The Fabric of Hope
Posted on March 8, 2010 by
The new Ghisilaine ensemble from Welspun/Christy. Textiles vendors are optimistic that the industry will begin to recover.
By David Gill
With the New York Home Fashions Market set to go, manufacturers of home textiles feel that they have some reason to be optimistic about business this year.
The showroom market is taking place as 2010's first quarter comes to a close. During the first quarter, there were signs that this year would bring to an end to the downward spiral in the textiles industry experienced last year and the year before. Vendors interviewed by HFN said sales ticked up slightly in this quarter, as retailers strove to fill the inventory cupboards that were nearly bare in 2009.
In addition, some significant positives emerged from last month's New York International Gift Fair, the textiles industry's first U.S. trade show of the year. According to GLM, owner and manager of the show, attendance at the winter Gift Fair rose by double digits over last year's winter Gift Fair, topping 35,000 and exceeding the company's expectations for attendance.
Anecdotal evidence about the Gift Fair found hopeful signs beyond the extra attendance. One textiles executive said, "I found both retailers and exhibitors very upbeat. People were packing the booths, and people were buying."
Based on this and the fact that retailer inventories are low, 2010 should be "conservatively a good year," the executive said. "I think we're done with the shrinking of the retailer customer base. The holidays also went very well for the retailers. The fuel for growth this year is the attitude. Happiness breeds happiness."
The attitude among other textiles executives can be described as a wary hopefulness.
"Things are a little better, but we're still on a business watch," said Larry Queen, president of AQ Textiles. "I'm optimistic in general. Retailers are managing their business better in terms of inventories."
There is, however, a flip side for Queen regarding a possible recovery for the industry. "I'm concerned about cotton prices," he said. Indeed, prices for cotton spiked by approximately 40 percent from July to December of last year, according to figures from the National Cotton Council of America. "You have a monopoly on (cotton) yarn in India plus huge demand in China," Queen said, "and this has led to shortages of cotton in China, Pakistan and the U.S. Also, speculators have driven cotton pricing up based on these shortages."
Still, AQ is forging ahead during this month's market. The company plans to launch its new licensed line of bedding under the Alexander Julian label--a return to the bedding arena by the designer, whose bedding license was the property of Dan River, where Queen served as an executive for many years. In addition, Queen said AQ would present an expansion of its licensed bedding program with Eileen West, which the company debuted at the New York Home Fashions Market last September.
Although the U.S. economy as a whole is recovering slowly, unemployment remains stuck at about 10 percent despite some recent slight improvements, and the housing market has been inconsistent in trying to emerge from its trough. For this reason, some textiles executives believe that business in this industry won't begin to improve until later this year.
"I think the economy won't start to turn around in a meaningful way until the fourth quarter or even 2011," said Barry Leonard, president of Croscill/Ex-Cell/Glenoit. "I don't think that retail has turned around the way some people think. It's a little better, but the margin structure continues to be tight."
Leonard is anticipating a highly competitive situation in the industry this year, with vendors straining to keep and perhaps expand their market share. This would mean, in spite of the price jumps in cotton, that some vendors will look to price their products lower as they strain to keep and/or expand their market share. "Some players in the industry can make money even with lower prices because of their SG&A structure," Leonard said.
For those vendors that want to hold the line on pricing, product innovation will be the key, Leonard said--innovation being what markets are all about, of course. "Product innovation will be what drives sales this year, along with the shape of the economy," he said. "It will be our focus during the market. It'll be something that sets a product aside from what is in the marketplace today--not necessarily in terms of design, but more about functionality. Focusing on product innovation will drive profits as well as sales."
This month's market will be a landmark for Croscill/Ex-Cell/Glenoit. The company will formally debut its combined showroom at 295 Fifth Ave., room 612, during the market.
Design, color in particular, will be a focus for other vendors. And the colors that will be seen during the market will reflect the optimism that has taken hold in the industry. "In any color family, cheerful shades will be big," said one executive. "Aqua, yellow, bright blues will be big. Red, which I think you'll see as an accent, is always an optimistic color."