Letter from Portugal
May 21, 2007,
The home textiles industry in Portugal is in some ways the land that time forgot; in another sense it is the land that moved away from time — and yet again the land with which time must inevitably catch up.
One has to admire the degree of resilience in this diminutive country, which still supports some 200 mills producing home textiles. Yes, most are tiny operations supplying the domestic and regional markets. But still: they've got 200 running, and the United States has…?
Also admirable: despite the fact that their U.S. exports are less than they were five or six years ago — in many cases disastrously so — the size of the overall business for the survivors is about the same or slightly larger.
So how did the larger survivors make it? While everybody else zigged to sourcing for lower costs, they zagged to Europe and the higher end in the United States, determined to hold on to better accounts (blessings on you; Pottery Barn).
The question each faces now is how long it can sustain a globally small operation dedicated to local production in the face of the onslaught from the East. As has been so painfully demonstrated elsewhere, one cannot simply keep one's head down and tend to ever smaller pieces of business. The world catches up. Over three days, I and two colleagues visited some 15 companies between us, only one of which was sourcing from the East to build up business.
What was heartening to see was the number of young professionals holding positions of authority in the industry. It bodes well.
So, what to make of a snapshot visit? On the one hand, if the exporting sector of the industry in Portugal is determined to stick to upper-moderate to high-end price points, the manufacturers need to find a way to deal with independent accounts. But China and India will catch up, as they always have.
Which then will demand a move even further up the scale, shrinking yet again the pool from which to draw business. It's a difficult model, but Portugal is a different country. Perhaps it is small enough to create a different future.
Related Content By Author
Vegas Performing with PureCare's Lonnie Scheps