SPRING ’98 BOOKINGS: STEADY, STRONG AND UP
Byline: Stuart Chirls
NEW YORK — With the spring ’98 selling season gathering steam, suppliers of fashion fabrics are looking forward to getting off the roller coaster they’ve been riding for most of the last two years.
After several seasons of up and down business, executives are reporting double-digit sales increases and a selling environment that generally seems healthy. Stretch goods are extending their reach through an array of markets, while synthetic fibers continue to set a torrid pace.
That’s the good news. The bad news is that fiber price hikes will once again challenge suppliers’ margins in the months ahead. One of the first major upticks came late last month when Trevira announced it was hiking the price of polyester staple 3 cents a pound — or about 3 to 4 percent.
“Spring ’98 business has been great. So far, so good,” said Alfred Greenblatt, president of the apparel fabrics division of Guilford Mills. “The market has really opened up, thanks to the strong economy, and we are very busy.”
Greenblatt said his firm’s backlog was running 10 percent ahead of last year’s robust levels, “The next two quarters are critical. There are big hurdles to clear.”
Hot products for Guilford include velvet as well as a wide assortment of stretch goods in synthetic fibers. Greenblatt said stretch has begun to make its presence felt in relatively new markets: “We are seeing stretch move into ready-to-wear — it is definitely a growing area for stretch — and it has also been a strong performer in intimate apparel as well as swimwear, especially printed swimwear goods. We’re also doing very well in the athletic, team and sports replica markets. Business is good.”
A major red flag has been raw materials. “We have seen that situation tightening up,” said Greenblatt. “I thought it might happen this year. Cotton’s tight all of a sudden, same with polyester. As we get price increases, we’ll pass them on. We are raising our prices across-the-board, both by single and double digits, on new orders. Our salesmen are doing it right now — I can’t help it if the customers don’t like it — and there are possible further increases down the road, based on the things I’ve been hearing.”
At Ge-Ray, a vertical stretch specialist, “business is terrific,” said a merchandising executive. “The performance of synthetics has been amazing, nylon in particular.” Ge-Ray focuses on better-priced goods, with a third of its offerings in nylon, the rest in cotton and other fibers.
For spring ’98, stripes in tonal and monochrome configurations in nylon and Lycra spandex blends have shown the way for Ge-Ray, with nylon up 30 percent, and overall business ahead 30 to 35 percent. Vertical needle-out constructions of derogated ribs that give a two-dimensional effect have also been checking, as well as yarn-dyes and piece-dyes, a contrast to the proliferation of plain jersey that has been selling.
While the sparkling sales have helped push Ge-Ray’s margins up by double digits on average, the company has adopted a wait-and-see attitude toward raw materials prices but figures to pass on costs eventually.
Intimate apparel and stretch have helped kickstart sales at Liberty Fabrics. “Business is very, very strong since the early part of the year,” said Ed Stoler, vice president of sales. “We are well over 25 percent year to date, and we think that is a substantial increase.”
The preponderance of lace at the European runway shows has fueled a resurgence in that segment, according to Stoler. “There is a major trend back to lace,” he said. “Stretch has also been very strong going forward in all areas of the market. Texture fabrics with surface interest and high tech fibers such as Tactel and Supplex nylons in microdenier constructions are attracting buyers.”
The effects of higher fiber prices have begun to show up in Liberty’s line. Said Stoler, “We are trying to hold our price structure, but [prices] are beginning to creep up. We try to pass on the increases. We are waiting for the yarn companies to tell their story to the market, but we are beginning to feel those increases.”
He added that margins have remained fairly flat against year-ago levels, with some scattered increases on new products, which total 35 to 40 percent of Liberty’s line. “There hasn’t been any real consistent leveraging factor.”
A robust first quarter got the year off to a rousing start for S. Shamash & Sons, a major silk importer. “The spring business is just starting for us but we feel it will be as much as 10 percent better than last year, because the first quarter was excellent,” said Jeffrey White, president.
Shamash plotted a business plan that White called “conservatively aggressive” for ’97, and business is cantering along 15 percent ahead of ’96. “We have seen an upturn,” said White. “Prints, which are a major part of our business, have been stronger, and silk prices are up about 20 percent because demand was weak for the past two years and production in China shifted to other crops.”
Stretch silk with Lycra has been a consistent performer for Shamash, in satin, georgette and crepe de chine. “Because it’s expensive, we keep it lightweight,” White noted.
As an importer, Shamash has been buffeted by the new U.S.-China textile trade agreements, as well as sweeping changes in Customs rules. “The new Chinese agreement has sliced quotas in several categories, including polyester print cloths, which we import,” he said. “Quotas are almost used up in Korean polyester; I expect they’ll be gone by mid-year. Korean manufacturers are now charging a premium of 60 cents a yard for polyester quota just to get fabric into the U.S. That’s money going from U.S. consumers into the pockets of Far East manufacturers. The quota situation will hurt U.S. manufacturers, in my opinion, because they will be forced to go to the Dominican Republic, Guatemala and El Salvador for manufacturing instead of manufacturing in the U.S.”
White said the new country-of-origin rules have turned Customs into a tortuous wait. The rules, which went into effect last year, stipulate a fabric’s origin is based on where it was manufactured as gray goods, not where it was finished, hence Italian silk scarves with “Made in China” labels. “The new rules have made a mess of importing. There is a massive bottleneck in Customs because they are examining everything very closely.”
At Gordon Textiles International, president James Gordon said business was running 5 to 10 percent ahead of last year “which was a boom year.” He said, “The feeling here after the European shows is that in terms of fashion and newness, there is a lot of stuff for manufacturers to work with.”
Gordon said he wrote substantial print business at Premiere Vision for the European firms he represents. “Manufacturers bought designs and colors to get some limited exclusivity, and that hasn’t happened in five or six years.”
Stretch wovens remain popular, Gordon said, noting that stretch styles now account for about half his total yards sold, and 60 to 70 percent of dollar sales. He also saw signs that linen, after peaking in 1993, was again important.
Gordon said the strong dollar has been a double-edged sword: It has made French and Italian goods more attractive to American buyers, but because world prices for cotton and wool are dollar-based, he’s had no edge buying those fabrics overseas. “The mills need more liras and francs to pay for fiber,” he said.