Embroidery integration among apparel companies has stifled growth opportunities
Los Angeles, CA (PRWEB) March 15, 2012
The Commercial Embroidery Services industry has unraveled over the five years to 2012, with high unemployment and intense external competition hurting revenue growth for its players. One of the industry's major market segments consists of administrative and hospitality service industries, so as the recession hit and unemployment skyrocketed in 2008 and 2009, demand from these buyers diminished. Industry revenue dropped 13.4% and 13.7% in those years, respectively. Moreover, the decade-long trend of large multifunctional apparel companies integrating embellishment processes into their operations has stifled growth opportunities for the industry, says IBISWorld industry analyst Nikoleta Panteva. As a result, revenue has declined at an average annual rate of 3.3% over the five years to 2012.
Since the recession, companies in the Commercial Embroidery Services industry have experienced some relief: unemployment in downstream markets has begun to decline and per capita disposable income has inched up. As a result, IBISWorld expects revenue to increase over the coming year. According to Panteva, “Operators are increasingly automating their activities to reduce labor costs and gain greater efficiency in production, causing average wages to decline while depreciation grows.” Additionally, players that can successfully cater to generation Y's need for customized apparel are more likely to succeed in this declining industry. These trends are anticipated to continue into the next five years.
Despite their efforts, industry participants are not expected to experience growth over the five years to 2017. Overarching competitive pressures – that are affecting the entire apparel-manufacturing sector – are likely to remain hallmark traits of the industry. Generally, commercial embroidery companies tend to cater to promotional product distributors, local businesses, sports teams, apparel manufacturers and government clients within a limited geographic scope in order to decrease transportation costs and maximize time-savings. Larger commercial embroidery service companies typically hold contracts with apparel manufacturers and original equipment manufacturers, while smaller companies in the industry target promotional product distributors, novelties companies and other commercial clients. Leading companies include Artwear Embroidery Inc., Fawn Industries Inc. and Hawkins Commercial Embroidery. For more information, visit IBISWorld’s Commercial Embroidery Services report in the US industry page.
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IBISWorld industry Report Key Topics
This industry includes companies that primarily provide embroidery services to clients. The embroidery process involves a sewing machine that creates pre-determined patterns on clothing and other textiles. The patterns can be designed using specialist software. Services are often sold to companies, teams and clubs for shirts, uniforms and other paraphernalia.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
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Barriers to Entry
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Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.