WASHINGTON — U.S. knit fabric mills, in demand as the world’s largest knit producers, are seeing their customer base change as they channel more business toward major retailers and catalog companies, according to a new government report.
“With retail sales volume becoming concentrated among fewer but bigger retail firms, the influence of these retailers and direct-mail catalog companies is expanding considerably in product development, fabric procurement and garment production,” says the International Trade Commission survey of the knit fabric industry during 1988-1992.
The mills have seen an impact on the way they do business.
“The growing bargaining power of these large retail firms tends to reduce the flexibility of knit fabric mills in scheduling production and negotiating prices and delivery dates,” the study says.
Nevertheless, the report statistically paints a portrait of an industry that has been growing, with exports and imports of knit fabric on the rise.
The report also points to the prominence of the vertically integrated knitwear firms in the production of knit fabric. More than 50 percent of U.S. knit fabric is produced and consumed by 10 large, vertically integrated apparel firms like Russell Corp., Fruit of the Loom, Sara Lee Corp. and Oneita, according to the report.
Other points in the study:
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- From 1988 to 1992, U.S. knit fabric exports increased 140 percent to $327.5 million, which the ITC attributed in large part to the industry seeking new markets as knit apparel imports increase. The U.S. now ranks as the fifth largest exporter of knit fabric after Hong Kong, the European Community, Korea and Japan.
- Although knit fabric imports — excluding apparel — have increased 114 percent to $217 million from 1988 to 1992, they amount to only 3 percent of total U.S. knit fabric consumption.
- U.S.-made product accounted for 53 percent of knitwear sales at U.S. retailers in 1992, up from 49 percent in 1986.
- Total production of U.S. knit fabrics in 1990 — the latest available figure, which includes knit fabric produced by vertical manufacturers and then made into apparel — was 914 million kilograms; this comprises 56 percent of world knit fabric production. The next largest producers were the European Union, with 354 million kilograms, and Japan, with 168 million kilograms. The U.S. production of knit fabric, excluding production by vertically integrated firms, grew to 451 million kilograms in 1992 from 367 million kilograms in 1988.
- Although circular knits accounted for almost all the growth in U.S. knit fabric production during 1988-1992, the demand has fallen, according to preliminary figures for 1993.
- All but a small part of the knit fabric made in the U.S. during the period went into apparel, with the bulk of it used for T-shirts, underwear and fleece apparel. U.S. knit fabric supplied to U.S. apparel makers increased by 22 percent to $6.6 billion during 1988-92, excluding vertical manufacturers. Including imports, U.S. producers’ shipments of knit fabric increased by 23 percent to $6.8 billion in 1992 against 1988.