December 21, 2010,
"The home textiles industry finds itself in the middle of yet another Cotton Crisis."
Warren Shoulberg PUBLISHER/EDITORIAL DIRECTOR
The home textiles industry finds itself in the middle of yet another Cotton Crisis, an ongoing drama that seems to pop up on a semi-irregular basis.
This particular crisis is not to be confused with any of the other maladies that seem to inflict the industry from time to time, including, but not limited to: The Margin Crisis, the Chargeback Crisis, the China Crisis and, of course, the Crisis Crisis.
Now, this is not to say the situation with cotton is not serious. It most certainly is. The wild swings in cotton prices - which are triggering sympathy increases in polyester - are very real and they are wrecking very real havoc with product prices.
So, perhaps a little context and perspective might help in understanding what's going on.
• Cotton doesn't grow on trees, but it does grow and like any agricultural product, it is subject to both natural and man-made variables. Floods in Pakistan are part of the former, agri-business decisions to reduce the acreage for cotton is part of the latter.
Cotton has been going up and down in price since the Garden of Eden. It's what cotton does.
• Cotton costs twice as much as it did a year ago, maybe even higher depending on when you read this. But, when adjusted for inflation, it's half the price it was during some stretches of the 1980s and 1990s. Everything is relative.
What is different this time is the violent changes in prices, often happening on a daily basis. This we haven't seen before and that's what makes this Cotton Crisis more severe than others in the past.
• Some suppliers and retailers have decided that polyester is the answer to the Cotton Crisis. More polyester, more blends, less cotton. This is a questionable solution for many reasons, not the least of which is that polyester pricing has been almost as screwy as cotton.
More importantly, the home textiles industry has spent the past 25 years telling its customers how wonderful all cotton products were. Now it has to say, wait, never mind, what you really want is a blend. It remains to be seen whether that's going to go over all that well.
• An unexpected consequence of this entire thing may be that the buying process - which has turned into a marathon nightmare of meetings, samplings, more meetings, style-outs and yet more meetings - may finally return to something resembling timeliness. With only short-term commitments being given by suppliers on prices, buyers may actually have to pull the trigger in a timely fashion again.
For an industry that claims speed to market is a key criteria, speed of ordering has been a joke. Maybe it will change now.
• In case you needed yet more confirmation, China is now firmly in control of the home textiles industry. American marketing companies and retailers may think they are running the show, but that's just an illusion.
• One last thing: This too shall pass. Eventually the growers will plant more cotton, someone will blink in the supply chain process and prices will start to moderate...until it happens all over again.
It's just something you're going to have to cotton to.