Picking Partners

By Jennifer Marks -- Home Textiles Today, 1/10/2005 12:00:00 AM

This is going to be a pinnacle year at the Heimtextil international home textiles trade show.

The 2005 factor has accelerated the influx of non-European exhibitors that have appeared in steadily increasing numbers over the past few years. At the show this week, their stands promise to be the hub of activity for American visitors looking for new sources and touching base with existing ones.

In the meantime, the weakened U.S. dollar somewhat brightens the prospects for the handful of U.S. exhibitor companies that see Heimtextil as an opportunity to sell to a wider audience.

There's likely to be a new type of shopping going on at this year's show — shopping for potential mergers and joint venture partnerships.

This is a big opportunity for manufacturers from India and Pakistan in particular. Some have already invested in U.S. suppliers' companies; and some U.S. suppliers have quietly acquired or invested in factories in those countries.

But rather than — or in addition to — such partnerships, perhaps executives from India and Pakistan should be looking for partnerships with Chinese manufacturers. For one thing, such partnerships would address the U.S. importing community's interest in a more balanced source of supply. For the manufacturers from the sub-continent, such deals would give them entry into the fastest growing consumer market in the world. For the Chinese, such arrangements would leverage the keener understanding of the U.S. market that many Indian and Pakistani companies have forged over the past four or five years.

But as important as this Heimtextil will be for World Trade Organization member countries, which as of Jan. 1 were freed from quota restrictions, it is equally notable that some of the major U.S. retailers are holding private sourcing meetings with groups of suppliers this week — in Shanghai.

Equally noteworthy is the complexion of the U.S. retail teams that are being sent to Frankfurt for the international show. In many cases, they are members of product development and private label divisions rather than buyers and merchandise managers.

Both of which argue in favor of more international partnerships. As retailers look to narrow the field in terms of the number of countries from which they source and the number of suppliers with whom they deal, the wiser course for smaller and medium suppliers especially may be to create a mutually owned supply chain across two or three countries.

Happy shopping.