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Fashion, juvenile build on flannel's cold-weather base

It's cold out there, and the retailers that didn't plan it that way are scrambling to stock up on flannel. And they may be in for another surprise.

They, argued Divatex's president Avi Gross, may be finding that prices have changed greatly from the previous spring, which is when flannel is normally bought.

"The people that booked flannel when flannel was supposed to be booked have maintained [the prices they originally got]," Gross told HTT. "I think that if people didn't book flannel, they'll see that prices have gone up along with cotton prices going up."

Gross said that the flannel market over the past five years has been intertwined with the cost of cotton and the strength of European currency. Prices during that time, he felt, went down as cotton prices fell and European currencies were relatively weak compared to the American dollar. Now, Gross said, the Euro has become stronger and cotton prices have ticked up.

Said Joe Gleicher, president of Poly Commodity Corp., "There was excellent growth for flannel in 2002 because of weather patterns. Some areas where weather was warm, they weren't as strong; but most of the country experienced very good flannel business for 2002 because of the weather. Generally speaking, retailers' shelves have been cleaned off. It's the nature of flannel because weather has such a dramatic impact. "Compared to 2001, 2002 was a much better year."

Unlike their non-flannel counterparts, flannel suppliers must deal with the issue of seasonality so the merchandising and presentation of their product plays a larger role in their sales. Gleicher felt department stores and catalogs both did good jobs, with catalogs getting the overall thumbs up. "They have the advantage of print, and the way they set up their products is better in general."

The merchandising done by warehouse clubs and discounters needed some work, Gleicher said.

The people that have good quality and a good assortment and right design are the ones experiencing the most growth in the category, Gross said. Those without those attributes "are hurting."

"Where we really saw growth is where people looked at flannel as the whole ensemble — comforters, sheets, shams," Gross added. "The right way to run flannel is to have better products and promotions for flannel at the end of the year."

In order to differentiate their respective businesses, both Divatex and Poly Commodity are striking out in a more fashion direction. Both companies carry printed flannel sheets for the adult and juvenile markets and both offer several variations in weight. Gleicher cited the latter as being the biggest innovation in the flannel market in recent years.

"We try to differentiate between Back-to-School and regular flannel," Gross said. "It's younger and funkier and sometimes you can show that on the packaging more."

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