Atlanta, Ga. – As we move into the 21st century towards the many changes that will take place, so, too, does the American home textile industry.

Apparel manufacturing done outside the United States took hold rather quickly in the second half of the twentieth century. In the first ten years of the new century. The American home textile manufacturing industry will make a similar shift.

In the past fifteen years, what used to be the big six U.S. home textile manufacturers has become the big three (Fieldcrest/Cannon, recently purchased by Pillowtex, Springs/Wamsutta and West-point Stevens) and could quickly become the huge two. To survive, these two or three major manufacturers must produce low cost basic sheets and towels for the mass merchant trade.

Technology has led the way for major American home textile producers to compete in an ever-growing competitive arena. Automation has been integral to improving and maintaining profit margins in this business, which is becoming increasingly price driven.

Mass merchants, like their department and specialty store counterparts, are constantly striving to differentiate their product mix to improve profit margins, even though solid-colored sheets and towels still account for much of their bread and butter business. Mass merchants continuously upgrade their assortments, often at the expense of the major home textile producers who have invested heavily to manufacture low cost sheets and towels. These American home textile manufacturers depend on manufacturing long runs of basic goods in order to operate more efficiently and build profit.

The question in this equation is who will supply ''differentiated product'' to capture the top line growth? Most likely, home textile manufacturers outside the States because of their flexibility and capacity to specialize. Also, privatization is taking hold in some countries where governments once subsidized manufacturers. With new sources of funding, manufacturers can add state-of-the-art, automated equipment. If you add these to low labor costs, you have a model similar to Nike and The Gap, both of whom manufacture outside of America.

The key to survival for American home textile manufacturers will be to capture all of the mass merchant business either with their own manufacturing or by sourcing the right differentiated product at the right time and right price to meet the needs of a changing market. Soon the rest of the world will manufacture home textile products that are better and cheaper than the United States does. Sourcing home textile products on an import/export basis will be the way to achieve critical mass in the twenty-first century particularly as global retailers emerge. Dominance will be in differentiation and fulfilling consumer demands at the right time with the right product at the right price.