Apparel Prices On The Rise
Americans are paying more for apparel – a price-hike trend that could impact the advertising specialty industry in 2014 and beyond. Read Article
The federal government revealed last week that consumers paid 0.6% more for apparel in 2013, marking the third straight year that prices for clothing have climbed. The sustained upswing is significant because apparel prices had increased annually only twice in the 13 years prior to 2011, a consumer-friendly reality created by an influx of inexpensively produced imported clothing and footwear. "Americans have been conditioned to expect low-priced apparel,' says David Bebon, CEO of DBEBZ Apparel, a manufacturer of woven and knit sport shirts for the corporate and promotional market. "But we're looking at a new situation where we're going to see increases at retail and in our industry.'
While apparel prices have risen 17% since 1986, that's nothing compared to the 112% rate of increase in the total consumer price index during the same period – with prices actually declining annually between the late 1990s and mid-2000s. But then, the worldwide cotton shortage in 2011 drove clothing prices up 4.6% in 2011 and contributed, along with other factors, to a 1.8% uptick in 2012.
As cotton prices descended to more normal levels, some analysts hoped a return to the previous price status quo or declines would occur. Instead, a variety of factors are spurring the trend of increases to continue. These include the rising cost to manufacture clothing in traditionally low-cost labor markets that are major exporters of ready-made garments, including China and Bangladesh. Everything from accelerating wages to growing costs to make factories meet safety standards are contributing to a more expensive production process, says Bebon. "In China you have an emerging middle class,' he says. "They've had factory tragedies in Bangladesh where more than 1,300 people have been killed and there's pressure to enact change, which is a good thing because social responsibility is of top importance. But the fact is that somebody has to pay for that.'
While production costs could ultimately impact the prices distributors and apparel decorators pay for the apparel they sell, executives on the supply side are not expecting to put their clients into sticker shock anytime soon. One particular cause for optimism, notes Bebon, is that the cost of fabric – which has the biggest influence on garment price – has held steady. "Are we going to see prices increase? Yes,' says Bebon. "But with that said, the increases should be slight. I'm not foreseeing anything catastrophic.'
4imprint Reports 16% Sales Increase
4imprint Group, the parent company of Top 40 distributor 4imprint (asi/197045), announced yesterday that its revenues increased by 16% in 2013 to reach $347.6 million. Read Article
The company also said that it attained sales of $89.5 million in the fourth quarter of 2013, which marked growth of 17% over the same time period in 2012.
For 4imprint, the company's North American division drives much of its sales and growth. In its public filing released yesterday, the company reported that its North American operation recorded revenues of $294.9 million, an increase of 15% over the previous year. "We're pleased with the performance as the results represent another year of progress that is consistent with our overall strategy,' Kevin Lyons-Tarr, CEO of 4imprint's North American business, told Counselor. "I'm really proud of the team. Their unrelenting focus on taking great care of our customers makes it all happen.'
In the North American market, 4imprint ranks as the fifth-largest distributor in the ad specialty industry. The company's stock price (listed as FOUR on the London Stock Exchange) increased more than 2% in trading yesterday and has jumped by 92% within the past year.
UK Promo Market Grows In 2013
Sourcing City, a media and marketing outlet serving the promotional products market in the UK, announced that the sector grew its revenues by 8.6% in 2013. Read Article
With revenues in the UK and Ireland markets reaching a total of 830.4 million pounds (about $1.4 billion), the Sourcing City data shows that promotional products sales there have grown every year since 2010. However, the region has not yet fully recovered to its pre-recession annual revenue total of 917 million pounds in 2008.
Sourcing City reports, though, that the market is primed for more growth in 2014, as it prepares to capitalize on some major events this year. "Recent press reports have stated that the UK advertising market is set to have its best year since the pre-recession days of 2008,' Sourcing City said in a statement. "This is driven by the solid indicators for economic recovery, and we also have the World Cup in Brazil to look forward to boosting our marketplace. The latest IPA Bellwether report found that advertisers raised their budgets for a fifth quarter in a row in the final three months of 2013.'
Alistair Mylchreest, CEO of Sourcing City, believes the market performed so well in 2013 because client budgets have finally loosened. "Major blue chip companies, who had been hording cash, started to invest, and that started with marketing,' he said. "Pleasingly, promotional products as a cost-effective medium have reaped the rewards.'
Distributors in the region are also forecasting growth for the promotional products sector in the UK for 2014, as it builds on the momentum built over the past few years. "I sense a more optimistic view of 2014 is felt by the majority of suppliers and distributors than there has been in the last three to four years,' said Chris Lee, CEO of distributor firm Brand Addition and the winner of Counselor's International Person of the Year award in 2013. "I imagine high-margin sectors such as technology and health and beauty leading the way but expect the majority of sectors to build upon the solid platform developed over 2010-2013.'
New Products From The Joe Show Live Orlando
In this episode of The Joe Show, Managing Editor Joe Haley shows off a variety of products first introduced during The Joe Show Live keynote session at ASI Orlando earlier this month. Read Article
Looking for a unique product that’s sure to score with travelers and younger consumers? How about a couple of items targeted perfectly toward the education sector? Watch The Joe Show for new product and promotional ideas.
Click here to watch this new-products episode of The Joe Show.
China’s Economy Expands By 7.7%
The economic growth rate in China stabilized at 7.7% in 2013 as the country looks to make gains in domestic consumption, rather than strictly through government-led investments. The annualized data, released this week by the National Bureau of Statistics (NBS), showed China expanded its economy to 56.9 trillion yuan ($9.4 trillion) last year, just below consensus forecasts. Following the GDP announcement, there were initial market concerns over potentially tightening credit, but the Chinese central bank has since promised extra liquidity in the financial system.
"This will reduce the credit crunch fears and assure funding continues to flow into the Chinese economy over this period,' said Evan Lucas, a strategist at IG Markets, in a report.
Despite attempts to rebalance, capital formation still accounted for 54% of China's economic growth last year. Meanwhile, so-called secondary industries, like construction, expanded by 7.8%. Net exports, conversely, detracted 4.4% from GDP growth, NBS data showed. Factory output growth fell as well to a five-month low of 9.7% in December, while oil consumption increased at its slowest rate in five years in 2013, signaling a slowdown in orders ahead of the Chinese New Year.
"Like everything else with China, the situation really is more than a simple answer or a generalization,' said Jonathan Isaacson, president of Top 40 supplier Gemline (asi/56070). "There are a lot of factories in China and most of them remain open for business. China is a resilient and dynamic place to do business, and the economy continues to grow. For the foreseeable future, China will continue to be a part of the business plan in promotional products.'
Still, analysts do believe China's debt load will weigh on economic growth in coming years. Local Chinese governments owe about $3 trillion to investors, as the total debt as a percentage of GDP has increased markedly in China over the last five years. Economists, though, expect China's economy to expand by 7.4% in 2014. The International Monetary Fund is forecasting average growth of about 6% each year in China through 2030.
ASI Radio: Handling Employee Disputes On today's Tuesday Morning Show, the hosts provided listeners with ideas for how they can overcome disagreements among their employees. Plus, we revealed our Favorite Things, detailed the best ways to spark creativity, and debated the phrases that good speakers should never say during a presentation.
If you missed the show, a recording is now available at www.asicentral.com/radio. And, don't forget to join us for our next broadcast – Tuesday, January 28. Log on at 10:30 a.m. ET to listen to the show – and give us a call at (215) 953-4979 to hear your voice on the air.
Q&A: Launching A Mobile App
In Counselor's latest Q&A profile, Motivators' (asi/277780) eCommerce Manager Bill O'Shea explains how the New York-based company developed and launched its own mobile app. Motivators introduced its app in April 2010 and the company saw benefits almost immediately. For example, by October of that year, the distributor's Web traffic had increased by 87%. "Because we're an online business, it's important to stay at the forefront of technology,' said O'Shea. "Creating a mobile app helped us to do so.'
Of course, launching an app took planning and a willingness to adapt. It took Motivators six months to research, design and test its app before its release. A few more months passed before Motivators offered an update to the app – a major upgrade that allows people to buy promotional products right from their mobile devices.
What can you learn from Motivators' experience? Should your firm consider launching its own app? Read this Counselor Q&A to find out. Click here to see the profile.
Counselor Unveils Distributor Choice Award Winners
At a ceremony during ASI Orlando, Counselor unveiled this year's Distributor Choice Award winners – the industry's top suppliers in 60 product categories. Seattle-based iClick (asi/62124) won the top award as 2014 Counselor Supplier of the Year, leading a group of 42 total companies that were honored.
This year's awards also included two new categories – children's apparel, won by alphabroder (asi/34063) and party products, won by WOWLine (asi/98360).
Click here to see the entire group of award winners, as voted on by distributors.
Nominate Now For Counselor’s Hot List
Are you doing something unique, hip, fun or trendy in the industry right now? Do you know somebody who is?
Counselor is looking for nominations of people for its annual Hot List. We're on the lookout for anyone in the industry who is taking an interesting approach to business, shaking up the status quo or simply networking like a maniac at all hours of the night. We're in search of those people who are making the industry a unique marketplace that's fun and energetic.
Send an e-mail by Friday, January 31, to Karen Akers at email@example.com explaining why your nominee should be recognized on Counselor's Hot List. And, please make sure to include a picture of the person you're nominating. Thanks!
In The News
Bic Graphic (asi/40480) has announced the expansion of its Norwood Good Value collection to include 168 new products for the 2014 selling year. In addition, the prices on four items (#45009 Captain's Chair, #45140 Budget Mug, #45624 Grocery Tote and #65073 Anodized Carabiner) have been lowered. Visit www.norwood.comfor more details.
Bodek and Rhodes (asi/40788) announced that it recently unveiled a newly-designed trade show booth with 33% more space. The booth features a retail inspired design with hi-definition videos playing continuously.
Charles River Apparel (asi/44620) has announced the results of its 3rd annual 'Tis the Season for Giving charitable campaign. Through social media users who 'liked' their page from Thanksgiving to December 31, the company donated a total of 3,000 garments to the homeless during the 2013 holiday season.
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ONLY 2 WEEKS UNTIL ASI DALLAS
Thousands of distributors are headed to ASI Dallas for the biggest show in the Southwest, taking place February 4-6 at the Kay Bailey Hutchison Convention Center. Register today and plan to take advantage of everything that ASI Dallas has to offer!
51 education workshops focused on topics to make you more successful