VISION 2000

January 8, 2000

New York – Throwing the word ''millennium'' into a sentence usually grabs attention, even if it only inflates a given statement with false importance. For example, ''This is the fabric of the new millennium'' might be less accurate than saying, ''This is our new fabric.'' In the past year the word has been used to sell everything from Y2K-proof microchips to around-the-world Concorde flights on New Year's Eve. In any case, time is what you make of it.

For Vision 2000, we sent four questions to industry leaders and left space in the magazine for answers. Appropriately, this space is also what you've made of it.

1) What changes do you anticipate in the home furnishings industry within the next ten years that will have the greatest impact on your business?

Ab van Marion, President, NedGraphics Group: The greatest change is likely to be the consumer's demand for greater choice and personalized manufacture as witnessed by the continued popularity of room makeover and TV decorating programs. Increasingly, individuals require that their homes reflect their personality and lifestyle. Technology will facilitate the move to consumer-based design and manufacture.

Matthew Crew, Sales and Marketing Director, Crowson: The advancement of E-commerce and Internet trading. There will be a consolidation and a reduction in the number of trading companies operating on our sector.

Roger L. Berkley, President, Weave Corporation: In a word, ''globalization.'' For weavers, the globalization of raw material sourcing is likely to have a major effect on how we do business. Modernization of yarn manufacturing equipment around the world is allowing surprising sources of supply to come to the fore. The use of off-shore suppliers takes more planning and frequently entails more false starts, but once relationships are established, they tend to run smoothly. Similarly, selling into the global market requires patience, understanding and attention to detail.

Enzo Angiuoni, President, Enzo degli Angiuoni: Stylists are taking a growing interest in house settings and accessories. The house will change in the next years both in rooms and accessories. The living rooms, bedrooms and bathrooms will change. The curtains will change on the direction of beauty. Regarding sofa fabrics, I think that the high quality standard will be the winner in the future.

Stan Fradin, President, Rockland Industries Inc.: The Internet and overnight international deliveries have made possible new types of retail operations and a host of booming fast-growing, mostly electronic communication businesses. More European fabrics or Far Eastern or Chinese fabrics will be shown to American consumers and more American products will be shown to the foreign consumer.

Trevor Helliwell, Managing Director, Prestigious Textiles Ltd.: The electronic age. Shopping via the Internet is already popular.

2) How will these changes affect the number of suppliers in the business?

Ab van Marion: The market will continue to move from high-volume long runs to short exclusive designs being produced in smaller volumes and with shorter lead times. Focus on the customer — particularly the final consumer — service and rapid response will have a significant impact on manufacturing. This could result in fewer large vertical suppliers and a greater number of small to medium sized specialist manufacturers.

Crew: Our current view is that there are too many suppliers, too many wholesalers and too many retailers in the market. We envisage a more direct chain of supply between the manufacturer and the retailer. The most likely casualty in this equation will be the wholesalers, as more companies are trying to find a direct route to market. This is already evident in many other industries.

Berkley: The mega-mills and super converters need to grow to survive and compete. To do this, they acquire everything they perceive to be potential agents of growth. As small companies weaken or find their owners retiring, they become targets for absorption by these mega-mills and/or super converters. Most likely, the result will be fewer players.

Angiuoni: I think that the companies who will play a leading role will be customer-oriented and meet a high quality standard.

Fradin: Certainly our industry worldwide has seen a shrinkage of suppliers in the past decade for many reasons. It's unlikely the wholesaler/jobber will become what he once was as far as influencing the marketplace. Major suppliers will service retail accounts on a direct basis, or at the very least try a minimal number of very important dedicated and capable remaining important wholesale distributors.

3) How will the structure of the industry change?

Helliwell: Improved access to a wider product range for the consumer will present problems for the converter-wholesaler relationship. How can we restrict consumer access to trade prices, for instance? Ultimately, I feel it will lead to a shortening of the supply chain, with consumers realizing the advantages of 'buying direct' in terms of choice and price and with manufacturers responding to the immediacy of dealing with the end-user.

This will doubtless lead to a faster turnaround of design trends. New production techniques support this view. In 10 years' time, many converters will have their own print shops, taking original illustrative material and transferring it directly to the fabric. Designs will have a shorter 'life,' more colorways will be available, production runs will be smaller and efficient stockholding will become the key to profitability.

Ab van Marion: Advances in computer-aided design, digital manufacturing and electronic marketing will offer unparalleled levels of choice, flexibility and speed. In the same way that a consumer is able to have a unique shade of paint produced in a store, current technology will enable the same customer to select designs and colorways in-store and have fabric produced digitally.

Berkley: As the mega-mills and super converters have grown, we have seen them become slower to respond and more tied up in their own internal bureaucracy. In the future, they will undoubtedly become more and more bloated and increasingly focused on the requirements of the financial markets rather than the textile markets. This will cause some to fail and deconstruct into either their original component parts or some combinations of their original component parts. Most of them will continue to think big, and be successful feeding the huge belly of global mass markets.

Meanwhile, the specialty mills and boutique converters will follow different courses. To the extent that they will be able differentiate themselves through base cloths and designs, they will survive serving the higher end custom markets until ink jet printing becomes commercially viable at which time they will have to have capital to invest or face extinction. Most assuredly this will begin to happen within five years. Some may survive by becoming distributors, retailers, and/or Internet sales companies.

We will continue to be successful because we can maneuver quickly. We will fulfill the higher end custom markets' needs for diverse product that is available in small quantities and confined to each customer, or at least to specific classes of customers, that will allow these clients to build unique identities. We will push the envelope of design and color. Because we are not wrapped in layers of bureaucracy, we can respond fast and lead the industry.

Angiuoni: The companies producing designer and high quality products who want to stay on market have to be flexible, slender and quick.

4) In what new ways will fabrics be marketed to the consumer?

Angiuoni: Producers have to revise their selling strategies and become much more considerate of the final consumer.

Fradin: European and other foreign national firms will have to make a greater effort to get their products distributed and shown in the U.S. They will probably have to rely more on their own sales efforts than that of representatives carrying countless lines. American firms will have to continue to push for international distribution and hopefully reverse the recent rend of the U.S. firms dropping out of international trade fairs and events.

The Internet will have a tremendous impact where companies can show their products to consumers in their homes. You need only click on at any time to see major manufacturers' complete lines for the home, where to buy and at what cost.

Helliwell: In the immediate future, new technology is dictating the pace of change in the sales force. Even today at many customer presentations, the need for a table on which to spread out pattern books and samples is being replaced by the question, ''Where can I plug in my laptop?''

Ab van Marion: Current technology is capable of revolutionizing the marketing of fabrics. Utilizing developments in color calibration and fabric simulation, it is possible to accurately produce a design on a PC. Clients can access a database or archive over the Internet, modify colorways, view the resultant fabric in a room setting or on a piece of furniture. They can be confident that what they see on the screen will be what they receive from manufacturing. Likewise, the supplier can be confident that the customers needs are accurately communicated. They can also be confident that their designs and other information are totally secure. The cost of such technology continues to fall, thus making it available to an ever-greater number of designers, converters and manufacturers.

Crew: As one of the first European textile companies to launch a fully integrated and interactive CD-ROM, our intention is to provide more marketing tools for the consumer to work with in their home environment, supported by Internet communication and access to showrooms.

Berkley: Undoubtedly, there will be increased use of the Internet to distribute fabrics. When cost-effective methods of distributing samples are developed, the potential of Internet commerce will be explored in a meaningful way. Some of the super converters and boutique converters are likely to pursue life as distributors on the Internet, since they carry stock. The mega-mills may attempt to set up divisions to market fabrics directly to consumers, although I would be skeptical of their chances for success. F&FI



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