A New Year of Change
January 8, 2007,
Forget 2006. It's so last year. (Of course, "It's so last year" is really so three years ago.) Today, we're hauling out the old HTT Crystal Ball. Here are the stories likely to have the greatest prominence in 2007.
The supplier-to-supplier unions are far from over. It's a sure bet that some of the U.S. firms marching around Heimtextil this week will be shopping for more than just product. So will several of the off-shore mills.
Hedge fund/private investor ownership
Recent reports in the financial press that equity firms are sniffing around The Home Depot and possibly Bed Bath & Beyond suggest that the money men aren't just shopping for distressed property anymore. The Wall Street Journal reports some $750 billion in hedge fund dough in search of acquisition targets in 2007.
Seems likely at least one flashy retail deal will emerge this year as well as several smaller supplier pick-ups.
An Inconvenient Truth
The combination of Al Gore's highly publicized movie, the wake-up call from Hurricane Katrina, a freakishly warm start to this winter, and Wal-Mart's very public environmental push all result in some powerful forces coming together to make going green a sexy product proposition.
Will consumers pay the premium, or will the pressures of volume retailing bastardize the meaning of "eco-friendly" product? If the latter, will consumers notice or care?
New fiber technologies have begun making their way into home textiles products. The marketing and merchandising of them will be key to charming consumers about their benefits and value.
Another bad news year for Wal-Mart
Late last fall, I saw what I believe was the first stock-analyst note suggesting that the break-up value of the company might be better than that of the behemoth as a whole. Will others pile on?
Another good news year for Wal-Mart
Comps, schmomps. In 2004 and again in 2005, Wal-Mart added more than $25 billion in annual sales despite the tepid 3% U.S. comp averages each year. It will add billions more when this fiscal year closes at the end of the month. And it will do so again a year from now.
The battle for global mill supremacy
Springs Global (aka Coteminas) lays claim to being the largest home textiles mill in the world, but is grappling with currency issues in both the U.S. and Brazil. WestPoint Home, a subsidiary of investor Carl Icahn's AREP, has snapped up mills in Pakistan and Bahrain and is hunting for others. Welpsun acquired the U.K.'s venerable Christy towel operation and is also is scouting for more.
Eighteen months ago, GHCL was a spinning operation in India, largely unknown in the finished-products world. Today, Dan River's parent company plans to be a $4 billion entity through the acquisition of a U.S. retailer.
And China's mills are, relatively speaking, just getting started. So here's to 2007. It promises to be a heck of ride.
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See the August 2017 issue of Home & Textiles Today. In this issue, we look at the Top 50 Retailing Giants Report, plus Manufacturing: Made in the USA gaining ground; International: Portugal ramping up exports; New products: NY Now home textiles introductions; Outlook: Commentary from H&TT's editors; and Planning: Trade show calendar.