Achieve Growth in a Down Economy
From Stitches' State of the Industry 2009
By Shane Dale
Unlike many decorators, Wes Sights didn’t start with a company that sold decorated apparel and then branched out. He did it the other way around.
“We’re in the uniform and linen service business, but have slowly grown our direct sales apparel business over the past several years,” says Sights, president of SITEX Corp., whose sales acquisition in the mid-’90s led him down the decorated apparel path.
In an economy in which only 32% of decorators labeled the industry as “healthy” in 2008, Sights has been proactive in a part of his business that is becoming more important to his bottom line. “We’ve managed to grow it some each year and have just this year increased the number of direct sales reps we have on the street,” he says. “We also work hard to penetrate our existing rental customers and route structure to generate direct sales on the route, as well as leads for our full-time apparel and promotional sales reps.”
Those strategies fall in line with that of most survey respondents. When asked about the strategies that had the most impact on their company’s growth in 2008, the top two strategies included finding new customers (66.5%) and increasing business with current customers (58.9%).
In an effort to attract new business, Marion Cuttino, co-owner of Arkansaucey Inc., says she does something that none of her local competitors will do. “If somebody wants me to do one shirt, I’ll do one shirt,” she says. “I can sit down and do one shirt in no time flat. I charge a little more for those, and in the long run I actually make more money.”
Cranking up her promotional product sales has also been a winning strategy for Cuttino, as she’s convinced some clients to forgo expensive TV and radio ads in lieu of specialty items. “Advertisements only last a short time, whether it’s TV or radio, but promotional products – that’s something that people will keep in their hands forever,” she says. “I tell them, ‘Rather than spending $5,000 on an ad, you can spend $5,000 on a promotional product.’ They make nice gifts for people.”
Many decorators have also picked up steam by going green. Jerilee Auclair, owner of Black Eagle Designs, has already carved out quite an eco-friendly niche for herself. “I’ve brought out a line of hemp bags,” she says. “People are interested in hemp. They’re interested in sustainability. Hemp takes no pesticides and very little water; it’s a very high-yield crop. It doesn’t require anything because no weeds or pests can grow on it. And you can’t get high on it.”
However, Auclair cautions decorators on investing in hemp or any eco-friendly material before getting to know their locale. “It’s nice because where I live (Vancouver, WA), it’s very eco-conscious,” she says. “When we lived in Phoenix, no one was interested in eco-friendly apparel. Decorators have to look and see what’s happening in their area.”
Connie Krieger, co-owner of the Iowa-based 77 Softwear Custom Embroidery, has also taken advantage of her surroundings; she has diversified by becoming a reseller of Iowa-made cutlery. It was a natural fit, according to Krieger. “We’ll be decorating aprons, kitchen towels and fabric lawn chairs that will complement the cutlery,” she says. “Our son enjoys barbeque contests, and we’ll attend those functions with our wares.”
The fact that the cutlery is Iowa-made is a big selling point to Iowans who take great pride in their home state. “It’s a really good marketing tool in that aspect, and that it’s made in the USA,” she says. “The cutlery business has been very good. It’s picked up and the wearables market has slowed down for us. So now, we really want to try to incorporate the wearables market into the cutlery. Today, you almost have to have a weird niche. The weirder it is, sometimes the better.”
But not everyone feels the need to branch out. Jeff Taxdahl, owner of Thread Logic, says his company enjoyed a 30% sales increase in 2008 from 2007, and budgets a 25% growth for this year. He calls himself an “odd nut” because of his narrow focus to specific industries.
“We’re primarily doing company logos and apparel. The school market, gift market – we don’t chase any of that business,” he says. “I figured out what wasn’t working and I quit doing it.”
While branching out may be beneficial for some companies, Taxdahl says decorators need to look at their business models before making that leap. “I think it’s interesting that there are companies flying in the face of the conventional wisdom and making it work,” he says. “There’s a lot of talk about diversification, and that’s going to work for some people and not work for others. Make sure it’s the right thing for your company before you jump into it.” – SD