Fabric suppliers see better days in '02
December 10, 2001,
Buoyed by recent activity in almost all channels of distribution, decorative fabric firms are predicting a better in '01.
Of the various channels of distribution, fabric retailers and export appear to be slower to rebound than home textiles, furniture manufacturing and jobbers, the fabric executives reported. In export, knockoffs from countries without legal protection for intellectual property and the growing numbers of Chinese goods are key negative factors.
For Merrimac, "business is excellent; we're up 7 percent in October for the year," said Mike Rice, executive vp. Additionally, "our backlog is up more than 50 percent in dollars for the year."
Merrimac's product mix has changed: "The heavy half is from China, the balance is Italian," Rice explained. The Chinese segment, he said, "covers a broad range of pricing; it's very price sensitive. The Italian fabrics are at the upper end but offer good value."
As Chinese goods proliferate, Rice said, "design has to be a factor, well beyond the commodity approach. Our value added is a big piece of the equation."
"Our backorders are larger than in 2000, and our silk program is fantastic," said Mark Aizawa, president of Chris Stone & Associates. To enhance the program, "We are going into linen," he said.
Looking at business, Aizawa said: "We are totally surprised in our own business with strength in both jobbers, furniture and RV, the latter because of low gas prices and domestic travel."
Looking ahead, he said, "I think it will pick up after a flat first quarter." But, he noted, "we factor all our receivables, and it's harder to get credit approval across the board."
One difference between business now and last year, according to Harvey Nudelman, president of Fabricut, "is it's not easy like it was. Our business is holding and is up, but it's hard." One reason, he added, "is that we've been in a rapid growth mode in the last couple of years."
Mike Shelton, president Valdese, said: "We bottomed out the first and second quarter of this year and things have been a lot better since September. Current orders are 15 percent ahead of where they were in the second quarter.
The biggest strength in distribution is in the home textiles and furniture segments, Shelton explained. "Jobber repeat business is not as strong as the other segments, and contract is really soft, although hospitality has come back a bit."
As for next year, Shelton sees the pace continuing at least as strong as today or even better. "We've been working six days for the last four weeks," he said. Strong placements of new product at the last two markets have fueled the growth in this half, he said.
"We'll end up slightly behind; but in the last month there's been more activity for the first time since July," said Roger Burnim, vp, Concord Home.
For Concord, jobbers and manufacturers are the strong segments, with retail still slow, he said. Across all channels, he added, "there's been more interest in sampling for new prototypes" — something that wasn't present during the year.
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