Out with the old...

JENNIFER NEGLEY -- Home Textiles Today, 12/18/2000 12:00:00 AM

This is the last issue of HTT for the year 2000, the keenly anticipated millennial kick-off year that ultimately brought the home textiles industry so much more than it bargained for.

One only need look at the first issue of the year 2000 to get a sense not just of how much has changed over the past 12 months, but also how profoundly the dynamics of the industry have shifted.

For instance, does this sound like something from 12 months ago or does it strike anyone as ancient history:

A very, merry Christmas indeed: "This past year ended with a bang for retailers, with holiday sales making a brilliant end-of-millennium showing. And while home textiles might not rival electronics in terms of capturing consumers' Christmas dollars, most retailers are reporting that the category enjoyed hearty growth..."

Big 15 bigger than ever: "Driven by continued strong growth of the industry's mid-size players-where gains ranged from 31 percent to 125 percent-sales of the nation's Top 15 home textiles suppliers continued to grow at a robust pace in 1999.Overall, sales at the 15 largest suppliers climbed by more than $1 billion, to $8.2 billion from $7.2 billion in 1998, according to Home Textiles Today's exclusive Top 15 rankings..."

Makes you want to turn the clock back and take another swing at it, no?

So heady were the times that one securities firm upgraded six home textiles suppliers to long-term buys:

Burlington Industries-Share price in January: $3.81. 12-month target: $9. Share price as of Dec. 12, 2000: $1.69.

Culp Inc.-Share price in January: $6.13. 12-month target: $9.50. Share price as of Dec. 12: $2.63.

Dan River-Share price in January: $4.48. 12-month target: $10.50. Share price as of Dec. 12: $2.26.

Guilford Mills-Share price in January: $6.69. 12-month target: $10. Share price as of Dec. 12: $1.63.

Pillowtex-Share price in January: $5.94. 12-month target: $15. Share price as of Dec. 12: 35 cents.

Springs Industries-Share price in January: $40. 12-month target: $52. Share price as of Dec. 12: $27.19.

If all of that now seems optimistic to the point of myopia, it's worth remembering that the pendulum will ultimately swing back again. And it may also serve as a hopeful example of how much change can be effected in a relatively short period of time.

Some larger companies are likely to become smaller, but they should emerge with more focused strategies.

Yes, mills will be forced to absorb medium-term hits as they shutter some domestic facilities. But they should come out on the other side of the process with a business that is less concerned with satiating capacity and more locked onto building brand equity.

Moderate-sized players will find that a slower retail environment makes for rougher sledding, particularly if retailers go heavily promotional.

The bumps in the road that the industry has encountered during 2000-and many of the lumps it is in store for in 2001-ultimately will result in a new and stronger textiles industry.

Whether we're in for three more quarters of misery or six, what's taking place now is happening because it can no longer be avoided. And shake-outs are survivable for those who keep their wits about them.

Here's a wish for happier headlines 12 months from now.