Everything You Always Wanted to Know About Portugal but Were Afraid to Ask

More and more European and American brands are manufacturing in Portugal, and we wanted to know why. What is it about the industry there that has made it not just the preferred hub of Western Europe, but one of the premier production outposts for the 21st century?

First, some history. Portugal’s garment and footwear industry dates back to the 1700s, but it never had the cache or name recognition of Italy’s or France’s. And by the later part of the 20th century, the country primarily produced large quantities of low quality product in an effort to stay competitive. As Jose Neves, the Portuguese founder of Farfetch, told Business of Fashion in 2015, “In the ‘90s, Portugal was the ‘China of Europe,’ with very low prices, lower quality and mass production, mainly targeting European markets.”

[image via Outlier]

But that changed when Portugal joined the EU in 1999. Suddenly, they had to abide by the zone’s detailed regulations, which caused the cost of labor to skyrocket, making the country’s high volume/low cost model unsustainable. And in the same way that a fast food restaurant couldn’t suddenly start charging steakhouse prices, a lot of the factories that were pumping out cheap goods were forced to close.

But instead of killing the country’s garment industry, those closings honed it. What remained – a skilled workforce and manufacturing footprint – coupled with Portugal’s central location and relatively low cost of living, proved the perfect foundation on which to build the high-end apparel apparel industry the country has today.

[image via Epaulet]

“A lot of Portuguese factories modernized in the past 15 years to accommodate production from the likes of Zara and other large European chains,” said Mike Kuhle from Epaulet, who do the majority of their footwear and suit production in the country. “I think that (1) lower cost of living, (2) modern factories with newer machines and automation, and (3) a business-oriented culture has made them really competitive.”

Competitive indeed. According to the Portuguese Textile Association, today, there are over 6,300 companies (many family-owned) providing over 120,000 jobs in the country, and their efforts make up about nine percent of the nation’s exports.

[image via Albam]

“The factories tend to be a bit smaller, which makes it easier to work on small run projects and have consistency within the team,” said Alistair Rae, of Albam Clothing. “Minimum order quantities also tend to be a bit friendlier in Portugal… and the handwriting of the factories gives a unique, crafted feeling product, so you don’t get a homogeneous end result.”

A Day’s March co-founder, Pelle Lundquist, echoes that sentiment. “What we’re looking for is quality and short lead times… We learned that many Portuguese producers are famous for quality and flexibility, probably because a lot of producers are family owned companies with qualified staff.”

[image via A Day’s March]

And that rare combination of flexible production and quality output makes a huge difference, because it allows smaller brands to be nimble with their offerings.

“Lead times are shorter, the transport is shorter, the transport is more efficient, [there are] less CO2 emissions,” said August Bard Bringéus, co-founder of ASKET, who cut and sew the majority of their products in Portugal. “Cultural barriers are lower, language is more similar, easier to understand, [which] makes it easier to work together.”

[image via ASKET]

And, for European brands like Bringéus’, there’s also the added bonus of proximity. “We can actually be there in person,” he said. “I’m there several times a year seeing all the factories, all the factory owners, talking to the seamstresses — and that just gives a tremendous amount of comfort and the ability to build relationships in a way that would be impossible working overseas.”

Bringéus also notes that those same Eurozone regulations that forced the closure of Portugal’s low-end factories now ensure that the still-operating ones adhere to strict emissions, labor, and waste disposal standards. “[The regulations] mean that we automatically fulfill a degree of hygiene factor,” and that “hygiene factor,” he argues, benefits everyone in the value chain, from factory worker to consumer.

[image via Outlier]

Of course, even with its wide-ranging strengths, Portugal’s textile industry does have its downsides.

“The factories close for a month in August, which is great for the workers, but sucks in terms of production scheduling.” said Abe Burmeister of Outlier, who moved their shirting production to Portugal after they were unable to find a factory in their native NYC that could scale-up with the brand. “When we looked at where the best shirts were getting made, Portugal was up at the top of the list,” says Burmeister. And it wasn’t long until they began producing their pants and shorts there as well. As for the yearly month-off, says Burmeister, “It’s manageable but not ideal.”

[image via A Day’s March]

Additionally, Lundquist of A Day’s March has found that innovative fabrics and technical outerwear aren’t the easiest to come by. “I don’t believe Portugal is the best place for innovation and development. We’re looking for producers to do technical garments and I don’t think we’ll be doing that in Portugal. But I might be wrong, I hope I am.”

The same is true for denim production. As ASKET prepares to add jeans to their collection, Bringéus has found that Portuguese-milled denim doesn’t measure up to Japanese (“that quality is just on another level”). But he’s still planning on cutting and sewing the jeans in Portugal.

[image via Epaulet]

Despite all of that, however, the set of circumstances that allowed Portugal to rise from a second-tier European manufacturing hub to one of world-class prominence seems to be sustainable.

“I think that they have an ideal combination of cost, quality, and reliability,” says Epaulet’s Kuhle. “Portugal tends to produce items at a very high quality for the price… If there’s a place in Italy that can equal their level of work [for the cost], I haven’t seen it.”