Don’t Start the Recovery Without Me!
By Len Mozer

Zorlu USA

SUPPLIERS LOOK FOR PICKUP IN U.S. ECONOMY TO BOOST SALES OF CURTAINS AND DRAPERIES IN 2004

With the stock market up and sales of new homes at record highs due to the continued low mortgage rates, suppliers of curtains and draperies are hopeful that the reported recovery in the U.S. economy will finally start impacting positively on their business.

But, as the New York curtain and drapery market opens this month, one gets the feeling that most industry executives are not quite as ‘upbeat’ as they were at the fall market in September 2003. At that time they reported that a good number of their key retail accounts seemed to be in a buying mood and ready to start placing orders on the new window fashions debuting at that show.

However, this buoyant attitude began to deflate as retailers remained cautious in making commitments for the spring 2004 selling season. In fact, as several company executives noted at the winter market in February, they were just starting to ship merchandise on items penciled in at the September market.
This long lag time is a result of delays by the stores in confirming orders, plus the 90 to 120 days it takes for shipments to arrive by ship from China and other offshore sources.

TexStyle

As a result, business since the last show has been chronically inconsistent with some weeks showing promising gains only to be followed by weeks of slow activity. The bottom line is that most of the companies contacted reported their 2003 sales were “flat at best” as compared to 2002.

A few firms even indicated they took a hit last year, particularly as some major retail accounts experienced serious financial difficulties, and either dropped out of the picture or greatly curtailed their home textile business.

As always, there were some exceptions. Firms such as Richloom, CHF Industries, and TexStyle reported double-digit growth in 2003. Todd Cella of Richloom says his company’s business has continued to be “explosive” over the last few years.

Janet Barragan reports that CHF enjoyed excellent growth in its higher end Peri line, but admitted that gains in its popular-priced CHF line were limited. She notes that “it’s very tough to compete in the mass market area” today as price competition heats up.

Spring Industries

Carl Goldstein acknowledges that S. Lichtenberg’s business in 2003 was “really flat” vs. 2002, but quickly points out that 2002 had been “the best year we ever had.”

Overall, the sales picture was basically flat, and the demand by retailers for more upscale looks and values at even lower prices has greatly intensified competition, cutting into sales volume and profit margins.

Goldstein feels the industry is still going through a “deflationary period” stemming from the high volume of lower priced goods pouring into the U.S. market from China, Turkey, Pakistan, India, and other offshore sources.

Alan Botwinick of National Curtain agrees, saying, “prices are going to continue to come down. There seems to be no bottom. Six years ago I used to battle my sources for a $10 panel that my retailers could sell for $19.99. Now, if you show a retailer a plain $10 jacquard, they look at you as if you’re crazy. It’s got to have fringe and other embellishments in the ultimate product that they can sell for $19.99.”

Barry Goodman of Commonwealth adds, “Everything is so price-driven. There’s no bottom price to anything. There are a lot of people bringing in goods out there, guys operating, figuratively speaking, out of their garage with no overhead. They work on a 15% to 20% markup, and all of a sudden, they’re in business.”

Evandale

The big question, however, is why the reported recovery in the U.S. economy—and especially, the record volume of home building and sales—has yet to trickle down to home furnishings industries such as ready-made curtains and draperies.

One answer offered was the fact that U.S. unemployment figures have not come down appreciably, despite record low interest and inflation rates, because many manufacturing and service industry jobs are going overseas, rather than being created here. The irony here is that the American ready-made curtain and drapery business offers a prime example of this shift to offshore sources, not only for fabrics, but also for finished goods.

This has been caused by retail demand for more highly styled fabrics with more embellishments at lower and lower prices each season.

And, as LDB Interior Textiles has previously reported, this has forced domestic producers not only to buy their fabrics from offshore sources, but also to shift an increasing volume of their cut-and-sew production overseas as well.

Quaker Lace

Just a few years ago, a good number of U.S. suppliers were reporting that their cut-and-sew operations here accounted for as much as 50% of their sales. Today, those companies that still maintain some manufacturing facilities here admit this piece of their business is a declining percentage of their volume—perhaps 15% or even less.

Others have closed their domestic plants, either by choice or through acquisition by firms that prefer to import finished product. In effect, most of the companies here have basically become importers, rather than producers.

Those firms that are doing their best to retain some cut-and-sew production here point out this capability gives them the flexibility to service their retailers quickly by finishing the fabrics at their plants. This is especially important for programs with major chains that involve a large number of SKUs.

Goodman relates that Commonwealth utilizes its cut-and-sew facilities to expand a successful program by offering more SKUs. He explains, “If we have a program that has a panel and a topper, we’ll also offer a balloon, a door panel, and a couple of other items to keep that program different from anybody else.” By producing these added items here, Commonwealth can deliver within weeks rather than the months it takes for delivery from their overseas sources.

However, the trend in the industry is definitely moving toward less domestic cut-and-sew production despite the demands by some major retail chains for ‘just-in-time’ deliveries on their orders. As a company executive explained, these stores are hoarding their open-to-buy dollars by having their suppliers carry their inventory, re-ordering only as they need more merchandise.

Commonwealth Home Fashions

The head of another firm, which no longer has its own manufacturing facilities here, admits that he farms out some cut-and-sew orders to independent contractors in order to service retailer programs heavy with SKUs.

Though most of the imports today are coming from Asian sources as well as Turkey, some companies importing fabrics from Europe and exporting some finished products to the continent are getting squeezed by the decline of the dollar against the Euro.

Some U.S. suppliers admitted they attended the January 2004 Heimtextil show in Frankfurt primarily to see the new styles their Asian resources had to offer rather than to shop the European exhibitors. In fact, one executive said he had to go to Frankfurt to find out from his Chinese suppliers what he was going to be able to show at the March market.

Of course, U.S. industry executives and stylists also attend Heimtextil to see what’s new from the European producers. The general verdict, however, was that most European curtains and draperies are designed for the European market. As one marketing director noted, “They have little relevance for U.S. consumers. They show too much organza and darker colors, which don’t sell here.”

National Curtain

Of course, all of the companies exhibiting at the New York market are betting that their new window fashions will sell to American consumers. But first, their new items will have to strike responsive chords with the retailers attending the show and get them back in a buying mood. To accomplish this, nearly every exhibitor is pushing value at the show, offering fashions featuring exciting new fabrics and styled with every kind of embellishment at very, very attractive prices.

And, though several company executives stressed they “do not choose to participate in this cut-price business,” there is no question that promotionally priced programs are taking the spotlight in many new offerings.

As one industry veteran observed, where just a few years ago the $19.99 per panel was considered the ‘floor’ retail price for many companies, “in today’s market that could be the top price in a lot of lines.” That might be an exaggeration, but don’t be surprised to see a broad selection of products ticketed at $14.99 and even lower.

As to styling, as Jamie Pincus, design director for Achim, points out, the advanced capabilities available from offshore sources today requires companies to offer truly different fashions each season. So, buyers can expect to see some very innovative treatments in every showroom.

In opaque fabrics, look for more elegant satins, velvets, faux suedes and leathers, corduroys, heavily textured chenilles, traditional jacquards in damasks and taffetas, novelty animal designs, and more well-colored solids.

The Oxford House Collection

In sheers, expect to see real silk and silk-like looks in vertical pleats, more chiffons and crêpes, bands of sheer and semi-sheer, weathered looks, heat-transfer prints, and extensive use of embroidery adding texture and design interest.

Look also for new laces with contemporary styling and novelty holiday treatments at attractive price points. In color, spice tones seem to flavor the palettes of many new lines, though blues, sea greens, and topaz are also in evidence.

As for embellishments, there appears to be no limit. Top treatments and panels feature fringes, tassels, beading (including strands of beads), faux pearls, sequins, and appliqués.

Here’s a rundown on some of the new fashions making their debut at the March Market in New York. Achim is showing some new satin and chiffon panels as well as a buckled tab on a striped chenille fabric with an upscale look and feel. The company is also expanding its well-received frog and fringe embellishments.

The Chandler Collection is extending its hand-smocked panels, including dressier silk-like opaque fabrics in brocades and solids. Look also for more of its sheer organdy prints and the use of tab tops.
CHF Industries features faux suedes, including a diamond-patterned perforated design, in luggage and leather shades; a printed stripe on velvet; a grid ‘window pane’ pattern created with thick chenille yarns; lots of embroidery on satins; heat-transfer floral and scroll prints on sheers, and some geometric jacquards. In tailoring, look for spaghetti tabs on a slinky texture as well as Parisian and goblet pleats.

Melrose Home Collections

Commonwealth Home Fashions debuts Bonita, an assembled program featuring a shadow stripe created by combining sheer stripes with plain fabrics; Ritz, a polyester seersucker; Cachet, a solid ‘tiki-grass’ look at a popular price; and an embroidered cotton bedding program called Carnivale.

Croscill Home is emphasizing traditional styles like damasks and multi-color floral jacquards. There are also new sheers ‘engineered’ on the bottom with embroidered sequins; casual fabrics such as chenilles in stripes and dots; vertically pleated fabrics; and more leather looks.

D. Kwitman is expanding its bedding ensemble programs and adding Rajah Crystal, a beaded valance, to its Rajah program. There are also novel top treatments with Velcro-secured tabs that enable the consumer to put the panel and topper on one decorative rod.

Ellery Homestyles is now situated in a much larger showroom, suite 1212, at 295 Fifth Avenue. Its new offerings, in addition to the Trading Spaces brand, highlight a broad selection of embossed and printed corduroys in pinwale and wide wale. Also new are Savannah, velvet appliqué panels with appliquéd tulle sheers, and Constantine, an antique floral with a vintage tea-stained look, printed on a textured barkcloth-like fabric.

Evandale introduces Bebira, a velvet with decorative silk strips sewn on top in a diagonal pattern in vibrant colors; Chloe, a beaded lace on satin in soft gold; Emma, a crochet design in ivory; Flamengo, a jacquard chenille with a patchwork effect; Jador, a floral jacquard chenille; Velvet Scrunch, a velvet with ‘scrunch’ embroidery; and Verona, a patchwork of velvet and burnout velvet with a floral pattern.
National Curtain incorporates ‘construction innovations’ with ‘contemporized’ classic motifs emphasizing color and weave. Chrysanthemum shows an Asian influence and look for the pareddown linear trend with interesting surface texture in Daisy.

Ellery Home Styles

Oxford House shows more innovative laces, especially the new slinky long-fringe styles, introduced in the Crystal collection. Pewter is forecast as an important new lace color.

Park B. Smith shows embellished tapestry valances as well as oversized panels and jacquard-woven animal designs such as tigers and cheetahs. There are also new panels with attached valances and two new sizes in its successful Magic Blinds.

Quaker Lace is showing Luxury, a damask lace with a crushed texture that coordinates with pieceworked panels and valances. Non-lace items are textured with silk and silk blends with suede trim. In addition to its popular Cobweb lace, Quaker introduces Spooky Halloween.

Richloom Home Fashions offers a wide choice of fabrics and textures including crushed satins, faux suedes, and velvets with heat-transfer prints. Sheers feature linen looks in color and construction and satiny looks embellished with beads.

SKU, Inc. continues to expand its Window Art collection of trompe 1’oeil scenic prints, including scaled-down versions as tiers and valances.

The Chandler Collection

S. Lichtenberg highlights a new satin collection that incorporates texture, embellishments, and print techniques with metallic and pearlized accents in a spice tone palette. New sheers include a print collection on textured silk-like fabrics with different layering and shading effects. Novelty tiers employ new appliqué techniques creating fun designs of chili peppers, cocktails, and geometrics.

Springs unveils a collection of tapestry toppers with heavily embellished trim including a red paisley, a Southwestern design, and a dramatic red floral. There are some solid-color programs, such as a 100% silk number called Juneau Silk, plus a selection of new jacquards, including chenilles. Also, expect to see faux-suede looks with a variety of prints and textures and ‘high-end’ novelty prints in a group of tiers.

TexStyle is debuting its new collections in the former showroom of Cadillac/Oxford, suite 707 at 230 Fifth Avenue. New are mid-weight opaques, including Gwyneth, a taffeta-like fabric with stripes and small cut-velvet rosebud embroidery, and Delilah, a “lightish” taffeta-weight fabric with vertical Fortuny pleats created by crashing on a faux silk. Premiering in sheers are Lina, which offers a crisp hand with a little stria and a bottom cuff woven in a linen-textured polyester sheer, and Layla, which combines fabrics such as pintucked faux silk and taffeta with a sheer in the middle. Another features rows of pearls stitched all the way down on chiffon.

Zorlu USA is introducing a new clipped lace called a ‘clip jacquard’ with a very dimensional look; chenilles on voile for a windowpane effect; Garden, a contemporary floral box; and several textures including a tweed and a damask. Other new laces include a positive/negative style with a heavy 24-gauge construction and a heavy airbrushed crushed fabric. New too are several embroideries, including an allover puckered voile style, and an iridescent poly-silk called Zorlon, engineered for a soft hand and drapability.

These are only a sampling of the well-priced window fashions to be unveiled at the market, and which the industry hopes will trigger some strong buying activity once the recovery in the economy really gets underway.

Despite the general flatness in the business last year, most company executives are looking for a definite improvement in the first half of 2004 and a bigger surge in the second half.