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Gemini Fashions in bankruptcy

Winnipeg outerwear maker may be liquidated

By: Martin Cash

Posted: 12/19/2008 1:00 AM | Comments: 0

Gemini Fashions, one of Winnipeg's oldest and most successful garment manufacturers, is bankrupt, sending shock waves throughout the city's fashion industry.Court of Queen's Bench ordered the respected outerwear manufacturer into bankruptcy on Tuesday.

Gary Steiman, the company's principal owner and one of the founders of the company 38 years ago, said in a brief interview, "Gemini has been put into bankruptcy. We were a successful company for 37 years, but the last year and a half have been a disaster for everyone concerned."

Gemini, which makes such brands as Osh Kosh B'Gosh, Mobius and Tsunami, was one of the first of the Winnipeg garment makers to set up manufacturing overseas and became part-owner of a large factory in Bangalore, India, which employed about 1,800 people.

Steiman, who was inducted into the Manitoba Manufacturers' Hall of Fame a couple of years ago, was regarded by many as one of the sharpest operators in the business.

PricewaterhouseCoopers is running the company as trustee. It is not known if intentions are to continue operating it or if Gemini will be liquidated. A spokesperson for the trustee was not available on Thursday.

Peter Feuerstein, president of the Manitoba Fashion Institute and vice-president of Winnipeg-based Sterling Glove, said the failure was a surprise.

"Things are very competitive, but it's no different than any other industry," he said. "We have been hard hit by the economy. People who concentrate on Western Canada and the Midwest U.S. are faring better than those who sell in Eastern Canada and the Eastern U.S. where there are big problems."

Industry sources said they believe Gemini was doing most of its sales in the United States.

"I have a number of acquaintances in the business and some are working 14 hours a day trying to keep up with production and there are others who are completely dead," Feuerstein said.

David Rich, president of Richlu Manufacturing, another Winnipeg outerwear manufacturer, said the industry is under the gun.

"The garment industry is in tremendous turmoil," he said. "Everyone is under huge pressure. It is tough for all of us."

But another industry official pointed out that whereas Richlu continues to make about 40 per cent of its product in Winnipeg, Gemini had moved 100 per cent of its production offshore. One said he thought the volatility of the Canadian dollar might have played a role in Gemini's demise.

Many people in the industry point to the decision made in Ottawa at the beginning of this decade to eliminate import quotas from the least-developed countries as the beginning of a major transformation for the Canadian industry. Since then, they say there has been a large increase in the volume of cheap imported garments into the country.

It also signalled the end of most Canadian production. In Manitoba alone, more than 4,000 garment manufacturing jobs have disappeared.

Gemini had several hundred Winnipeg employees at the beginning of the decade. When the company was placed into receivership this week, it had only accounting and business development staff in Winnipeg, likely far fewer than 100, as well as workers at a distribution centre near the Winnipeg airport.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition December 19, 2008 B6

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About Martin Cash

Martin Cash joined the Free Press in 1987 as the paper’s business columnist.

He has spent two decades chronicling the city’s business affairs.

Martin won a citation of merit from the National Newspaper Awards in 2001 for his coverage of the strike and subsequent multi-million-dollar union settlement at the Versatile tractor plant. He has also received honours and awards for his work on agriculture and technology development in Manitoba.

Martin has written a coffee-table book about the commercial and industrial make-up of the city, called Winnipeg: A Prairie Portrait.

Martin Cash on Twitter: @martycash

martin.cash@freepress.mb.ca

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