James O'Brien Business Staff
The British carpet industry will continue its decline towards death in the next ten years unless strong action is taken quickly to win back its markets and beat off cheap foreign imports. The industry is well aware of its condition and there is genuine fear in its boardrooms that it could be a manufacturing industry without a future.
At present the industry is beset with failed mergers and reorganisations which have led to some well-known names in carpet manufacturing going out of business or into administrative receivership.
Management buy-outs are one avenue which has been pursued as a line to saving some firms but as the industry attempts to escape from a tightening ligature of cheap foreign imports it is getting harder to survive.
Firms showing small returns on their efforts are already running faster just to maintain the status quo.
The Carpet Foundation, which comprises most of the remaining carpet manufacturers and is based in the once-thriving carpet town of Kidderminster, is now busily enlisting the support of retailers to win back urgently needed business.
Mike Hardiman, chief executive of the Carpet Foundation said: 'Ours is a sector that will be allowed to decline and die and people will end up saying they get their carpet from Belgium.
'It is very much a case that we have to do something very fast and the retailers have been told in clear terms that action - and quick action - is essential.
'We talk to the Department of Trade and Industry but they do not seem to have anything they can deliver as cheap imports come into the UK at pounds 2 a square metre.
'It is not as if these imported products from Belgium are made with massive technology back-up but there is something going on and even if our manufacturers had the labour for free they could not compete with those prices.
'It seems to us that nobody at an official level has the slightest interest in the decline of the manufacturing industry and the best carpets in the world are made in the UK,' he said.
Passengers on luxury liners, travellers treading their way across some of the biggest airports in the world and gamblers walking to gaming tables and machines in Las Vagas casinos all have top quality Kidderminster-made carpets under their feet.
Sitting in Mr Hardiman's office at a conference table covered with charts and documents carrying the industry's latest statistics, they presented a collection of deepening gloom.
Imported carpets from Belgium is now showing up at pounds 2.15p a square meter and even if the British carpet industry made its product for nothing to get a market at that price it could not even compete on the cost of raw materials.
But there is a glimmer of light as manufacturers and retailers look to joining the battle to save the industry whose products probably win more accolades abroad than in the home market.
'For the first time there is a unified focus on the issues among manufacturers and we have talked to some top retailers. They now recognise also for the first time there is a serious situation.
'They were unaware of the figures staring the industry in the face until we presented them.
'They now know that if we continue to get cheap imported carpets, it will affect the independent retailer and they are already under threat from the multiples. The irony is that the independents are among the best retailers,' said Mr Hardiman.
When words like 'courage' and 'bravery' are used then one must accept that the industry has got its back to the wall.
But what is being done to revitalise the market for UK-made carpet?
September will see the start of an advertising campagn and while pounds 1 million has been earmarked for getting out the message mainly through interest magazines which have a high proportion of women readers, some of the money will be spent on television time.
The carpet industry has been hit very badly by the fashion surge for smooth floors - anything on the floor that is not carpet. This has usually taken the style of 'wooden'flooring.
The carpet industry is concerned about this incursion which was led through television shows about the home and style tests in magazines claiming that carpets were out and look-alike wood flooring was in.
But recent research by the Carpet Foundation has shown that this bow towards minimalism may be on the way out.
This would take advantage of a detectable change in customer atitudes.
Rupert Anton, marketing director at the Carpet Foundation, has talked to magazine editors and writers and they tell him there is a definite move back to 'comfort and warmth and away from minimalism'.
'The carpet will play its part in this return to softness and warmth, so the journalists on the home interest magazines tell us, and they are very influential in the market place. So this is good news for us.
'But it will take some time to get things where we want them.
'We have a vital mission to carry out for the carpet industry and if we are not successful then in-store merchandising will vanish along with the UK manufacturing base.
'One chief executive has already said the carpet industry could be out of existence within the next ten years,' said Mr Anton.
That chief executive is Mike Mills of Ulster Carpets who believes that companies comprising the carpet industry should all put their shoulders behind the industry to help it to reorientate its position.
He warned: 'If we do not reorientate and bring people back to buying quality carpet then there will be more carpet failures.
'If the British carpet industry vanishes then carpet will come in from Belgium and it will be low quality.
'Profitability of carpet industries in the UK has been squeezed but the good and professionally run companies like Victoria and Brintons will survive because they have managements that look after the cost base.
'It is not unreasonable to say that 50 per cent of the British carpet industry will disappear and unless we get something moving it will have gone inside the next three years.
'The Government has no interest in manufacturing but the Belgian Government is very supportive of its carpet industry and that manifests itself in all sorts of ways - some which we know about and have suspicions about.'
Mr Mills said a good quality carpet was at least pounds 15 per square metre, bearing in mind the cost of raw materials.
Carpet costing pounds 4 or pounds 5 a square metre would be 'furry stuff' and within three or four weeks it would look like trash. A retailer might make a pounds 1 profit per square metre for poor quality while it could be pounds 4 on carpet costing pounds 15 a square metre.
Mr Hardiman said: 'I think we can get our message over in a more aggressive way and manufacturers and retailers could team-up to promote the best of British manufacturers' products.
'There is now a strong interest in carpets growing in magazines and television programmes and in the last few days we have been on five TV shows.'
The pain the carpet industry has gone through is obvious. Its total UK manufacturing workforce is about 7,000. In the 1970s the total workforce in the industry was 45,000.
In Kidderminster, the sites where carpets were once manufactured in imposing buildings with architecture that marked them out as the community's lifeblood and backbone are now either office accommodation or sites have been razed for sprawling supermarkets and car parks.
The carpet companies have been cashing in their last assets to get money through to the bottom line.
The task now is for the industry to make its impact in the market place which is populated with people whose disposable income is now 28 per cent more than it was ten years ago.
There will be no help or sympathy for the carpet industry from the Government which has ignored the industry's shouts of 'foul' about cheap Belgian carpet is being dumped on the UK market.
The Belgian carpet industry is thriving - with Government help according to the Carpet Foundation - and it has more than 40,000 employees.
'Belgium is a small country and for so many people to be working in the carpet industry something strange must be going on,' said Mr Hardiman.
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