Global Suppliers See Improving Markets
Carole Sloan -- Furniture Today, January 11, 2010
Coming off a year that most would like to forget, exhibitors at Heimtextil here this week view 2010 as a potentially good year.
Most, in fact, see business improving, at least minimally. And there are others who see business improving to as much as double what it was in 2009.
With prices for cotton as well as feathers and down already skyrocketing, many are anticipating more raw materials increases as the year progresses.
For the Three Stars Group of Pakistan, 2010 definitely will be better, said Shakeel Javed, general manager, marketing and merchandising. The retailing and hospitality industry were much more affected than the institutional supply sector, Javed explained.
As an export-oriented company, Three Stars reports that business in the United States dropped 70% last year, while European business fell just 40%.
Looking to this year, Javed added that the U.S. economy is beginning to stabilize and inventories are low. But he noted, stores, especially in America remain fixed on commodity items. “We are almost unable to sell high-value items to many retailers in the United States and elsewhere.”
Trident India also sees a better year ahead, driven particularly by increased exports to Europe and other non-U.S. markets, said P.K. Markandy, managing director. While sales exports to the United States saw a small uptick last year, a strengthening valuation of the rupee against the dollar is expected to be challenging this year.
The global financial crisis, he said, “has led to new dynamics for new investments and a competitive business strategy. The retailers are playing safer, bargaining harder and yet facing the compulsion of clinching deals as goods on retail shelves are exhausted.”
Trident exports 90% of its production, with 60% going to the United States and Canada, 30% to Europe and 5% to Asia.
For Italy-based Zambiati, this year should be significantly better, said Claudia Parati, general manager, Zambiati USA. Improved business should especially be seen in the United States, she believes.
The company’s business overall is 40% export, with Europe taking 40% of that figure, the United States and Asia, 30% each.
As for currency impacts on business, Parati commented that the weakness of the dollar will continue to have a big effect on businesses that produce in Italy. But, she added, “There is an increasing demand for 'good deals’ in terms of price and quality, but at the same time there is an increase in requests for unique products and better quality.”
For Premier Fine Linens of India, this will be a better year than 2009 with a “huge surge of orders coming in India, the result of stores refilling their shelves,” said Kumaravel T, senior manager, marketing. The result of this, he added, could impact pricing since yarn prices have increased and margins will be impacted.
Overall, Premier expects to double its business this year, mostly via export, which accounts for 95% of volume. The United States and Canada capture 80%, Europe accounts for 15% and Asia 5%.
For AKS Rugs of India, 2010 will be a much stronger year, said Ravinder Jain. The company, whose product is sold 100% through export, sees some potential change in the current breakout of export sales, with Europe currently at 50%, the United States and Canada at 30% and Asia at 20%.
While currency issues exist, the company also sees a change in the demands of consumers toward value along with fashion versus the former formula of fashion newness only.
For Brazil-based towel producer Dohler, business this year also is expected to surpass last year, said Eric Vergucht, the company’s U.S. representative.
With its export business pegged at 15% of the total, the company sees an increase in both the United States and Europe, which currently represent 10% and 20% respectively. South America consumes 70% of the mill’s export sales.
As for market changes, Vergucht noted that consumers are more budget-conscious, and importers are buying more on last-minute orders and in smaller quantities to avoid large inventories. Bargains and lower quality products also are in demand to be competitive.
For Bombay Dyeing, both the U.S. and European markets appear to be on a growth cycle, said Jiten Rajput, head of export for the Indian company. With 40% of the company’s business coming from export, 45% of that goes to the United States, 30% to Europe and the rest of the world takes the balance.
Adding to the complexity, the strengthening of the local currency has put marginal pressure on the product prices and the bottom line of the business, he added.
In an interesting new twist, the outlook for better business this year is coming because customers have started asking about new products, said Prafull Jain of Sarla Antiques in India.
The percentage of its export business by region is not expected to change, with Europe accounting for 60%, and the United States and Canada for 40%.
Like many others, Sarla is seeing a trend of customers buying in smaller quantities to keep inventories down.
As for currency issues, the company sees the weak dollar giving it less conversion value — also because European customers are now asking for prices in dollars rather than euros.
For Design Weave, export is the company’s total business, said Judy Vella, vp, product design/development/branding for the China-produced company. The United States and Canada represent 70% of the business, Asia 20% and Europe 10% — ratios that are not expected to change.
As for international issues, the strong demand in the domestic Chinese business has impacted cotton prices, and labor sources are becoming very short in supply, especially in the cut and sew sector, she said.
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