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Great American Group notes progress in US textiles sector
02
Jul '13
Despite margin compression resulting from feedstock price increases over the first quarter, Great American Group, analysts note that the overall textiles industry continues to make progress after bottoming out in 2009.

“Many marketers believe that customers are willing to pay a premium for domestically-produced textiles. However, it remains to be seen whether overseas operations will be ‘inshored’ to the U.S. or simply relocated to another foreign country.”

Great American Group’s latest Textiles and Apparel Monitor notes that, while domestic demand remains intact, overseas concerns have largely driven market trajectory. Cotton prices rose steadily from November 2012 through March 2013, but have flattened in the wake of weaker economic forecasts for China. The rising cost of Chinese textile production has also impacted the domestic apparel market.

“Industry news still points to rising labor costs and inflation in China as a concern, and some manufacturers have, in fact, relocated,” commented Kristi Faherty, managing director for Great American Group’s Industrial Appraisal division. “However, the implications and extent of shifting operations have not become clear as of yet.”

While the impact of overseas concerns cannot be understated, the domestic market is not shaped solely by external factors. Recent reports indicate that reinvestment in domestic mills has led to consistently improving mill efficiency over the past four years.

“Whether the current rebound is being driven by forces in the U.S. or by higher costs in China, it is certain that the industry is showing a necessary adaptive ability,” said Faherty. “Many marketers believe that customers are willing to pay a premium for domestically-produced textiles. However, it remains to be seen whether overseas operations will be ‘inshored’ to the U.S. or simply relocated to another foreign country.”

About Great American Group

Great American Group is a leading provider of asset disposition and auction solutions, advisory and valuation services, capital investment, and real estate advisory services for an extensive array of companies. A trusted strategic partner at every stage of the business lifecycle, Great American Group efficiently deploys resources with sector expertise to assist companies, lenders, capital providers, private equity investors and professional service firms in maximizing the value of their assets. The company has in-depth experience within the retail, industrial, real estate, healthcare, energy and technology industries. 

Great American Group

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