Where will the industry be in 10 years?
Here's what eight key players have to say
By Susan M. Andrews -- Furniture Today, February 27, 2006
High Point — Few segments of the home furnishings industry have undergone as great a change in the past decade as the textile segment has endured.
Although the overall domestic textile industry had its first uptick in production in 10 years in 2005, the landscape is vastly different now with so much furniture manufacturing shifting overseas.
In 1995, for example, the Top 15 fabric mills supplying upholstery manufacturers, according to Furniture/Today's annual survey, were:
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Collins & Aikman
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Culp
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Malden Mills
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Microfibres
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Quaker Fabric
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Joan Fabrics
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Burlington House
Upholstery Fabrics -
Chatham
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Phillips
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Valdese Weavers
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Sunbury Textile Mills
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Hoffman Mills
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Dicey Fabrics
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Weave Corp.
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Craftex Mills
The top five converters were:
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P/Kaufmann
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Ametex
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Richloom
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Covington
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Lanscot-Arlen Fabrics
Some of these suppliers, such as Hoffman, Phillips, C&A, Burlington and Lanscot-Arlen are gone or have been absorbed into some other company. Others, such as Malden Mills and Chatham, have shifted their businesses to focus on other segments such as apparel, automotive or industrial textiles and are no longer involved in producing fabric for residential upholstery.
Global Textiles Today recently asked eight of the industry's leaders to describe what they think the residential upholstery fabric segment will look like 10 years from now. Here are some of their responses.
Roger Berkley, president of Weave Corp., a custom designer and weaver of upscale yarn-dyed jacquard fabrics for interior and outdoor applications:
"Over the next 10 years, free trade advocates will have freely traded the American manufacturing base away and with it the high-paid, high-skill jobs that manufacturing has provided over the first two centuries of our nation's history, replacing them with lower-paid clerical and manual labor jobs, all in the name of 'Always lower prices. Always.' I call this the 'Wal-Martization of America.'
"In our industry, we are already nearing the end of that road. Our largest weavers and printers have either vanished, are facing stiff financial problems and/or have changed their business models to become converters. These companies have provided the mass market with the large variety of fabrics to which the public has become accustomed. As more and more upholstered furniture production is moved to other countries — notably China at this point in time — the viability of the U.S.-based fabric producer will decline.
"Fabric for foreign-made furniture will be sourced in the countries where (furniture) is made or where (fabric) is cheapest, or both. In 10 years, there will be little or no domestically made upholstery fabric for the mass market. We are already seeing that the Chinese and other foreign fabric sources are aggressively seeking to eliminate the converter, both here and in Europe, by selling directly to their customers or by acquiring American companies to act as nameplates.
"There will still be manufacturing in the U.S., but American manufacturers will be small, niche-oriented and highly customized. This will be true in the textile weaving and printing fields as well as in the furniture industry. As I see it, globalization, that catchall moniker that really means building more wealth for the wealthy at the expense of everyone else, will tend to polarize our nation into winners and losers. The winners, a small group, will be big winners, and the losers, the vast majority of the population, will range from moderate losers to big losers. The manufacturers who will survive and prosper will be those who cater to the winners. Their employees will be fortunate enough to be among the moderate losers.
"As a nation, we have lost our way, abandoned our values, all in the name of 'free trade,' a process that is neither free nor results in trade, since our economic decline (not the stock market but the lives of people) will restrict our freedom and we are getting nothing of value back except cheap products, which is all our newly impoverished citizens can afford."
Harry Blumenthal, president of Blumenthal Print Works, a full-line producer of upholstery fabrics and ticking:
"I believe that in 10 years, about 75% of the residential upholstery fabric segment will be overseas and will come into the United States as rolls, cut-and-sewn kits or already applied to furniture produced in the low-cost countries.
"A lot of mills will have closed by that time, although there will always be a place for domestic producers who focus on their core competencies and are willing to invest heavily in product development, color and design.
"The surviving mills also will take a blended approach by importing complementary designs to their domestic offerings.
"The distinctions will continue to blur between converters and mills. The mills will have to become more competitive with the converters as growth in the industry will continue to be in China, while manufacturing in the U.S. will continue to decrease."
Rob Culp, CEO of Culp Inc., a manufacturer and importer of decorative fabrics for home furnishings, ticking and other markets:
"I am afraid that the residential furniture upholstery fabric market in 10 years will be very different from today. I see U.S. production to be niche markets serving specialized customers in specialized markets. I see a need for domestic production to also serve quick-delivery requirements.
"We feel high-volume business will continue to move to countries with low labor and raw material costs. Historically, the textile industry has always chased low costs, and there is no reason to think this will change.
"Our goal at Culp is to market our fabrics to our customers wherever they are producing furniture or cut-and-sewn kits."
Jack Eger, vice president of sales for Craftex Mills, a manufacturer of middle to high-end jacquard fabrics for home furnishings manufacturers and related markets:
"Ten years from now, I think the residential upholstery fabric segment will be broken into two separate categories — one will be commodity product and one will be a value-added niche product.
"On the commodity side — and by commodity product, I don't mean just plain fabrics, but anything that can be easily duplicated — everybody will be killing each other in the market.
"On the other side, there will be a group of fabric mills that realize their future is niche manufacturing. They will recognize that, if they are agile enough to handle it, their hope will be to provide service, short warps and customization — all the things that create added value. If they can do that, they will survive and flourish.
"Companies like Craftex are in a better position than most to do that because we have already taken steps in that direction. We've already decided that is the future and we have embraced the diversity instead of running from it.
"Having made that decision — as a mindset and as a business strategy before the industry began to shift — puts us in a better position to survive in the future.
"The larger domestic producers of commodity products are in an awkward situation. They will have to reinvent themselves — or become the very best at producing commodities in order to survive — and the smarter ones will do that. There will also be more consolidation in both the fabric and the furniture segments."
Irwin Gasner, president and CEO of Wearbest Sil-Tex Mills, a producer of middle to high-end jacquards for indoor and outdoor use:
"There is no question that we are living in a global economy. For anyone not to realize this, appreciate it, and embrace it would be foolish. The question is what the residential upholstery fabric segment will look like 10 years from now. Although the upholstery fabric business is certainly not the largest segment in terms of overall textile consumption, within it there are many different segments — prints, wovens, velvets, flocks, microfibers, dobbies, jacquards, etc.
"For the customers that we serve, the most important elements are fabric design, color, texture and performance, and price points. Suppliers that are capable of producing quality fabric in a dependable timely fashion are essential. Our customers are looking to reduce their vendor list to partner with only those suppliers that can achieve, at a minimum, all of the above.
"Creativity and ingenuity at the high-end of the business are paramount. It is vital that we enable our customers to showcase cutting-edge, exciting product. Our job is that of being astute merchants. Where we produce the product may be impacted by a variety of world events, but how we create the product and bring it to market will determine our futures.
"At the high end of the market, our customers simply will not wait 12 weeks for product to come in from some far-flung, undependable foreign source of supply. There is a lot to be said for short lead times, with the ability to be responsive, whether it means increasing a one-piece order to two pieces, or quick delivery on 1,000 yards for a special project.
"Manufacturing in the United States will still have its place. With a positive mental attitude and strong creativity, it is amazing what can be accomplished."
Ken O'Shields, specialty accounts sales executive for Swift Galey, Swift Galey, represented by Golding Fabrics, specializes in denim, twill and khaki fabrics for indoor and outdoor home furnishings and other industries:
"The furniture consumer of 2015, like today, will still want spectacular furniture that is easy to care for, durable and comfortable. The difference is that she will want it immediately. In short, she will want 'Wow Now.'
"The furniture industry of 2015 must be able to produce, with quality, in the low-cost regions of the world — plus be ready to respond to the demand for innovation, speed and service through reputable domestic facilities.
"We must provide solutions without boundaries. With the recent addition to its current worldwide manufacturing capabilities of two modern new facilities in China, Swift Galey (is now capable of supplying) customers with innovative products and superior finishes wherever they manufacture in the world."
Jack Cobb, president of American Decorative Fabrics, a Western-run Chinese mill with North American warehousing:
"I think in 10 years there will be some niche specialty mills in the U.S. providing service, quality and high-tech fabric. There will be some of that, but I think the large commodity-driven mills will have a tough time because by then that segment will be in China — or another low-cost country. Who knows? It could be Vietnam or any other place 10 years from now.
"A lot depends on style swings, too. A market dominated by plains and leather is a lot different from a market dominated by pattern. But I believe the China model will continue to evolve. China and other low-cost countries will continue to improve in providing what Americans want — such as smaller minimums and more special orders.
"You can never eliminate the boat ride from China, though, and that will always leave opportunities for mills here that are nimble and have speed to market.
"In 10 years, I see a few strong players left here, and more of the basic, commodity, mainstream business moving offshore to whatever is the low-cost country by that time.
"And who knows, in 10 years there may be a consuming class in China. I think it will take longer than that but as I see it evolving, at some point it will be there.
"Companies like Coca-Cola, Budweiser and Buick recognize it already — China is filled with a lot of people who are pursuing the American Dream. Cars and apartments are genuine status symbols, and they really measure their personal success by their financial means."
"Everybody will have a global strategy in 10 years. That doesn't mean the residential upholstery fabric segment will be finished in America — but it will be a lot more specialized.
"The big question, though, is how much furniture will be made here versus in low-cost countries overseas. If furniture is being made overseas, then the move to supply it in those low-cost countries will accelerate."
Larry Liebenow, president and CEO for Quaker Fabric, a major producer of jacquard upholstery fabric that recently announced a partnership with Chinese producer Hang-zhou Zhongwang Fabric Product Co.:
"There will be fewer companies manufacturing product in the United States as a result of more consolidation, and the focus of the companies remaining will be more specialization using new tools and constructions, and with a very strong service capability.
"I think it will be exciting for U.S. fabric manufacturers in 10 years — a significant and better market than exists today. The segment will be driven by the needs of furniture manufacturers and retailers as they work to differentiate themselves from each other and from imports. The domestic fabric companies, as they develop this specialization, will be well positioned to market their products abroad as well as here.
"On the import side, I think we'll see radical change. The model for importing today is a very haphazard one, kind of like the Wild West, with a lot of cowboys bringing in bits and pieces here and there.
"The result is enormous service problems and a lot of very poor quality product being imported. A significant majority of imported fabrics we tested did not meet joint industry standards (for tear strength, pilling, durability, etc.) that predict the performance of the product over several years of use.
"If the joint industry standards mean anything in the market, then companies simply focusing on price — and ignoring the standards — are playing a very dangerous game and many of them will go by the wayside as a result.
"I also think issues that haven't been important so far will become very important, such as environmental issues. The production of suede fabrics in China, for example, creates enormous environmental contamination. That's why it's not done here.
"Companies that ignore those issues are going to have to address them going forward. We are addressing those issues by developing a special relationship with our Chinese partner so we can ensure good quality and design as well as working and environmental conditions that are appropriate for the American consumer."
