Byline: Georgia Lee
ATLANTA — Upper-end, high-fashion fabrics, rather than basic commodity goods, have become one of the strongest growth areas for Burlington Industries, according to George Henderson 3rd, president and chief executive officer.
“We’re differentiating ourselves with better fabric for women’s wear, rather than trying to compete in the rat-race competition going on with discounters such as Wal-Mart,” Henderson said in a speech here at a luncheon meeting last week of the Atlanta Textile Club. “We’re concentrating on fashion, with value-added products.”
For example, Henderson said, in February Burlington launched Esenzia, a high-end fabric collection of worsted wools, viscose blends, gabardine and novelty piece-dyed products aimed at women’s and men’s domestic designers such as Donna Karan, Ralph Lauren and Anne Klein. The collection marked Burlington’s initial foray into the upper-end, designer apparel fabric market.
Henderson told the 80 executives attending the luncheon at the Atlanta Marriott Perimeter Center that he is “most excited” about the potential for growth in apparel fabrics, due to beneficial trade laws and retailers’ increasing savvy about maintaining proper inventory levels.
Henderson emphasized Burlington’s commitment to production in North America, sourcing close to the marketplace. “Under [the North American Free Trade Agreement], the trend toward growth in North America will accelerate,” he said. “We want to be like the produce department of a grocery store. Fashion items with a seasonal limitation need to be sourced nearby.”
He cited government statistics on U.S. garment imports from Asia, which decreased from approximately 63 percent of the apparel business in 1984 to 33 percent in 1994. Mexican and Caribbean Basin Initiative imports, however, grew from 6.5 percent in 1984 to 25 percent in 1994, he said.
Burlington’s exports were up 30 percent in 1994, he said, partially the result of recent acquisitions such as Bacova, Bacova, Va., a $40 million printed rug manufacturer. “We’re buying expertise that we don’t have,” he said.
In a question-and-answer session, Henderson was asked about the rising price of raw materials such as cotton, wool and polyester — a major concern of many of the luncheon guests. “While prices have escalated, we see a better understanding between mills, manufacturers and retailers in the past year,” he said. “[Price increases] are probably a two-year chapter in a book.”
As reported, Burlington’s biggest polyester-using fabric division, Burlington Klopman, said Thursday that due to the rising cost of polyester, it was withdrawing all product lines from sale to reevaluate pricing.
At the time, Gary Welchman, president of Burlington Klopman, said Burlington would notify customers of any changes by the end of this week.
Henderson said that while Burlington had concentrated on survival in the late Eighties due to a leveraged buyout in 1987, the company had begun growing, after going public in 1992, by building exports and developing high-fashion fabrics.
“The structure of the industry is changing due to pressure at retail,” Henderson said. “There are too many stores and too much floor space. Everyone will be forced to concentrate on a particular consumer focus.” He cited Ann Taylor as an example of the successful niche marketing to which all industry players should aspire.
With the increasing sophistication of information systems, he observed, management has a responsibility to get information into the hands of people throughout the company, rather than restricting it to upper management.
“Management should become more like coaches than bosses,” he said.