NEW YORK — Following a first half that in many cases was stronger than expected, textile vendors are predicting solid sales through the rest of the year, as long as the economy remains steady.
This story first appeared in the July 6, 2004 issue of WWD. Subscribe Today.
Executives said orders picked up sharply this year, as the fast pace of spring sales left retailers scrambling to keep shelves stocked.
“Our sales are up fairly significantly this year for the first half, more than we expected,” said Jim Gutman, president of Pressman-Gutman, a fabric importer that handles primarily Asian fabric and Latin American garments. “I don’t know whether it’s what we’re doing or the marketplace. Generally, the reports are fairly positive out of the apparel sector. For the second half of the year, it should continue, as long as retail continues to be strong.”
U.S. imports of textiles and apparel have been up modestly this year, rising 2 percent to $24.89 billion through April — the most recent data available from the Commerce Department. While the domestic textile industry has contracted dramatically — the National Council of Textile Organizations reported that, since 1997, more than 250 U.S. mills have closed, at a cost of 200,000 jobs — executives at some of the surviving companies said this year that their much-touted advantage of proximity has paid off somewhat.
“There was apparently a good surge at retail, in particular early in the year, and it’s just difficult to respond to that kind of surge from too far offshore,” said Keith Hull, president of marketing and sales at Graniteville, S.C.-based Avondale Mills. He said business “has been considerably improved” this year from last.
The increase in business has been such that the company last month added 140 staffers to its Sylacauga, Ala., denim plant to allow the facility to run 24 hours a day, seven days a week.
“Denim, in particular, has been strong,” Hull said.
While demand for nondenim fabrics hasn’t been as high, makers of other fabrics also reported a recent pickup in sales.
“First quarter was a little bit slower than what we had anticipated. Second quarter is pretty much on plan,” said James Martin, president of apparel fabrics at Danville, Va.-based Dan River Inc., noting the company had seen an uptick in demand for fabrics destined for corporate uniforms.
“That’s directly related to the service-sector industry in the U.S. When jobs are being created, it automatically begins to pick up.”
Looking at the second half, textile companies also are faced with their final opportunity to prepare for a radical change in the industry’s rules. On Jan. 1, the 147 nations of the World Trade Organization will drop their quotas on textiles and apparel, an event that will allow no-holds-barred competition between manufacturers around the world, most of which will be seeking to grow their sales to rich areas such as the U.S., the European Union and Japan.
Chris Glynn, a partner in Edwardia Sales Corp., a New York company that serves as sales representative for the Mexican denim mill Grupo Romano, said, “I don’t know who’s positioned well for next year. We’re just going to have to see. Not everything is going to come from China. There’s still good garment manufacturing in Mexico and the people who are using quick turnarounds as a way to be competitive are going to survive.”
He added that one event that would be crucial for the survival of Mexico’s industry, which has been losing market share to China over the last few years, would be the approval by Congress of the Central American Free Trade Agreement. CAFTA allows for “cumulation” with Mexico and Canada, meaning goods made in those countries can be processed in CAFTA countries and still enjoy duty-free benefits upon entering the U.S.
It’s seen as a first step toward the Bush administration’s eventual goal of establishing a Western Hemisphere Free Trade Area of the Americas.
On the domestic front, Hull of Avondale said all the companies can do is stick to their strategies and see what 2005 brings.
“You’ve read 42 different theories on how it’s really going to shift production from some of the rest of the Third World to China and not impact us here, or that it will impact us here,” he said. “Our game plan is to keep as lean as we are cost-wise, put the product out there and keep our turn times quick.”