Bon Voyage, Baby
Don Hogsett -- Home Textiles Today, March 30, 2001
NEW YORK - Adios, addio, auf wiedersehen, aloha. Say farewell to the textiles mills of America's Deep South, and hello to a new global marketplace, a challenging new world of immense potential and equally great risks-a barely charted playing field that spans from the giant manufacturing campuses of China's sheet and terry mills to the hand-weavers of India's village co-ops.
Don't kid yourself-it's here, this business of global sourcing. And it's a whole lot bigger than most people think.
Just how big? Try this for starters. At textiles giant Springs Industries alone, almost $450 million worth of product is sourced abroad each year, almost 20 percent of total company sales, mostly in the form of greige goods for sheeting that the company then prints and finishes here. At WestPoint Stevens, it's roughly $100 million, including most of the American-as-apple-pie Ralph Lauren program-and WPS wants to get it up to 30 percent, chairman and ceo Holcombe Green Jr. has said.
Indeed, of the nation's 15 largest home textiles suppliers, which generated $8.2 billion in sales last year, as much as $1.5 billion worth of product is being sourced abroad each year, more than 18 percent of the total.
And it's not just the big sheet and towel mills that are scouring foreign shores for low-cost product to fill the shelves of Wal-Mart and Kmart and Target, three huge customers that wield enormous power, that keep driving down prices the way a hammer drives down nails into a coffin, that, at the same time, take down an industry's margins and profits and mills and jobs.
It's the smaller players as well that rely on off-shore suppliers. At S. Lichtenberg, one of the nation's largest curtain companies, virtually 100 percent of its $125 million in annual sales is derived from off-shore products. Ditto for Franco Mfg., where virtually all of its $153 million in sales is sourced off-shore. At Croscill, it's more than $100 million, said David Kahn, ceo. "It's half of our window treatments and all of the cloth for sheets and top of the bed. We bring in the cloth and do the cut and sew here. All we do here is the value-added part."
And in these uncharted waters one of globalization, Crown Crafts is only of several companies discovering that a manufacturing plant is moving from one side of the balance sheet to the other-it's becoming a liability, not an asset. Selling off its woven products division, Crown is transforming itself from a manufacturing to a marketing company. With its Calvin Klein and Royal Sateen sheets, it confines its U.S. product work to cutting and sewing-for Calvin the fabric comes from Italy, for Royal sateen from Israel.
This concept of global sourcing began decades ago as a small niche business, when design pioneers like Park B. Smith brought in rugs and table linens. Later Hal Alden of Brentwood Originals, a decorative pillow producer, hit upon the strategy of importing appliqued and embellished pillow covers from India and finishing them off here by stuffing them full of polyester.
But not everyone sees an off-shore future for his company. Tony Williams, the man charged with turning around giant Pillowtex, has said he thinks the plants need to be close to the markets. What works for low-cost commodity items, he thinks, may not work so well for the shortened runs and lead times associated with fashion items and better goods.
And sometimes the ship goes both ways across the ocean. More than 20 years ago, Biederlack started shipping high-pile throws from its plant in Germany to America. But under executive vp Peter McCabe, the company liked the market so much it decided to build a plant here, and has kept on adding to it ever since. Now it even ships product to Germany once in a while.
What's next on the horizon? All these producers now bringing in greige goods and finishing them here will likely go all the way and bring in finished product. And way off on the horizon? After American mills have idled their looms and consolidated their plants, then it may be the turn of those Asian or Latin American producers to buy stakes in American companies-not for their manufacturing plants, but their marketing expertise and easy, affordable access to one of the world's biggest markets. Ciao, adieu, shalom, to an industry that's being transformed before our very eyes.
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