LOS ANGELES — One-stop shopping is the new sales mantra in the textile world.
This story first appeared in the April 22, 2003 issue of WWD. Subscribe Today.
As exhibitors prepare for the upcoming Los Angeles International Textile Show, which runs at the California Market Center April 28-30, many are readying to hawk their full-package garment production services, in addition to their fabrics.
Survivors in a battered industry, these textile companies either are reinventing the way they do business, or simply touting a value-added component for their customers as the country’s textile and apparel imports from China and Vietnam soar, leading U.S. mills to shutter and jobs to disappear.
Charles Bremer, vice president of international trade at the American Textile Manufacturers Institute, called full-package production “the new buzzword, the new god whose altar we worship. Somebody assumes all the risk, all the work and all the liability and retailers don’t want to do it and importers don’t either. Everybody expects us to do it.”
Despite Bremer’s awareness of the downside to these ventures, the results haven’t been half bad, textile executives said.
Ken Cohen, president of New York-based converter Kenco, said he implemented his full-package program to benefit from new trade concessions. For instance, the Andean Trade Preference and Drug Eradication Act took effect October 2002, eliminating duties averaging 18 percent on apparel products from the region. Cohen sources his garments from Columbia and Peru, where he’s producing junior and misses’ clothing, as well as men’s, with a focus on pants. To date, eight of his customers have signed on for full-package deals.
“It offers us survival,” said Cohen, noting his sales were flat in 2002. “It appears, based on initial orders, that we’ll be up 30 percent this year.”
Though financing is a hurdle in the apparel industry, Cohen said his banks are behind the venture. Still, he has no delusions about his company’s true direction.
“We’re not in the garment-selling business. We’re basically contractors, in effect producing what they want,” he said. “Our clients have 40 pages of specs on the garment, sizing and interlinings, and we follow their instruction, so we’re home free. Our specialty is presenting fashion fabrics they can use for their garments.”
In six months, Hoffman California Fabrics, a Mission Viejo, Calif.-based designer and converter, already has amassed a client roster of seven brands for its new full-package program. The surf-oriented firm takes the specification sheets, sketches a prototype from a customer and converts the information into a fabric selection, product sample and, finally, a clothing order.
“We’ve gotten backlogged. We had only one client when we started,” said Jerry Lund, Hoffman’s director of finished goods, who was brought on board last year to manage the program.
Another believer in packages is 65-year-old Robert Kaufman Co. in Gardena, Calif. The woven-fabrics importer has hired two people to help roll out the new program in the next few months, according to sales executive Ron Kaufman.
Kaufman wants to remain in step with its competitors, he said, especially when the 146 World Trade Organization countries drop quotas on apparel and textiles in 2005.
“Everyone is trying to get ready for that,” Kaufman said. “If we maintain business as an importer, we’re getting cut out of the picture and we don’t want to. We think this is a better way to compete.”
Those embracing the full-package strategy said the relationships they’ve forged with factories over the years are the glue in their strong supply chains. They contend that the trust they’ve built with their existing customers has helped them in selling new services.
Other textile players, however, prefer to stay the course and stick with their fabric strategy, offering fast-turn service to customers ordering conservatively in a tough economy.
“We don’t want to get involved…there are too many headaches,” said Bernie Gardner, chief executive officer of Los Angeles-based Impala Industries, a stretch-fabric importer that stocks more than 300 prints. “For a huge cutter, that’s great. For a little guy, it doesn’t fly — the minimums are too hefty. We’re looking for smaller players who want continuity and service. We try to ship goods within 24 hours.”
More immediate concerns are occupying his time. For starters, deflationary price pressures aren’t helping the textile cause. The good news in March was that wholesale prices for domestically produced apparel held steady with a 0.7 percent gain, but the growth followed consecutive monthly declines. Textile mill producer prices fell 0.3 percent in March and sank 0.9 percent year-over-year.
To compete, Gardner said he lowered prices 5 to 8 percent in the last year. Kaufman said linen prices also fell about 10 to 15 percent in the last year due to lower supply costs. But for the textile companies, there’s still little margin in the transaction.
“We’re eating things, cutting into our price margins,” he said, noting that business has started to improve. “We’ve been holding steady, and recently we’ve seen a pickup in demand. We think after the [fall lockout of dockworkers], people need to fill orders.”
Along with pricing pressure, textile companies also have to manage costs such as transportation expenses, which have grown due to the rise in oil prices. That’s one burden they’re passing on to customers.
“We’ve been charging an extra surcharge for fuel for the past couple of months,” said Raj Parikh, sales manager of Los Angeles importer Jay Ann Fabrics. “It basically amounts to a couple of cents per yard, so we’re not seeing real resistance to it. [Customers] understand that we’re not making this up.”
The macroeconomic picture may not be sunny, even with signs that the Iraqi war is drawing to a close, but most exhibitors said they expect solid business at the upcoming textile show, which will feature both fall and spring fabrics.
Prints are the flavor of the season at Kaufman, where stripes in cotton, nylon and spandex are top sellers. There’s also strong hula appeal with retro prints in Hawaiian tropical scenes and florals, as well as Mod-influenced designs.
“The prints are pushing the impulse buy a little more,” Kaufman said.
Impala also has had a strong print run in both florals and animal prints of zebras and leopards. But Gardner said the real business is in the french terry crafted from DuPont’s Tactel nylon, with price points ranging from $7 to $12.95 per yard, a bump up from typical cotton-and-polyester blends at $4 to $5 per yard.
“We have 45 colors in solids and they’re incredibly popular — they just keep selling,” he said, adding that after a flat 2002, business is up in the single digits for the first quarter.
With the show now in its 10th year, organizers also express strong expectations for the Los Angeles trade fair, which averages 5,000-plus attendees yearly and will feature a cocktail party April 28 honoring the anniversary.
The show has attracted more than 350 exhibitors representing 600 lines holding court at the mart’s sixth, seventh and 13th floors, as well as in the lower-level Exhibit Hall for trims and specialty services. The B section of the 13th floor also will house 12 exhibitors in the French Textiles Pavilion, and the main lobby Fashion Theatre will host 13 textile companies in the Italian Textiles Pavilion. Exhibitors from at least a dozen countries, including London, Spain, Thailand, Brazil and Canada, attend the show.
At press time, fears of the SARS outbreak that is ravaging Asia isn’t impacting show preparations, said Jen Uner, the mart’s executive director of advertising and communications. So far, one domestic exhibitor from North Carolina bowed out of the show, but CMC officials are welcoming Asian businesses. About 15 percent of the exhibitors hail from the Pacific Rim region of China, South Korea, India and Nepal.
Change could be on the horizon, however, for the show. There’s concern among both exhibitors and attendees that the timing of the show — following the International Fashion Fabric Exhibition in New York and Material World in Florida — isn’t the most advantageous.
“We don’t gain if we’re last in the line-up…so we’re polling exhibitors to see what they think of the timing and then assessing dates for 2004,” Uner said.
For attendees, such as Lian Murray, design director of Costa Mesa, Calif.-based Hurley International, the show provides a better read on the youth and contemporary markets.
She said she primarily attends European shows but likes the heavy assortment of fabrics appropriate for the junior market that are shown in L.A.
She remains bullish on the innovations coming out of the textile market with the help of computer-aided-design systems that are sparking new collaborations.
“Why not put a nylon yarn in a knit machine? Or, try a men’s pinstripe with a Hawaiian print? Let’s try it and keep coming up with creative, cool looks,” she said.
In a trend shift, Murray said she’s moving away from stretch fabrics in tops, which can break down with distressed finishes. She plans to seek out denim, pigment dyes and acid washes at the show for summer and fall looks.
Novelty blends are top of mind for Michael Aguirre, design director for the denim-driven juniors resource, Hot Kiss, in Los Angeles. His goal is to put a signature print on the fabrics.
“I’m looking for items that I can overdye and cross-dye and cross-fuse,” he said. “It’s just like food, like Cuban-Asian. I’m looking for the next fusion.”