The home fashion products industry is navigating global economic changes, tariffs, and supply chain challenges. Today’s CEO Roundtable brought together industry leaders to discuss these timely issues, offering unique insights into how companies can adapt and thrive in an ever-evolving landscape.
Challenges in 2025: Tariffs, Freight, and Global Supply Chains
As Warren Shoulberg, an award-winning journalist and consultant specializing in the retailing and home furnishings industries, opened the discussion, he posed a critical question to the panel: “What’s the biggest challenge for your company going into 2025?” The answers highlighted a mix of economic uncertainty, shifting trade policies, and supply chain complexities.
- Charles Gaenslen, HFPA President and CEO of Loftex Home, emphasized the ongoing challenge of tariffs. With global trade policies in flux, he described the “elephant in the room” as the unpredictable nature of U.S. tariffs under the next Trump administration. For manufacturers like his, proactive collaboration with retail partners has been crucial in weathering such challenges.
Charles also noted the limitations of shifting production closer to home. “We’ve given serious thought to nearshoring, going back to 2018,” he explained. “But with our substantial capital and human investment in China, the risks and costs of relocating, both financial and reputational, would simply be too high. We’re committed to playing the long game in the U.S. market, waiting out any administration actions.”
He further highlighted the decline of domestic manufacturing capacity: “The last two U.S. towel mills—one medium-sized and Pakistani-owned, the other smaller and China-owned—have both closed in the past two years. Scaling them to meet market demands was never feasible, and now they’re gone.”
- Jeff Kambak, HFPA Vice President and President of Yunus USA, shared that the focus on diversification away from Chinese imports has brought both opportunities and hurdles. Freight costs and warehouse space shortages in the U.S. are creating cascading effects across the supply chain.
- Julie Mckenzie, CEO of Trident USA India, noted challenges in container availability and bottlenecks caused by smaller players struggling to secure freight capacity. Julie added that automation in production has reshaped the labor landscape and would have an effect on bringing textile manufacturing back to the U.S.: “What once required 10,000 people now takes just 100 to 150, even in our India mill.”
Signs of Recovery: Glimmers of Optimism in the Market
Warren asked the panel about their outlook for the industry amid signs of a potential recovery. “The last 18 to 24 months have been slow for the home furnishings industry, especially compared to the pandemic boom,” he said. “Are you seeing any glimmers of recovery, and how is that affecting your budgeting?”
- Charles Gaenslen shared his cautious optimism for 2025, saying, “By focusing on delivering great value and innovation, we’ve bucked the general trend and had a very strong 2024. We work with a curated base of mass retail merchants, and by placing high-value products with the strongest U.S. retailers at the right price points, we’re seeing positive consumer response. Looking ahead, while we anticipate economic growth under the Trump administration, there’s potential for overheating and inflation. Still, we remain confident in navigating these uncertainties and foresee 2025 being even better than 2024.”
- Jeff Kambak expressed similar sentiments: “We’re budgeting for a revenue increase in 2025. Discussions with retailers suggest a positive shift, with buzz about growing business again. While the holiday season may not be our biggest driver, the overall sentiment feels more optimistic, bolstered by consumer confidence climbing back to pre-pandemic levels.”
- Julie Mckenzie highlighted innovation as a key growth driver, saying, “Compelling new products are flying off the shelves, and bundled offerings are transforming financial projections. For example, a $4 towel as part of a $20 bundle significantly boosts volume and average unit revenue.”
Retail Standouts and Competitive Strategies
Warren mentioned a sensitive topic, asking the panelists to discuss which retailers they see outperforming the market in the next few years. While careful not to single out customers, the panel shared valuable insights:
- Charles Gaenslen noted, “We primarily deal with the largest retailers, and Walmart is killing it right now. Home Goods, Costco, and Sam’s Club are also doing exceptionally well. Target deserves a special mention—they’re making strong efforts to regain their position in the market, and their revitalization is crucial for the industry and consumers alike.”
- Julie Mckenzie praised the clubs and off-price retailers for their agility: “They’re turning inventory quickly and delivering tremendous value. Amazon remains a major player in every home textile category, but we’re working with brick-and-mortar retailers to create Amazon-proof products by offering better pricing and emphasizing the tactile shopping experience. Shoppers still like to touch and feel products, and we see opportunities to recapture some market share for core retailers.”
- Jeff Kambak added, “The mid-tier department stores are facing challenges but could benefit from an improving economy. Off-price retailers, clubs, and big-box stores are setting the standard for value and innovation, but it’s vital that we support traditional department stores to maintain balance in the industry.”
Heimtextil: The European Perspective
Looking ahead to next year, many are gearing up for Heimtextil, one of the world’s largest trade fairs for textiles. This Frankfurt event is especially relevant for those looking to gain global insights, particularly from Europe. Julie, who has been attending Heimtextil for years, explained that the event is a valuable opportunity to understand global trends that often make their way to the U.S. “It’s a great chance to connect with European retailers and get ahead of the curve,” she said. “The relaxed environment also allows for meaningful conversations and strategic feedback.”
Building Strong Teams: What to Look for When Hiring
As the year winds down, many businesses are looking ahead to 2025 and considering new hires. What qualities should you look for when bringing someone onto your team? For Jeff, the key is fit. “Are they a good citizen? Do they get along with others? I’ve built some great teams, and a lot of that comes from my college baseball days. Teamwork is essential, and the last thing you want is someone causing drama behind the scenes.”
Julie emphasized the importance of curiosity and energy. “You need people who are eager to learn, move fast, and innovate. In our competitive landscape, being proactive and agile is crucial.”
Charles adds that, for him, hiring is just part of the equation. “It’s about fostering an environment where talented professionals can thrive,” he says. “I manage a small team, and I focus on creating a stable and secure atmosphere where my team has the freedom to do their best work.”
The Heart of Great Leadership
When it comes to leadership, Jeff believes the key qualities are empathy, vision, and communication. “Especially since COVID, empathy is more important than ever. Leaders need to understand what their team is going through and provide the support they need. That’s how you create a team that feels valued and appreciated,” he says.
Charles, who leads a tight-knit team, emphasizes providing stability and freedom for team members. “I don’t believe in micromanaging,” he says. “I’m here to support and provide the tools they need, but ultimately, I trust them to take ownership of their work. It’s all about creating an environment where they can shine and grow.”
Looking Ahead
As we wrap up 2024 and look toward 2025, the retail industry and the global marketplace continue to evolve. The home fashion products industry is ready for a dynamic year, with challenges and opportunities shaping the path forward.
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