Interview with Nick Hahn

Face2Face
Nick Hahn
Nick Hahn
Founder and CEO
Hahn International
Hahn International

As an expert, what is your opinion on the textile industry in the USA?

Our industry suffered a major meltdown with most of our mills closing their doors in the 80's and 90's due to the needle trades (apparel) moving off-shore to low wage countries in Asia, Latin America and more recently, sub-Saharan Africa. We are seeing some recovery at the high end of the market but I don't see mass produced commodity products being made in the USA in the foreseeable future.

Countries resort to the practice of stockpiling cotton, which affects cotton prices the world over. What steps are needed to deal with it?

Stockpiling is a tried and tested strategy for holding a product off the market until the law of supply and demand kicks in and prices recover. This practice is an individual business decision and changing this strategy will be difficult. As you examine the supply chain, you realise that more than one link (farm, gin, spinner, knitter, manufacturer) could be stockpiling and/or reducing or expanding production to manipulate the market and through that, prices. The present situation in the oil business is a classic example. The Saudis are holding production down to make oil less profitable for the Iranians and Russians. I don't know how you can change this.

Do you expect textile logistics prices to come down in the near future because of low oil and gas prices globally?

Probably. But that said, it assumes that mills will pass on energy savings to their customers. By no means is this assured. Look at the airline industry: Fuel costs have dropped dramatically but ticket prices have held steady. The airlines are driving those reduced fuel costs to their own bottom line. Mills and manufacturers may do the same.

Thanksgiving and Black Friday sales were disappointing as compared to Cyber Monday sales. Does this indicate the onset of the virtual era in retail and the role of physical stores going down globally?

You're right. Brick and mortar sales were off and on-line sales continued growing, especially for branded products that consumers are familiar with. Fashion apparel is less susceptible to internet shopping. Consumers still like to see, try-on and feel the goods. We've recently seen Amazon decide to build their first brick and mortar store in New York City. Their strategy is to have a physical location where consumers can pick up orders, try on apparel and return things. It seems Amazon, the largest on-line shopping portal in the world, believes integration between physical and digital is the way to go. I recently saw a TV interview with the CEO of Wal-Mart. He said the same thing. They are aggressively kick-starting their on-line sales capability while finding ways and means to integrate with their thousands of physical locations around the globe.

Any plans to visit India in the near future? What is it that the world seeks from India, when it comes to cotton? What are the issues they face and what can India do to tackle these problems?

I have no current plans to visit India but would love to be invited to do so! India represents over 1.2 billion people, and is second only to China's 1.3 billion. The world's economy will continue to be guided by both countries as producers and consumers. The educated middle class in India dominates the global on-line service industry due to a propensity for software development and application combined with English language skills. My guess is, we'll see India take a leadership role in cotton production once the small, independent farmers organise into trade associations and/or marketing cooperatives. This consolidation is inevitable and will result in more efficient cotton production using high tech techniques like drone surveillance, BT cotton planting seeds, computer guided ploughing, planting, harvesting and spraying. The cotton world needs India and India needs world markets. The issue is scale and sophistication. Right now, your producers are small and uneducated. This can change with enlightened leadership and consolidation. I predict we'll see both in the not too distant future.
Published on: 23/12/2014

DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.

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