NEW YORK — The domestic firms that are still around to kick off the one-year countdown to 2005 are now planning to stick to the strategies that have allowed them to outlast many of their fallen competitors, rather than attempting a last-minute retooling of their businesses.

This story first appeared in the January 6, 2004 issue of WWD. Subscribe Today.

“We will pretty much continue to do what we have been doing,” said James Martin, president of apparel fabrics at Dan River Inc., Danville, Va.

That means continuing to focus on the value-added nature of yarn dyeing and largely staying away from the commodity business, he said.

The nations of the World Trade Organization in 2005 will wind up a 10-year phaseout of quotas on textiles and apparel. This is widely expected to enable China to control the manufacture of the lion’s share of those products worldwide.

Given the cost structure, suppliers in China and other developing nations are sure to win out when it comes to producing goods inexpensively. Instead of offering the lowest prices, domestic firms are leaning on their proximity to retailers and producing a more selective offering than their overseas counterparts.

For instance, Martin said few U.S. firms employ the yarn-dyeing process, which is both capital-intensive and more time-consuming, since the yarn has to be dyed at the start of the process, after the order is placed, which adds to the total amount of turnaround time needed.

When piece-dyed fabrics are used in garment production, companies may start from fabrics that have already been woven and colored, speeding turnaround time.

Referring to the yarn-dyeing process, Martin said, “It’s a niche. It’s specialized. It’s differentiated.”

Accordingly, Dan River has built a business model around that positioning.

“We believe that there are going to be fairly robust cut-and-sew operations in the Western Hemisphere after 2005,” he said.

Having goods made nearby helps stores test-market looks, since the turnaround time for merchandise is quicker than is generally possible with companies operating out of Asian facilities.

“We’d have to have our head in the sand to believe that Asia is not going to continue to grow,” noted Martin. “Our survival is very much dependent on service, turn time and the value-added nature of our particular product.”

Ed Moskowitz, president of the knitter Fabrictex — which has its headquarters in New York and its mill in Lincolnton, N.C. — said his firm would also stay the course and continue with a specialized offering.

“Our plans basically are to keep our niche business in place, present very focused and directed stylings to our customers that we do not think they can find in the overseas market,” he said. “Fashion and styling are key to our survival in this hemisphere.”

Aggressive niche marketing is also the formula for post-2005 life for Fred Baumgarten, owner of the converter Majestic Mills, based in New York.

“After 2005, we have to be nimble,” said Baumgarten. “We have to be quick or we have to have a small appetite. We are going to unrestrained world competition. We have to take advantage of the structural opportunities that a domestic supplier has.”

In addition to being closer to the customers, he said domestic firms benefit from an understanding of the end consumer and the level of customer service they can offer.

“We want to decommoditize what we’re doing,” said Baumgarten.