It's an Off-Price World
January 26, 2009,
I didn't speak to anyone at the recent Heimtextil international home textiles show who thought 2009 would be an easy year. Indeed, exhibitors arrived at the trade fair prepared for a tough year, slower show traffic and fewer U.S. buyers.
Off-shore mills — especially those in the sheet and towel categories — are still contending with the aftershocks of the Linens 'n Things liquidation, compounded by order cancellations in the fourth quarter as other retailers diminished their inventory requirements. There's a lot of merchandise on the floor looking for a home. In such a climate, meetings with off-price retailers were a necessity.
But off-pricers weren't just making the rounds in the Asian halls. They were also all over the European section in Hall 9. I spoke to one representative at a stand offering a host of brand names for the global market who told me only the off-pricers had visited.
There was a great deal of talk about the economy throughout the week — the U.S. economy, the global economy and one's home country's economy. Within that subject there were a number of discussions about what various governments around the world are doing to stabilize/subsidize their textiles industries — or not. Consensus winner of the government that is doing the most to help: China. Government most cited as having no interest in helping: the United States.
The more hopeful among fairgoers and exhibitors envision positive economic movement getting underway in the back half of this year — but it must be stressed that those people were more hopeful than optimistic. Most expect the thaw to begin in 2010, some late in the year.
Everyone I spoke with sees further retail consolidation ahead, although no particular company was named as on the precipice. Everyone also expects further closures in the supplier and manufacturing communities.
Despite the lousy economy, the mood was fair. Companies are looking for opportunities where they can find them, with smaller companies, obviously, seeing more of an upside.
Perhaps the best perspective I heard on the current environment came up in conversation with a supplier executive I spoke to after the show. He said, "This year, to survive is to win."