Tales Of A Fourth Generation Textile Executive: Stick With The Jaftex Companies For The Long-Term

Happy Monday to all, and of course, Happy belated Father’s Day to all the fathers out there and all the fathers in your life.  I hope everyone had a great day on Sunday, I know I did.

This week I want to talk about something that has been brewing in my mind since quilt market.  The subject at hand is the major inflection point that I think we have reached in the industry.  Based on my observations, I think the inflection point we are nearing in on is going to result in a healthy cleansing for the industry where only the strongest will survive and the weak will essentially disappear.

There really are many aspects of this cleansing, but what it comes down to is survival of the fittest.  We have reached the point in the fabric business where there is an over supply of fabric suppliers and fabric retailers and something has to give.  As such, this has caused downward pricing pressures (lower selling prices=lower margins) across the board, but this has probably been a bigger issue for the retailers.  I believe that it has finally reached the point where the pricing pressures (higher costs) and other upward pressures i.e. inflation related to labor, rent, commodities, etc. all have combined to force owners to take a long hard look at the viability of remaining in business.

As many of you know, I am a firm believer of being in business for profit. Therefore, if you are no longer making a profit, overworking yourself and stressing out, it is time to throw in the towel and find something new to do.  Otherwise, what is the point?  This is a difficult decision to make, but if the writing is on the wall, you need to make the tough decision before things get even worse and it takes a toll on your well being.  You can’t be afraid to cut your losses because as we often like to say at Jaftex, “The first loss is your best loss.”

The challenge for fabric vendors is that the demand for fabric is being spread over so many more vendors.  In other words, everyone is probably doing less business than they were doing a couple years ago with the same amount of time, effort and overhead, in spite of the overall total purchases in the industry having remained around the same.  This is certainly starting to take its toll on the industry and starting to become evident.

I know that several competitors were very disappointed with how poor their sales were at quilt market.  I have also heard rumors of vendors being in such poor financial shape that they have considered closing their businesses.  We have also seen a big increase in resumes coming through our offices due to industry layoffs.  Some of our contemporaries are even cutting employees down to fewer than 5 days a week. It is very hard to keep morale up when you can’t keep your employees working for 5 days a week and it is not surprising that these people are looking for other work. Moreover, this does not send a good message to anyone.  In any case, I guess you need to do what you can to try to survive until you just can’t take it any longer.

I hate to be a Debbie Downer in this blog, but the truth is that if we lost some suppliers and retailers, it would be healthy for the industry. It would improve the supply/demand balance that has certainly gotten out of whack.  I am not wishing this upon anyone, as I would not want someone to wish this upon my company, but in the end this will help everyone involved.

Now that I got all the negativity out of the way, I want to tie this all back to our companies and explain why everyone should stick with the Jaftex Companies.  As you know, we have been in business for 86 years and we aren’t going anywhere anytime soon, especially with my brother and I around.  We are both in our 40’s, each with 2 sons, and of course our still very active father who is just turning 70 this year (recall my grandfather worked until about 94) who is also very involved.  Our business is financially sound and we take a lot of pride in being financially prudent in all our business dealings.  Contrary to what is going on in most parts of the industry, our businesses are bucking the trend and we are currently growing.

I give much of the credit for the growth to the sales force that we acquired when we purchased Blank Quilting.  I feel strongly that due to the knowledge of our sales force and the added value that they provide that we are in fact taking market share from others in the industry.  Shop owners are starting to take notice that our sales force really knows their stuff. Ironically, the competition has been taking notice too as demonstrated by all the calls from other company sales managers trying to steal our reps.

We are also thinking outside the box and trying new things.  Case in point, we recently partnered with Air-lite Manufacturing to offer batting products and this too will add to our volume.  Moreover, The Blank Quilting Corp. just partnered with Stof of Denmark to offer their beautiful fabrics in the USA.  As you can see, we are not sitting idle waiting for the world to come to us because business has gotten much harder.  We are making things happen and we are not afraid to try new things, nor are we afraid to cut our losses when something isn’t working.

All in all, it is sad to have this happen to our industry, but it is what it is and in the end a cleansing will be healthy for all involved.  Just remember that the Jaftex Companies are going to be here for a long time to come, so stick with us and you will be in good hands.

Thanks for your time.  Until next time.

Sincerely,

Stick With Studioe (& Jaftex) Scott