Meanwhile, the Forsyth company itself has been engaged in its own battle for survival. Born in Waterloo in 1903, the company long ago changed ownership and moved its head office to Mississauga as it morphed into an apparel business that imported most of its product from Asia.
The Cambridge plant on Savage Drive was its last manufacturing operation in Canada, but when the federal government ended a program late in 2012 that waived duties on imported textiles if a firm kept at least one production facility here, its fate was sealed.
The loss of that program and debts amassed when Forsyth purchased Premium Wear Inc. of Minnesota in 2007, only to see it go out of business in 2010, forced the company to seek court protection from creditors in February.
BDO Canada Ltd., the monitor appointed by a Toronto court to restructure the company, has now proposed a plan to keep Forsyth in business and pay at least some of the money owned to unsecured creditors.
Under the plan, trade creditors would recover 24 per cent of costs, employee claimants 26 per cent and Manunion, Forsyth’s Hong Kong manufacturer, 46 per cent. Manunion would also share in future profits to recover more costs.
For its part, Forsyth has trimmed management salaries, downsized rented space in Mississauga, sold off some inventory, terminated 15 employees, found cheaper digs for its New York City office and put its warehouse in Georgia up for sale.
The changes will leave it with around 50 employees.
Creditors will vote on the plan June 26 at a meeting in Toronto. If approved, it will go back to the court for approval on July 11.
Meanwhile, production at Canadian-Made Apparel is already exceeding expectations since it opened on April 5.
“We are already at the production level that I projected to be at by the end of our first year,” founder and president Rick Droppo said in an email.
Rick Droppo, founder of Canadian-Made Apparel.
The plant, which makes the same dress and sport shirts and uniforms as Forsyth, employs 40 former workers from the Forsyth plant in Cambridge.
The launch of Canadian-Made Apparel has touched the hearts of many Canadians, says Droppo, the former general manager of Forsyth in Cambridge.
Since starting his company, he’s been contacted by hundreds of supportive citizens, small businesses seeking help and large businesses re-assessing their sourcing strategies.
The sad part is that the federal government has done virtually nothing to help the apparel industry in Canada, he says.