political and financial center. Forbes magazine says Moscow had 79 billionaires last year, more than any other city in the world. Moscow’s economy is boosted by a variety of industries, including textiles, chemicals, energy production and software development. Companies with a Moscow headquarters include ABBYY, a provider of document recognition and linguistic technologies and services; Akella, which develops, publishes and distributes computer games; and Kaspersky Lab, the world’s largest privately held Internet security company. Moscow also is home to the Cristall distillery, which produces a variety of vodkas, including Stolichnaya.
Steeped in history, Fairfax County features Mount Vernon, the home of U. S. President George Washington and his wife, Martha. A visit to the historic estate includes the mansion, a working blacksmith shop and the George Washington Pioneer Farmer site, a 4-acre demonstration farm. Other attractions include Gunston Hall, a former tobacco and corn plantation owned by George Mason IV, who drafted the Virginia Declaration of Rights. The Steven F. Udvar-Hazy Center near Washington Dulles International Airport contains the James S. McDonnell Space Hangar where the Space Shuttle Enterprise and the Gemini VII space capsule are housed.
Fairfax County is home to nine Fortune 500 companies, including Capital One Financial, Gannett, General Dynamics, Northrop Grumman and Science Applications International Corp. (SAIC). The county has more than 6,700 technology firms that include 24 of the top 50 largest technology employers in the Washington, D.C., region. It has 45 non-retail companies with 1,000 or more employees and 14 companies on Deloitte’s Technology Fast 500 list. Largest employers in Fairfax include management and technology consulting firm Booz Allen Hamilton and Inova Health System, both with 7,000 to more than 10,000 employees.
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