U.S. fabric producers still standing despite import wave
Companies banking on better design, value and service to beat competition
By Susan M. Andrews -- Furniture Today, June 2, 2003
High Point — Is there a light at the end of the tunnel for the U.S. textile industry? Maybe — but it's more likely an oncoming train, and survival will depend on agility and speed.
It's been another tough year for companies that supply fabric for upholstery in the United States. And despite assurances of action from members of the Bush administration, many fabric executives think the government is just paying lip service to an industry it has abandoned to the overwhelming forces of low-cost imports.
For example, there are currently quotas on how much of any type of upholstery fabric can be imported into the United States from China. The quotas, part of the 140-plus member World Trade Organization's Agreement on Textiles and Clothing, are scheduled to disappear on Jan. 1, 2005. No one really knows what will happen then, but no one doubts the change will drive some of the remaining U.S. textile mills into oblivion.
The reality is that price drives today's upholstery fabric business, thanks to the continuous drumbeat of cheap imports combined with the sluggish world eco-nomy. In addition, quota and tariff issues have been effectively bypassed so far through cut-and-sew programs, which are being used by fabric sources of all types — mills, converters and importers — as well as by some top upholstery manufacturers who are going directly to China.
However, the U.S. textile industry is not rolling over in defeat, and those producers determined to remain standing are banking on their ability to beat the imports with better design, value and service.
Part of the key to survival may be hybridization, with U.S. mills adding some type of offshore production to better serve furniture manufacturers, many of whom continue to move their operations to whatever area of the world has the lowest cost production — currently China.
Joan Fabrics and Culp have already started to morph, with both companies recently announcing plans to launch operations in China.
Rob Culp, chairman and chief executive officer of Culp, said his company's China platform "is right on schedule. We'll have product at Showtime next month that is sourced in China for distribution there, or here, or anywhere else in the world.
"We need to supply our customers no matter where they are manufacturing," Culp said. "If Company XYZ is making furniture in China, we want to supply them in China. If they are making furniture here, we want to supply them here at China prices."
Culp also noted that the export business for textiles, which had dwindled in the past few years in the face of the strong dollar, could become another growth opportunity since the dollar has weakened.
Another example of increased globalization is No. 9 Weave, which last year launched Glasgall Silk, a division that produces silk fabrics in China. Some mills will do as Weave did, using China as a source for goods they cannot produce at home.
"We opted to go to China for product we can't make in our mill here so we didn't displace our own manufacturing," said Roger Berkley, president. "Others have opted to supplement their normal production with long runs of items for furniture manufacturers, which they then have cut and sewn into cushion covers, thereby getting around the issues of quotas and duties, since after it's cut and sewn, the fabric is classified as parts."
Because of a tie in the sixth position, 11 companies are ranked this year as the top fabric mills. These 11 mills had combined estimated interior fabric shipments in 2002 of nearly $2 billion. The top three positions have not changed since last year.
Joan Fabrics, a privately held company that includes Mastercraft Fabrics, Main Street Textiles, Home Fabrics, Circa 1801/Doblin and Joan Velvets, is estimated to have interior fabric shipments of about $500 million in 2002, keeping it in the No. 1 position. Joan Fabrics is led by Elkin McCallum.
Culp Inc., which has been streamlining its operations for the past few years, remains at No. 2, with 2002 interior fabric shipments of $357 million, about $250 million of which was upholstery fabric. The company exited its unprofitable nylon flock business in the past year. The China operation is expected to increase annual revenues by $25 million in the first year or so, and increase after that as it gets ramped up.
No. 3 again this year is Quaker Fabric, which has done better than most of its peers in the past few years. Quaker had 2002 interior fabric shipments of $350 million, up 14% from $308 million in 2001. Residential upholstery is the company's primary product, representing 96% of total shipments. Export continues to be important to Quaker, with about 14% of interior fabrics being exported in 2002. Last year, the company spent about $32 million for such capital improvements as double-wide jacquard looms.
During 2002, Quaker spent about $32 million on capital expenditures, primarily to further the company's overall information technology, quality, productivity, service and capacity objectives. The investment includes the addition of a significant number of double-wide jacquard looms to support Quaker's entry into the decorative home furnishings segment.
Burlington Inds. was No. 4 on the 2002 list, but does not appear this year since selling its decorative fabrics and upholstery fabric businesses. The company continues to produce ticking and contract upholstery fabrics, but no residential furniture fabric.
Microfibres, which was No. 5 in 2001, moved into the No. 4 spot this year with 2002 interior fabric shipments estimated to be $205 million, down about 14% from $238 million last year. This figure includes sales from the company's European division.
Tietex bought Burlington's residential upholstery business last summer and christened it Tietex Interiors, which puts that company on the list at No. 5. The company's 2002 interior fabric shipments are estimated to be about $120 million.
Tied for No. 6 are Blumenthal Print Works and Hoffman Mills, each with estimated 2002 interior fabric shipments of about $105 million, which represents a 5% decrease for Blumenthal and a 9% decrease for Hoffman from 2001.
No. 7 is Valdese, with 2002 interior fabric shipments estimated at $79 million, up 8% from $73 million in 2001. Residential upholstery is about two-thirds of Valdese's business, and the company exported about 8% of its shipments.
No. 8 is Sunbury Textile Mills, with $45 million in residential and contract upholstery fabric shipments in 2002, down slightly from $47 million in 2001.
Weave is No. 9 on the list, with estimated shipments of interior fabrics of $40 million, down 11% from $45 million in 2001. Weave, in addition to its domestic operations, produces silk fabrics in China under the banner Glasgall Silk.
Craftex Mills completes the list, with 2002 interior fabric shipments of $39 million, down about 3% from the year before. The major portion of the company's business, 91%, is done in residential upholstery fabrics.
| Top fabric mills | ||||
|---|---|---|---|---|
| Estimated interior fabric shipments | ||||
| (non-automotive) in millions1 | percent change | |||
| Rank | Company, headquarters, notes | 2002 | 2001 | 2001 to 2002 |
|
1Figures include all residential and contract interior fabric shipments, not just upholstery, including exports. Figures exclude all automotive, carpet and commission finishing shipments. To qualify, companies must be a mill and sell upholstery fabrics directly to U.S. residential furniture manufacturers. Fabric converters and jobbers are excluded. Shipment estimates based on 12 months ended Dec. 31, 2002, unless otherwise indicated. 2Tied for 6th position. NA=Not applicable Source: Furniture/Today market research |
||||
| 1 | Joan Fabrics Tyngsboro, Mass. | $500 | $620 | -19% |
| Includes Joan, Mastercraft, Main Street, Home Fabrics and Circa 1801/Doblin. Includes residential and contract upholstery fabric shipments. | ||||
| 2 | Culp Inc. High Point | $357 | $369 | -3% |
| Fiscal year ended April 27. Estimate based on trailing 12 months ended Jan. 26. Includes Culp Decorative Fabrics, Culp Velvets and Prints, Culp Yarn and Culp Home Fashions. For the trailing 12 months, upholstery fabrics accounted for approximately 71% of shipments and mattress ticking accounted for approximately 29%. | ||||
| 3 | Quaker Fabric Fall River, Mass. | $350 | $308 | 14% |
| Includes Quaker Fabric, William Whitaker Sons and Davol Fabrics divisions. Residential upholstery fabrics accounted for 96% of 2002 total shipments. Yarns, accounting for 4% of totalshipments, have been excluded. Approximately 14% of interior fabrics were exported in 2002. Spent approximately $32 million on capital expenditures last year, including the addition of a significant number of double-wide jacquard looms. | ||||
| 4 | Microfibres Pawtucket, R.I. | $205 | $238 | -14% |
| Includes residential upholstery, top-of-the bed and decorative pillows. Includes sales from Microfibres Europe as well. | ||||
| 5 | Tietex Interiors Spartanburg, S.C. | $120 | NA | NA |
| Purchased Burlington Inds.' residential upholstery segment in June 2002. | ||||
| 6 2 | Blumenthal Print Works New Orleans | $105 | $110 | -5% |
| Includes residential upholstery fabric and mattress ticking sales. | ||||
| 6 2 | Hoffman New York | $105 | $115 | -9% |
| Includes residential upholstery and top-of-the-bed shipments in North America. | ||||
| 7 | Valdese Weavers Valdese, N.C. | $79 | $73 | 8% |
| Residential upholstery fabrics accounted for 66% of total shipments, contract accounted for 16% and other home furnishings fabrics, including top-of-the bed, decorative pillows, window treatments and rugs, accounted for 18% in 2002. Approximately 8% of interior fabrics were exported. | ||||
| 8 | Sunbury Textile Mills New York | $45 | $47 | -4% |
| Includes both residential and contract upholstery fabrics. | ||||
| 9 | Weave Hackensack, N.J. | $40 | $45 | -11% |
| Includes shipments from Weave and Glasgall Silk. Residential upholstery fabrics accounted for approximately 88% of total shipments and contract upholstery accounted for 12% in 2002. Approximately 10% of interior fabrics were exported. | ||||
| 10 | Craftex Mills Blue Bell, Pa. | $39 | $40 | -3% |
| Residential upholstery fabrics accounted for 91% of total shipments and contract upholstery accounted for 9% in 2002. Approximately 1% of interior fabrics were exported. | ||||
