What about U.S.?
May 24, 2004-- Home Textiles Today,
The home textiles industry in the United States has grown so accustomed to serving as a magnet for manufacturers from all over the world that it's a shock to encounter a group of people who express only a limited interest in the market.
Talking with Turkish manufacturers at the Evteks show last week in Istanbul, one heard little of the feverish interest in top 10 volume retailers that arises during conversations with manufacturers from China, Pakistan and India. By the same token, one rarely encounters a manufacturer who wishes to form a joint venture partnership with a significant U.S. supplier.
Obviously, there are companies in Turkey doing big business in the United States and looking to do more. The occasional Zorlu or Kucucalik is keenly interested in taking a bigger slice of the big pie. However, many of the manufacturers I spoke with viewed their U.S. business as supplementary to their other businesses, rather than an opportunity for explosive future growth.
You can probably guess the rap: companies in the States are too focused on price, too willing to sacrifice quality. The general view, said one manufacturer who is actively working to expand U.S. business, is that margin is better than volume.
And contrary to the general modus operandi of overseas manufacturers, most Turkish companies that are doing business through wholesalers and importers have no interest in making the leap to direct retail relationships. As one who had visited China in recent months remarked, "You see an empty factory, and why is it there? Because they built it for a Wal-Mart order, and then when the order was over, Wal-Mart went to some other factory."
But if the Turkish industry appears (from an American perspective) to approach the United States with a limited vision, from the perspective here it is the U.S. industry wearing blinders by not looking beyond its borders.
Suppliers at Evteks are mining Europe, Russia and the Middle East, and making a nice margin from it, too. A few have begun selling into China.
Small potatoes compared to the riches of the United States, perhaps. Granted, it's a strategy that would solve few problems at a $100 million supplier company. But it could provide an opportunity for the scores of $10 million to $40 million companies that are growing their businesses one or two skus as a time.
As the cycle of retailer contraction, vendor "rationalization," and direct imports continues to coil in upon itself, at some point the U.S. industry is going to have to stop looking at the rest of the world as an inexpensive toolbox — and start looking at it as a market.
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