The soft home furnishing sector is a major market. Up to the present, that market has been controlled by garment retailers such as Zara, H&M, Gap, Target etc. Recent changes in the global economy and the textile-garment industry have opened the door for textile mills to move up from simple suppliers to direct retailers.

We are presently living at a time when the world is undergoing rapid and radical fundamental change and it is very difficult to predict where the industry will be next Tuesday much less in the next 12 months. Still, I give here simple  professional opinion.

We will be looking at two trends:

•   The evolution of the home furnishing sector.

•   The fundamental changes which have created an for textiles mills to move from simple suppliers to retailers.

The Evolution of the Home Furnishing Sector

The soft-furnishing sector began with advent of ‘garment sourcing’. Previously, the industry operated through ‘garment buying’ whereby the garment factory supplied all the fabric and trim, with the result that the customer (retailer/brand) had no relationship with the textile mills. Garment sourcing brought a great change because the customer started working directly with the mills - negotiating prices and placing contracts. Once the customer had a direct relationship with the fabric suppliers, home furnishing became a natural extension of their business: They had the consumers, the designers, the marketing skills, the venues and now the suppliers. Indeed, they had everything required to enter the soft home furnishing sector with no additional costs.

For the consumer, home furnishing was, for the most part, a form of do-it-yourself (DIY) interior design. The big retailers selling to middle and lower income consumers did very well. Soft home furnishings quickly became the great low-cost high-profit sector.

Home furnishing peaked during the COVID-19 pandemic. Consumers everywhere were in a state of lockdown. With no place to go, retail garment sales fell, while demand for home furnishings rose as consumers were stuck at home.

Fundamental Changes Which Have Created the Opportunity for Textile Mills to Move From Simple Suppliers to Retailers

The global economy has changed bringing new existential challenges.

Declining Demand: We are living in a time of stagflation when prices are rising, while at the same time, incomes are falling. As a result, consumer demand for both garments and home furnishing is falling and will continue to fall for the next few years. Due to this, the pie for both customers (retailers) and suppliers (factories) is becoming smaller. Those who develop new strategies to meet the new challenges will become the new industry leaders.

The Great Resignation: During the COVID-19 lockdown many people were stuck in their homes, unable to travel to their offices. While this resulted in many problems, there were some real advantages: The cost of living fell, while for many, increased family time brought lifestyle improvement. When the lockdowns ended, many did not want to return to the office. This included middle class workers such as technicians, professionals and managers. It now appears that the great resignation is here to stay. As a result, we can expect reduced demand for clothing against increased demand for home furnishing.

Global Warming: This is the greatest problem facing humanity and the situation will become worse each successive year. We can expect people’s demands for sustainability to increase every year, far into the future. This will lead to a shift in the home furnishing sector. Those retailers and brands that move to sustainable products such as reprocessed and/or artificial fibre will grow to become the market leaders while those who fail to move ahead will become the losers.

The Evolution of the Industry has Brought the Supplier Side to the Forefront

Seventy years ago, in the early days, the customer (retailer and brand) was king. The customer made demands and everybody else - supplier (factories) and middlemen (independent agents) - replied ‘Yes Sir! Yes Sir!’.

In the middle 1970s the situation changed as a new generation of retailers, such as Inditex and H&M, began to recognise that they faced serious problems such as poor quality assurance (QA) and increased markdowns which the retailers on their own could not solve. Indeed, these new generation retailers recognised that the solution rested with the factory. And so, the best factories moved up from simple product makers to more sophisticated service providers. As a result, the service-providing factory and the new generation retailer became partners, albeit with the factory as a junior partner.

This trend has not only continued but has moved into a third iteration whereby, the entire industry structure, customer-middleman-factory is about to transmogrify. The names may well remain, but the functions will change completely. In this new industry, the factory supplier can become the factory-supplier/retailer. Much of this is due to the advent of e-commerce which has given a low-cost venue to would-be retailers.

Cutting out the middleman who took most of the money: think music record companies and movie theatres.

Creating new sectors that reduced sales of both retailers and suppliers: think vintage clothing and online fashion clothing rental.

However, the greatest change is the result of the retailers’ failure to meet the demands of the consumer. To a great degree, what retailers are now offering are overpriced boring products.

After 70 years, the door has opened to a new sector: Factory Direct.

This can be the future, where textile mills will dominate soft home furnishing because the mill can offer a greater variety of products, faster delivery, and at half price. Most importantly the mill, and only the mill, can ensure high levels of sustainability through development of reprocessed and artificial fibres.

At this moment, the consumer is looking for a new retail model that will meet their demands. Today a new generation of more educated, more sophisticated consumers are looking for sustainable higher quality products at reasonable prices. With regard to the soft home furnishings, the mill and only the mill can meet those demands.