 Market Preview - February 2008  |
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Climate Change
As New York market opens, vendors hope the weather stays mild and the economic climate brightens in 2008 As the New York Home Fashions Market opens Feb. 11, vendors at the showroom buildings are hoping that the weather stays mild and sunny throughout the week. The last thing they want is a repeat of the snowstorm that hit the city last year. But industry suppliers of curtains and draperies are hoping even more that the nation’s economic climate will brighten as the Spring selling season gets underway. Right now, they’re not too sanguine about this prospect. That’s because, though a few companies recorded some single-digit growth in 2007, most vendors report their business was “quite soft” in the second half which they attribute to a sharp drop in consumer traffic and sales activity for many of the window fashions retailers across the country. Recession Threat & Rising Costs Key factors in this decline, they note, are the “meltdown” in the housing market, soaring gas prices and general lowering of consumer confidence as that dirty “R” word—recession—keeps cropping up in media reports on the nation’s economy. Executives are also becoming more concerned about the rising cost of product from China due to the creeping devaluation of the dollar vs. the yuan, higher prices for polyester fabrics, plus continuing hikes in shipping and other business expenditures. Yet, despite these significant rising costs, vendors say retailers remain adamant in refusing to pay higher prices for their products, and in fact, are even asking for bigger markups. As one executive comments, “Some dealers want only one price point, $19.99 or less, regardless of our cost. They don’t seem to understand that products with better fabrics, more embellishments and special tailoring simply cost more.” “Buyers have a pre-conceived value of a product,” another vendor notes. “They feel that the retail price of a panel has to be $19.99, and working on a 56 percent or 60 percent markup, their cost has to be $9.10. So, they tell us, ‘If you can’t make it for that price, don’t show it to me’.” Another ongoing industry concern is the growth of direct importing (D.I.) by major retail chains from factories in China and other offshore sources, by-passing their regular suppliers. A few industry veterans say they’re spotting a trend of retailers swinging away from D.I. as they experience the pitfalls of carrying the highly sku’d inventories in draperies and curtains, “eating their mistakes,” and paying for the packaging and freight costs. But others question this as they see such stores as JCPenney’s committing heavily to direct importing. Another major concern is that stores are taking even longer to make buying decisions. A frequent complaint heard from executives is, “Because of these delays, things bought at the August Market will just be getting into the stores in February.” In fact, a number of the exhibitors state that these longer decision delays by retailers have negated the reason given for the switch to the earlier February and August Market dates, which was to allow for the longer time required to create and receive goods being shipped from Asian sources. As one executive put it, “So, why schedule markets for the two worst months of the year? It’s either hotter than heck or blizzards and freezing temperatures!” New Styles Emphasize Basics As for the new fashions debuting at this market, though some innovative styles will be offered, there’s a sense that the emphasis will be on the basics. As Carl Goldstein of S. Lichtenberg notes, “The basics continue to sell, and when you get into a recession period, the basics get even bigger.” A different view is held by Jason Carr of Softline who says, “Price is an issue, but, everything revolves around being fresh, having fresh looks.” The “going green” trend seen at the August market will continue to be highlighted at this event. But, the eco-friendly features will be confined primarily to more energy-saving treatments, including separate linings and interlined panels as well as blackout fabrics and foambacks. But some vendors say that though retailers recognize the sales appeal of lined draperies in terms of insulation and a more luxurious custom look, many buyers won’t pay the added cost, so they are emphasizing their foambacks and blackout fabrics. As to the use of natural fibers, some companies will feature their silks, linens, cottons and blends of these fibers. TexStyle will again spotlight fabrics made of hemp and bamboo. However, don’t look for pricey organic cottons, but do expect to see more polyester fabrics in faux silks, faux linens, faux leathers and faux suedes. Other new trends on display at the showrooms will be more grommet headings, metallic yarns, glitzy sparkle effects, elaborate embroideries, pinch pleats and new laces. Vendors relate that new lace machines and better controls of dye lots have greatly improved the quality of laces from China. Style Highlights Here are some new style highlights at the New York Market:
Summing up, vendors are hopeful that their new fashions debuting at the February New York Market will give a kick-start to their business in 2008. Several companies, such as Softline and Stylemaster, are expanding their sales force in anticipation of new placements. Beacon Looms and S. Lichtenberg executives say they expect to hit their growth targets again this year. Still, a number of other suppliers indicate that, though they’re looking for some gains in 2008, they are not expecting any miracles in the current economic climate. Resources
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