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When it comes to fabrics, most roads lead to China

Susan M. Andrews, Fabric Editor -- Furniture Today, February 27, 2005

China ... so mysterious, so distant, so central to the world of upholstery fabric. Two big U.S. textile companies, Culp and Quaker, reported disappointing quarters last week, and both pointed to furniture manufacturers' ongoing preference for low-cost imported upholstery fabrics and consumers' ongoing preference for leather and suede fabrics as part of the reason. All of which is code for "China."

Domestic business is soft, raw material prices are up, capacity is out of balance with production needs, prices are increasing and workforces are decreasing. Major textile groups continue to address inequities in trade relations, business practices and currency issues, but the industry obviously is turning a corner and companies are deciding whether or not they must be on the ground in China in order to survive. Or not.

Back in the early '70s, around the time Richard Nixon was traveling to Beijing, Premier Zhou Enlai called China "an attractive piece of meat coveted by all ... but very tough, and for years no one has been able to bite into it."

Nixon himself once said, "Solutions are not the answer." I have no idea what he meant by that, but I think it's plain that China is both the problem and the solution for the upholstery fabric business. It's going to be exciting to watch American companies as they gear up to get in some good bites on that "attractive piece of meat."

Culp already has a solid footprint in China. CEO Rob Culp is excited by the growth in its offshore manufacturing and sourcing, noting that "sales of upholstery fabrics produced outside of our U.S. manufacturing plants (including suede fabrics and fabrics produced at its plant in China) were up 92% over the same period last year and accounted for almost 20% of Culp's overall upholstery fabric sales during the quarter."

Privately held Blumenthal also has been exploring opportunities in China, and a major converter is sending one of its bright young sales executives to live in Shanghai. Many domestic sources are importing silks and suedes to take advantage of opportunities in China.

Even Quaker President and CEO Larry Liebenow, long against Chinese imports, began to soften in the past year or so, saying his company intends to get back on a growth track by "bringing fabrics into the U.S. market that we don't have the equipment to make ourselves."

Although he won't say yet where the product will be sourced, he said it will introduced in the second half of 2005 and on furniture at next October's market. Maybe it will come from Vietnam or India or Pakistan or Turkey, but my money is on China. That would really signal the American industry had turned a corner.

Meanwhile, back in the '70s, after Nixon returned from Beijing, China sent us two giant pandas. Ling-Ling and Hsing-Hsing became roly-poly, non-threatening icons of China emergence from a closed society.

Nothing to fear here, folks. Aren't pandas cute?

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When it comes to fabrics, most roads lead to China

Feb 28, 2005

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