By  on May 3, 1994

NEW YORK -- Textile and apparel executives expressed surprise and irritation over a recent decision by the International Wool Secretariat to charge $5,000 a year for the use of the Woolmark and Woolblend marks, beginning May 1, 1995.

Although most said the fee wasn't a make-or-break figure, they said they were upset by the way the IWS informed them of the move -- a nonnegotiable announcement in a letter.

While executives said they realize the IWS needs to raise money, they added that charging for the use of its marks might not be the best way to do it. Some said they wanted to hear specifics before making a decision.

As reported, the IWS sent notices two weeks ago to its 700 North American apparel licensees, informing them of the charge. The new agreement will cover all licensed spinners, weavers, knitters and apparel makers who make their own wool and retailers who produce wool apparel under private label programs. The Woolmark is a quality assurance tag used on pure wool products; the Woolblend mark is a similar mark for blends of at least 60 percent wool.

Danny Neff, director, Americas, the Wool Bureau, the North American arm of the IWS, said he understood why some users might be angry, but said the letter was the only practical way to handle the announcement.

"If we could have met with all 700 people at once, it probably would have been a lot better, but physically that was not possible," Neff said. "We have given the licensees 12 months' notice, and we will be meeting with all of them in that time period. I think many that are upset now will come to realize that this will be beneficial."

Neff added that the fee, which he expects to generate about $15 million a year, will provide a "sustainable source of income to supplement fluctuating growers' prices." Worldwide, the IWS has 8,700 licensees for its Woolmark and Woolblend marks.

Here's what some users of the marks had to say:

Christopher Schaller, chairman, president and chief executive officer, Forstmann & Co.: "While we have been involved in preliminary discussions as the IWS was researching and developing the plan, we have not yet been briefed on specifics of its final form. We look forward to hearing more about the program in its entirety from the IWS."Ted Goldsmith, chairman, Bromley Coats: "We were very surprised, but they must have their reasons. Years ago, the Wool Bureau used to give out money, and that was beneficial to the retailer and to us. Now they're asking for money in return.

"As of now, we haven't made a decision, but we're going to think long and hard before we pay it. We already pay royalties on the labels we use."

Bromley is a producer of coats under the Anne Klein, Anne Klein II, Evan-Picone and J.G. Hook labels. It also produces its own brand.

Larry Levine, president, Larry Levine Coats: "I would think with what's going on in the market, they must be having problems and they need the support of whoever uses wool. The charge won't have much of an effect on a larger producer, but I think it might hurt a smaller one. One alternative the IWS could have taken could be done through a mill charging a couple of more cents per yard, with that money going to the IWS."

Arthur Spiro, president and chief executive officer, Carleton Woolen Mills: "Philosophically, I agree that there should be an effort made to weed out some of the people who take the most and contribute the least. The IWS has every right to devise a means to channel the efforts into those that deserve it. Still, I'm not so sure that it's the right way to go about it.

"Conceptually, it's the wrong thing to do in terms of getting clients or customers to use the product. You ought not to charge them. Rather, you ought to pay them. We just have to wait and see what develops, and see if the money is spent wisely. For us, though, $5,000 isn't significant one way or another."

Steve Blatt, president of coat manufacturer Searle Blatt: "I don't think this company will pay for the Woolblend or Woolmark marks. They didn't discuss the fee with us, they just told us about it in the form of a letter. In fact, the first I learned about it was in WWD."

Chuck Milber, president, The Worcester Co., wool fabric producer: "The IWS has done such a fantastic job of promoting wool for the fall and spring that the Woolmark has almost become a generic symbol, and some manufacturers may feel it's not needed anymore."By law you have to state if it's 100 percent wool or if it's worsted anyway, so the Woolmark may not mean that much anymore. The IWS is going to find that some major people may just stop using the mark."

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