Tales Of A Fourth Generation Textile Executive: My Quilt Market Crystal Ball Is Getting Clearer
I am headed to Salt Lake City, Utah bright and early this Wednesday for the International Quilt Market. In preparation for the market, I am running through a variety of scenarios in my head in anticipation of what I expect to see and hear.
I hate to keep beating the dead horse, but I think for sure we are going to hear more about the sorry state of the Quilt Market and the fabric industry too.
With respect to Quilt Market, I believe that low vendor attendance will be noticeable and this will be the talk of the show. Attendance will be down for many of the same reasons we have been hearing about over the last couple of years (hard to be away from the shop, too expensive, too far, can buy from a sales rep, etc.) I expect US shops written orders will be down as that has been the trend of late. More and more people say things like “we will buy from our rep when they visit us.” This is legitimate reasoning, but is still frustrating nonetheless for most. For me, I am confident that our reps will do a great job selling to their customers and they will probably do better than we would at the booth due to the time pressures, distractions and other market related constraints.
With respect to the fabric/quilting industry, there are many subjects at the forefront right now. Of course there is the chain stores vs. quilt shops vs. online sellers. That is a constant discussion which I am sure will continue. The state of the chain store industry is quite dire right now with only Wal-mart, Joann’s Fabrics and Hobby Lobby standing since the demise of Hancock Fabrics. Moreover, if you have opened any business newspaper lately, you have seen how the big box retailers are really suffering which many attribute to online competition from the likes of Amazon.com. These chain stores are all under extreme pricing pressure and are trying more and more to take out the middleman i.e. some fabric vendors that attend quilt market. Then there is the discussion of how the quilt shops can compete with the likes of Fabric.com, Craftsy & Missouri Star to name a few. In short, retail is in strife and everyone is scrambling to figure out how to survive.
Speaking of survival, many fabric convertors, especially those who sell to the chains, are struggling to survive. Due to the shrinking customer base, the fact that more chains are buying direct from the mills and taking out the middleman, many fabric convertors are teetering. The fabric sales pie has shrunk in an unbelievable way which really hit home when Wal-mart started buying direct from the mills last year. Add the lower selling prices due to competition, lower prices due to the chain buyers knowing the pricing and essentially making fabric a commodity, and things are as challenging as I have ever seen them. On the one hand, it would probably be healthy to lose some suppliers in the shakeout. On the other hand, it is a sad and scary state. For the Jaftex Companies however, this has always been the time to pick up the scraps and find a struggling company to buy and revive or integrate in to our organization.
As I have mentioned before, the most important reason for our companies to attend market is to be able to see our international distributors. Our international distributors help us to get our lines off the ground. I anticipate that the big discussions from the international customers will be the pain from the strength of the US dollar. Unfortunately, I have no control over this, but I am sure this will be used as a reason to rationalize buying less or putting off purchases for a later date. This makes absolute sense, but it just adds another negative to the list of worries. A new subject that I expect will come up is how the US distributors and quilt shops are shipping all over the world. In essence, the world is becoming one homogeneous market. This too will be another problem for the international folks demonstrating how violent the competition has become. After reading through everything I just wrote above, it just seems like a vicious cycle of how competition is making everyone adjust to the environment and things are getting very fierce and unpredictable. As you can probably deduce, this quilt market is going to be stressful. Wish me luck!
If I survive the week, I will be sure to report back to you next week to let you know how well my crystal ball predicted the events for the week.
Until Next Time,
Skeptical Scott
One Comment
SS
Skeptical Scott-
I hope you come to SLC with an open mind and an open heart. Portray positive confidence and it will surround you.
Over and out – see you there.
-SS