 Cover Story - October 2009  |
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Unstoppable Ingenuity Details on the recession's effects, signs of the tide turning and course changes creating new opportunities
The big topic affecting everyone’s business strategies and bottom lines is, of course, the recession. Its impact has been global. “Factories overseas have seen a slowdown in production as a result of the recession in the U.S.,” states Jason and Rodney Carr, owners of Softline Home Fashions. “Many factories have shut down parts of their production plants and many looms are stopped temporarily.” “Buyers from around the world are more price conscious,” says Mandy Coughlin, sales executive, Auskin USA, Inc. “Buyers from international companies are passing along price and product information to their counterparts in other markets.” Here in the U.S., change has influenced retailers and consumers alike. “Auskin has had to remain very cost conscious, not holding as much inventory and has aggressively shopped for the best freight rates out there,” Coughlin continues. “Retailers also are looking for just-in-time inventory.” “The most significant impact of the recession has been the reduction in retailers (and doors) to sell,” says Jeff Kaufman, president and coo, Avanti Linens. “This leads to less new product being tried in the market, which means less options for all retailers and, more importantly, consumers.” When Life Gives You Lemons Setting aside the doom and gloom, what perhaps isn’t brought to light enough is the hard work and ingenuity many companies have had to exhibit in slogging through the economic downturn. “The recession has caused textile suppliers to be smarter about their businesses,” notes Nelson Chow, vice-president, C & F Enterprises, Inc. “Cutting costs, working more efficiently and honing in on opportunities to continue business during the recession will allow for expansion in the near future.” “We have to design better, be more fiscally responsible and generally run a tighter ship,” says Stuart Handelsman, co-owner, Daniel Stuart Studio. “As a small company, we are finding wonderful opportunities. People are looking to designers for a new direction. Not only do our designs have to be compelling, they must also have a sales component. We recently introduced a well-received retail selling system that helps retailers build their business.” Glimmers Of Hope Is it just imagination or does it seem as if “the bleeding” has subsided? We asked the managements in a few of the buildings that house home textile showrooms about traffic during September New York Home Fashions Market. “There has clearly been a weeding out process of both vendors and retailers and the general buzz was that this process was nearing its end,” says Chris Collins, vice-president/general manager, 7 W New York. “Our attendance did not decline, which is very encouraging in itself. “We had more exhibitors and new companies than ever before, which points to optimism. We are all working within a new business climate and many companies we work with have employed and are getting more comfortable with new or adjusted go-to-market strategies,” he says. Claude Litton, general manager, 295 Fifth Ave., believes the upswing “partly stems from stores having to reorder because they were low on stock.” He has also noticed changes within suppliers’ companies. “More companies are diversifying their products and offering more of everything,” Litton says. “Some larger companies have gone into licensing, which gives them a degree of exclusivity. We’ve been pushing more tabletop and furniture tenants into the mix as well.” Lucy Zhune, creative marketing director, 230 Fifth Ave. concurs, “The recession has led some of the companies at 230 Fifth Ave. to expand into different categories in order to be able to offer buyers more of a variety and help keep their businesses lucrative.” Randy Briskin, vice-president of leasing, 261 Fifth Ave., has a different point of view. “I see both ends of the spectrum. How market went depends on whom you talk to,” he says, noting that the recession has seen some companies thrive and others go under. The industry has been consolidating and challenges had been arising years before the recession, particularly with the predominance of manufacturing overseas. “Those who were prepared and saw opportunities in the consolidation survived and those who were weak and caught off guard have not,” he says. Like everyone else, the market buildings are stepping up their efforts. Litton notes that the Buyer’s Lounge will become a permanent feature at 295 Fifth Ave., although on a different floor from where it had been set up in Sept. At 230 Fifth Ave., which also offers a Buyer’s Lounge, painted corridors, new hardwood flooring and refurbished elevators make for a better buying experience. Lights At Tunnel’s End?
Because of the recession’s depth and breadth, some things put in place by it may not change easily or at all as the economy slowly recovers. “I think more important than what will change is what won’t change,” says Kaufman. “I think the retailers have figured out that they don’t need as much inventory as they thought they did prior to the meltdown. This should lead to cleaner inventories and the ability to react more quickly when business picks up.” “You will see certain retailers and suppliers become more innovative and aggressive in growth,” Chow explains, with retailers more willing to try new programs. “As for consumers, they will remain more savvy than before, looking for quality, fashion and value for their hard-earned dollars.” Some companies are turning the tables on the global nature of the industry by increasing efforts to export, though it’s not easy. “Many companies in the U.S. face logistical problems when they export,” say Softline’s Carr brothers. “It takes a lot of paperwork and the right people to make sure that the duty drawbacks are done correctly. We also feel that exporting has suffered since most product today is made overseas. Avanti Linens is planning to expand its reach overseas. “We are already selling a significant volume to the Middle East,” says Kaufman. “Our next biggest target is India, where we know there is a ready market for better, highly styled product. “The two biggest obstacles that we face,” he says, “are finding the right partner, whether it is a rep, distributor or joint venture partner and tailoring the assortment to fit the local markets abroad.” Branding Versus Private Label Speaking of partnerships and tailoring product, Jerry Haggerty, director of licensed brands, Sunham Home Fashions, points out, “Brands make a big difference, but now many large retailers are opting to create their own private labels, which gives them more control over the merchandise. “It’s a concern, but there’s room for everyone and they still need other brands,” says Haggerty. “A brand like Modern Comfort by Angela Adams produced by Sunham gives them legitimacy, because it’s a far-reaching lifestyle brand.” Eileen West, designer and owner of Eileen West, launched a line of bedding with AQ Textiles during the N.Y. market. It mirrors her Eileen West sleepwear collection. “We are known for an attention to detail and it incorporates signatures such as pintucking, pleats, unique lace and delicate embroideries.” West says, “We are confident that the best way to grow is to offer a well-made, original product at a good value, even in a crowded field.” “You have to be flexible to do business these days,” says Diane Piemonte, vice-president of creative services, Revman International. “We offer private label programs to retailers as well as licensed brands. We have an in-house design studio and understand how to develop a lifestyle brand.” The September N.Y. market saw the introductions of new designs in the company’s licensed lines, which include Michael Kors, Tommy Hilfiger, Laura Ashley, Columbia, Jantzen and Steve Madden. The company ventured into the freestanding window business with designs and a display created especially for the window buyer in the Tommy Bahama line. Better Together The quest to reach new customers has some companies partnering with firms in non-textile product categories to create exciting packaged units. United Feather & Down (UF&D) signed a licensing agreement with Borghese for a line under the Villa Di Borghese brand that promotes the synergy between beauty and a good night’s sleep. UF&D claims it’s the first licensing agreement ever between a home textiles firm and cosmetics manufacturer. The bed and spa pillows, comforter, booties and spa body wrap are each packaged with samples of Borghese skincare products. The line launches nationwide through Bloomingdale’s in October 2009. The textiles are crafted with 300-thread-count Italian tile dobby cotton in white or Borghese’s signature ivory and finished with an aloe vera treatment. Fill features either Botanical Down™, a blend of Lenzing TENCEL® lyocell fibers and Freshness Assured® down, or a Botanical Down Alternative™, a blend of micro-fiber down alternative and Lenzing TENCEL® lyocell fibers. Each piece is embroidered with the Villa Di Borghese crest. Northwest developed a licensed “Toy Story 3” throw with graphics printed in a layering process that results in a 3-D effect visible with special glasses. The throw will be packaged with the DVD of Disney Pixar’s 3-D “Toy Story 3” movie and a pair of 3-D glasses for sale on the HSN TV shopping channel this fall. Marketing takes a high-tech turn as Sferra partners with Ronda Carman, founder of allthebestblog.com, to focus on Sferra’s Lose Count™ campaign and raise Sferra’s profile among designers and design-conscious consumers. The Lose Count campaign promotes determining linen quality through factors beyond thread count. Carman is planning launch events in Los Angeles and New York. The Trident Group is the exclusive manufacturing partner for the Southern Living Home Collection line of luxury towels. Southern Living magazine has a range of branded products, but this marks its first entry into the bath category as well as the first licensed/branded towel program for Trident. The collection features three ranges, each in 16 colors: Morningside, a basic two-ply towel; Abington Hill, made with Supima cotton and Air Rich technology; and the top-of-the-line Highland Park constructed with premium extra long staple, three-ply, zero-twist yarn and silver yarn for anti-odor and anti-static properties. New Players What better time than in recession, which has shaken even the affluent consumer, to open a luxury home goods outlet store? Milan Luxury outlet store opened in New York’s Soho district in May 2009. Its online store, milanluxury.com, debuted in the summer. Products offered include linens, dinnerware, giftware and spa/bathroom products. Goods at the Soho store are offered at 30 to 60 percent off manufacturers’ suggested retail price. On milanluxury.com, customers register for private sales with even higher discounts, creating a database for e-mail promotions. According to Carlo Mantica, president, Mantica Ventures and co-owner of Milan Luxury, his affluent customers can afford luxury items, but still want a bargain. The recession has not stopped Kathy Fielder from opening the IbC Design Studio in Dallas, TX, in July 2009. The studio is a design center and retail distribution outlet for the Isabella Collection of elegant linens, established by Fiedler in late 2005. “IbC Design Studio was formed as a creative concept retail boutique. It is our goal to bring quality goods to the retail market at very competitive price points,” says Fielder. “IbC Design Studio not only carries made goods, such as top of bed, dec pillows, and readymade couture window panels, but it also carries fabric and trim by the yard. The best part is we manufacture right on site!” Fielder plans to open five more Texas studios over the next five years. Keep On Keepin’ On Though the economy may gradually recover, the truth is that times keep changing anyway. “Innovation is the key,” he concludes. “Thinking outside of the box is what is needed in today’s economic climate.” resources
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