Annual Report October 2018

The Art Of Adaptation

 

Our annual State of the Industry Report explores how companies are adapting
to succeed in fast-changing times

Changes seem to happen more quickly and often today. To survive in business, one must adapt swiftly and in ways that build on core strengths as well as break new ground. Here leading suppliers and manufacturers reveal how their companies have adapted over the past few years to keep pace with economic, social and technological changes.

Growing With E-Commerce

According to Jeff Kaufman, president and coo, Avanti Linens, the shift to direct-to-consumer (DTC) shipping as online retail venues have grown has been key. “By the end of 2018, DTC will represent 23 percent of our total, up from nothing five years ago. We’ve updated systems, physical space in our warehouse, office and warehouse staffing and merchandising—essentially every aspect of our business—to accommodate the DTC business,” says Kaufman.
In the rug sector, the ability to sell online has been a pleasant surprise. “Years ago it was believed that consumers wouldn’t buy rugs online,” says Bart Hill, senior vice-president of products and operations, Mohawk Home. “However, the portability of ordering a rug from home has won out. Early on, we laid a foundation with Amazon, Wayfair and others online that put us in the forefront.”
Hill reveals, “Today, 18 percent of our area rugs are sold online. The days of 400 Walmart stores opening across the country per year are over. Retail is shifting to online and is more fragmented. Today, product runs are wide and shallow. More skus and smaller lot sizes. “

Knowing The Consumer Better

Adapting to the growth of omnichannel retailing is key to achieving success as it mirrors the way consumers want to shop, according to Christopher Mooney, chief marketing and merchandising officer, Welspun, USA, Inc. And consumers today also want to know what they are buying. “The consumer is now demanding traceability, provenance and authenticity when it comes to the attributes of product that create difference, including country of origin and branded cottons, for example,” says Mooney.
“Consumer research and direct communication with your end user and how they live with your product is not just lip service, it’s mandatory and a huge part of our marketing spend in recent years. We’ve now, in partnership with the best agency in the business, created a Welspun Moms managed panel of consumers from whom we can get real-time answers to surveys, questions and rankings in a matter of days, sliced and diced anyway we want it, demographically,” Mooney explains.
“And finally, design is taking a front-and-center position as one of our new key tent poles,” says Mooney. “Fashion top of bed is a new and loud part of the family.”

Updating Operations

Adapting to changing times can mean streamlining operations as well as expanding them. “Our business has transitioned to having less personnel employed due to the advanced business systems we have incorporated,” says Randy Wright, senior vice-president, Taymor Industries, Inc. “With the Warehouse Management Software program we’ve embraced, along with an Enterprise Resource Planning system, fewer people are required for customer support and other daily business activities. We also have to remain flexible to change as it relates to product trends and react quickly to be in or out of trends as they develop.”
At the other end of the spectrum, in recent years Trident added a large manufacturing complex in Budhni, India, that incorporates the world’s largest sheet and terry towel plants. “On the terry side, this plant eliminated any manufacturing bottlenecks on our core solid color businesses, and allowed us to service regional retail partners more efficiently, as the large programs were relocated from our existing factories to Budhni,” says Jeffrey Kambak, ceo of U.S. operations for Trident Global Inc., the U.S. division of The Trident Group. “We had never been in the sheet business before. Now a couple of years into it, we currently supply, or will be soon, some of the premier sheet programs in the country.”
Trident has also upped its game when it comes to Corporate Social Responsibility programs. Though long known for helping people in the villages surrounding its facilities, now entire teams from the company are dedicated to economic, educational and healthcare initiatives.
Trident’s presence in the U.S. increased in recent years, notably with the opening of a showroom at 295 Fifth Avenue and a U.S. team in design, operations and sales.
In time for September 2018 N.Y. Home Fashions Market, Linum Home Textiles moved into a larger new showroom in Suite 908 at 295 Fifth Avenue. The company required more space to showcase new assortments, including decorative pillows, embellished towels and the Linum Kids Collection. “With more than 45 major retailer customers, the business has seen tremendous growth in the past couple of years,” says Sevgi Duman, sales and marketing director, Linum Home Textiles. “We are focused on developing our embellished towel business and have also expanded our in-house embroidery capabilities to fulfill the growing demand. Our product categories include dobby, jacquard and embellished bath towels, bathrobes for children and adults, pestemal beach towels, body wraps for men and women, decorative pillows, chaise lounge covers and bed linens.”

Material & Market Shifts

Artisan-based non-profit social enterprise, Anchal, provides eco-friendly products created by women in India and Louisville, KY. Natalie Hugon Smith, marketing and public relations director, Anchal, explains, “Originally, Anchal exclusively used recycled sari material to create over 6,000 products since 2010. However in 2016, Anchal introduced a collection of contemporary kantha products made from 100 percent certified organic cotton fabric and natural dyes. These new contemporary designs and eco-friendly fabrics have allowed our products to stay relevant and popular in a highly competitive artisan textile market.
“We have also expanded our impact locally to Louisville, KY, through dyeScape,” Smith continues. “Anchal’s dyeScape provides training and career opportunities in eco-friendly textile production to exploited women in Louisville,” says Smith. “The project trains and hires women to grow, harvest and dye fabric with natural dye from plants grown through urban gardens located on vacant lots.”
Over at Milliken, one of the biggest changes the company made was to re-enter the home interiors market a few years ago. LeAnne Flack, marketing manager, Milliken Specialty Interiors, explains, “After thorough gap analysis, we discovered an unfilled need for better performance fabric options. So our Breathe by Milliken™ line, the market’s first fluorine-free, eco-elegant performance fabric available in natural or recycled polyester fibers, was born.
“After launching this product, we also restructured the Milliken Specialty Interiors team and tools to better meet the needs of the market,” says Flack. The tools include new website and product pages, social channels to engage retail customers and end-users, and a new High Point showroom that opened earlier in 2018.
“Our Grund business is constantly changing and we are forced to reinvent ourselves almost every couple of years,” says Michael Twer, vice-president, sales/general manager, Grund America, LLC. “For example, two years ago, our 30-year-old, Czech Republic family-run business decided to focus 100 percent of the U.S. market on organic cotton products certified to the Global Organic Textile Standard (GOTS). As stewards of our environment and community, we felt called to change the textile industry by offering the best, chemical-free products held to the highest textile standard.”
Twer also is the chairman for the Organic Trade Association’s Fiber Council. “The Organic Trade Association’s Fiber Council is successfully working to strengthen and grow the organic fiber and textiles sector,” says Twer.

A Global Perspective

As a global business with worldwide distribution, and factories in the U.K. and China, Caldeira has to remain responsive to change at all times. According to Tony Caldeira, founder and ceo, Caldeira USA, real estate, labor and raw materials costs in China are rising. His company has adapted by downsizing its operations in China and shifting more production to the U.K. and the U.S. “We have also switched our fabric supply base to vendors who carry stocks, enabling us to be even more flexible with lower minimal order quantities and shorter lead times,” says Caldeira.
“In the U.K., even when the Brexit uncertainty is over, retail and, subsequently, its supply chains will be under severe pressure with rising rents, local taxes and labor costs, and added competition from online retailers,” says Caldeira. The company has pulled away from weaker retail customers in the U.K. and reduced overhead as a defensive measure.
In the U.S., Caldeira reduced the size of its New York showroom. “President Trump’s negotiating style with overseas textile-producing nations means that the art of adaptation may be needed more than ever in the near future. For example, his stance with Turkey has had significant implications for textile producers there,” Caldeira explains. “Of course, all of this will be dwarfed by the implications of tariffs being imposed upon Chinese textiles. If the President goes down this road it will lead to the biggest shake up in global textiles since globalization itself.” LDB

Resources
• Anchal, Inc., 502-709-4377, anchalproject.org
• Avanti Linens, 800-360-0836, avantilinens.com
• Caldeira USA, rg@caldeira.com, +44(0)1512909090, caldeira.com
• Grund America, grundamerica.com
• Linum Home Textiles, 855-933-0300, linumhometextiles.com
• Melange Home, 212-689-2002, melangehome.com
• Milliken Specialty Interiors, Dan Baker, 630-908-7623, breathebymilliken.com, millikenspecialtyinteriors.com
• Mohawk Home, 800-843-4473, mohawkind.com
• Taymor Industries, Inc., 800-388-9887, taymorcatalog.com
• Trident, 212-684-6342, tridentindia.com
• Welspun USA, 212-620-2000, welspun.com


Eco-Elegant Sustainable Fabrics From Breathe by Milliken™

Breathe by Milliken offers sustainable fabrics made with natural fibers and with polyester from recycled plastic. The all-natural fiber fabrics are fluorine-free cotton and cotton-linen blends. The REPREVE® recycled polyester fabrics are made from plastic bottles diverted from landfills and the fibers are verified by Unifi’s UTrust™ certification program to be transparent, traceable and FiberPrint® certified. Both natural and polyester fabrics incorporate a plant-based stain repellent and are UL GREENGUARD® Gold certified to meet environmental standards.

Australian Merino From Melange Home

The 100 percent Australian Merino wool blankets come in two colorways: oatmeal/ivory (shown) and charcoal/gray. They are now available with a self-hem border.

Function Meets Style At Taymor Industries

The Hanz toilet paper holder represents out-of-the-box thinking in the company’s approach to product development. This functional item has been designed to be a fashionable statement piece that also remains true to its purpose.

Organic Cotton Bed Linens From Grund America

Savannah 100 percent GOTS-certified sateen organic cotton sheets and pillowcases round out the company’s home and bath collection that also includes organic bathroom rugs, towels and throws/blankets. Savannah 300-thread-count sheets and pillowcases are offered in slate gray (shown), driftwood, ivory and white.

Farmhouse Collection From Avanti Linens

Introduced at the Sept. 2018 N.Y. Market, the Classic Farmhouse Decorative Towel Collection includes five styles in five colors each. Embroidered in the company’s Moonachie, NJ factory, the towels feature classic farmhouse looks in Spring colors with coordinating fabric trims. They will be available to ship Dec. 15, 2018.

christmas

Holiday Hand Towel From Linum Home Textiles

The Christmas Snow Family embroidered 100 percent Turkish cotton hand towel, embellished in the U.S., features whimsical figures dressed for the holiday season. The towel measures 16 by 30 inches and is available in white (shown) or sand. The towels are manufactured with more cotton per square inch for maximum softness and absorbency in Linum’s state-of-the-art vertically integrated green factory in Turkey, which runs on 100 percent solar energy.

Textured Shag Rugs From Mohawk Home

Made with a mix of proprietary synthetic textured yarns and microfibers, the Millenia Collection of woven shag rugs are constructed with yarns in varying pile heights, creating an organic-style sculpted, three-dimensional surface. Colors include indigo, cream, gray, blush, periwinkle and pops of gold viscose.

Textured Pillows From Caldeira USA

The Content Living Collection focuses on textures. Pillows include (clockwise from top left): 17- by 17-inch Belgian chunky chenille, two 16- by 16-inch ethically sourced Mongolian pillows in charcoal with white tips and in ivory, 24- by 24-inch stonewashed cotton striped, 17- by 17-inch Belgian diamond-cut velvet, 17- by 17-inch textured wave jacquard, 24- by 24-inch Belgian ikat chunky chenille, 17- by 17-inch Belgian ochre cut velvet with slub ground, 24- by 16-inch Belgian striped chunky chenille, and 8- by 8-inch Belgian distressed ochre cut velvet.

Organic Cotton Bedding From Anchal

Anchal, a non-profit social enterprise, offers eco-friendly products hand-stitched from vintage materials, certified organic cotton and low-impact dyes. Distinct contemporary design, heirloom craftsmanship and a personal signature connect one to each artisan’s journey towards empowerment.

Anti-Bacterial Towels From Trident

Towels with a sour odor are a top complaint by consumers. Antimicrobial/anti-odor towels are gaining in popularity due to the increased use of high-efficiency machines and cold water washing. Over time, microbes build up in towels, leading to bad odor. Everyday Fresh towels are blended with smartcel™, the first antibacterial zinc oxide incorporated fiber. This technology fights odors without the use of nanotechnology or aggressive chemicals.


What Is The Most Challenging Aspect Of Doing Business Today?

“The direct-to-consumer (DTC) business, while a growth engine, is the most challenging component. The resources needed to manage this business are greater than its volume contribution. And the DTC channel has become the fallback position when it comes to new product. Instead of committing to placing orders for stores, the default answer is ‘put it online’. So the inventory commitment is all ours and we have to deal with manufacturing minimums and more inventory risk.”—Jeff Kaufman, president and coo, Avanti Linens
“Challenges in the industry today are centered around the issues of speed-to-market, as well as creating and profitably operating the infrastructure for direct-to-consumer selling. Digital marketing and retailer support is also a bit of the Wild West…try and test and reallocate and rethink.”—Christopher Mooney, chief marketing and merchandising officer, Welspun USA, Inc.
“There are no new retail prospects emerging through the standard brick-and-mortar venue. E-commerce is dominating the landscape with no commitment to the supplier, since they are selling ‘virtual inventory’ in which the supplier ‘owns’ and drop ships.”—Randy Wright, senior vice-president, Taymor Industries, Inc.
“One of the biggest challenges is keeping the industry honest. The market is being introduced to lesser quality [cotton] products with an unregulated organic label. There is much debate on what truly is 100 percent organic and there are many certifications claiming to be 100 percent organic. However, we strongly believe in the GOTS standard, which documents the entire supply chain process until the time it reaches our consumer’s home.”—Michael Twer, vice-president, sales/general manager, Grund America, LLC
“There is now intense scrutiny on traceability protocols for premium, specialty and eco-friendly products. We spend an unbelievable amount of time, energy and money making sure our supply chain protocols are among the tightest in the industry.
“Another challenge with the growth of the off-price channel is the compression of timelines in relation to the supply pipeline. Quick turn-around is critical to grow these businesses.”—Jeffrey Kambak, ceo of U.S. operations for Trident Global Inc., the U.S. division of The Trident Group
“The big difference in today’s market is changing customer demands and overall buyer sophistication. Many buyers have a high expectation for performance and durability, and sustainability is increasingly a requirement. People have never been more interested in materiality – what their furniture is made from, how it’s sourced and produced, and its impact on their overall well-being. Manufacturers and suppliers are faced with the need to keep up with these demands, to be transparent, to demonstrate sustainability claims and, ultimately, to innovate or die.” —LeAnne Flack, marketing manager, Milliken Specialty Interiors
“Challenging is the emergence of other source countries, such as Turkey, in the rug sector. As a U.S.-based company, there is pressure to combat lower-priced imported goods with innovation and design. Deflation is an issue—rugs haven’t appreciated in a long time. Retailers don’t want to move price points up.”—Bart Hill, senior vice-president of products and operations, Mohawk Home


What Is Better Today Than It Was Five Years Ago?

“Current customers are creating closer/longer-lasting business relationships due to the fewer domestic suppliers available—the partnerships are stronger than they were five years ago.”—Randy Wright, senior vice-president, Taymor Industries, Inc.
“Because of e-commerce we have more distribution channels.”—Alan Laytner, senior partner, Melange Home
“Because of the explosion of the online business, there are more opportunities to get product tested and out in the market. We have found a number of winners via online selling, that in the old model would not have been placed because we were able to test online and get retailers to put them in stores.”—Jeff Kaufman, president and coo, Avanti Linens
“What’s exciting and new is that brand appetite has increased and resulted in unexpected partnerships that would not have been attempted even a few years ago. We’re launching Goodful by Buzzfeed next month with a major retailer. Buzzfeed is a news and entertainment company, not a personality or a celebrity. The idea is that an engaged and vocal community coalescing around common goals is a powerful, enduring source of demand and marketing.”—Christopher Mooney, chief marketing and merchandising officer, Welspun USA, Inc.
“In manufacturing, the technology available now to lessen the impact processes have on the environment has been a fabulous advancement for the greater good. On the product side, what’s improved is the sheer breadth of product and nearly limitless availability of really breathtaking designs. In the past, trends were encapsulated as either traditional or modern. Now there are so many sub-categories that allow designers the freedom to truly express themselves.”—Jeffrey Kambak, ceo of U.S. operations for Trident Global Inc., the U.S. division of The Trident Group
“The scrutiny and discerning tastes of end-users have really propelled the industry forward, including the development of better products, offering less wear and greater overall durability. The focus on natural and environment-friendly solutions and the development of items like The Red List have compelled the industry to make great strides to improve our sustainability and significantly reduce use of chemicals of concern, constantly seeking better ways to produce, and to limit waste and excess.”—LeAnne Flack, marketing manager, Milliken Specialty Interiors
“The industry is pushing towards a less-chemical/chemical-free environment. Today’s consumers understand the value in higher quality, less toxic products. At some point in the future, this will be the standard with a globally accepted standard in place.”—Michael Twer, vice-president, sales/general manager, Grund America, LLC
“Overall, homeowners have shifted their flooring preferences from soft (wall-to-wall carpeting) to hard surfaces, such as hardwood, laminate and tile, that are increasing the use of area rugs.”—Bart Hill, senior vice-president of products and operations, Mohawk Home