A Model Endeavour
By Jennifer Marks -- Home Textiles Today, 4/4/2005
Over the past couple years, one subject of keen interest to the industry has been what would emerge as the key post-quota business models for market share growth.
The outlines of those models are already becoming apparent.
The American Pacific model: Acquisition of a privately held supplier firm by an investment company that ensures capitalization while tightly controlling costs. Other investment firms are actively scouting the industry, so look for more of the same.
The Welspun model: Sizable offshore manufacturer gains market knowledge through business with U.S. wholesalers/importers, transitions over time to retail-direct programs, eventually opens U.S. showroom, later hires permanent U.S. staff, then begins to expand from core competency into new product areas. At the moment, the only offshore manufacturer that looks likely to become one of America's leading home textiles suppliers in the coming decade.
The Louisville/Pem model: American manufacturer and U.S./offshore hybrid with previous sourcing arrangement deepen their relationship through joint venture in overseas production. Some U.S. equipment and personnel transferred overseas. There are plenty of offshore manufacturers looking for similar deals.
The domestic production/offshore sourcing model: Although Springs and WestPoint Stevens have scuttled a lot of U.S. capacity in recent months, both espouse the model as the key to holding massive replenishment programs. Will offshore manufacturers follow suit?
It's a sure bet the industry will see more permutations in the coming months. If anything, the wave of retail mergers promises to spur the process along.
