The Buzz on 2008
January 7, 2008,
Hard to believe it's already 2008. Harder still to comprehend that the next five weeks will see textiles folk bouncing between shows in Germany, Atlanta, Las Vegas, Los Angeles, New York, Dallas, Paris, San Francisco, Orlando and Seattle — depending upon which segments of the market they're working.
Price increases: Retailers keep saying they will not go there, but anecdotal evidence suggests they're already being pushed there. The critical factor is the number of suppliers and manufacturers closing the door on unprofitable business. A scenario closely allied to…
Dollar devaluation: It hurts, it's been hurting and it's been making a difference for offshore manufacturers in their decision-making for several months now. Again, the question is critical mass. As long as somebody is willing to take business at a loss just to get more shelf space, the beat goes on. But scuttlebutt since last summer suggests there are fewer of those somebodies.
Learning the lesson: There's a reason there are fewer of those somebodies. During the great offshore manufacturing build-out, conditions largely favored the anything-to-get-your-foot-in-the-door approach. Buyers now are far less forgiving and far more demanding. Over the past 18 months, but in the first six of 2007 in particular, manufacturers have discovered that a favor granted today will not likely be rewarded with consideration granted tomorrow.
Fewer newbies: From 2002-2006 they were spreading like kudzu. Not so in 2007.
Domestic disturbances: The offshore shift over the past year of mill giants Springs and WestPoint continued to rock the industry in terms of the market share battle. As each pursues a rebuilding effort this year (whether successfully or not) the overarching effect is one of uncertainty.
Rocky retail? Talk about uncertain. The prevailing narrative in the consumer business press is Lousy Christmas/Lousy 2008 for Retail. Sure, the holiday season appears at this juncture to have fulfilled expectations that it would be weaker than average — but I have yet to see a report asserting that sales declined. Sales were anticipated to be slow, and most retailers seem to have responded accordingly. I believe that's how smart businesses are supposed to behave.
That said … I'm hearing from suppliers in rethat below-plan performance has been the norm in recent weeks. How far below plan varies by retailer. Which in some quarters is raising another question…
Blocking and tackling: If the gathering subprime/housing/consumer confidence storm clouds end up drenching us in a tough first half at retail, some suggest it will result in more creative buying and merchandising.
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