Decorative Fabric Producers Evolving
November 8, 2004,
New York — In moves that reflect the rapidly changing way the home textiles business is being done, American decorative fabrics producers — both mills and converters — are adopting new strategies to survive and prosper.
These moves are competitive from two perspectives: the price advantages that make many American fabrics non-competitive, and the fact that so many of their customers are going offshore directly.
In many instances, fabric suppliers are competing with their own customers in the rush to find fabric partners, primarily in China, but also in countries like India, Pakistan and Turkey.
And with the price advantage of offshore sourcing is the very real deflationary factor for fabrics and manufactured product, whether for bedding, window coverings or furniture. In bedding, price points have plummeted by major double digits. In furniture, like fabrics from China often are a third to 40 percent less than their American counterparts.
The competition is multi-faceted. There are Chinese companies with American divisions that offer both fabrics — open line and exclusive designs — as well as cut-and-sew capabilities. Others are American companies that have formed joint ventures with Chinese mills to produce woven fabrics. And yet others are taking a one-by-one approach with key customers, allowing them to use archival designs or new confined patterns on a royalty basis.
No matter what the format, the condition is ever-changing, fabric suppliers agree. The situation is neither black nor white, as suppliers and customers alike struggle to determine the best process of the myriad ways to source offshore.
Increasingly, converters are setting up full-scale organizations in China especially, but also in other countries, to oversee their fabric production and cut-and-sew operations. Fewer mills have moved into the cut-and-sew business, while at the same time, beefing up their own offshore weaving operations.
While there still is a dichotomy among the players in China concerning the cut-and-sew business — with some more adept in the home textiles world, others in the furniture world — they all appear to have both distribution channels in their sights.
Implicit in the trend to full-scale offshore operations is the need for onsite oversight of quality control. If a color or weave is off, even by a miniscule amount, it is prohibitively expensive and almost impossible to ship it back once it lands in the United States. And the time factor that is involved in shipments of products destined for specific retail promotions precludes any type of production misstep.
Underlying all of the issues is what possibly could be the most critical factor of all — intellectual property rights, otherwise known as knockoffs.
For those involved in fledgling licensing programs with American customers sourcing in Asia, the copyright issue is combined with the issue of trust in the overall arrangement with the American customer. Without trust between the two parties, there is a need for audits to determine yardages used, as well as determining whether the fabric maker has violated the copyrights, several fabric suppliers explained.
At this point, there are still other American mills and converters doing work on special programs from China and elsewhere that bring the fabrics to the United States for specific projects, many in the contract field.
For the cut-and-sew user, whether home textiles or furniture manufacturer, using an American supplier offering offshore goods eliminates much of the risk factor.
Among the mills, Quaker is not moving offshore "and not doing anything regarding China, we're watching the situation. We want to understand how to make it work," said Tom Muzekari, vice president.
"Unlike other companies, Quaker will not release its designs in bedding to others to work on commission. In the last weeks, we picked up three big programs from furniture manufacturers who didn't get their products right from China," he added.
For Barbara Hoffman, vice president of Hoffman Mills, "China is evolving, ever changing. We're absolutely doing top of the bed, and it's doing quite well. We're doing innovative product at different price points, and it's evolving into seasonal frequency."
In furniture, Hoffman noted, "We're doing cut and sew as well as fabric from China, but we're also doing very nicely with American made," she said.
"Our own cut and sew is a growing business, and we're doing our own sourcing," said Jim Richman, president of Richloom. "We ship fabrics within China to furniture suppliers and do top of the bed. As for royalty arrangements, we prefer not to."
Several major issues are impacting Waverly, said Dale Williams, president. "First is the intellectual property issue; then there is the question of replenishment. If there is no way to replenish an item, you have to move on, and nobody at retail can really forecast," he related.
But Waverly, like most of its competitors, is already doing bed and window coverings offshore, Williams added.
Overall, offshore sourcing has shifted dramatically for Covington Inds. "Where it not long ago was 75 percent domestic, 25 percent imported; it now has reversed," said Roger Gilmartin, executive vice president.
As for cut and sew, "It's a service we can provide if requested, both for furniture and home textiles," Gilmartin related.
At China-based American Century Home Fabrics, "We will ship from our own facility for American manufacturers," said Tom Finneran, president. "More customers are asking for cut and sew, and we get the schematics in-house."
Overall, Finneran reported, "Furniture is rocking and rolling — it's way ahead of bedding overall."
Jack Eger, vice president of Craftex, said, "Our first goal is to sustain and grow our U.S. business. We're not much committed to producing in China. We see using our design archives as a major asset for that. And that approach has dramatically increased our ability to sustain productivity."
He added, "The bedding supplier wants control of the cut-and-sew operations."
In both bedding and furniture, Craftex "has partnerships with a few key players for production of fabrics using their designs in China," Eger said.
At Valdese, several approaches are used, according to Mike Shelton, president. "We're weaving in China and sending to specific manufacturing facilities for our customers in China. We also do design work and modify the designs for the specific end use to make the item in China or provide the service," he said.
Critically important, Shelton emphasized "is that we don't compromise our product line of quality."
For Swavelle/Mill Creek, "We do no furniture at this point, and we're really not in cut and sew for home textiles," said Richard Hanfling, vice president. "We will do some for manufacturers, and we can make an easy transition with our contacts of sourcing for fabrics — something we have done for years."