Economic Woes Come to Bear on N.Y. Textile Shows

Trade show organizers preparing for next week's circuit of international textile fairs here are bracing for buyers facing extreme pressure to control costs.

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NEW YORK — Trade show organizers preparing for next week’s circuit of international textile fairs here are bracing for buyers facing extreme pressure to control costs.

This story first appeared in the July 8, 2008 issue of WWD.  Subscribe Today.

With consumer spending taking a hit from rising energy prices and deteriorating economic conditions, buyers trolling textile manufacturers’ booths will be keenly aware that fabric is one area where they may, at least, stabilize costs. Fabric can represent as much as 50 percent of the cost of a garment and buyers entering the shows will be under more duress than ever to make sure those costs don’t increase.

Textile manufacturers have been struggling with higher energy prices and poor exchange rates, as well. The conditions have already changed the makeup of New York textile week, which kicks off Monday.

One casualty has been the Turkish Fashion Fabric Exhibition, launched by the Istanbul Textile & Apparel Exporters’ Associations, also known as ITKIB, in 2002. Attendance among exhibitors and buyers had been steadily declining in recent years, as Turkish mills grappled with rising energy and labor costs and poor exchange rates. Over the last several years, some mills opted to move to the higher-profile Première Vision Preview or Texworld USA shows. ITKIB has since confirmed that the New York show will no longer take place, nor will its show in Milan.

Paul Cavazos, director of marketing and sales for Olah Inc., which produces the Kingpins denim show, noted that retail consolidation and changes in how major retailers place orders has played a significant role in changing the nature of the textile business. Kingpins will take place July 15 and 16 at 267 Fifth Avenue.

“We operate in a finite world,” Cavazos said. “We’re all basically chasing 20 orders a year for the major retailers’ core items. That’s where a mill stays open. There aren’t that many orders in the market and there were far fewer in 2008 than there were in 2004.”

During the last six to eight years, Cavazos said large retailers have made moves to reduce the size of their orders and the amount of goods held in stock. He estimated that orders have fallen 30 to 50 percent in some cases, aided by the quickening pace of retail consolidation. The most substantial declines came in the middle of 2007, he said, which was around the same time the full impact of the Macy’s consolidation began to be felt.

However, Cavazos also believes the apparel industry has worked through these adjustments and that textile manufacturers who have survived are likely to see an uptick going forward.

However, that won’t change the fact that buyers are under extreme pressure to keep costs down.

“The pressure for the people who look at and buy fabric now is pretty strong,” he said. “Nobody is behaving luxuriously. If before it was a penny business, now it’s a half-penny business.”

Jacques Brunel, Première Vision’s general manager and international director, understands that there is no escaping the realities of economic woes in the U.S. or Europe.

“The panorama is quite clear,” Brunel said. “We have less exhibitions than before and we have to be strong enough with the products to attract the designers and the collection managers.”

For Première Vision Preview, set to run July 16 to 17 at the Metropolitan Pavilion, Brunel expects to have 116 mills exhibiting. The total is slightly less than last year’s edition, but the same as in the January show. Brunel said mills that are presenting have a solid grasp of the difficulties of the market, but are also aware of the value of the U.S. market and the need to maintain a presence here.

“[The mills] know everything about the American market and they are ready to fight,” Brunel said. “They know it’s a tough market, but they also know it’s an intelligent market that understands what creativity means, and what research and development means.”

Prefab: The Supima Premium Fabric Show has made changes for its fourth edition that organizers hope will better suit buyers’ schedules. The show will move to a one-day format, July 15 at Gotham Hall, and will dispense with the traditional trade show model of mills setting up booths to show their product. Instead, Supima has obtained fabrics from 25 to 30 mills and will handle displaying them and taking sample orders from buyers.

Buxton Midyette, marketing director for Supima, said the format change should benefit those mills that previously exhibited at multiple shows during the week. It will also allow the organizers to show a broader range of fabric made exclusively from Supima. Previous editions of the show featured 12 to 15 mills that were allowed to show non-Supima products.

The show has added a design competition that will culminate with a runway show the evening of the 15th. Supima hosted an open call for “emerging designers” on June 17 that drew 50 contestants. The field was narrowed down to 25 designers, each of whom will be given 10 yards of Supima fabric to use for their runway design.

Midyette said even though there has been no drop-off in attendance or interest in the show or a high-end fiber like Supima — exports of American Supima have increased as much as 37 percent recently — it is necessary to be flexible and willing to address the market in new ways. As part of that effort, Supima opened a pop-up store here in SoHo from March 13 to April 14.

“The awareness we generated for Supima, the interaction with customers and for people to come in and see the difference Supima makes in apparel, it was great,” Midyette said. “You can have a dozen Supima garments on a department store floor, but they’re not merchandised together, so people might not have a chance to become aware of Supima.”

The success of the store has Midyette and Supima considering doing another one in Paris and perhaps a second in New York.

“We have to speak to the market in different ways…always participate in the market in different ways and at different levels,” he said.

Stephanie Everett, group show manager for Messe Frankfurt Inc., which produces Texworld USA, said she has seen “a little pullback” from mills. The number of mills exhibiting has decreased slightly, she said. An estimated 185 mills, primarily from Asia, are scheduled to exhibit, representing 15 countries.

Texworld USA runs July 14 to 16 at the Jacob K. Javits Convention Center. Everett believes lower-cost Asian mills should have an advantage given the market conditions.

“We still have more exhibitors than any other show in New York,” Everett said.

Like Cavazos, she is optimistic that the industry is likely poised to rebound.

“I think this will be the worst of it, that’s just my gut feeling,” she said. “I think once we get through the election and the new year, things should change.”

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