Hot Times for Home Textiles

A few weeks ago, I ran into a home textiles designer/product development specialist who had recently lost her job because her employer decided to get out of the product category in which she is an expert. As she was being handed her pink slip, she already had two job offers. Within days, she received seven more.

I had expected to find her despairing about any future in the industry. Instead, she was wrestling with which company to join.

The incident served as a reminder that too many people have grown used to thinking of the home textiles industry as battered, embattled and bruised — against some evidence to the contrary.

GHCL certainly believes in the industry. It has acquired Dan River, continues to shop for other home textiles suppliers, and has been stating in the Indian press that come January, it will announce the purchase of a $1 billion U.S. retailer.

Executives at S. Kumars were also telling the Indian press last week of their plans to acquire American Pacific. No word yet in this hemisphere about the deal.

American Real Estate Partners (aka Carl Icahn's company) continues to invest in WestPoint Home, which is furnishing the lion's share of its revenue although not yet generating a profit. AREP, which says it is being "patient" about WestPoint and expects to begin making a profit from the division in 2008, has also snapped up a Pakistani company, a new towel mill in Pakistan, and a vertical bedding manufacturer in Bahrain.

Li & Fung USA is in the process of acquiring Homestead, and its president says the company is in "productive discussions" with other home textiles suppliers — some acquisitions, some strategic partnerships.

The principals at Fayette — a multi-faceted operation dealing in licensing, global sourcing, brokerage for off-shore mills, and consulting projects — report that they are getting plenty of business from private equity investors looking to add domestic home textiles suppliers to their portfolios.

In fact, the roster of companies in this industry now owned by outside players includes SureFit, American Pacific, Sleep Innovations, Frette, WestPoint Home, Mervyn's and Linens 'n Things.

The point is this: the money men are spending on the home textiles industry. Sure, a few of them may be in the game to strip out value, but many look to the day when they can flip their properties. One assumes they don't intend to do so at a loss.

Just a little something to keep in mind the next time you hear somebody say the whole outfit is going to hell in a hand basket.