TDA: NEW WAYS NEEDED
Byline: Stuart Chirls
ABSECON, N.J. — Converters are re-creating their business to better compete in the global textile wars.
From offering products such as small-run specialty fabrics to providing services that include entire garment manufacturing packages, no merchandise is too esoteric and no market too far-flung for converters’ new vision of their future.
That was the message from 165 converters and their suppliers who attended the annual Textile Distributors Association meeting, which ended its three-day run June 19 at Marriott’s Seaview resort here.
“There is no doubt that the apparel market today presents unique challenges to the converter,” said Martin Tandler, president of Tandler Textile and outgoing president of the TDA. “The devaluation of Asian currencies has made the import situation here worse than before, and that is increasingly putting pressure on suppliers to apparel retailers to work cheaper than ever. We have to find new areas to exploit.”
Said Bruce Roberts, executive director of the TDA, “There are opportunities, such as the North American Free Trade Agreement, for the domestic textile people here. The keys to success remain being as creative as possible, being number one in quick response, not expecting to make million-yard runs, having special relationships with a few manufacturers and sourcing offshore if you have to.”
Tandler, who runs one of the largest converters in the industry, said that the pressures on converters have never been greater. “There are no margins anymore to speak of, and really no proprietary fabrics to build a business on. Plus, there’s too much supply and not enough demand,” he said.
Since 1996, Tandler has been putting together garment production packages for his customers. “You have to have a reason for being,” he said. “By offering our customers packages, we are cutting out steps and streamlining costs in the apparel production process.” He added that the converter is also enlarging its home furnishings division.
“Business is tough,” said Richard Knight, New York sales manager for the gray fabrics division of Hamrick Mills. “We have turned to pocketing and bedding as niches, because so much of the apparel fabric has gone overseas.”
Knight pointed out that for years, the southern textile mills used converters not only as a styling resource, but also as a buffer between themselves and the manufacturers and retailers on Seventh Avenue. “They didn’t want the aggravation of dealing with temperamental designers, the credit hassles, so they would funnel all of that through the converter. Now the apparel business is global and they don’t really need a go-between anymore.”
James Gutman, president of converter Pressman-Gutman and incoming president of the TDA, thought that converters could still function in that role, this time as an interface between mills and retailers. “Without the converter, who is going to style and market goods?” he asked. “Mills will not be able to turn their dollars as well.”
The larger issue, Gutman noted, was how a shrinking domestic customer base would affect converters’ ability to develop new products. Pressman-Gutman has been scouring the ranks of dyers and finishers for some time in hopes of creating a strategic alliance.
“As a converter, you have to be affiliated with a dyer, because having finishing capabilities is the only way to be able to afford new product development,” he said. In the meantime, Pressman-Gutman reduced its costs by moving to smaller offices earlier this month.
With the Asian economic crisis igniting a surge of low-priced imported fabrics from Asia into the U.S., domestic textile suppliers are feeling still greater urgency to retrench.
“Asian prices have definitely had an impact on all of us,” said Amber Brookman, president and chief executive officer of Brookwood Cos., a specialist in synthetic fabrics. “Also, Eastern Bloc countries are delivering gray goods to the U.S. market for the first time. Goods made in the Czech Republic, Hungary and Poland are readily available, creating an overabundance of textiles at depressed prices. And that cuts our margins.”
In addition, Brookman expected sales of the company’s outerwear fabrics to slow over the next three to four months due to ample retail inventory left over from the mild winter.
Brookman said that it has also become quite clear that converters have changed their approach.
“We are managing our assets as business people, not just as textile designers,” said Brookman. “That was not always the case in the past.”
Other firms are putting international sales high on their priority lists. “We are looking to expand into foreign markets,” said Ed Ricci, general manager of Duro Textile Printers, a finisher. “Mexico continues to look like a viable situation because of the North American Free Trade Agreement, and that might be a good choice because we do very little export.”
“As far as Asia is concerned, it’s price, price, price,” said Gerald Greenstein, president of the JBJ Fabrics division of Fab Industries, “so our aim is to be more into novelties than commodity fabrics. We have carved a niche in the better print market, which is small but where there is little available domestically.” There may be more good news in store for converters, as Greenstein expects the spring ’99 market to be strong for prints for the first time in three years.
Fiber suppliers are also feeling the pangs of Asia. Among those attending the conference was Don Vidler, commercial director for Courtaulds, who noted that because the Asian crisis is putting a crimp in its sales of Tencel there, it is focusing even more so on the U.S. and South American markets.
“South America has been very strong for Tencel,” said Vidler. “Denim is doing well, and Tencel is a mainstay of denim in Brazil, Argentina and Chile. Tencel is more of a year-round product there.” British-based Courtaulds is supplying Tencel fiber to South America from its plants in Axis, Ala.
In the U.S., Courtaulds is projecting Tencel sales to grow 50 percent in 1998. “The business slowed earlier this year, but it is starting to pick up. We are more into knits than ever before, and denim is starting to come back. Tencel adds value to fabric, and converters, mills, spinners and retailers are looking for value-added goods, to get more for their money.”
Perhaps most important, the converters have kept their sense of humor. TDA members entitled their annual satirical take on the textile business this year “Oh, How the Mighty Have Fallen.” The musical featured lyrics by John Cavanagh, executive vice president, CMI Industries, and script by Cavanagh; Pat Shea, sales manager of ICF, and Fred Shaw, vice president of sales, Bloomsburg Mills.
For example, “Expotela’s Nice” (sung to “Strangers in the Night”) lamented the action at the Mexico City trade show: “Expotela’s nice/I’ve been there often/ I’d accomplish more/Dead in a coffin/ Nobody I know/Has ever sold a yard…”
“You’ve Got to Hide Your Debt Away” (using The Beatles’ song “You’ve Got to Hide Your Love Away”) marveled at the financial wonders being worked in the textile community: “Forstmann crashed for lack of cash/Bathing in red ink/They prepackaged all their bills/Now they’re in the pink…”
Vietnam veteran Cavanagh sharpened his saber with the “Feel Like I’m Fixin’ to Buy Rag” (from “Feel Like I’m Fixin’ to Die Rag” made famous at Woodstock by Country Joe and the Fish): “And it’s 1-2-3, where are we goin’ next/Laos, Kuala Lumpur, Cambodia, Singapore/And it’s 5-6-7, we’ll buy most anywhere/After our next big air attack, whoopee!/We’ll buy from Iraq.”
At least, they still have their health.
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The Fiber Price Sheet
On the last Tuesday of each month, WWD publishes the current, month-ago and year-ago fiber prices. Prices listed reflect the cost of one pound of fiber.
Price on Price on Price on
Fiber 6/23/98* 5/22/98* 6/20/97*
Cotton 68.96 cents 67.08 cents 73.74 cents
Wool $1.60 $1.72 $2.57
Polyester staple 61 cents 62 cents 62 cents
Polyester filament 81 cents 82 cents 82 cents
3-denier acrylic $1.04 $1.04 $1.11
150-denier acetate $2.07 $2.07 $2.07
Rayon staple $1.12 $1.12 $1.11
40-denier nylon $2.42 $2.43 $2.59
Spandex $14 $14 $14
*The current cotton price is the May average on fiber being delivered to Southeastern region mills, according to Agricultural Marketing Services/USDA. The wool price is based on the average of 13 microns for the week ended June 26, according to the International Wool Secretariat. Prices for man-made fibers are averages based on various industry sources.