By and  on September 27, 2005

NEW YORK — U.S. textile manufacturers are focusing on quality, innovation and the advantage of proximity to market as the keys to surviving seemingly insurmountable competition from China.

"I think the facts speak for themselves. Year to date in terms of imported fabrics, there's clearly a large erosion in the domestic market," said John Bakane, president and chief executive officer of Cone Mills. "However, there are niches that are actually flourishing."

According to Bakane, the greatest opportunities for domestic manufacturers will come by claiming business in developing specialized areas. One of the most recent examples, said Bakane, is the specialty jeans market, which has experienced rapid growth. According to Port Washington, N.Y.-based market research firm NPD Group, women's jeans priced at $60 and up more than doubled last year. For the year ended in February, the $60-plus range represented 5.8 percent of the denim market compared with 2.9 percent a year ago.

"The premium jeans market, it's been a phenomenal growth story," Bakane said.

Cone also has reaped unexpected rewards from a growing European trend for historical denim. European markets have seen a strong call for denim inspired by its heritage as a working garment for miners and laborers, a need only a domestic manufacturer such as Cone is prepared to meet.

"We have a 115-year history in the business," said Bakane. "When it comes to authentic vintage products, no one can touch us because they don't have the history."

Levi's was one of those companies seeking styles that had first been produced at the turn of the 20th century.

"Don't underestimate this issue of history in regards to products, particularly for denim," Bakane said. "The focus on historical authenticity of denim jeans has been quite an advantage."

The ability for U.S. manufacturers to respond quickly is another factor that Bakane said has helped many domestic firms stay in business.

"I had someone from overseas tell me that cheap labor from overseas can't do two things: It can't change geography and it can't change history," he said.

The domestic mills that are at risk are those that are manufacturing products "in the middle," or do not meet a unique need."A basic ‘me-too' denim jean that's been marketed at retail for five years and has seen no changes, that's in the middle," said Bakane.

Don Bailey, vice president of textile research at Cotton Incorporated, said innovation is the thread that ties successful domestic manufacturers together. According to Bailey, innovation is being demanded by the customer, who is constantly looking for their fabrics to perform better.

"U.S. firms are going to look at how they can add value to the lifestyle of the consumers' lives," said Bailey. "That's quite different than what we did 20 years ago."

It also has resulted in a shift in how domestic manufacturers approach the market.

"We have to look at less units in the future and more margins on those units," said Bailey. "The day the innovation stops is the day the industry starts to disappear."

Bailey also believes the apparel sector now offers manufacturers opportunities beyond providing replenishment services.

"There's a lot of categories now that there's not really a season for," said Bailey. "The shortest time it can get into the retail cycle, that's where U.S. mills are in the best position."

Malden Mills, based in Lawrence, Mass., has a three-to-four-year outlook in place that involves continuous innovation — something the company can easily do since it works out of a modern facility, built in 1996.

"We are spending a great deal on innovation and investing in development of that innovation," said Michael Spillane, chief executive officer at Malden Mills. "Coming up with break-through products will help us to develop our brand and make it important."

In addition to the importance of innovation, Spillane acknowledges that textiles is a global market.

"We have to accept that fact and participate in it," he said, noting that Malden Mills has begun to produce throughout Asia and will double its Asian business this year.

Spillane said the challenges to stay on top of domestic manufacturing continues, especially with competition coming from all over the world, but he said there are other issues affecting his business.

"Labor rates are high, higher in this country than in others," he said. "Health costs are a national problem, but it's a burden that we carry. And then there's rising energy costs. These are all challenges we have to deal with, but as long as we stick to our strategy, we will continue to be a balanced company."To his benefit, Spillane said he has a roster of loyal customers that are still interested in domestic manufacturing.

"Our customers will pay more for what they want; they are as driven by innovation as we are," he said. "And we keep them interested by offering our best customers those new products we have in the pipeline."

Jim Chesnutt, president and ceo of National Spinning Co. and chairman of the National Council of Textile Organizations, said he has seen an upswing in U.S. manufacturing over the past few months.

"What we are hearing is the real dissatisfaction with foreign mills," he said. "The consumer is changing her mind for fashion in terms of what she wants so rapidly and retailers place orders too far in advance. So what happens is that when the merchandise hits the floors, it looks stale right away."

Chesnutt said the Chinese mills are not willing to work with clients to speed up delivery times, so domestic mills have been stepping up to the plate.

"We always take care of those fill-in orders that there would be no way for foreign mills to do," he said. "We are here to fill the needs of these retailers and we can help them to deliver on time, but we cannot survive on fill-ins alone. So what needs to happen is that the domestic mills, retailers and importers need to think things through and work together to make it work."

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