KNIT MARKET GETS NEW LIFE
Byline: Stuart Chirls
NEW YORK — A surging market for knitted fabrics promises a strong fourth-quarter finish and a solid start to the new year as textile executives look to lay to rest the ghosts of late 1995.
Knitters and converters generally are running up double-digit volume increases over year-ago levels and bookings stretch through the first of the year and beyond. Executives credited the growing optimistic mood of retailers and apparel manufacturers.
An assortment of styles leads the way, topped by stretch goods, novelty stitches and textured looks. Synthetic blends also are getting play. But one old story remains: Margins are still under pressure.
“We are running ahead of last year in several categories. Sportswear is up, swimwear is up, shapewear is up and the technical athletic and team markets are way up,” said Alfred Greenblatt, president of the apparel division of Guilford Mills.
Greenblatt noted the sportswear market, in particular, continued to show the strong results it has posted throughout the year. “We are up 10 to 15 percent in Lycra spandex blends, both in synthetics and cotton,” he said. “We have also seen a continuation of our velvet business going later into the season.”
A change in apparel production strategy also has given Guilford a lift. “We are seeing more people going to domestic sourcing because there has been an increase in apparel manufacturing in this hemisphere,” said Greenblatt. “That this will continue to increase is our hope. Look at how strong Mexico is becoming, at the expense of Asian manufacturers. And a lot of that is being done with U.S. fabrics.”
Despite the upbeat market, margins remain a problem.
“As for synthetics, I think the market is going to tighten up [next year], and that could push our prices up,” said Greenblatt. “People are selling a lot of yarn around the world and my sense is that sales are getting close to fiber capacity. We’re looking at polyester, nylon and Lycra being in healthy positions.”
Supply is an issue at other knitting mills, as well.
“Business activity is very strong versus a year ago,” said Jon Adelman, president of Lida Stretch Inc. “Our booked-ahead is much stronger than last year at this time; we are up 20 to 25 percent for November, and we are quoting January deliveries on some fabrics. People are scrambling to get goods.”
Lida’s performance fabrics have been pacing sales in 1996. “Stretch has been getting much stronger,” Adelman said. “There has been a lot of growth to the junior tops market, and we are doing more and more business in dresses. Our leggings programs are a standout. Aerobic bodywear has been getting stronger, too, and swim has been fairly good; we are on plan there. We are firing on almost every cylinder.”
Adelman observed that retailers and manufacturers are rethinking their strategy, which has helped fuel order-writing. “I think retailers may have underprojected their buying. Everybody has played it close to the vest, but since the economy is halfway decent, they’re chasing the business a little more.”
The fast-changing market for knits prompted Lida to shift gears this year. “We introduced a couple of new groups this year that targeted specific style and price areas,” Adelman said. “We are doing nylon blends, and jacquards and textures in polyester. We have a polyester and Lycra group that has been doing very well since we rolled it out three weeks ago, and we are getting orders already at $4 to $7.”
The pumped-up demand eventually could lead to price increases of raw materials, Adelman said. “The raw materials market is what I would call ‘busy,’ but we are getting everything we need, and prices are stable. I have heard some rumblings about raw materials, but no one’s raised prices on me yet.”
Some fabric suppliers are “working smarter” by developing new, innovative products that create more profitable niches in the market.
Liberty Fabrics has turned to technical development by launching a line of jacquard knits made on raschel warp knitting equipment, which Liberty calls “rascheltronic,” said Ed Stoler, president.
“This is something new and high tech,” Stoler said. “At $8 to $18 a yard, rascheltronic generates better margins and has more potential applications than just in the typical warp knit area.”
Offering better value is simply a fundamental of doing business today, Stoler said. “The name of the game is apparel manufacturers getting more bang for their buck. That means exotic fibers in micro and stretch performance constructions — any hook that the retailer and consumer can hang their hats on.”
Stoler said Liberty is running “flat out,” with booked-ahead orders running weeks over plan. “We are a couple of months ahead of ourselves. Retail seems to be picking up, and manufacturers feel optimistically confident that the fourth quarter of this year and the first quarter of next will continue to be reasonably good. In the past, right before Christmas, retailers would pull back [in anticipation of a slow retail season], and they turned out to be right. Now, they think things will be good, and the apparel manufacturers agree. We’re fairly bullish on the market going forward.”
Retail momentum also is boosting sales at Agmont USA, the American arm of the vertical Canadian mill Agmont.
“Stores are starting to make buying decisions ahead of the season,” said Jolene Northrup, sales manager in the company’s New York office. “Before, they were waiting until the floors were nearly empty of merchandise. Now, they are committing to putting product on the floor before the racks run down. Our customers are starting to get a lot of solid inquiries from big stores, for the first time in a long time.”
Sales for the women’s and junior segments were up 15-20 percent year-to-date, Northrup said, with orders booked through January. “Orders for the first of the year are just starting to come in,” she said.
Among the important styles have been nylon and Lycra blends, priced from $4 to $6. “That gets around the Supplex nylon price point for the mass market trade,” said Northrup. Other hot items included novelty stitches in synthetics for daywear, $2 to $4, and stretch fleece in Lycra, polyester and cotton blends, $5 to $7.
Knits have been strong for JBJ Fabrics, which opened a knit division, JBJ Knits, a year ago. “Business is terrific. It’s the brightest spot in my business at the moment,” said Michael Garson, a partner at JBJ.
Microfiber nylon, from $3 to $6 in solids and prints, has been a big seller for the division. “It’s priced just a notch below Tactel nylon and Supplex, and that makes it affordable for the mass market,” Garson said. Polyester and rayon blends, acetate and printed tricot lace are chalking up steady gains. JBJ is wet-printing on polyester microfiber goods, another example of using technical innovation for more effective marketing.
“We’re seeing a more optimistic customer than a year ago,” Garson said. “We’re sold up twice as far ahead. There’s new product out there, and the consumer has responded to it, giving retailers more confidence to try newer products.”
Garson also said margins remain difficult. “We’ll just have to be that much more efficient and settle for smaller returns,” he said.
Domestic suppliers are benefiting from apparel makers’ search for an economical edge. “The big manufacturers are starting to get a little tighter with money,” noted Laurie Miller, in design and sales for Komar Knits, a converter. “Why should they send designers overseas when they can come across Seventh Avenue? And with imports, they have to plan far ahead at the same time they are buying closer and closer to the season. They can get a better turn here and work more closely with their suppliers. As a result, we have found ourselves doing more styling than ever before.”
Miller said sales for fall will exceed year-ago totals. Brushed fleece solids and jacquards in acrylic and polyester blends are selling well, as are rib knits, space-dyes and jacquards in both 100 percent acrylic and 100 percent cotton. “We are doing more acrylic because it is $1 to 75 cents less per yard than cotton,” she said. “Price has a lot do to with buying decisions.”