Not surprisingly, Europe is the top market for better yarn suppliers, with buyers valuing quality and innovation (and are willing to pay more to get it). So it was also not surprising that Spinexpo Paris (July 3-5, 2017) drew strong visitor attendance, especially from Germany, the UK and Scandinavia, as well as of course from France.
The fair, which features commercially viable fashion yarns, seemed to offer buyers what they were looking for.
Some new customers are coming and they are giving us very good feedback. They are very satisfied, because they are finding what they need here. That’s important,” said Jacky Chien, managing director at Best Shan.
“There are very high quality customers coming, so it’s really interesting to be here,” added Simone Ganz from Milano Trend.
Spinners said that business in Europe was “stable”, however they were still finding it difficult to grow.
“Overall, the general climate is poor, but business is good for us. There are not many people willing to do what we do, so in a sense we have a lot less competition than spinners who are fighting for immediate business,” said Stephen Trigg, creative director at UPW, referring to his company’s extensive in-stock service.
“Our stock service enables us to serve a different type of market, which is smaller retailers and designers, as well as the big ones. We still do huge volumes for massive companies, but our model is mainly based on our stock service,” he said.
“We concentrate on the high-end, and people are trading up – not necessarily moving away from fast fashion - but investing a little bit more for something nicer. Consumers are increasingly buying less and buying better. That has really played into our hand,” Mr. Trigg told Inside Fashion.
For many better to high-end spinners, Europe is the best market because they are well suited to serve niche brands that want creative products, small minimum orders and somewhat flexible on price.
“Business is better than last year. The trade fair is going well because it seems our yarn matches well with what the European market wants. To me, the European market is the best right now,” said Mr. Chien at Best Shan.
“It’s a little bit tougher this year, especially for the US market. For us the European market is pretty stable, and we have gotten the same business as last year,” said John Liu, executive vice president at Zhejiang Xinao Textiles Inc.
Spinners agreed that in the US market, people always look for softness and value for money, whereas in Europe it’s all about style and hand feel – cost isn’t the crucial element. In Europe, consumers want to buy apparel that they can wear for a while, whereas in the U.S., they want to switch every half year to be on trend, or retailers discount collections before they even hit the selling floor.
Rising Wool Prices Bite Into A/W 18 Margins
While sales are steady, suppliers still face a lot of challenges, in particular soaring wool prices.
“Wool prices have increased more than 40 percent from last year. For the extra fine microns, such as 17.5 or 16.5, the price is nearly 50 percent higher than last year. For 19 micron, it increased roughly 35 percent,” said Mr. Liu at Xinao.
Despite rising costs, buyers are holding firmly on price, leaving suppliers to find a way to digest raw material price increases.
“Just because raw material prices have gone up, we cannot simply increase our FOB price for the final product. This is making business very difficult for us, even though sales are good,” said Mr. Liu at Xinao.
Speed to market remains another challenge. From fast fashion to high end brands, no one wants to carry inventory and final buying decisions are left until the last minute in order to get the best possible sense of what the market wants.
“The whole thing about speed to market is very important, whether about fast fashion or even slow fashion. People still want to start working early, and then they want to change things at the last minute and order very late. So that whole buying process has really stretched. Even though, we talk about fast fashion and quick turn, the market is basically in flux,” said Mr. Trigg at UPW.
For many spinners different markets bring different challenges. In China, US, is always about the price. In Italy and France is about quality.
“The problem is to have a collection that can be interesting for everybody. Realistically, you have to make two different collections: One based on price, the other based on quality, so you can cover all the markets. Otherwise it’s very difficult,” said Ms. Ganz.
This season semi-worsted yarn is on trend with mills reporting strong interest in most of their semi-worsted products.
“The interest has shifted to semi-worsted, and we see a lot of buyers are looking for that,” said Mr. Trigg at UPW.
This has prompted spinners to look for ways to upgrade their semi-worsted products by adding value or reinterpreting classic versions.
“This product used to be just semi-worsted, now I twisted it with normal polyester. By twisting it with polyester fiber, we created a new product,” said Samson Lam at Winning Textile Ltd. “I used the basic material but add a little twist – this helps customers to develop new products,” he told Inside Fashion.
“Generally, 100% merino is our bestselling product,” said Mr. Liu at Xinao.
“Our bestselling product is our extra fine merino, 100% woolen spun yarns. It’s against the trend, but it’s always been our core business,” said Mr. Trigg. “We’re doing massive volume for our New England yarn, which is an 100% extra fine merino, so it's a quality wool product,” he told Inside Fashion.
Overall, it is the better, higher-end products that are getting buyers’ attention this season.
“We focus on the better end of the market and have seen a lot of interest in cashmere fancy yarns,” said Jane Sked, creative director at Consinee Group.
“We are concentrating on finer, smoother yarns of higher quality. We’ve got more natural fibers, and more based on 14 gauges. Smoother qualities lets customers work with stitches and with jacquards. It encourages them to play with the yarns. From that point of view, it increased the number of colors you can offer as well,” said Mr. Trigg at UPW.
“Almost all of our yarns look a bit more minimal. There is more of concentration on core, but those cores are not basics, they are actually cashmere/cotton or cashmere/silk. We’ve increased the number of finer yarns. We still have an element of fancy. The fancy is more around color twisting, to create crazy color effects,” he explained.
Commercial Viability Counts
Innovation is the key to survival and spinners had clearly invested in serious R&D.
“We believe in continual innovation,” said Mr. Lam at Winning, discussing his ‘non-stop approach to product development. “I’ve added stretch to this yarn because nowadays the trend is towards stretch viscose or stretch rayon,” he told Inside Fashion.
Hairy or feather yarns, on the other hand, got a lot of enquiries, but not a lot of orders.
“Hairy yarns are on trend but are difficult to sell. Alpaca blends, mohair blends…I’ve seen it everywhere. People like it, but don’t buy it. That’s the biggest challenge,” said Mr. Ganz at Milano Trend.
“Novetly yarns are selling well. Our yarn with tiny sequins, just 1mm in size, is doing very well. So is our paper yarns,” said Mr. Chien at Best Shan.
“Quality wise, more and more customers are asking for machine washable or functional yarns,” said Mr. Liu at Xinao. The company has rolled out a new machine washable collection this season that got a great response from the European market, especially from the UK and Nordic countries.
It is not enough to just keep rolling out new products. Suppliers have to careful managing their costs, because although buyers will pay a little more for something special – it is only a little.
“We always need to have new ideas and new products, but we cannot make the price very high. Price is still a key factor for buyers,” said Mr. Lam at Winning.
“I think we are getting out of the big economic crisis worldwide and things are getting better and better year-by-year. The best year is yet to come,” said Ms. Ganz, marketing manager at Milano Trend.