Posted January 18, 2017

 

By Devin Steele (DSteele@eTextileCommunications.com)

 

eTC sent questionnaires to selected leaders of the textile and apparel industry and its supply chain, for inclusion in our Review & Forecast edition. While 2016 created a certain level of uncertainty due to the political campaign season, shifting consumer shopping habits, retail traffic slowdown and other factors, several companies enjoyed successful years as the reshoring movement continued – while others did experience a softer year. (Read their forecasts here and their assessment of the Trump administration here.)

 

Following is a summary of responses from those companies that participated in the survey. Note that some participated only on the condition of anonymity, either for proprietary reasons, the fact their companies are publically traded or they are part of an employee-owned company.

 

Manufacturers/brands

 

On the fabric production side, 2016 was a good year for North Carolina-based Glen Raven, Inc. from a macro level, according to C.G. “Leib” Oehmig IV, president and COO.

 

“For us, the assessment must be both market and geographic specific, considering that we currently sell into more than 100 countries,” he said. “The markets that are thriving for Glen Raven relate to a broad range of both consumer-facing and infrastructure products and services that are being delivered in countries that continue to show the most economic and geopolitical stability. Therefore, we are continuing to place a great deal of emphasis and investment in these markets, globally.”

 

Milltown, N.J.-based Jason Mills, a manufacturer of polyester and nylon knit mesh fabrics and textiles, also reported a successful year. Business revenue grew about 8 percent to 10 percent, and gross profit (GP) also showed strong growth, said Michael Lavroff, company president.

 

“Revenue growth was from our sales into the healthcare supply industry as well as our personal safety cut-resistance material and indoor impact screens,” Lavroff said. “GP remained strong due to stable yarn costs.”

 

Meanwhile, Springs Creative, a manufacturer and supplier of fabrics, packaged crafts and specialty licensed products, Rock Hill, S.C., saw a slowdown at retail and other factors affect its business in 2016, according to Derick Close, CEO.

 

“Like most sectors, traditional retail sales were softer than anticipated in 2016,” he said. “We felt the effects of store closures in our specific category (Hancock Fabrics), as well as decreased retail traffic overall in brick and mortar. On the production front, sourcing abroad offered similar complexities. While in China last week, they too face an array of headwinds that seem to be getting stronger, including commodity price fluctuations, currency shifts, increasing environmental concerns and increasing costs from myriad fronts, including real estate, labor and utility prices. The current U.S. political turmoil is exacerbating global uncertainty.”

 

Also contributing to a slower year at Springs Creative was the continued shift of consumer shopping habits, Close said.

 

“More purchases were made from a mobile device than ever before,” he said. “The younger generation wants more personalized experiences, and more experiences in general over consumption. Retailers who successfully appeal to Millennials have strong omni-channel strategies, marrying their online presence with brick-and-mortar experiences.”

 

Three yarn production companies that participated in our survey also reported sluggish business in 2016. One called it “trying,” with volumes across all products down compared to 2015, according to a company official who wished to remain anonymous.

 

“We did not experience a loss of customers, only significantly reduced volume with very few long-term commitments rather more frequently, along with smaller orders for immediate shipment,” he said.

 

He cited a number of contributing factors in the decline, including a “crazy election season” that created much angst and uncertainty; high inventories in the supply chain, with adjustments occurring throughout the year; an overall slowness in apparel sales growth as a result of consumers spending for new car leases, high cable and cell phone expenses, medical cost increases, eating out and other “experiences,” exacerbated by slow wage growth; a slowdown in military purchases; industrial markets being impacted by low crude prices and a slowing of activity in the oil drilling industry; weather; and, as typical, the import situation that continued to play an important part of retailers’ overall purchases.

 

Another yarn spinner provided a similar report: “We saw a general slowdown in all of our markets we serve,” said the company official, who did not wanted to be quoted by name. “Our customers, both knitters and weavers, saw their business slow. Exports slowed in mid-year due to market conditions in the apparel sector.”

 

The third spun-yarn supplier said that business was down significantly in 2016 compared to the previous three years, due primarily to the drop-off in its high-end, fine-count apparel yarns.

 

Additionally, a U.S.-based supplier of resins and staple fibers reported that business was off at least 20 percent in its textile segment, with significant inventory reductions at retail occurring to deal with consumer demand.

 

A technical fibers producer added: “We were down in 2016 compared to 2015 and we believe the main contributing factors were a drop in military as well as a drop in hosiery and seamless.”

 

Meanwhile, a textile roll goods processor, Palmetto Finishing LLC, Easley, S.C., noted that 2016 started very strong until business waned in the late summer months.

 

“Our key customers’ business conditions remained strong for most of the year,” said Mike Kingsmore, company president. “We are seeing a larger percentage of cloth coming in from domestic mills, which is encouraging.”

 

San Antonio Shoemakers (SAS), which crafts handmade shoes and handbags in the U.S. and operates numerous retail stores, saw its business remain consistent with the overall retail market, said CEO Nancy Richardson. It saw its strongest growth online but faced similar challenges to those of traditional retail stores, she added.

 

Suppliers

 

Among weaving machine providers, Picanol of America, Greenville, S.C., the U.S. arm of Belgium-based Picanol Group, turned in a great year.

 

“We had one of the best, if not the best, years in our history,” said Cyril Guerin, president. “That’s a fortunate coincidence of having the right and state-of-the-art products and positive factors stimulating our customers in our strongest market segments to invest in new equipment.”

 

Meanwhile, after experiencing the most successful year in its history in 2015, American Dornier was challenged to better that performance last year, according to Peter Brust, executive vice president of the Charlotte, N.C., weaving machine provider, which serves this hemisphere.

 

“2016 was very good in regards to sales, service and spare parts in North America,” he said. “Central and South America was still very slow, however. The political and resulting economic situation in Brazil is very troublesome.”

 

Kevin Ahlstrom, president of McCoy Machinery Co., Inc., Monroe, N.C., which manufactures textile warp prep and beaming equipment, also submitted a good review of 2016.

 

“Machinery sales increased in all sectors – textile, composites and spare parts,” said Ahlstrom, who bought the company for which he worked last year. “Overall, it was the result of many ‘reshoring’ programs, and we also believe it was related to the overall deterioration of machinery in the knitting and weaving sectors. A lack of parts and service for many customers forced decisions to rebuild or purchase new equipment, and this was a key factor.”

 

This theme of positivity also was reflected by Will Motchar, president of finishing equipment producer Navis TubeTex, Inc., Lexington, N.C.

 

“2016 was a great year for us – even stronger than 2015, which was an excellent year,” he said. “We had a lot of activity in the Western Hemisphere, especially in the technical textiles area.”

 

Circular knitting machine manufacturer Vanguard, Monroe, N.C., rang an optimistic tone following a tremendous year.

 

“2016, when we began to sell machines in South Asia, was a big stepping stone for Vanguard’s future,” said Bill Moody, company owner. “The energy around the Vanguard product was sparked at ITMA late in 2015 in Milan, where we showcased several new models and our high-speed, four-track jersey machine, which we sold in multiple major targeted countries in 2016.”

 

Capital equipment provider Karl Mayer North America, Greensboro, N.C., a subsidiary of Germany-based Karl Mayer Group, experienced “excellent growth” last year in all business units – warp knitting, warp prep for weaving and composites, said Tony Hooimeijer, president.

 

“The main driver in our view was increased confidence of our customers in the textile industry,” he said. “This leads our customers to higher investment in upgrading their installed base of sometimes very old machines. In addition, we’ve observed some signs of supply chain changes, real or anticipated, that have led to more domestic apparel production. In technical textiles, we had some new entrants, completely new applications or overseas manufacturers starting a plant here (in the U.S.).”

 

Robert Reimann, CEO of Jakob Müller AG, Frick of Switzerland, with U.S. operations in Charlotte, N.C., pointed out that 2016 turned out to be “rather stagnant” after several years of good growth.

 

“Several product segments of the Jakob Müller Company operated within its projections, or even exceeded expectations,” said Reimann, whose company manufactures machinery and equipment for narrow fabric and label production. “But some areas suffered due to worldwide economic uncertainties and conflicts. The North American market was a welcome exception whereas the trend of sustained growth is continuing. Highly efficient machines and systems to improve the manufacturing processes were sold very successfully in areas where markets were stable. Unfortunately, the many areas with political instability did influence an overall positive trend to make investments during the past year.”

 

According to company President Roland Zimmer, last year also was good for Zimmer America, the U.S. branch of Zimmer Austria, which supplies a wide range of capital equipment in such areas a digital printing; hot-melt coating and laminating; coating, embossing and gravure printing; screen coating; and more.

 

“Business increased in 2016 for Zimmer Austria and is expected to further increase in 2017 because of further improvements of business conditions in USA,” he said. 

 

Another U.S. textile capital equipment supplier with headquarters in Europe pointed out that business in 2016 was above the previous year. “There are no particular reasons why that happens,” he said. “Most of our business is with U.S. entities in Central America.”

 

A U.S.-based provider of capital machinery added that a better level of sales was realized in 2016, mostly represented by the nonwovens sector.

 

Frank Henderson, president of Henderson Sewing Machine Co., Andalusia, Ala., offered evidence of optimism in his review of 2016.

 

“In a very contentious election year, we saw numerous Fortune 500 companies begin to reshore textile and sewn products back to the Western Hemisphere,” he said. “Most customers look at fast turn, nearness to market, less inventory, more inventory turns and total landed cost as significant contributors to reshoring and near shoring textile and sewn products.”

 

Patrick Weissgerber, president & CEO of Norcross, Ga.-based sewing machine provider DAP America, Inc., said his business saw a minor slowdown last year, he said.

 

“2016 has been slightly below the previous years, mainly because our business depends on the automotive industry (seating and interiors) to a good part,” he said. “2011 to 2015 were outstanding years and it was to be expected that 2016 would be a little slower as capacity ramp-up with all suppliers took place in previous years.”

 

Another provider of equipment to the apparel-manufacturing sector noted that his business was also softer in 2016 than previous years, probably due to military spending cutbacks and the holding pattern that may have resulted from the campaign season, he said.

 

Similarly, Universal Sewing Machine Co., Miami, reported that equipment sales for the sewn products industry were flat last year compared to the previous year, both domestically and in the U.S.

 

“This follows equally flat sales in 2014, but a large, almost 40 percent jump in sales in 2013, mostly in Central America,” said Martin Gopman, president. “The reason, I believe, is that reshoring appears to have stalled after 2013.”

 

Another supplier of machine parts and accessories to the global textile industry disclosed that business was off about 10 percent from 2015 due to a decline in the short-staple fiber and carpet segments of the industry.

 

Steve Adams, president of specialty chemical supplier Seydel-Woolley & Co., Pendergrass, Ga., said the last two years were also flat for his company.

 

“Most of this lack of growth was due to the direct run schedules of our customers,” Adams said. “No one was building any inventory and only ran to replace existing business.”

 

Meanwhile, a provider of color standards and color communication tools grew its customer base and revenues last year, according to a company leader, who wished to remain anonymous.