TEXFI SETS UPSCALE UNIT TO CHALLENGE IMPORTS

Byline: Stuart Chirls

NEW YORK — Texfi Industries is betting that it can create higher-priced domestic fabrics that will enable it to compete head-to-head with imported goods and, in the process, give the mill a cachet that will dovetail with its core commodity goods.
The start-up division, called Texxus, will offer upper-moderate to bridge fabrics that will sell at prices executives said are significantly less than imported goods.
“The key to the growth of Texfi is to produce and market higher-priced fabrics,” said Gerald Rubinfeld, president of Texfi’s blends division, under which Texxus will operate. “Our core competencies have been in the mass market up to moderate, and it was always difficult to breach the upmarket. We have had other starts in this area but exclusively with outsourced fabrics. But the difference was that we didn’t have a product developer who could adapt goods to our looms.”
That responsibility will fall to Walter Lichtenson, who has been named president of Texxus. “There’s definitely a niche in the upper-moderate-to-bridge market,” he said. “We feel there is a void in the low $4 to $7 area.”
“These fabrics will feature styling similar to better international fabrics,” said Paul Cohen, Texxus’ vice president. “Since we are manufacturing vertically in Texfi’s mill, we will be able to weave, dye and finish these goods and sell them at prices $2 to $3 less than imported goods.”
The division will be driven primarily by proprietary ultra-high-twist yarns developed by Lichtenson, who previously worked as vice president of the Rochambeau mill division of Westwood Fabrics. Fabrics will be mostly rayon, as well as blends in rayon and wool; rayon, nylon and wool; nylon and linen, and acetate and linen.
“Nylon is a buzzword coming on the scene,” said Cohen, who worked with Lichtenson as a sales manager at Westwood. “We will also be big on Lycra-driven goods. Stretch means an awful lot to buyers. We are also doing a little bit of converting.”
Texfi has had its share of troubles in the past, struggling with gray goods production as well as an unprofitable T-shirt manufacturing operation, but the company has shown signs that it is turning business around after posting its best first quarter since 1989. In the three months ended Jan. 31, Texfi’s earnings hit $1 million on sales of $48.5 million.
Rubinfeld pointed out that the move to better fabrics coincides with Texfi’s capital investment strategy, which annually runs in the low eight figures. “We have been buying equipment that will give us greater specialization instead of commodization,” he said. “Our focus is to niche our markets and diversify distribution. We don’t see growth in continuing to sell $2 fabrics.
Cohen explained that the key to Texxus’ success will be unique, proprietary products. “That’s the weakness of converters — that there are a lot of common warps. There are a lot of cousins out there, so there is tremendous price pressure. Texfi makes the expenditures to keep its mills up to date, so we are constantly developing new yarns.”
Added Lichtenson, “We want to expand the product offerings of Texfi to insure maximum use of its equipment.”
Texfi projects sales at $4 million to $5 million for Texxus this year. Lichtenson pointed out that because Texfi is a vertical domestic resource, the company can bring a greater depth of service to apparel manufacturers than importers when it comes to sampling, turnaround and reorders. “The key is, we don’t want to be like everyone else,” said Cohen.

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