Posted January 18, 2017

 

By Devin Steele (DSteele@eTextileCommunications.com)

 

In our 2016 Review, selected leaders of the textile and apparel industry and its supply chain offered their business assessments of last year. Here, through questionnaires sent to these leaders, they offer their expectations of 2017 as it kicks off and stands on the cusp of President-elect Trump’s inauguration. (Read leaders' thoughts on Trump 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

 

A representative of a yarn-spinning company that experienced a soft 2016 said he does expect to see some improvements this year based on conversations with vendors and customers.

 

“While not a boom, results should improve,” said the executive, who wished to remain anonymous. “However, there continues to be some overcapacity in some segments of market.”

 

Factors affecting his optimism include customer outlook, lower inventories throughout the supply chain and “hopefully, changes in Washington as the new president implements policy changes and an improved Congressional, Executive and Judicial makeup,” he said.

 

Meanwhile, global fabric producer Glen Raven, Inc. enters 2017 with “cautious optimism,” according to C.G. “Leib” Oehmig IV, president and COO.

 

“Like many companies, we continue to search for growth opportunities around the world, while remaining cognizant of the rapidly changing geopolitical and global economic environment,” Oehmig said. “We will maintain a strong balance sheet through disciplined investment and further mitigate risk by keeping our scenario plans current and executable.”

 

Answering the question, “what are the biggest factors affecting that outlook?” he answered: “In a post-election environment, we are working to better understand the strategies of our new administration in the U.S., and how those issues that were front and center during the campaign actually play out during the president-elect’s first term. Outside the U.S., we are utilizing local knowledge to ensure that we both anticipate and respond appropriately to changing dynamics in the different markets that we serve.”

 

After experiencing a slower 2016 as a result of declining retail traffic, shifting consumer shopping habits and other factors, Springs Creative, Rock Hill, S.C., expects a better overall outcome this year, said Derick Close, the company’s CEO.

 

“Springs Creative, like many others, is redefining how textiles can be used in both B2B and B2C relationships,” said Close, whose company manufactures and supplies fabrics, packaged crafts and specialty-licensed products. “In 2016, we invested in several custom technologies to improve our reaction time and technical capabilities. We have forged business partnerships with key players in new product categories, including hospitality, technical textiles, and upholstery."

 

The leader of a spun-yarn producer that experienced a slowdown in 2016 said he expects better things this year.

 

“We do expect 2017 to return to a more normal year,” said the executive, who asked to remain nameless. “In addition, we are forecasting an 8 percent to 10 percent increase in sales over our normal volume. We have moved into new markets that require specialty yarns that will increase our volumes and margin opportunities.”

 

A key to expected improvement is diversification and continuous improvement, along with the reshoring movement, he added. “We have developed new products that have moved us into new markets and gives us hope of new business,” he said. “Innovation is the key for us. We continue to work every day to find new products by working closely with our customers to meet their ever-changing needs.”

 

The head of another yarn-spinning company that saw a significant downturn in 2016 from the previous four years said he doesn’t expect the fine-count apparel business to pick up until the second half of the year, although other segments look to be on schedule for a comeback heading into the second quarter, he said.

 

“We have seven-day operations to run our plants,” said the executive, requesting anonymity. “Until the apparel business rebounds, it makes for a difficult process on balancing weekly running schedules and controlling finished goods inventory.”

 

He added this caveat: “The business has always gone in cycles. We recently came off an up cycle. The apparel business this past year hit a down cycle. The question always is how long before we get back to the up cycle.”  

 

Meanwhile, Jason Mills, a manufacturer of polyester and nylon knit mesh fabrics and textiles based in Milltown, N.J., enjoyed a strong 2016 and is anticipating another good year, according to President Michael Lavroff.

 

“The optimist in me says, yes, we would love to see 5 percent to 7 percent growth in both revenue and GP (gross profit),” he said. “We are working towards that goal by securing annual blanket releases from customers and locking in yarn costs by projecting out six to 12 months on the purchasing end. However, if sales should falter, we will have to run partial MOQ’s (minimum order quantities), thus taking a hit on the GP end of things. We’ll know more after the first quarter.”

 

What factors does he expect to have the biggest effect? “The economy, the economy, the economy,” he said. “Despite our company showing strong growth over the last three or four years, there is a real frustration in that the ‘new normal’ of 1-1.5% GDP has held everybody back. We should all keep in mind that difference in 2% vs. 3% GDP is not 1%, but 50%! I would welcome a fiscal policy that would get us back into a 3-4% GDP range.”

 

Another yarn producer that experienced a decline in 2016 said he expects things to improve this year. “We believe military will pick up and inventories are getting to be at a normal level,” he said.  “We believe a Republican government will spend more money on the military.”

 

Nancy Richardson, CEO of San Antonio Shoemakers (SAS), said that 2017 has started on a positive note and all indications point to a stronger growth year compared to 2016, despite challenges in retail.

 

“If companies begin to bring back some of their manufacturing to the U.S., I believe that will help everyone since it will strengthen and expand the infrastructure of suppliers and support for U.S. manufacturing,” said Richardson, whose Texas-based company crafts handmade shoes and handbags in the U.S. and operates numerous retail stores.

 

Suppliers

 

The owner of knitting machine manufacturer Vanguard of Monroe, N.C., said he expects to see growth for his company in both the South Asia market and the Americas.

 

“We are preparing for growth by introducing new machine innovation, our Wildfire initiative continuously developing new structures, support from the Campfire group for finishing technology and supporting the Americas’ growth in apparel with our Pai Lung fashion product line,” Bill Moody said. “In addition, we are making capital investments in our machinery to increase our production capacity. We want to be a big part in the resurgence of textile manufacturing in the region and the U.S.”

 

Navis TubeTex, a Lexington, N.C. manufacturer of textile finishing equipment, has been on an upward trajectory the last couple of years, according to President Will Motchar. And he is expecting something of a surge this year, he added.

 

“I am hopeful that 2017 will be an even better year,” he said. “However, it has started off much slower than 2016. Activity level remains high but much of this has not converted into orders. I think the global economy will be strong in 2017. Therefore, I believe the slow start to 2017 is nothing more than timing.”

 

Another Monroe, N.C., capital equipment provider, McCoy Machinery Co., Inc., also sees good things on the horizon.

 

“We anticipate 2017 to be as good, if not better, than 2016,” said Kevin Ahlstrom, president of McCoy Machinery Co., Inc., a manufacturer of textile warp prep and beaming equipment. “We base this on activity and inquiry levels now vs. last year at this time, and there’s a clear uptick in both as of today.

 

“Continued growth in the composites sector will definitely help, along with our continued R&D and product development,” he continued. “Knitting and technical weaving look like the strong areas for us again this year, and can be contributed to the recent reshoring and the need for increased efficiency in the current limited machinery capacity. Capacities are being increased by simply updating and refurbishing existing machinery, which is a tremendous benefit to the bottom lines of our customers.”

 

Belgium-based Picanol Group, a publicly traded company that produces weaving machines, will release its financial report later in the spring. So Cyril Guerin, president of Greenville, S.C.-based Picanol of America, would not speculate on expectations. But he did comment on factors affecting global textile demand.

 

“The long-term fundamentals like growing world population and growing middle class, driving up total textile consumption as a whole as well as textile consumption per capita will remain the main drivers of the long-term growth of textile needs worldwide,” he said. “Depending on the influencing factors, however, we all know that demand can fluctuate heavily around this long-term growth path – even more so for investment goods, where reactions of investors are more sudden and more intense.”

 

Mike Kingsmore, president of Palmetto Finishing LLC, Easley, S.C., said he anticipates a better year in 2017, and early backlogs and order positions look positive.

 

Peter Brust, executive vice president of American Dornier, Charlotte, N.C., said he expects a similar year to 2016, which was a mixed bag – good in North America and sluggish in Central and South America.

 

With global stagnancy in its business last year – the North American market being an exception – Jakob Müller AG, Frick of Switzerland expects 2017 to mirror that trend, likely with an increasingly positive outlook, according to CEO Robert Reimann.

 

“However, our company's planning is conducted in a very careful manner, as there are still a good many markets that struggle with volatile political and economical situations,” he said. “The textile market is growing but also shifting and the Jakob Müller company can offer a lot of innovation with solutions that will help our customers to justify new investments. Still, one of our biggest question marks for ‘Outlook 2017’ is possible global surprises that could influence the investment confidence level of our worldwide customer base.”

 

After an “excellent” 2016, Karl Mayer North America, the U.S. arm of Germany-based Karl Mayer GmbH, expects even more growth this year, said Tony Hooimeijer, president.

 

“There could be more apparel-related investment and we may also see upgrading of technical applications, such as roofing material and geo-textiles,” he said. “Our global manufacturing backbone has sufficient capacity and flexibility to easily absorb these volume increases. In our U.S. operation, during the last few years we have been investing significantly in growing and reinforcing our service team.”

 

Certain factors affect that outlook, he added, including: Continued confidence of established customers and more focus on supply chain optimization. Regarding the latter, Hooimeijer said, “We see an increasing trend of overseas companies starting operations here in the USA, particularly in our technical textiles business (glass, carbon, etc.).”

 

Zimmer America, which also enjoyed a successful 2016, said the digital printing boom will help his company and its sister company, Zimmer Austria, according to President Roland Zimmer.

 

“There is a visible trend of textile business coming back onshore, especially in the area of printing, which was very quiet for several years now,” he said. “Digital printing and digital functionalization are the two buzzwords here for 2017. Zimmer Austria is fully committed to expanding the digital application opportunity for all kind of textiles and nonwovens.”

 

A U.S.-based capital equipment manufacturer also sees good things for the industry this year. “Consistent and improving customer pull-through should convince producers to make capital replacements or additions,” he said.

 

The president of another large machinery producer that saw business improve in 2016 said he expects the trend line to continue to move up. “Projects our clients have had for a while are getting closer to being realized,” he said. “Also, the equipment we offer seems to meet market demands more than ever before.”

 

Coming off a flat year, specialty chemical supplier Seydel-Woolley & Co., Pendergrass, Ga., is “somewhat optimistic” that things will turn around in 2017, said President Steve Adams. “But we are conservative in our business plan right now,” he said. “Our business depends on how well our customers grow their business units.”

 

Frank Henderson, president of Henderson Sewing Machine Co., Andalusia, Ala., said he expects good things to happen to the textile and apparel industry in this hemisphere.

 

“We look favorably at 2017 with a new administration in Washington, a more favorable business-friendly environment, more reshoring and near-shoring efforts, greater innovative and technological investments by more companies and the ability for products to be automated more economically,” he said. “It will depend on how much organizations are committed to funding innovation, R&D and automation and producing products rather than only merchandising, as well as reshoring textile and sewn products back to the Western Hemisphere.”

 

Another sewing machine provider, DAP America, Inc., Norcross, Ga., saw a softer year in 2016 and a comparable year is anticipated, according to Patrick Weissgerber, president & CEO.

 

“Political decisions might affect business development for the next years,” he said. “As manufacturers need to plan their production ahead of time and the (political) decision-making process will take some time, I do not foresee any drastic change for 2016 yet.”

 

Meanwhile, a representative of a color standards and color communication tools provider said he expects 2017 to follow the path of the previous five or six years, that of steadily increasing sales and a growing customer base.

 

“Market uncertainty in the retail apparel area is a concern,” he said. “We know that retailers are facing hard times in growing their market share, and some will fail. This will make it more difficult to move the needle in a positive direction.”

 

An anonymous global parts and accessories supplier said there are signs that running conditions are improving and he is therefore expecting improvement this year, he said. “There is more optimism in the general economy since the election, as infrastructure spending is promised, as well as a heightened interest in manufacturing jobs,” he said. “This optimism could translate into increased consumer spending that could boost textile products.”

 

An American resin and yarn supplier that saw a big business decline last year said he expects 2017 to be a recovery year, but not quite back to 2015 levels, he said. “Supply chain levels are very lean through all segments of manufacturing, but consumer demand is still a slight concern,” he said.

 

Though business was off for Miami-based Universal Sewing Machine, President Martin Gopman said he is optimistic for a slight turnaround going forward.

 

“I expect 2017 to be a small improvement over 2016 because we have more outstanding quotations at the end of 2016 that have been indicated to be turned into sales in 2017,” he said. “Most of them are to non-apparel companies, such as automotive, marine, geo-textiles, military and home furnishings.

 

“Barring any political or economic upheavals in the U.S. and globally, I expect our market to continue to improve because of economic trends in Asia and Latin America, which would benefit reshoring and near-shoring,” he continued. “Depending on how the new administration’s policies on trade and taxation are implemented, it could be another boost for reshoring.”

 

This year also portends a turnaround for another supplier to the sewn products trade whose business was a little soft last year, he said. “I anticipate significant increased military as well as infrastructure spending,” he said. “I am preparing by increasing my on-hand inventory to be ready for the increased demand.”