February 18, 2011 -
Impressions of MAGIC | February 2011
by Ilse Metchek
President, California Fashion Association
Show Floors Visited: MAGIC, PROJECT, Workroom, Off-Price, Platform, Pool
Attitude of the exhibitors toward the 'traffic' depended upon the expectations of the exhibitor. Most of the newer "hot" contemporary companies thought the show's traffic was positive because they were seeing more retailers and press people. The retailers in this space were looking for something new and reaching out to view the lines they may not have shopped before. The show, however, was disappointing for the long-time exhibitors expecting to 'write' orders based on past experiences, and who did not make appointments.
There was a cautious approach by the vendors at every level due to price increases of source materials.
The specialty store retailers are realizing they will have to charge higher prices for the merchandise that will be coming in from their current vendors. This is another drive for the retailers 'shopping' frame of mind: The retailers are getting ahead of the curve by seeking alternative, and are sampling new down-market vendors. This is the case unless they have established a 'must-have' brand within the store or the department.
Even the higher priced lines (not quite 'luxury') know that the consumer has price on his-her mind. The vendors who are accustomed to higher margins for their fashion merchandise are caught in the middle of the re-thinking that is going on.
There was also a cautious approach with retailers buying much closer to need. There was much more activity in the booths where bright colors and summer-y styles were being shown, than where transitional and fall merchandise in dark colors were in view.
Another impression is that the retailer is cautious as to the individual or company with whom they are dealing. With no specific trend as the most important one right now, retailers are selecting the vendor with the best reputation and track record for on-time delivery and service within their buying plan strategies. Conversely, when a new speck on the horizon (the return of 'preppy') is talked about, the knowledgeable retailers go back to those brands synonymous with that look (i.e.: Pendleton, Timberland, etc.)
As Roth Capital Partners' Senior Research Analyst Liz Pierce writes, "The obvious question being will price increases lead to demand construction and if so, who in the supply chain will bear the brunt of the increase? At this point we think it is too early to tell, but we did hear that more and more retailers have accepted the reality of the situation and have started to raise prices, especially on newer and non-basic items."
The Off-Price show also showed the effect of the current economy. There was a clear lack of 'newer' merchandise available, whereas in recent years there was copy-cay availability throughout. Perhaps because there is nothing 'hot' to copy. On the other hand, it could be that vendors of all stripes and sizes are controlling inventory, mindful of the costs of over-cutting.
February 17, 2011 -
The California Apparel News recently talked with financial experts, several of which are associates of TALA, for their industry outlook for 2011.
Click here to see what each had to say.
February 16, 2011 -
“What Goes Around Comes Around”
By Bruce Berton
Executive Vice President COO
Roochi Traders Inc
According to the U.S.A. Government latest figures, the Textile/ Apparel manufacturing business is one of the fastest growing employment sectors in the country.
Over the years we have lost textile, apparel manufacturing jobs to other countries, mainly due to low cost labor in developing nations.
I have spoken many times about the “Yankee Ingenuity”, of the U.S.A. business economy.
WELL!, it is happening, the textile mills are opening up closed plants with existing machinery, cut and sew plants in the Mid West and California, are increasing their capacity, with skilled workers that left the industry, but now are coming back, as they need jobs.
COTTON! COTTON! And the U.S.A. agriculture market has cotton projections readily available that the lower prices of cotton here in the U.S.A. will take some of the offshore producing countries exports.
With Free Trade Agreements, in place the importers can take advantage of US Cotton prices, of fabric and thread, have it cut and sewn in Free Trade Agreement countries like Mexico, all of Central American countries, and some South American countries, with competitive pricing, because no duty, and QUICK TURNAROUND.
India, Pakistan, Bangladesh, Sri Lanka, China, are all going to lose business at the better or higher end where the gross margins within the USA, with the slightly increased costing, of product, is now available.
We all know that cotton prices are not going back to where they were a little over one year ago, so the USA investors are looking at increasing the supply of U.S.A. cotton increasing for the long haul.
This will not be a spot market filler, as faster turn, quick response, offsets some of a higher cost and no duty from our trade partners it all becomes a turn around.
We already have the machinery in place, we already have the skilled workers, therefore by countries holding hostage cotton exports, increasing prices, not allowing the free flow of material, has just allowed a market to get away from many countries.
I am not saying our Textile/Apparel industry will ever grow back to its previous levels, but it sure is starting with availability already, and in 6 months to a year, it will capture and maintain a higher level of production than in 2009 and 2010, and maintain these investments.
We as consumers fortunately do not have to purchase NEW PRODUCT, unless it is a necessity of life, because of credit, our markets expand because of the “HYPED”, advertisements suggesting our needs to buy.
The U.S. A. market place has many levels of marketplace to serve the largest Economic Place globally, for a long time to come. When we stop buying mainly because of our economic condition, we all can survive, and look well for many seasons, that can become years, and wipe out many suppliers in these developing countries.
We as Americans in a free capitalist free marketplace, react, create, and even take risk, in order to maintain our customers, we do not wait to see what government is going to do, we use the ingenuity I have talked about, and move forward without regard to whom it might hurt, or put out of business.
I do not have an answer to the cotton crisis, but even my midsize business, has already moved production from India, China, Bangladesh, to Free Trade Agreement countries of the U.S.A.
We have many “OOPS! Mistakes, in our methods, like trying to use CORN to make Ethanol, but when the consumer found out it was way too expensive to use, corn for eating prices went very high, this highly government subsidized program, “FLOPPED!”.
I hope all will start to settle into normal price fluctuations of the commodity market for cotton, so we can assist the developing countries produce fabric and apparel for their growth and keep pricing competitive in our marketplace.
Remember, as the title states, “What goes around, comes around”.