A
n open-end spinner opened his comments to the Yarn Market by saying, “Yarn sales for our
markets aren’t too bad. The larger knitters seem to be okay, but the smaller knitters are having
some difficulty in keeping their machinery running. Unfortunately, the ‘T-shirt mentality’ has
drifted toward the hosiery trade. We spinners are really messing up the markets, and no one is
forcing us — we are doing it to ourselves. Even our customers can’t understand — one customer said
to me, ‘If you people would just price yarn realistically, everything would be okay.’“
The spinner was speaking of the volume of yarn being offered at ridiculously low prices to a
market already saturated. He went on to say, “We all know that there is not enough in the markets
to satisfy all producers, but the way we work it, when the demand goes down, the supply goes up.
Then some spinners cut prices and throw the markets into turmoil. This has been going on for years,
but I thought this year would see a turn-around.”
He ended his comments by saying, “If it weren’t so sad, it would be laughable. All I can do
is hope that someone will finally see the light and reduce production.” For this to happen, someone
is going to have to assume a leadership role to lead all spinners to consistent pricing and
production practices.
It is interesting that this spinner never once said imports are the cause of the problem
facing the textile industry. He recognizes imports affect the markets but feels other factors are
causing us to “shoot ourselves in the foot.” Weavers are also fighting poor market conditions by
curtailing their operations. The textile industry did learn one thing back in the seventies — don’t
build an inventory when demand is down! Every spinner, weaver and knitter today will say something
to the effect, “We may not have many sales, but we have controlled our inventory. We learned that
the hard way!”
Is it time to learn another lesson about the value of pricing that at least allows realistic
profit?
Change Is In The Air
Recently, the CEO of a large sales yarn company was asked about the impact and future potential
of the Caribbean Basin Initiative (CBI). He responded by saying, “So far, it hasn’t had much of an
impact. There are several reasons for this. First of all, many of us were already doing some
business there. Secondly, we don’t know what the rules of the game are; they have not been clearly
spelled out. Lastly, and probably much more important, is the fact that Asian yarns are coming into
that area at a lower price than domestic yarns, so our yarns are at a competitive disadvantage. We
realize there are a lot of competitive players out there, and we have to work smarter to become
more competitive. In general, we think the CBI will benefit us in the near future.”
“Where in the heck is the textile industry going?” was the response from a weaver. He went on
to say, “To find the answer, we must determine where we are today and how we arrived there.”
One large spinner said, “The entire industry working together — customer, retailer, …
spinner, fiber producer — is what is necessary for the textile industry to survive.” Talk about
change — this is a change from the typical way of doing business. An organization can no longer
work independently thinking it alone has the secret formula for success. True success will require
working together, forming partnerships and sharing ideas. Maybe we should ask: are our domestic
neighbors our real competitors? This same spinner went on to say, “This market is consumer-driven.
The consumer is king, and the consumer is looking for value, cost savings, faster and cheaper.”
Aren’t spinners and weavers looking for the same things? Survival depends on the entire
pipeline — all segments, not working as individuals, but working together, for the benefit of
all.
Changing Demand Causes Switch In Markets
Another respondent stated, “The woven yarn market has become very soft. Specifically,
medium-count yarns that were going pretty well last year have really slowed. I feel this slowing is
due to changes in demand for apparel. Suppliers to those markets are switching their production and
entering our markets. Their entry has caused inventories to build, the pipeline has become
saturated, and prices are weaker — the age-old law of supply and demand.”
August 2001
