NEW YORK — Faced with mounting competitive pressure, U.S. fabric resources have struggled to evolve, extending their production reach overseas and developing new business strategies.
This story first appeared in the March 4, 2003 issue of WWD. Subscribe Today.
That evolution will be on display at next week’s International Fashion Fabric Exhibition, where in addition to offering fabric for fall 2003 and spring 2004, vendors also plan to pitch themselves as importers and providers of complete apparel packages.
The show, which is to run March 11-13 at the Jacob K. Javits Convention Center on Manhattan’s West Side, will also feature a larger number of foreign vendors. Show manager Amy Bonomi said that the number of exhibitors at IFFE is expected to be evenly divided between foreign and domestic companies.
A pavilion of Turkish producers, called Turquality, will feature about 40 mills producing fabrics and trims. It was organized by CNR, a Turkish trade show organizer and is the latest international trade group to have joined the show. Other pavilions are to feature suppliers from Japan, Taiwan, China and South Korea.
According to show manager Amy Bonomi, domestic companies represent about half of the exhibitors at IFFE.
At next week’s show, New York-based lace converter Malibu Textiles Inc. will premiere a small group of lace the company sourced overseas. This is a new step for the company, as it has previously bought all of its merchandise from domestic lace manufacturers.
Malibu president John Irwin said that lace that costs $5.95 per yard to produce domestically can be bought for $3.95 in Taiwan, for example.
While the grouping of laces that Malibu will have on hand at IFFE is not the company’s own designs, Irwin said Malibu is looking into producing some of its copyrighted designs overseas in the future.
Malibu currently develops patterns with its domestic resources, so Irwin said he’s still working out the details with his suppliers on whether Malibu would be allowed to produce jointly developed fabrics overseas.
Producing the fabrics overseas would likely require that profits be spilt among three parties: Malibu, its domestic resources that helped to develop fabric designs and its potential foreign suppliers of those fabrics. However, Irwin contended the three-way split would be justified by the much larger revenue potential in selling to the major brands that produce apparel overseas.
“This will definitely open up avenues,” said Irwin. “Everybody’s got to work new deals. We’re finding new ways to source our product so we can continue to sell product. The big business is offshore, so you’d better be able to come to your customer and say, ‘I can give you something domestically or I can source something just like it overseas.’”
Malibu prices run from as low as $1 a yard up to $13. The outsourced products will be priced from around $2.50 a yard up to $5. Even when the price of a domestically made fabric and a foreign-made fabric is similar, Irwin said other factors can drive a customer to opt for the foreign product. When garments are being made in Asia, the shipping cost and time of sending fabric from the U.S. is a competitive disadvantage, he said. He contended that price isn’t the sole motivator to his customers, whom he said will pay extra for fashion versus a commodity product.
“To make lace domestically and ship it to Asia becomes cost prohibitive,” said Irwin. “And the real majority of the industry wants their garments cut and sewn in China. In order to do that, they have to have resources in the Far East.”
New York-based U.S. Silk Inc. has also started to work offshore. It has begun to offer full garment packages. To do so, it has started working with Vietnamese apparel contractors.
“Instead of customers in the old days or even just a few years ago that would buy 1,000 yards of silk, now they’re saying, ‘Sell me the silk garment,’” said president Elliot Glantz. “We’re definitely a fabric company, but we have to be in the package game.”
U.S. Silk is currently offering garment packages out of Vietnam and has expanded its ability to make harder pieces, such as styles with beading. It had started out in garments by making simpler items, like basic blouses and dresses.
Since the company began selling garments eight months ago, that business has grown to represent about 10 percent of sales, Glantz said.
At IFFE, Glantz said he will bring fabrics — which run in price from $4 to $25 per yard — geared to both spring 2004 and fall 2003, since some of his customers work with retailers that buy closer to season. U.S. Silk will have about 50 percent of its spring collection, though Glantz said he’s constantly adding to it as trends develop it.
“If somebody goes to the Oscars in April and there is a geometric print, we’ll be doing geometric prints,” said Glantz. “Our customers are both big and small so we try to cater to both. We’re just waiting to pick up on trends ourselves, we’ve seen a lot of sheer fabrics this spring.”
Glantz and other fabric vendors said they’ve faced a little increase on the price of some of their materials as a result of the rising cost of petrochemicals. But vendors said they wouldn’t try to pass those new costs along, partly because they are small enough to absorb and, more importantly, because their customers wouldn’t accept them anyway.
“There’s nothing across the board where there’s been a price increase,” said Arnold Kobelt, president of New York-based converter Nipkow & Kobelt. “There’s a push for raising prices from mills, but they’re struggling to get it. And getting it increased when customers are used to something is difficult. There are so many alternatives to the types of fabrics we use that it’s risky for a mill because they’re afraid we’ll source it somewhere else.”
Kobelt said he has noticed more and more companies in the textile industry are moving overseas to source or manufacture due to pressure from retailers to keep prices down. He said if he can’t meet the right price, he will source overseas to meet the demand. The only other choice would be to forfeit the order.
“We also have to go to China and do it at competitive prices,” said Kobelt. “But we still bring in ideas, designs, fabrications, finishes and techniques. We’re all trying to keep our little slice of the pie.”
Michael Steiner, president of New York-based print converter Michael Miller Fabrics LLC said he’s noticed a price increase in cotton fabrics. He said that’s probably inconsequential in the short term though, since it’s widely available and increasingly produced in cheaper labor markets including China and Pakistan.
Returning to IFFE after sitting out several shows is Ascher Studio Inc., a New York-based manufacturer. The company is also celebrating its 25th anniversary. Fabrics from Ascher Studio generally run between $4 and $8 per yard.
Owner Peter Ascher, who often works closely with his customers to develop prints and fabrics, said he would prefer working a little closer to season.
“I think the best ideas develop from trends and sitting down and having coffee with the designers,” said Ascher. “If you do a collection based on what you believe, it may not be in tune with what the market wants, and then you’re jeopardizing sales.”