FIRMS PONDER NET, OFFSHORE
Byline: David Grant Caplan
NEW YORK — With Caribbean Basin Initiative trade parity finally a reality — it went into effect on Oct. 1 after seven grueling years of lobbying — and the current push by many mills and converters to expand their presence on the Web and set up e-commerce initiatives, next week’s International Fashion Fabric Exhibition in Manhattan will focus on the textile industry’s burgeoning opportunities — whether they exist stateside, in the Caribbean or even in cyberspace.
CBI parity comes into effect just as textile mills and converters are coming back a bit after a sluggish period. The bill allows apparel assembled in Caribbean Basin countries of U.S.-made fabric containing U.S. yarn to enter the U.S. without duties or quotas. Also, some apparel made from fabric knitted in the Caribbean of U.S.-made yarn will have preferential access to the U.S. market.
“That is the most exciting thing for our industry,” said Pearl Ann Marco, a principal at New York converter De Marco California Fabrics. “It’s going to be a shot in the arm and it will revive a lot of business.”
Gail Strickler, president of New York converter Saxon Textile Corp., shares Marco’s enthusiasm for the bill, which was signed into law this spring by President Clinton.
“It’s an exciting time for us because we are really poised to take advantage of the new bill, which will affect a large part of our programmed goods.”
Seymour Schneiderman, president of New York converter Symphony Fabrics, welcomes CBI, but does not regard it as the textile industry’s economic saviour.
“We are not in a growth industry,” Schneiderman asserted. “The only thing that will perhaps serve as a Band-Aid to the domestic industry is CBI, since it will provide apparel manufacturers with the ability to manufacture garments in the Caribbean at a lower level than it would cost them in the U.S.”
But many of Schneiderman’s colleagues said business has picked up recently.
“Business in general, has been pretty good — very good for better fabrics. Silk fabrics have been very strong,”said Jeffrey White, president of Shamash & Sons, a New York importer specializing in silk, rayon and linen.
“The last six weeks or so have been really busy,” said Saxon Textile’s Strickler. “We’ve been adding some colors and fabrics to our in-stock program and working more on some of our development fabrics, as well as adding some stretch fabrics.”
One thing that’s been pressuring the industry is the rising price of oil. For over 1 1/2 years now, rising oil prices have pushed up the price of synthetic fibers — for which oil is the ultimate raw material — as well as increased operating expenses. The rising costs have eaten into margins and in many cases left firms trying to raise prices.
“We have not had to increase prices,” said Strickler, “but have we had our prices to us increase? Yes.”
Strickler said her company has had to endure all sorts of cost increases. “We’ve had oil surcharges, we’ve had surcharges in finishing and we’ve had synthetic fibers go up, as well.”
Despite these external financial pressures, Strickler said she hasn’t been able to completely pass along the burden to her customers.
“We’ve held our prices and we’ve absorbed most of the increases,” she said. “On large programs where we work really, really closely on something, obviously those prices have been a little higher — but on our stock programs, we have really been struggling to hold our prices hopefully through the end of the year.”
According to Shamash & Sons’ White, he had no choice but to raise the prices on his imported products.
“We’ve had to increase silk prices — but only silk prices,” he said. “The supply of silk decreased dramatically since a lot of factories closed, creating a shortage of silk raw material right now.”
Current consumer spending is showing signs of slowing and many converters can speak to the poor retail figures they witnessed during the summer.
“I think that the summer was not as good as we’ve had in the past and business was off in August in the department stores and that really reflects on us,” said De Marco California Fabrics’ Marco.
White said it’s up to the textile industry to be flexible in countering the side effects of poor retail figures.
“Retail has not been so strong in the last three months.,” White said. “Consumer spending always affects our business, but I think we have had to create a process of speeding up in our company to make newer fabrics, because the stores are looking for new products.”
For the employees at D. Zinman Textiles, a Montreal linings distributor, it’s not so much the amount of consumer spending that threatens their livelihood, but the type of spending.
“Since we are a lining house, what is affecting us is the trend to get away from ‘suiting,’ in respect to casual Fridays or companies having a policy where you don’t have to wear suits,” sales manager Paul McLaughlin said.
As domestic converters and mills prepare for IFFE, excited about the opportunities CBI heralds, they are also preparing for an influx of higher-end European companies at the show. The dissolution last year of the European Textile Selections event, as well as the hiring of show manager Amy Bonomi, former Italian Trade Commission senior trade promotions officer of textiles, has contributed to an increase in European exhibitors.
“We are looking to upgrade the show,” said Bonomi. “A lot of European companies are coming over anyway, and a lot of that comes out of the request from the market.”
In spite of the competition, many domestic exhibitors are excited about the Euro-invasion.
“That’s great — I think the show needs more higher-end collections,” said Shamash & Sons’ White.
“The New York show should be one that has a really strong fashion sense — and that’s been lacking,” said Saxon Textile’s Strickler.
Like her colleagues, De Marco California Fabrics’ Marco embraces the competition. “The more who come, the better the show is going to be, although we certainly have high-end people in New York,” she said. “But I’m not worried about competition — it’s the healthiest thing.”
Many of the high-end European companies scheduled to show next week are also looking forward to crossing the pond to show their wares, since they are familiar with Bonomi from her years running the European Textile Selections.
“We know the show manager from the other show and we found her particularly good,” said Ruth Gilbert, company director at London mill Maison Henry Bertrand (England) Ltd. “We hope it will be even better this time, since we have a wide base of American customers, particularly in New York.”
Adrian Litman, company director at London lace manufacturer Alan Litman PLC. said “it’s wonderful” that more European companies will be exhibiting at IFFE. “We would be delighted if more people came to the show — especially better-quality people.”
There will be a pavilion at IFFE specifically for European companies, a feature the overseas firms said they hope will increase traffic.
“There have been quite a few other companies like ourselves who found themselves without a method of bringing their collection to the market in a show,” said Gera Gallico, the head of U.S. sales for Billion Freres, a high-end French mill. “They have us all in one particular area, so it will be easier for the customers to spot us.”
Gallico said she was “pleasantly surprised” with the attendees she met at IFFE in April, Billion Freres’ first time as an exhibitor at the show.
“We were able to get exposure to a lot of the private label people, who may not have gotten to the European Textile Selections event, but who are very viable customers, buying for Saks and Nordstrom,” said Gallico.
Gallico said her high-end company is benefitting from the changing preferences of the U.S. consumer.
“I’m hearing from my customers that the American consumer has become more quality-oriented,” she said. “They are experiencing a difference in manufacturing, because there are no problems, no damages.”
While the Caribbean Basin countries have been garnering attention in recent months, the textile industry certainly hasn’t forgotten about Asia. Many mills and converters said they are still recovering from Asia’s late-Nineties financial meltdown.
“Capacity is getting very tight in Asia now, because about 50 percent of the factories closed in Korea and in China, about 30 percent closed,” estimated Shamash & Sons’ White. “So we are seeing shortages of printing capacity and shortages of silk fabric — but everything else has been pretty much in plentiful supply.”
Even France’s Billion Freres was affected. “We did have business in Korea, Japan, Thailand and China so we did get affected by their problems,” said Gallico.
While east Asia suffered economic turmoil, some of its neighbors claimed to be immune to the region’s woes.
“As far as the Asian crisis is concerned, Bangladesh was not that affected,” said Mohammed G. Jussain, commercial consul at the Bangladeshi Embassy in Washington, an exhibitor at the show.
As the industry recovers from the Asian financial crisis and many mills and converters have more available capital, many are seeking to expand onto the Internet. Because of the growing interest in setting up online, there will be an e-commerce pavilion at next week’s show, featuring exhibitors such as ClickTex.com and Fabria.com, as well seminars on the topic.
John Irwin, vice president of Malibu Textiles, said his company plans to launch a Web site within six months. Although the Web site will initially offer only general information about the New York converter, Irwin said he eventually wants to allow his customers to retrieve data regarding shipments. He said such an initiative will “increase the flow of information, minimize phone calls and increase the efficiency of sales.”
But not everyone remains convinced about the usefulness of a Web site.
“We don’t think it is particularly useful for our product,” said Litman. “We do a lot of laces and you really have to feel the product to get an idea.”
Symphony Fabrics’ Schneiderman is also skeptical.
“I don’t see how a Web site, other than bringing attention to the fact that we exist, will take the place of submitting the product,” he said. “People have to look, feel and touch fabric — you can’t do that on a Web site.”
John Besanceney, the U.S. sales director for Turkish mill Berke Tekstil, is also not too keen on setting up an elaborate online presence.
“Fashion changes all the time — by the time it gets up on the Web, everything would have changed,” he said. “Just to have a contact place, possibly, but I could not see putting samples of fabric up there.”
Not only is fashion constantly changing, but it is also never a homogeneous medium. At next week’s show, scheduled to run Oct. 16-18 at the Jacob K. Javits Convention Center, the products showcased by exhibitors — both domestic and from overseas and both high-end and moderate — will span the textile spectrum and the seasons.
“We will be showing spring and fall,” said White. “But a lot of people are still going to be looking for nearby or summer fabrics, so we’ll be showing that, as well as winter fabrics.”
At next week’s show, about 500 exhibitors are set to showcase some of the latest trends in prints, according to show management.
“Plaids are coming on very strong,” said Barry Pollack, president of Earthsea Trading Co./Jemi Traders, a New Jersey firm that designs and develops yarn-dyed wovens.
“Certainly the gold or Lurex trend is a very, very important one,” said Billion Freres’ Gallico. “We have never been known as a Lurex or glitter house, but this is the first year that we have over 30 or 40 items that have Lurex in them.”
IFFE attendees in search of current and upcoming trends, will not be restricted to scouring exhibitors’ booths for the latest and the greatest. The show, which will be managed for the second time by Woodland Hills, Calif.-based Magic International, will also feature the Designer Summit Seminar Series.
Trend seminars include “Leather Apparel Trends,” “Color and Trend: Apparel and Home Fashion” and “2001/2002 Global & Trend Predictions with ‘An American Point of View.”‘
Other seminars, scheduled on all three days of the show, will cover CBI, digital textile printing and forecasts for men’s wear and women’s wear.