Neo Fashion closes doors

Neo Fashion Inc. announced yesterday that it will be closing its operation on Saipan at the end of July after 17 years of operation on the island.

Lawyer Rex Kosack, counsel for Neo Fashion, said the closure was mainly a result of the Jan. 1 lifting of the quota requirements for the apparel industry.

“The company has been a successful company for the past 17 years. [Neo Fashion’s decision to cease operations] is basically due to the Jan. 1 change in the law. It’s pretty clear that the buyers are going to other countries,” said Kosack.

As far as he knew, he said, Neo Fashion did not owe any back wages to its employees. It is also the company’s intent to pay its workers until the last day of operation.

“This is not a company that failed to pay wages for the last three weeks because it does not have money. The company has money; it’s not broke. It’s a business decision that it had better shut down before it does go broke,” he explained.

The garment manufacturer went into business on Saipan on March 9, 1988. It was the first factory built in Afetna, located several blocks to the east of Beach Road on land leased by Susan P. Schwarz.

Neo Fashion Inc. is a joint venture of a Japanese garment trading company, Doko (Saipan) Inc., which is owned by Doko International Corp. of Osaka, Japan, and a Korean garment producing company, Geo Inc. It has primarily produced women’s suits, jackets, and slacks in its 17 years of operation. It has manufactured apparel for brands such as May Company, Jones New York, J.C. Penny, and Liz Claiborne.

Its president for the past 14 years has been Dal-Eon Chung.

“We are very sorry that we have to close down this month, but we just are unable to compete with garment manufacturers from other countries due to their extremely low labor costs. We simply have no orders for future work,” said Chung.

In the past, Chung has been a member of the board of directors of the Saipan Garment Manufacturing Association.

Neo Fashion employs 405 workers. The largest number, 259 workers, are from Jilin province, China. Seven are from Vietnam, six from Korea, and three are from the Philippines.

The company hires 78 local workers and 52 workers under temporary worker authorizations.

“We have obtained return airline tickets for our regular nonresident workers and they will be paid and repatriated at the end of the month,” said Chung.

Neo Fashion’s owners are looking at the possibility of starting again in Vietnam, one of the few counties able to compete effectively with the China market.

Three other Saipan garment manufacturers have closed down this year: Mariana Fashions Inc., Sako Corp., and La Mode Inc. (Agnes Donato)