Posted May 17, 2017
By Devin Steele (DSteele@eTextileCommunications.com)
Editor’s note: Following is part 2 of the Synthetic Yarn and Fabric Association’s (SYFA’s) Spring Conference. Part 1, published last week, can be found here.
CHARLOTTE, N.C. – An air of positivity for U.S. and Western Hemisphere manufacturing continued to emanate during the second day of the Synthetic Yarn and Fabric Association’s (SYFA’s) Spring Conference here last month.
Eric Henry, president & CEO of TS Designs, Burlington, N.C., beat the local-for-local drum in telling the story of his screen-printing T-shirt company that is committed to sustainability and a transparent supply chain. And that “dirt-to-shirt” supply chain is based completely in the Carolinas.
As a student at N.C. State in 1977, Henry started the business as a small, manual screen-printing operation. The company soon became fully automated, printing shirts for big brands such as Nike, Tommy Hilfiger, Ralph Lauren and GAP. However, he explained, the 100-employee business began to deteriorate after the implementation of NAFTA, and the company was forced to lay off 80 percent of its employees.
“We came very close to going bankrupt,” Henry said. “Economic advisors were telling is textiles was dead. I saw firsthand not only what it did to my business, but to my community. That began a new philosophy of my business.”
Henry and then-CEO Tom Sineath (who retired in 2015) then implemented a triple-bottom-line business model focused on three equally important bottom lines: people, the planet and profits, he said. Today, TS Designs sells largely to local, environmentally and socially conscious businesses and organizations that make up the “green movement,” and also prints for organizations looking for a locally made, better-quality product with a better environmental and social footprint, he said. The business impacts more than 500 jobs, he added.
“Think about your responsibility beyond the product and the profit,” Henry said. "We have a responsibility for the world we leave behind. That’s what drives TS Designs and me. It’s not about next month’s profits.”
The company also developed REHANCE technology, a process that is a more environmentally friendly, higher-quality alternative to traditional T-shirt printing methods, he said. The REHANCE process utilizes a specially formulated, water-based ink that resists dye.
“Nobody in the world makes T-shirts like we do,” Henry said. “We changed the vision of TS Designs to create the highest quality T-shirt possible while simultaneously looking after the environment.”
And nine years ago, the company started its Cotton in the Carolinas initiative aimed at reconnecting local cotton to the market. Through this effort, shirts are made from conventionally grown N.C. cotton and, on the website, can be tracked through the entire supply chain back to the farmer.
“Every day, you have a choice – when you buy cup of coffee or a tank of gas or a blouse – think about the impact beyond price,” Henry said, in closing. “Sometimes, people are starving to death to get that cup of coffee for you. You and I have more power in this room than they have in Washington because we have the power of the dollar. So, please, think about that.”
Sourcing the right materials
Leslianne Carbary, apparel materials manager at Seattle-based Brooks Sports, Inc., discussed the brand perspective for sourcing the right materials. Brooks Sports is a footwear company focused on running.
In developing a product, she went through an example of how she made fabric out of horsehair and took it to the Brooks Sports’ team.
“So what did our designers think?” Carbary asked. “They hated my fabric. It was too slick and shiny. But I didn’t want to give up on this idea. So I went to our product development. They tested it and they hated it. They said it was not pliable and lacks modulus. I then took it to line management. The result? They hated it because it didn’t achieve the margin goals. And lastly, I took it to our sustainability experts – and they hated it. They said it was horrifically bad for the plant – and horses!”
The fabric also failed lab testing for moisture management, wicking and modulus, she added.
“So there are some serious pitfalls for developing a product outside of the process,” Carbary said. “In reality, there is a correct path to success when developing a new material.”
She went on to explain the “correct path,” from line planning to considered, conscientious design; and from product and material development to sustainability. “Considered” design begins with the end in mind, she said, as it sets the tone for the entire line.
In product development, proof of concept prior to commercialization is very important, she said.
“We have an entire team of professional runners in our building,” she said. “We put things on the runner and make sure it works.”
Brooks also sources responsibility, and uses intelligent material development and selection, she added. In material development, the company works in close partnership with the team to meet all goals, she said. It also protects the company and the consumer through testing and validates material performance claims, she added.
The success of product development depends on several factors, Carbary said, including: process implementation from the start, strong working partnerships, thoughtful consideration of goals and targets, rigorous product creation analysis and, finally, “having fun.”
Overcoming disruptive forces
Judith Russell, global marketing strategist at Nilit America, Greensboro, N.C., covered, “It’s About the Story: How Savvy Apparel Brands and Retailers are Overcoming Disruptive Forces.”
She began by discussing the disruption that is occurring in the retail sector. Economies are recovering, but the worldwide retail industry is undergoing the biggest strategic and structural transformation in history, she said, and it’s not having the same recovery. “It’s not cyclical – it is secular,” she said. Already this year, 1,800 stores have announced closures, she pointed out.
A big driver to retail decline is demographics, she said, noting that the power is shifting from producers to the “all-powerful consumer,” she added. As Baby Boomers are downshifting spending on goods, Millennials (ages 20-36) have become the biggest demographic group and, as the first “digital natives,” they want what they want when they want it, bypassing traditional retailers, she noted. And the latter group shops differently and wants convenience, she said.
She went on to talk about the growth of online and mobile and its impact on brick and mortar. Online apparel sales are expected to grow by nearly 20 percent annually over the next four years and add another $50 billion in sales, which is equivalent to Macy’s, Nordstrom and Kohl’s.
In outlining how this affects apparel, she called it the “calm before the storm.” Traditional brands are mature and are rapidly losing share to next-generation players, Russell said.
“The winners will deliver value either through being the lowest cost or delivering the most compelling product,” she said. “It can’t be both.”
The second driver is technology, Russell contended. Technology provides consumers price transparency and unlimited and immediate access to product, info and data, she said. Marketplaces such as Amazon, the big game changer, are using advanced algorithms and robotics, driving huge increases in productivity, she added.
She also provided a number of statistics related to mobile-first social shopping, among them being that 74 percent of consumers rely on social networks to guide their purchasing decisions.
Globalization also is having an impact on retail, as it has driven down cost of goods and increased access to markets and products, Russell noted. And retailers and brands are expanding across borders.
More consumers than ever make purchasing decisions based on such things as transparency, giving back, a concern for the planet and a concern for wellness, she said.
In addition, next-gen commerce is having a huge impact on the supply chain, Russell said. A power shift from those who make to those who buy is occurring, and retailers and brands – empowered by the consumers they touch – now exert more control over supply chains, she added.
“Fabric producers have lost power, decisions have moved down the supply chain and value created is closer to the consumer,” Russell said. “And fibers are viewed as raw materials or commodities, with value lost in translation.”
In today’s disruptive environment, Russell said that companies must develop a digital commerce strategy, work with next-generation brands and heavily engage in social media marketing. In addition, she said they should work closely with the supply chain to help them differentiate, innovate and win in this “new normal.”
Additionally, textile and apparel companies must improve quality, value, speed to market, responsiveness and delivery; and must work closely with brands and retailers to deliver what their target consumers want and figure out how to engage them, both in and out of a retail setting.
Economics and trade
On economics and trade matters, Alasdair Carmichael, director of Americas, PCI Wood Mackenzie, provided his well-researched review of manmade fibers; and Mark Vitner, managing director and senior economist at Wells Fargo Securities, offered his latest forecast.
Carmichael discussed the growth of polyester and China’s dominance in that area. Among a number of interesting points, he noted that all fibers excluding polyester are on a growth path of 86 percent from 1980 to 2030 – and all fibers including polyester are on a trajectory to grow 310 percent during that same period.
He covered key trends related to the rest of the fiber supply chain as well oil prices and production, in addition to China’s One Belt, One Road initiative, an economic and diplomatic program that could transform global trade. Nearly 70 countries and international organizations have signed up for the mega infrastructure project, which spans 60-plus countries across Asia, the Middle East, Europe and Africa. China looks to replicate the historic “Silk Road” trading route, Carmichael noted.
“In 35 years China has gone from an inward-looking agrarian economy struggling to feed its population, to a basic manufacturing powerhouse, to a heavy industrial and high-tech manufacturing leader in export growth,” he said. “Now they are looking to be not just the manufacturer to the world but also the influencer.”
On the trade front, Carmichael noted that Global Trade Alert, a trade-monitoring group, counts nearly 7,000 protectionist measures enacted worldwide since the recession of 2009. About half of the items are aimed at China. It has been 23 years since the completion of the last global trade deal in 1994 and no other is on the horizon, he added.
The U.S. dropping out of the Trans-Pacific Partnership (TPP) is good for the Central American Free Trade Agreement (CAFTA) and therefore good for U.S. textiles, he posited.
He also listed a number of foreign investments in U.S. textile and apparel suppliers and manufacturers. “Based on recent expansions – does the rest of the world see more opportunity in the U.S. textile chain than the U.S. does?” he asked.
Meanwhile, Vitner said that economic activity appears to have once again gotten off to a slow start. First-quarter growth looks like it will be less than a 1.0 percent pace.
“We look for real GDP to grow 2.0 percent in 2017 and 2.5 percent in 2018,” he said.
Manufacturing activity, he added, appears to be gaining momentum now that the inventory cycle has run its course and global economic growth is picking back up.
Part 2
Positivity of Day 1 carries over into second day of SYFA event
