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Searching for market clarity through the fog of war, terror and a softened economy

The New York home Textiles Market gets under way later this week at an unprecedented moment for the both the nation and the global network of suppliers that create product for the country.

The industry's buyers and sellers find themselves wading into a market environment churning with elements they are powerless to control — the war in Iraq, the escalation of raw material prices, an economy in suspended animation and a once-resilient consumer base that no longer seems willing to prop up the economy on its own.

While no immediate remedy lies in view, the top U.S. suppliers told Home Textiles Today they plan to move forward and work toward building their business as best they can under the circumstances.

Volume suppliers continue to focus on volume retailers, and most of the majors said they will look for growth among specialty chains, mid-tier retailers and discounters — which collectively account for more than $14.0 billion in home textiles sales to consumers —while continuing to service the major department store sector, with its roughly $1.2 billion in category sales.

"Balance is a benefit," said Chip Fontenot, president and coo, WestPoint Stevens. "Retailers have proven to be a very resilient group. The channels take care of themselves."

A few, however, are looking beyond traditional retail classifications. Louisville Bedding is exploring non-traditional channels of distribution, according to David Roshberg, national merchandise manager, bedding.

"The customer base is shrinking, leaving and we're all battling it out with the same guys," he said. "But there's a whole other world we could potentially be selling to."

Mohawk Home is spreading its wings through the acquisition of Karastan in late December 2002, which plugs the company into department stores and high-end dealerships, noted president Bill Kilbride.

"We're doing a lot to add to new designs and products to the Karastan line and to understand priorities of dealers on that side of the business," he said. However, Mohawk is primarily relying upon its existing business across several categories in the mass market to drive volume. "Organic growth is our No. 1 priority."

If the strength of the channel leaders provides volume suppliers with some assurance about their potential to grow the business in 2003, the increasing demands for faster cycle times remains a challenge, several vendors told HTT. So, too, is the prospect of rising raw material pricing.

"History tells us that retailers are not open to price increases," said Barry Leonard, ceo, Glenoit Corp., parent of Glenoit Rugs and Ex-Cell Home Fashions.

The solution, vendors said, is to fight off what they can, shift construction where they have the opportunity, and hope that they can make up for higher costs now with better sales in the back half of the year.

"Raw material prices fluctuate," said David Kahn, president, Croscill. "Oil is $30 a barrel today, but it won't be a year from now."

Overall, value was the prevailing theme among leading suppliers preparing for the market.

"Suppliers, retailers and consumers are looking at value more closely at each price point and every quality level," said Tom O'Connor, executive vp, Springs Industries.

None of the suppliers surveyed by HTT said they expect retailers to significantly step up promotional activity. The direction of the economy may be uncertain at the moment, but "I haven't sensed any panic among retailers," said Wade Maples, president, Maples Rugs.

That may constitute the greatest promise for suppliers in 2003, and the leaders said they have been designed their lines to meet the industry's value demands. Product development details that were either shared with, or previewed by HTT include the following (at right):

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