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Flannel players look to an uncertain future

Flannel importers in the United States believe their business has reached its maturation point. While gram weights and quality have inched up in the last few years, these improvements leveled off in 2003.

"Flannel has been maintaining its ground for the last few years," said Avi Gross, president of Divatex, who explained that the business is on a plateau right now.

Gross added that because of the lifting of quotas next year, it won't be feasible for countries like Pakistan to export a lot of flannel in 2004, so the industry will see less from new sources. "I think you will eventually get more countries involved in flannel because it represents a new opportunity for them to bring products into this country," said Gross. "However, it is a traditional business where people tend to buy from the usual sources."

The biggest producers of flannels are still Portugal, Turkey, Pakistan and Turkmenistan.

"There seems to be a lot of interest in heavy-weight flannel and a desire to trade up these days," said Joe Gleicher, president of Poly-Commodity. He explained that since flannel is a quota item, most of the countries in Asia or the Middle East prefer to use their quota on higher value products. Most of the world's flannel still comes from Portugal, where there are no quotas on sheets and shipping costs are cheaper to the United States.

According to Gleicher, 2003 was an outstanding year for flannel, whereby colder weather and higher energy costs positively impacted the business.

"We believe this coming year will be even better," he added. Gleicher also said different cotton blends — such as silk, linen or wool — are bringing flannel into more upscale pricing and making it softer and more breathable.

Noted Gross, "Because retailers have been chasing price, they have let non-traditional countries like India, Thailand and China produce printed flannels, since their equipment is not capable of making yarn-dyes, but their quality is very different."

Yarn-dyed plaids are only becoming relevant to better stores and catalogers. Ryan Jones, a partner at Dormisette in Atlanta, added that flannel has become a commodity.

"We think of flannel as a comfort product as opposed to a warmth product; our flannel is more of a luxury item that we sell to catalogs and Bloomingdale's," said Jones. He added that gram weight is not always a measure of quality because worth also depends on the yarn, finishing and napping. "There is a movement afoot for better weights, but not necessarily better quality or more expensive products," he explained.

Jones said U.S. importers are seeing more embellishments now like embroidery, bringing flannel to a duty level that is about 10 percent higher. "In the better flannel category, business has been growing in the last decade; each year we bring in new retail clients," said Jones. "Also in the last two years, more competition has been coming in from countries like Turkey, India, Pakistan and China, who are making these products cheaper."

However, some say that a few years ago jersey knits hurt flannel sales and ever since flannel has been on the rebound with sales expected to reach former levels.

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