NEW YORK — Battered by a slowdown in sales, hobbled by rising debt levels, hammered by the costs of shutting down plants in a ferociously competitive global arena — then, adding insult to injury, drained by rising retail chargebacks — the American home fashions industry endured its worst year in decades, moving into a new millennium, with 15 key players recording a composite loss of almost three-quarters of a billion dollars.
In a punishing year that left an entire industry reeling, fully two-thirds of the companies in this year’s HTT Vendor Report Card — 10 out of the 15 — lost money, generating a composite loss for the entire industry of $669.1 million, compared with a profit the year before of $289.7 million — a one-year drop of almost a billion dollars.
Taking a big toll on the industry last year was the double whammy of both high debt and high restructuring costs, as a handful of companies hurried to shut down some of the capacity, plants and U.S. workforce made obsolete by a rising tide of low-cost imports and the shift of American production to other countries, notably Mexicom.
The top line didn’t look much better, as a consumer slowdown that started during the second half of the year held overall sales in check. Combined sales for the entire sample eked out a whisper-thin gain of just 0.2 percent, to $15.3 billion.
Operating profits? Forget it. Down 30.5 percent, to $761.7 million from $1.1 billion in 1999, a drop of $333.5 million — a third of a billion dollars. Putting operating profits under heavy pressure, average gross margin narrowed by 210 basis points, to 16.7 percent from 18.8 percent the prior year. But hacking away at costs — closing plants and cutting jobs — the industry held expenses in check at 11.7 percent of sales.
Skewing the entire sample, and dragging down the entire industry’s profile, were just two companies which between them lost more than $790 million — Burlington Industries Inc., a giant denim, apparel and home goods producer, w