MORE MILLS JOINING THE BURGEONING WORLD MARKET
Byline: Stuart Chirls
NEW YORK — Fabric producers have been selling goods in foreign markets for centuries.
But today, with trade barriers falling and communications technology making markets halfway around the world seem as close as next door, textiles have become as much a free-flowing global marketplace as their downstream neighbors, garment manufacturing and retailing.
Not only are domestic mills finding new opportunities overseas, but an increasing number of foreign manufacturers — including smaller specialized operations and larger mills and yarn producers — are carving out profitable niches in the U.S. They are giving U.S. apparel makers the opportunity to shop a growing range of options without having to travel abroad.
“We have brought over a number of mills to the U.S., but we never are sure quite what to expect here because it is so different from the markets they have sold into in the past,” said Max Leimgruber, a sales representative for Filtex International, a New York-based sales agent for European mills. “On the whole, we have been quite pleased. We’ve had a lot of interest in mills from Austria and Switzerland that has helped us open new accounts.”
“Business in Italy is not bad, but we want to continue to see what we can accomplish in other places,” said Sergio Ferla, president of the Idea Biella Association, which represents a group of mills in and around Biella in northern Italy. Ferla visited New York recently in conjunction with the Mohair Council to better promote his association in the U.S.
“The mills in our association export to Japan, the U.S. and Eastern European markets,” Ferla said. “What we have learned about exporting is this: There is only one way to stimulate business, and that is to make nice collections and to offer excellent service, three times underlined.”
The Biella association also holds its own four-day trade event each year.
Another Italian company that has stepped up its global marketing is Filatura de Grignasco, a spinner of high-quality merino yarns that sells in more than 40 countries. While the 102-year-old firm has sold wool and wool-blend yarns in the mid-priced and upper-priced markets here since the late Seventies, over the past 10 years, Grignasco has refocused its American strategy to include better worsted yarns.
“The volume of the U.S. market for worsted yarns is enormous,” said Giuseppe Ghisoni, marketing manager. “Even a small part of that is interesting to us.”
The high-priced worsted market helped boost Grignasco’s overall sales 10 percent to $135 million in 1996, and the mill’s direct shipments to U.S. mills totaled 50 tons, up 25 percent from 40 tons the previous year, at a value of about $10 million.
“We think that European, and in particular, Italian, spinners have a technical advantage over U.S. producers,” he said. “For low-to-medium-priced yarns, textile makers can buy domestic, but when you want nice merino, you go to Italy.”
Yarn Sales Corp. has represented Grignasco in this country since 1986. Its president, Charles Battaglia, noted the changing dynamics of apparel retailing are helping make the American market even more attractive to foreign producers. The explosive growth of private label apparel programs by stores, he said, has led retailers to seek out companies that can provide not only innovative products, but critical merchandising direction.
“Retailers are realizing that they need more creativity to bring consumers into their stores, not just to knock the next guy off,” Battaglia said. “They may end up making the merchandise cheaper that way, but they aren’t creating anything new. We offer them the full services of a spinner, but also a merchandiser.” He added that Grignasco spends $75,000 each year on color cards.
Battaglia pointed out that the so-so retail apparel sales of recent seasons has actually made it easier for companies like Grignasco to place pricy products with American stores.
“There are healthier margins to be realized in yarns blended with cashmere and other luxury fibers, and that makes them all the more attractive to retailers,” he said.
Trade shows are stepping up their efforts to cast themselves as the crossroads of export sales. In the U.S., the International Fashion Fabric Exhibition (IFFE) and European Textile Selection (ETS), both here, are aggressively courting fabric producers with international credentials. IFFE has for the past several seasons featured a cadre of Taiwanese mills that exhibit as a unit, while ETS’s roster of high-end suppliers has expanded from one to two floors of the Hotel Inter-Continental.
While many exporters, particularly those from Asia, long ago established themselves as formidable price-driven manufacturers, not all foreign mills’ marketing plans are so driven. European mills, in particular, find keen interest among makers of higher-priced apparel. “There is a better quality to the buyers in the U.S. than in the past. They seem to be more willing to buy more expensive styles,” said Peter Wozasek, president of Petex, an Austrian embroidery mill, which exhibited at ETS in April.
Ferla of Idea Biella, however, noted the proliferation of expos has made buyers’ time more precious than ever and put a premium on mills’ one-to-one marketing efforts.
“There is a new illness called ‘saturation of [fabric] fairs,”‘ explained Ferla, who is also president of Lanificio Egidio Ferla, a Biella mill. “We can’t expect buyers to spend all their time visiting shows. If a buyer goes to three or four fairs in a season, they are ‘finished.’ This is something we must keep in mind. For a buyer, time is money, and we must respect that.”
Executives agreed that no matter where a textile company is based, the guidelines for developing a successful overseas business remain more or less the same.
“Exporting takes a total commitment on the part of the company that wants to export, as well as a change in the culture of that company, which translates into the will to make it happen,” said Tom Tolar, a textile export consultant based in London who has worked with U.S. and European manufacturers. “It is very, very tough, make no mistake. It takes staying power, and it takes time and money.”
Tolar emphasized that identifying target markets and studying their unique characteristics are a necessity and should be done before a single container is ever unloaded on foreign shares.
Unfamiliarity with regional customs, traditions and cultures, he pointed out, can doom the best intentions. As an example, Tolar said, one apparel manufacturer sold its underwear three-to-a-package in one Latin American market. When a company executive visited a retailer to check on sales, he found shoppers tearing open the packages and purchasing the underwear one at a time, even though the three-pack was less expensive. The manufacturer was puzzled until it later discovered that consumers in that region buy underwear only after feeling the material first.
But after the logistics, costs and government red tape of international trade have been attended to, ultimate success still comes down to one thing: product.
“Innovation remains a key element for success in fabric, fiber and style in giving consumers a choice,” he said. “You may have to try your whole line for one or two seasons, but you have to think narrow and deep, with niche targeting in both products and customers.”