Reflections on a Savage Spring
June 2, 2008,
It's been a savage spring, one marked by too many sudden collapses. The Linens 'n Things bankruptcy. The Dan River wipeout. NexCen's stunning announcement that it might not have enough money to keep going. Lay-offs at several mid-sized suppliers.
But as we debate, for example, whether the outcome of Linens 'n Things' bankruptcy will buy the company another year or only another six months, it might not be wise to write anybody's obituary too soon.
If you'd asked a lot of people 10 years ago whether Kmart would still be around today, most would have said no. They'd have said no if you asked eight years ago. Many would have said no if you asked three years ago.
But it's still standing. The chain is not in the best of shape, certainly, but Kmart remains a big account and the sixth largest seller of home textiles in the country.
Pillowtex the mill may be gone, but its brands live on. They don't have the U.S. market penetration they once had, but they're still generating revenue (and royalties) and looking to expand on licensing arrangements in other countries.
People in the know about the former WestPoint Stevens were predicting the company's imminent demise every other week for two years before the mill actually filed for bankruptcy. It now owns more off-shore production than domestic manufacturing, and does something akin to half the volume it generated in its glory days, but it's still here, too.
Even though most of the U.S. mills are gone, the "mill people" are still here. In fact, they're all over the place. Many of them are working for — surprise — mills! A lot of the retail people who populated now-defunct chains are around, too. They're working for other retailers, or they're working for suppliers.
The industry will cycle through the current situation, just as it has every other downturn. Montgomery Ward is gone, but QVC is here. Maison Blanche is gone, but Amazon is here. HomePlace is gone, but Z Gallerie is here.
We may find ourselves yet again in a different place than the one we were in, but we're still standing.