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Newfoundland and Labrador Knitwear Industry Scoping Study

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					 Newfoundland and Labrador
Knitwear Industry Scoping Study




           Final Report




       Management by Design




             May 2000
                                       TABLE OF CONTENTS



Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4


1.0 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
   1.1 Background of the Apparel Industrial Adjustment Strategy Initiative . . . . . 10
   1.2 Objectives of the Knitwear Scoping Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11


2.0 Knitwear and the World . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
   2.2 Woolmark 2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
   2.3 American Demographic Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
   2.4 The Echo-Boom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
  2.5 Canada’s Textile and Sweater Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.6 Knitters in Northern Scotland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.7 Profile of the Textile Industry in Shetland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22


3.0 Profile of Knitwear Producers in Newfoundland and Labrador . . . . . . . . 23
3.1 History of Knitwear in Newfoundland and Labrador . . . . . . . . . . . . . . . . . . . . . . 24
3.2 Newfoundland and Labrador Knitwear Producers . . . . . . . . . . . . . . . . . . . . . . . 26
      3.2.1 Nature of the Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
      3.2.2 Employment and Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27


4.0 Retailer Perspectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35


5.0 Issue Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39


6.0 Conclusions and Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50


Appendix A Interview List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
 Newfoundland and Labrador Knitwear Industry Scoping Study
 April 2000


Appendix B Heriot-Watt University School of Textiles . . . . . . . . . . . . . . . . . . . . . . 54


Acknowledgments


The Management by Design study team would like to thank all those who contributed
time and thought to the contents of this study. The private sector knitwear producers
as well as retail outlet owners comprised the major information base for the study,
and we would like to thank those who generously took the time to give the team
perspectives based on industry experience.


The team would particularly like to thank Karen Thistle, DDRR Marketing Specialist,
for her support in terms of conceptual approach, industry contacts, useful documents
and general overview based on her many years of experience in the sector. The
time and effort contributed by other members of the IAS Committee is also
appreciated.


At the same time it should be noted that the study team takes full responsibility for
the report which follows. The photographs on the front cover are from the Teteks
Garment Knitting Factory, Macedonia, website (www.teteks.net).


The funding for this study was provided by the Department of Development and
Rural Renewal and the Labour Market Development Agreement, a joint initiative
between Human Resources Development Canada and the Province of
Newfoundland and Labrador.




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Executive Summary

Background
Knitwear has been an integral part of Newfoundland culture and heritage for many
centuries. In current times, knitwear is produced not only for personal use and
creative enjoyment, but also as a market commodity, by both independent
entrepreneurs and cooperative groups of knitters. Presently, sales of Newfoundland
and Labrador knitwear at the wholesale and retail levels are estimated to fall
between $1.5 million - $2million/annually.


Over the past year an Industrial Adjustment Strategy (IAS) process has been in place
focusing on apparel production in Newfoundland and Labrador. As part of this
initiative, a Training Needs Assessment for the Newfoundland and Labrador Apparel
Industry was conducted. This study identified specific training requirements needed
to move the industry forward in the province. Knitwear was referenced in this study
from the perspective of professional development, but the IAS committee felt that the
knitwear sector required additional concentrated focus in order to better understand
the issues faced by knitwear producers.


Because of the importance of knitwear culturally and economically, the IAS
committee contracted Management by Design to undertake a Scoping Study of the
Knitwear Industry which would shed some light on perspectives from past, current
and future activities within the knitwear sector. The objectives of the study were to
outline important dimensions of the provincial knitwear industry and develop an issue
identification framework upon which future initiatives for knitwear sub-sector growth
can be built.


Knitwear Trends


The Knitwear Scoping Study examined trends in wool apparel, in terms of fashion
and consumer groups preferences. Technology has changed the composition of
wool, creating blends which meet the growing consumer demands for Total Easy
Care garments which can be machine washed and dried at home. A demographic
analysis of the buying public indicates two major age groups as target markets: the
65+ group and the “echo boom”(also known as Generation Y) - those between the
ages of 5 and 22 years of age. Another target group are women between the ages
of 45 to 54, the biggest spenders on women’s clothes.



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Knitwear in Scotland and Shetland


Knitwear production in Northern Scotland and the Shetlands is a subsector of the
textile industry, an important economic sector in these regions. Total sales for
Northern Scottish knitwear were estimated at approximately $15million Cdn (1994
figures). The strengths and weaknesses of this subsector are substantial, with
issues such as the aging domestic knitwear workforce, the competition from better
paying jobs at the local level and the lack of direct contact between knitters and their
customers facing the knitwear industry.


Shetland knits are known the world over for their distinctive colours and patterns.
The industry is valued at approximately $10million Cdn. 78% of the garments
manufactured in Shetland are exported, with the largest proportion going to the
European and the Japanese markets. The knitwear industry here is also facing
competition from other higher paying jobs, although with the decrease in petroleum
related activity, the area will have to rely on its traditional industries for future growth.
Investments in people and state-of-the-art production techniques are required to
build a modern industry which at the same time will not lead to the demise of
traditional knitwear.


Newfoundland and Labrador Knitwear Sector Profile


There is a long history of knitting in the province, going back as far as the 17th
century. This tradition is still alive and well, although the number of handknitters
appears to be gradually decreasing. The knitwear sector employs at least 35 full
time and 10 part time employees, including the enterprise owner/operators. The
industry supports 450 pieceworkers who knit from their homes. These figures are
probably low in that they do not include all knitwear production enterprises, those
shops that operate only on a seasonal basis, or other retail operations that sell but
do not produce knitwear. 40% of the operations produce hand knits only, 40%
produce machine knits only, and the remaining 20% produce both. The targeted
market segment for most producers is very broad, focused primarily on the 35 - 55
age group and has remained constant. Over 50% of the producers reported that
retail sales make up 50% or more of their total revenues. Wholesale sales have
declined over the past few years, pushing many producers into additional retail
venues to keep their sales levels up.


Knitwear producers find that the bulk of their market is in Ontario and Eastern
Canada, with a few buyers in the West. Marketing is done through retail and



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wholesale shows, with very little focus on other marketing methods, such as sales
representatives. Product lines and prices have changed little over the past twenty
years, essentially due to a perceived resistance on the part of consumers to pay
more for the product. Competitors are seen as the other knitwear producers in the
province, primarily because these producers compete in the same marketplaces.


Retailer Perspectives


Retailers who handle Newfoundland knitwear were interviewed to gain perspectives
on in-store competition for the products and suggested improvements in business
practices and presentation. As might be expected, “Made in Canada” and “Made in
Newfoundland” are important selling points depending on the target market. At the
same time, there was no clear distinction for most retailers between Newfoundland
knits and other knitwear. In the tourist market, knitwear is in competition with all
other products, not just other knits. Consumers generally spend according to a
personal “expendable dollar amount” and decide on products that fit into this range.
Traditional styles are sought after, but there is not necessarily a buying preference
for hand knits versus machine knits.


Retailers feel that the onus for meeting changing consumer demands is on the
knitwear producers. Retailers do not see their role being that of providing product
feedback and direction to their suppliers. They expect to be able to offer their clients
products that show well in their shops and carry all necessary product information
such as product descriptions, care methods, etc.


Issue Framework


The main objective of the Knitwear Scoping Study was to identify and define the
issues inhibiting economic growth of the knitwear industry in the province. The
issues facing the knitwear industry are:
!       Product brand identification through a place of origin symbol
!       Diversity of existing knitwear products
!       Marketing practices of knitwear enterprises
!       Definitions of competition
!       The current information base available to the industry
!       Organization development and decision making processes




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!       Policy issues
!       Promotional materials utilized by industry participants
!       Business skills and market planning capability
!       Access to appropriate technology
!       Methods of obtaining feedback from clients
!       Performance analysis tools with which to manage knitwear business
!       Trend tracking and forecasting consumer demand


These issues are linked to economic growth and development in the knitwear sector.
Some of them are not specific to knitwear, but apply as well to the larger apparel
industry. The issues are described in detail in the report, and presented in a
framework which includes the issue, the objective of addressing the issue, initial
actions required and the stakeholder assigned lead responsibility for initiating these
actions.
The primary stakeholders for action in the knitwear sector are the Department of
Development and Rural Renewal through its Marketing Specialists and Economic
Development Officers, the newly forming Apparel Sub-committee of the Association
of Manufacturers and Exporters of Newfoundland and Labrador, and the knitwear
producers themselves.
In order to broaden the knitwear producers access to new markets, distance delivery
modules about the apparel industry - industry definitions, players, technical
requirements, opportunities and risks - should be initiated. This was one of the
recommendations of the Apparel Industry Training Needs Assessment.


Conclusions and Recommendations


The knitwear segment of the provincial craft industry at the present time does not
recognize its economic significance. As a component of an apparel industry it can
remain true to its traditional, classic roots, bridging between time honoured methods
as well as utilizing new technologies. The IAS process has provided the opportunity
for knitwear producers to reflect on past achievements as well as to explore future
orientations. As many of the established knitwear producers consider lifestyle
changes, now is the time to revitalize the vision to maintain enterprise productivity to
ensure future investment attractiveness, and to encourage young entrepreneurs to
become players in the development of the sector.




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The Knitwear Scoping Study recommends that:
!       The major and primary recommendation is that the DDRR marketing
        specialist who has been working with the Apparel IAS Committee be
        “seconded” to the Apparel Industry sub-committee of the Association
        of Manufacturers and Exporters to bring some focus on the issues
        framework.


The knitwear producers have recognized the value of remaining with the apparel
manufacturers as the group sets out to organize a sub-committee within the
Newfoundland Association of Manufacturers and Exporters. The knitwear producers
can continue to work towards a stronger network among themselves within the
apparel industry context, while at the same time exploring potential future products
and technologies. In order to begin to address those items identified in the
foregoing issue framework, it is essential to have a dedicated resource to begin to
put the pieces in place to increase investments to and raise returns from the apparel
industry.


• An ongoing series of targeted workshops such as the technology
  workshop be scheduled for apparel industry participants/knitwear
  producers.


Workshops would include market specialist presentations, business planning and
trend analysis, as well as technical workshops with industrial engineers, knitting
specialists, hardware and software specialists. At the present time, the apparel
subcommittee through its DDRR specialist will be required to develop knowledge
about industry attributes and bring in specialists to work with established knitwear
producers on product improvements such as labelling, potential new materials which
have the same attributes as their current ones as well as working with new entrants
on quality issues and product testing.


Specific workshops should include a 4 day technical workshop with Asha Ruperelia
for knitwear producers. Paula Cornec of Winterhouses should be invited to present a
seminar on Tips of the Trade, lessons learned during her 20+ years as a knitwear
producer, retailer and craft shop owner. Other workshops should be identified
during consultations with industry participants.




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• A series of consultations with apparel industry/knitwear producers be
  scheduled to discuss policy issues and the other issues described in this
  report.


The knitwear producers at the present time do not see themselves as a potential
marketing network or collaborative industry sub-sector. Meetings which bring
knitwear producers together to discuss issues of common concern will continue to
consolidate their position within the apparel industry and contribute to sectoral
thinking.


• Address the issues of industry support. Review the present support
  mechanisms and other existing programs which may in fact be available
  to and suitable for apparel manufacturers/knitwear producers. Revise
  policies as required and inform sector participants of appropriate
  programs.


The current policies and programs available to craft producers may not be entirely
suitable for apparel manufacturers. An entire review of existing support programs
should be undertaken with a view to addressing specific needs and interests of the
apparel industry group in the province. This will require consulting with other craft
and industrial stakeholders, and identifying already existing programs which are
most suitable to small scale manufacturers.




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1.0 Introduction

Knitwear has been an integral part of Newfoundland culture and heritage for many
centuries. In current times, knitwear is produced not only for personal use and
creative enjoyment, but also as a market commodity, by both independent
entrepreneurs and cooperative groups of knitters. Knitwear in Newfoundland is both
a hand knitted specialty item as well as a home knitting machine made hand crafted
garment. At the present time there are no industrial factory knitwear manufacturers
in the province. Sales of Newfoundland and Labrador knitwear at the wholesale and
retail levels are estimated to fall between $1.5 million - $2million/annually.


1.1 Background of the Apparel Industrial Adjustment Strategy Initiative


The craft industry has traditionally played a role in the provincial economy, especially
in rural areas. The industry now reports sales of over $25 million, with growth rates at
7% per annum since 1992. Over 2500 people earn income from this industry on a
part or full-time basis. Growth is projected to continue at an annual rate of 5-7%
which will translate into an additional 200 full-time equivalent jobs.


One aspect of the craft industry presenting good growth potential is the apparel
sector. At the present time the sales level of the 50+ companies in the province
which represent the apparel sector is estimated at $27million per annum. This
includes large companies as well as the numerous smaller companies. While there
are sub-sectors within the craft apparel sector, such as knitwear and outerwear, and
each sub-sector presents specific opportunities and challenges, there are common
issues facing the players across the sector which can be addressed to promote
development.


In this context, support was requested from the Industrial Adjustment Service to set
up an Industrial Adjustment Strategy Committee to define the requirements of the
apparel industry in Newfoundland and Labrador. The Industrial Adjustment Service
works with sectors that are growing or shifting in response to industrial market
demands which reconfigure their human resource development needs.


The IAS process, based upon industry participation, is designed to create rapid and
effective knowledge transfer among government agency representatives, industry



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players and private sector consultants. The purpose of initiating an IAS process for
the apparel industry is to identify and validate provincial as well as industry issues
and develop strategies to aid the local sector in taking advantage of the
opportunities presented.


1.2 Objectives of the Knitwear Scoping Study


Because of the important place economically and culturally, that knitwear plays in the
province, the IAS committee felt that it would be important to conduct a study
shedding light on perspectives from past, current and future activities within the
knitwear sector. The objective is a brief scoping study which outlines some
dimensions of the provincial knitwear industry. The study will include an issue
identification framework upon which future initiatives for knitwear sub-sector growth
can be built.


The scoping study should identify:


•    Current sales levels of knitwear products produced in Newfoundland and
     Labrador
•    Comparison of current and past sales performance to national knitwear industry
     sales trends, including future projections
•    Historical approaches, results and future marketing focus of local companies -
     target market, distribution channels, pricing, promotion, etc.
•    Analysis of market trends and impact on local companies - includes changing
     consumer demands, changing industry requirements and buying practices,
     competition, etc.
•    Current barriers and constraints faced by knitwear companies and rural
     producers
•    Suggestions for ways in which to address these constraints and barriers


The issue identification framework will provide an overview of the issues raised
during the study and the impact of these issues on economic growth for knitwear
producers in Newfoundland and Labrador.




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The Knitwear Industry Scoping Study was undertaken by a Management by Design
team comprised of Marget Davis of Management by Design, Don Beaubier of Axis
Consulting and Ronalda Steele.


Section 2.0 of the report tracks global trends in wool apparel and buyer preferences
with a view to targetting specific market segments. Aspects of the Canadian textile
industry are presented, followed by analysis of the knitwear sub-sectors of the
Northern Scotland Textile Industry and the Shetland Textile Industry.


Section 3.0 profiles the Newfoundland and Labrador knitwear production sector,
beginning with its history and analyzing sector specific perspectives gained during
interviews conducted for the study.


Section 4.0 presents retailer perspectives on consumer trends, product
identification and marketing approaches.


Section 5.0 sets out an issues framework, defining the issues, the objectives,
suggested actions, and potential time frames.


Section 6.0 draws the report to a close with Conclusions and Recommendations.
Appendix A contains a list of knitwear producers who contributed to the study and
Appendix B contains information about Heriot-Watt University Scottish Borders
Campus School of Textiles.


2.0 Knitwear and the World

It is commonplace thinking today to recognize that we all live in a global village. The
trend perspectives that follow are selected from Web sites related to wool products,
market segments and demographic analysis. While these may seem a bit esoteric
on the surface, they are useful to consider in the context of our provincial knitwear
industry and the issues that surround it. Market segments, changing consumer
tastes and demands and their impacts on traditional products which will increasingly
prosper through enlightened and creative marketing approaches gives the following
material its place in this report.




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2.1 International Trends in Wool Apparel


A market survey of January 2000 states that the growth in wool consumption in
apparel in the US appears to be stabilizing following several years of large
increases. Although full figures are not yet available, 1999 is expected to have
declined slightly on 1998 despite the positive environment for apparel retailing and
expected strong growth in total fibre consumption.


Womenswear is the most challenging sector for wool consumption in apparel as it
has not been able to keep up with changes in manufacturers’ and consumers’
requirements. In contrast, wool consumption in menswear has continued to grow as
the emphasis on quality fabrics over the past few years has highlighted wool as a
material of choice. At the same time, the market for apparel knitted from wool
appears to be saturated, after growing by 39% in 1997 and 25% in 1998.


There are a number of reasons why wool is struggling in womenswear: in the rapidly
changing womenswear market, synthetic blends have allowed manufacturers to offer
consumers something new and interesting without increasing price. Wool’s biggest
segment in womenswear - structured career apparel such as suits - has been hit
hard by casual trends in the workplace. Heavy, structured apparel is now viewed as
out of date and uninteresting. As a result, many brands are cutting back on their
offerings of structured career apparel, with blazers being the worst affected.



While current fashion trends suggest that there may be a return to career apparel in
fall 2000, wool in womenswear is still unlikely to benefit as growth is expected mainly
in the price sensitive mid-market.


Wool consumption in menswear is expected to have risen further in 1999 as the
focus in this market is still on quality fabrics, together with softness and a less
constructed/tailored look. While there has been some interest in synthetic blends that
feature softness, this interest is mainly confined to consumers under 30 years of age.


It now appears that recent growth rates in wool consumption in mass produced
knitwear have been too strong to sustain into 1999, with the market now saturated
following back to back trends in ‘merino’ sweaters and twinsets. To sustain recent




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record volumes of wool consumption in knitwear, new stylings and new technologies
such as TEC1 (Total Easy Care) must generate interest.


2.2 Woolmark 2005


The Woolmark 2005 Survey was commissioned by The Woolmark Company to
survey trends in demography, lifestyle, buying habits, retail structure, apparel fashion
and fibre technology. Woolmark 2005 provides a picture of how consumer demands
are changing in major regions of the world.


The world can be broadly divided into: (1) the West (Europe, North America and
Australia); and (2) Developed and Developing Asia.
The West


     •   Aging populations, changing gender roles and busy dual-income families with
         less spare time are looking for more comfortable quality apparel that is easy
         to care for and doesn’t consume exhorbitant financial resources.
     •   Apparel for business wear is becoming less formal: a flexible "third
         wardrobe" of smart casual separates is becoming the norm, with items
         wearable for multiple occasions.
     •   Sporting icons increasingly lead younger people to favour active leisure wear
         garments for their wardrobe and branded lifestyle items in all areas of their
         lives.
     •   North America leads the world in casual fashion brands while Europe –
         particularly Italy – sets the trends in more formal style and fashion. (See
         Section 2.3 below)


Developed and Developing Asia


     •   Where the West leads in fashion, the rest of the world follows. Everyone
         aspires to buy – and wear – the brands that America promotes and the styles
         that Europe excels in.


1
 Total Easy Care Wool garments can be machine washed and tumble dried at home on the low heat setting. More
information on this and other features of wool products can be found at http://www.wool.com.au/global/woolmark.




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   •   However tradition, even in Japan, and conformity to social norms – including
       gender roles – will continue to drive a continued preference for more formal
       dress codes.
   •   In China the change from agriculture to factory and office work and from rural
       to urban living means more town-based office workers, for whom the formal
       suit is the ultimate in status. Casualisation is beginning in the more
       developed markets in Asia, such as Japan, but at a slower pace than in the
       West.


Retail change


   •   E-tailing – retailing through the Internet – seems set to become a major new
       channel for global sales, although it remains to be seen if it will be used for
       higher value "see, feel, try" apparel purchases. (See Section 5.0 for more
       information on e-tailing and internet marketing).


Competitiveness and technology


   •   Synthetic fibres are developing new attributes – breathability, moisture
       control, UV blocks and other features. Many of these are trying to mimic the
       natural attributes of wool, especially moisture absorbency, where it excels.
   •   They have also begun to brand and sub-brand themselves to put across their
       end-user benefits. Wool has always been a premium fibre and has recently
       sub-branded – both in pure wool and in blends – to create a more focused
       story for its markets.
   •   Further wool developments include Sportwool, a range of new blends, easy
       care and processing enhancements. Extensive research is being conducted
       by wool producers in New Zealand and Australia to increase the competitive
       position of wool as a fibre for the modern consumer.


2.3 American Demographic Trends


American demographic trends are often mirrored in Canadian markets. In the April
1999 issue of American Demographics, an article described “The New Consumer
Paradigm”. Points of interest for the Knitwear Scoping Study are:




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•    Consumer spending has been growing: the population is growing, the number of
     households is increasing, and the baby-boom generation-the youngest of which
     is now 35-has entered its peak spending years. But a close look at trends in
     spending by individual households tells a different story. Despite low
     unemployment levels and rising wages, the average American household's
     spending has been cautious, if not downright miserly in the last decade. After
     plummeting during the early '90s recession, it wasn't until 1997 that spending by
     individual households finally caught up to the level of 1987, according to latest
     Consumer Expenditure Survey (CEX), released by the Bureau of Labor Statistics
     in December. In fact, the average household spent $34,819 in 1997, only 0.9
     percent more than the $34,493 of 1987, after adjusting for inflation. This is
     reflected in similar Statistics Canada surveys.


•    There has been a dramatic decline in spending by householders aged 35 to 44.
     This downturn is of paramount importance to businesses, because the age group
     accounts for the largest share of American households-23 percent-and,
     consequently, the largest share of most consumer markets. Ten years ago, this
     group spent 29 percent more than the average household on goods and
     services. Today, its spending is just 16 percent above average. Between 1987
     and 1997, householders aged 35 to 44 cut their spending 9 percent, after
     adjusting for inflation


•    Between 1987 and 1997, spending by the 65-plus group rose faster than in any
     other age group, fueled by a more educated and affluent generation entering
     senior citizenhood. Thus, older Americans' spending is rising to approach the
     average, and the trend will only intensify as the hyper-educated boomers hit their
     sixties in 2006. Entertainment and travel are two of the industries that have
     benefitted from these trends.


•    Many businesses still haven't noticed the aging consumer markets. Some are
     ignoring it entirely. Older consumers are spending money, but they're spending it
     on the industries that have been courting them.


•    More important is the clothing industry's failure to create products that appeal to
     middle-aged women. The biggest spenders on women's clothes are
     householders aged 45 to 54, followed by those aged 55 to 64. Yet most clothing
     is designed and marketed to teens and young adults. With so little to choose
     from, women aged 35 and older are spending their money elsewhere.




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2.4 The Echo-Boom


Now 70 million strong, echo boomers – also known as Generation Y – are projected
to outnumber their parents at some point between the years 2010 and 2015.
Ranging from 5 to 22 years old today, Gen Y has become a critical consumer
groups. According to market experts, $168 billion was spent by or on youths
between the ages of 4 and 19 last year.


At the same time the target market – 17 to 22 year olds – is difficult and expensive
to reach. Youth marketers have to embrace fast change and reinvent themselves
nearly every six months to keep up with the latest trend. Some of these trends can
be set by sports or entertainment celebrities, or by very popular figures in the local
community. Journalists are also important influencers on this group, with editorial
coverage being more relevant than important advertising campaigns.


This market is challenging but lucrative.


2.5 Canada’s Textile and Sweater Industry


The textile industry is one of the oldest manufacturing industries in Canada.
Established over 150 years ago, the textile industry commenced with the production
of natural fibre yarns and fabrics. The industry has evolved from its early beginnings
to a highly modernized and capital-intensive industry selling to over 150 industrial
sectors in Canada and worldwide.


Concentrated mainly in Quebec and Ontario, the industry rose up along waterways to
take advantage of water-generated power and abundant water supply for dyeing and
finishing requirements. Currently, most textile production continues to take place in
smaller urban communities which provide a stable labour supply. (Industry Canada)


Statistics Canada defines the Sweater Industry (SIC 2491) as: Establishments
primarily engaged in manufacturing for men, women and children, sweaters of wool,
cotton or man-made fibre yarns either alone or with combinations of other
materials such as suede, other leather or imitation leather incorporated into the
garment.




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Some, but not all of the products related to this industry include:
•    Cardigans
•    Coat sweaters
•    Pullovers
•    Sweater knitting
•    Sweater vests
•    Sweaters
•    Turtle neck sweaters


In 1996 the Sweater Industry accounted for 12.9% of total shipments valued at $1.8
billion for the Other Clothing segment of the apparel industry. Over the 1990 to 1996
period, total employment within Canada's Sweater Industry declined from 3914 to
3199. In the U.S., total employment in the industry decreased from 31900 in 1990 to
21900 in 1996.


Canadian domestic exports totaled $63.8 million in 1996. In 1996, Canada's total
imports were $280.3 million, which represented a decrease of 8.25% from the 1995
level of $305.5 million. The Canadian industry received 26.8% of its revenues from
exports in 1996. In 1996, Canada's apparent domestic market for products
manufactured by the Sweater Industry was estimated to be
$0.5 billion.


The top 10 countries of destination for the Canadian Sweater Industry are:
•    USA                     84%
•    Japan                   6.8%
•    Belgium                 0.45%
•    Hong Kong               .3%
•    United Kingdom          .3%
•    Italy                   .2%
•    Germany                 .1%
•    Netherlands             .1%
•    United Arab Emirates    .1%




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•    Brazil                       .1%


These statistics, while broad and limited to the definition of sweaters as shown
above, nevertheless give some perspectives on the value and size of this apparel
segment within the Canadian economic and export context.


2.6 Knitters in Northern Scotland


The Newfoundland and Labrador knitwear industry is comprised solely of hand
knitters and home machine knitters. Due to the nature of production, most of the
statistics available on international trends as well as on Canadian sweater
production deal primarily with factory made fabrics and knitted products. Of more
relevance to our understanding of the trends in our particular provincial product niche
are the studies available from Northern Scotland 2. “The Review of the Textile
Industry in Northern Scotland” looks at the economic importance of the textile
industry to this region and profiles the industry in terms of its strengths, weaknesses,
opportunities and threats along with recommended support programmes to be
offered by Local Economic Councils and governments.


The study defined the textile industry as comprised of textile manufacture,
manufacture of wearing apparel, dressing and dyeing of fur, and the manufacture of
leather and leather products. Exports in the Textile industry were valued at £40
million, accounting for approximately 66% of sales. The top destination countries for
textile exports were:


•    USA                                   9%
•    Germany                               18%
•    France                                9%
•    Italy                                 11%
•    Other European countries              5%
•    Japan                                 17%
•    Rest of the World            18%3


2
  “Review of the Textile Industry in Northern Scotland”. Final Report for Highlands and Islands Enterprise and the
Scottish Textile Association. May 1997. Malcolm Newbery Consulting Company.
3
  These are the percentages as found in the study. It is recognized that they do not add up to 100%.



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Knitwear was identified as a subsector within textile manufacturing. In Northern
Scotland, it is estimated that 800 people (full time, part time and outworkers) are
employed as knitters, with self employment and small enterprise size (less than 10
employees) important attributes of this sector. Total sales value is estimated at
£5.4m (1994 figures). The Northern Scotland knitwear producers who participated in
this study indicated approximately 8% growth in sales over the previous year’s
figures (1995/1996).


Scottish knitwear as a subsector exported primarily to Japan with France and Italy
following. The USA as a market for Scottish textiles has declined since its heyday in
the late 1980’s. Japan and Germany have been the growth markets. Companies at
the same time seem to recognize the need to spread their exports across a variety
of markets.


The study notes that production in knitting tends to be extremely uncompetitive in
terms of costs because the product is competing with products manufactured by low
unit cost, high speed machinery. It is also a low wage industry. Strengths and
weaknesses in the knitting sub-sector were:


Strengths


•    Good supply of relatively local woolen yarns;
•    Use of wool commands higher price points;
•    Domestic outwork knitting uses very cheap labour;
•    Computer driven knitting is very flexible.


Weaknesses


•    Wool is now open to competition from super-soft acrylics. Acrylics and woolen
     blends represent easy care to the consumer.
•    Domestic outwork knitters represent a very low paid, and generally aging
     workforce with an increasing range of better paid local employment
     opportunities. This accounts for the gradually decreasing supply of knitters.



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•     Computer driven knitting is a threat to hand frame/hand knit. Customers are
      often not educated concerning methods of knitwear production, and therefore do
      not recognize the skill and efforts required for handknit and handcrafted products.
•     Sales of Scottish knitwear are nearly all agent based, with the result that
      producers lack sufficient customer contact to identify new trends and consumer
      demands. .




The Scottish Textile Industry report contained other perspectives which are useful for
this Newfoundland and Labrador Knitwear Scoping Study: The research findings
noted below highlight points of importance for the future development of additional
knitwear production in Newfoundland and Labrador:


•     Market feedback obtained by conducting “Made in Scotland” Trade Promotion
      surveys suggests that the “craft look” in knitwear (novelty materials, pictorial
      images, etc.) is no longer as popular as in the past, and that classical and
      relatively plain designs by high quality producers have been increasingly
      successful. Classical designs have stood the test of time extremely well.
•     Textile related initiatives focussed at sustaining the knitwear industry have
      included recommending that companies concentrate on niche marketing to
      increase the product selling price points e.g. identifying garments as produced
      from Orkney spun wool and garments that are hand knitted.
•     Inward buyer missions have been organized of groups such as Japanese and
      American specialist buyers, who may be interested in limited editions (up to 500
      garments) which suits local production capacity.
•     Companies have been assisted to develop the mail order side of their
      businesses through the efforts of a full-time Orkney Marketing Scheme project
      officer.
•     Designers reacting to market trends can in a relatively short time drive the
      demand for specific skills in an area. The study found that it is primarily the
      smaller companies in the industry who feel they lack the ability to access to
      contemporary design trends.
•     There is a need to facilitate awareness among the textile entrepreneurs of
      contemporary design, technology, equipment and market trends in order to keep
      the industry firmly planted in the present time.
•     One key benchmark in textile production is labour costs. International
      comparisons suggest that higher value added per employee through quality and




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     the use of state-of-the-art computer equipment should be the target rather than
     competing through low labour costs.


2.7 Profile of the Textile Industry in Shetland


The report prepared by The Malcolm Newbery Consulting Company included an
edited version of a Shetland Islands Textile Report prepared by AB Associates.
This report presents a profile of the Shetland Islands Textile industry.


There are approximately 25 knitwear businesses operating in the textile industry in
Shetland, six of which are entirely outworker operations with annual sales which
range from £50,000 to £500,000. These 25 businesses employ:
        •   83 Full time workers
        •   17 Part time workers
        •   829 Outworkers


78% of the garments manufactured in Shetland are directly exported:
•    48% to the European market,
•    6% to the USA, and
•    24% to Japan.
•    About 10% of the garments are sold locally,
•    London retailers and wholesalers are major customers for the remaining 12%
     output.


Sales (outputs) of the total Shetland knitwear industry – £4m/year. These sales were
stable between 1992 and 1995.


Relevant points from this study which are useful for the provincial knitwear
perspectives are:


•    Shetland has a tradition of knitwear dating back 500 years. In more recent times,
     however, the arrival of highly paid oil jobs, and a general improvement in the
     economy, have resulted in fewer people entering the industry, as well as many




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      people moving into other areas of the economy. However, with oil related work
      declining, and a general slowing down of the economy within the islands,
      Shetland must look towards its traditional industries, including textiles, as a
      source of employment and income for its inhabitants.
•     Automation was believed by all those interviewed to be the only way forward for
      the industry to remain competitive, especially in the face of cheap imports from
      the Far East. It was believed however that there would always be a market for
      hand knitted garments, and the decline in home knitters was generally viewed
      with regret. This was attributed not only to the attraction of better paid jobs
      elsewhere, but also to the fact that skills are no longer passed on.
•     In Shetland there has been a significant shift over the past ten years from home-
      produced hand and hand frame garments to factory made machine products.
•     Inability to protect the word “Shetland” as denoting those products produced on
      the islands has limited the impact of economic support measures as other
      producers not located in the Shetlands can promote “Shetland” knitwear at
      various levels of quality. The “Shetland Lady” label is used to identify garments
      produced within the islands, but the public outside the islands, in general, do not
      know the significance of the label.


The following needs in the Shetland knitwear industry were identified:


      •   Investment in machinery, so that production techniques do not become out-
          dated
      •   Attraction of young people into the industry, with a proper wage and career
          structure
      •   A modern approach that did not lead to the demise of traditional knitwear
      •   Increasing promotion of the designs of local companies
      •   Developing more courses at Shetland College




3.0 Profile of Knitwear Producers in Newfoundland and
Labrador

Knitwear producers in Newfoundland and Labrador have been seemingly ever
present in the coves and crannies of the province. Home knitting clothed families,




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supplied income, created gifts and heirlooms. The opportunities for a redefined
knitwear sector will co-exist with time-honoured traditional practices, creating a
multi-dimensional industry which meets home and industrial demands.


3.1 History of Knitwear in Newfoundland and Labrador


One of the issues that always arises when discussing the promotion of
Newfoundland and Labrador knitwear surrounds the definition of the distinctive
traditional Newfoundland sweater. In her study “Picking up Lost Stitches”,4 Gloria
Hickey provides the following chronological summary of the history of knitting in
Newfoundland and Labrador:


q    Prehistory
The Aboriginal population practiced woolcraft (weaving and quilting with dog wool)
but did not undertake knitting with fibres


q    1000 AD – L’anse aux Meadows.
A woman’s tool kit (soapstone spindle whorl, small quartzite needle and a long bone
needle) has been found in the Viking settlement but this is considered to be
evidence of nalbinding, the one needle ancestor of knitting, similar to crochet.


q    16th century - Red Bay Labrador.
A fragment of knitted cap was found at the Basque whaling station. It is attributed to
the seasonal Basque fishery. The cap was restored at the Canadian Conservation
Institute in Ottawa. It is a simple stocking stitch toque with no brim.


q    17th century
English workers from West Country England visit Newfoundland with the seasonal
fishery. They wore what we consider the “fisherman’s sweater” or guernsey – richly
cabled according to family traditions and knit in a 4 ply heavy weight wool.




4
 “Picking up Lost Stitches” Research into the History of Knitting in Newfoundland. Gloria Hickey, supported by the
Craft Council of Newfoundland and Labrador and the Jean A. Chalmers Fund for the Crafts secured through The
Canada Council for the Arts.



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q    17th century
English and Irish settlers in Newfoundland knit for themselves plain working sweaters
of undyed wool from local sheep. The structure of these sweaters is similar to the
gansey/jersey but also to an Irish farm labourer’s smock. Unlike England, both
women and men are involved in the cod fishery and there was neither time nor
commercial wool available for cabled work in Newfoundland. However, a steady
supply of sturdy sweaters, socks, underwear and mitts were regularly knit by
womenfolk. Mitts are the only patterned items and often specialized for specific
work functions (trigger mitts, header and splitter mitts, thrummed mitts).


q    18th century
The Moravian mission was established in Labrador in 1771. Inuit in Nain are taught
German (left over) style knitting and patterns (perhaps the snowflake).


q    19th century – L’anse aux Loup Labrador.
Brown and white plaid knit men’s costume discovered. Attributed to Basque
seasonal worker or soldier – may be machine knit. Dated 1810. Can be viewed at
the archaeology study collection, Memorial University of Newfoundland.


q    20th century 1906 onward
Knitters in Labrador and the northern peninsula produce “fancy work” for the Grenfell
Mission. Patterns were pictorial and made with wool from England via St. Anthony.
This practice continues. For domestic use Labrador knitters ordered wool from the
Hudson Bay Company.


q    20th century – The War Effort.
Knitting mitts, sweaters and specialized pieces for the war effort is organized by the
Red Cross and the Women’s Patriotic Association in Newfoundland. Many home
knitters learn to read and work from patterns for the first time.


q    20th century 1924 onward
NONIA knitters produce garments based on cabled and “Norwegian” sweaters
brought as patterns from the Shetland Islands by the Governor’s wife, Lady
Allardyce. Wool for these patterns was brought from England. NONIA patterns were
imitated by home knitters for their own use.




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q    20th century 1930 onward
The Jubilee Guild actively promotes non-commercial knitting across the province.
As of 1961 the Guild had 230 knitters and 157 weavers (NONIA at the same time
had 423 knitters and 10 weavers). The Guild becomes an educational program of
the Women’s Institute of Newfoundland and Labrador in 1967.


q    20th century 1940s
Patterns for pictorial motifs such as the Newfoundland dog are printed in pre-
Confederation newspapers, which have a regular craft column. Circa 1945
government sets up the National Handicraft Centre in St. John’s duplicating the
Jubilee Guild’s office and school.


q    20th century post-Confederation
Patterns from mainland distributors become more available through companies such
as Eaton’s and Mary Maxim. Patterns are imitated from illustrations seen in
company advertising. Fashion knitting and functional knitting co-exist. Working
sweaters, salt and pepper caps, banded socks and diamond mitts continue to be
knit from local wool as long as sheep are kept.


It is evident from the above historical research that the threads that lead to
Newfoundland and Labrador knitwear are many and varied. If a traditional sweater
was to be identified, it would probably be a fishermen’s guernsey with little shaping
and no fancy cable work.


3.2 Newfoundland and Labrador Knitwear Producers


From the interviews conducted during the Knitwear Scoping Study, it has been
possible to draw a generalized profile of the knitwear industry in the province. While
the intent of the Scoping Study was not to undertake a comprehensive survey, but
rather to identify sector issues and make recommendations, enough material was
collected to draw a fairly comprehensive picture of the industry and its participants
as it currently exists.


Knitwear producers throughout the province produce the full range of knitwear
associated with hand knitted/hand crafted products. These include:




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•    Sweaters (cable, Fair Isle, Norwegian, double knit, plain knit, fashion knits,
     thrummed
•    Mitts
•    3 finger mitts
•    vamps
•    socks
•    ski socks
•    headbands
•    children’s wear – sweater sets, dresses.


3.2.1 Nature of the Business


•    50% have been in business for 18 years or more
•    33% are one person operations (self owned, self producing)
•    50% operate the business with a manager/owner and piece workers for
     production
•    45% pay full time or part time staff as well as being involved in the business
     themselves


This is an industry sector with a long established production base and product lines.
The one person operations allow for individual creative expression as well as
independent choice of materials and marketing approaches. The larger segment of
the business is that formed by a nucleus of manager/owners with a network of
knitwear pieceworkers established in their homes producing either handknits or
machine knits. These operations are run both as independent businesses as well as
cooperative groups reporting to a Board of Directors. Full or part time employees
are an important element of this industry.


3.2.2 Employment and Sales


• Employment




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The industry supports approximately 450 pieceworkers as per figures supplied
during the interviews. These figures do not take into account individual knitters who
supply the community craft shops around the province, or other knitters working with
other companies not interviewed. It can safely be assumed that this number could
be as high as 1000 pieceworkers taking part in domestic commercial knitting
activities. From figures obtained during the interviews, the knitwear sector
employed 35 full time employees – including the owner operators. Once again – this
figure does not include all production enterprises in the province or those who
operate retail operations not involved in production. The knitwear sector provided
part time employment for 10 people – this figure does not include those who work in
summer craft shops or retail operations during the year.


• Sales


From extrapolation of interview findings and with corroboration of industry
participants, sales within the knitwear sector may be valued at close to or more than
$1 million. From information received during the course of the study, it appears that
there is also a thriving “underground” knitwear economy – earnings that are
unreported and uncounted. This has always been the case, particularly when many
Newfoundland communities had a number of knitters living there, but became a
more serious concern with the advent of HST. Those who produce and retail
knitwear are aware of many who copy patterns and have them knit elsewhere to
avoid the additional 15% tax


• Comparative Analysis


Using the Shetland study, and from the comparative table below, the provincial
employment figures compare favorably with those from the Shetland study, except in
the area of long term employment (85 versus 35+) gained from the knitwear
manufacturing operations resident there. What is most evident is the disparity
between sales figures, with the Shetland industry in 1996 obtaining an “output” of
approximately $10mill/Cdn, with present day Newfoundland and Labrador knitwear
sales estimated at between $1.5 million and $2 million/Cdn with a similar size work
force.


From internet listings, it appears that hand knit/hand loomed products elsewhere
(USA, Channel Islands, Scotland, Shetland, Ireland) retail at higher prices than those
currently sought by provincial knitwear producers. It is of course unknown at this
point what the market response to these products/prices is. From this cursory



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comparison, it is apparent that the Newfoundland and Labrador knitwear industry
has room for growth in terms of production output and product pricing.




Location          Full time        Part Time         Pieceworkers     Sales
                  Employees        Employees         (Outworkers)
Shetland (’96     83               17                829              £4m/year
figures)                                                              (approx,
                                                                      $10mill/Cdn
Nfld/Lab          35               10                450              $1.5 mill+Cdn

3.2.3 Material in Use


75% of those interviewed use only 100% wool or natural fibres with the exception of
specialized yarns for baby wear. The other 25% use 100% wool in addition to wool
blends/acrylics, with a small percentage using mainly acrylics. A tiny percentage
includes cotton products in their repertoire.


As indicated in the trends in Section 2.0, these figures are important when
considering “easy care” fabrics and garments.


3.2.4 Production Methods
Production methods are varied and generally quite flexible.
•    Approximately 40% handknit only.
•    Approximately 20% market both machine knit and hand knit products
•    Approximately 40% produce machine knit products only.


Handknitting, as might be evident, is carried out predominantly by those operations
with larger numbers of pieceworkers. The numbers of handknitters still in existence
in the province is a feature that may allow some niche market specialization. At the
same time, it is the perception of the knitwear producers that the market is not
currently distinguishing between hand knit and machine crafted. Most producers
price hand knits slightly higher than machine crafted products.


3.2.5 Targeted Market Segment



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The targeted market segment for most provincial knitwear producers was very
broad, and was comprised generally of middle to upper middle class income
earners ranging in age from 40 – 60, with a preponderance of female customers.
This market segment was characterized as interested in classic styling, good value
and excellent quality. Some producers are targeting the casual/sporty crowd and a
younger market comprised of 18 – 20 years old. Others who are relative
newcomers to the sector see this younger group as the target market because of
their disposable income.


Groups may wish to consider their market segment approach based on trend
information such as that contained in Section 2.0. Trend analysis based on
demographic and statistical data coupled with in-depth retailer feed back would be
useful inputs for business planning and strategic marketing efforts.


3.2.6 Retail/wholesale Marketing Efforts


•    53% of the knitwear producers interviewed reported that retail sales make up
     50% or more (up to 100%) of their total revenues.
•    33% reported that wholesale sales make up 50% or more (up to 100%) of their
     total revenue.
•    14% have an even split, with 50% of revenues from retail sales, 50% from
     wholesale sales.
•    20% undertake no retailing, relying entirely on wholesale or consignment
     markets. 33% undertake little or no wholesaling.


This profile is a moving snapshot: wholesale sales have declined over the past few
years, pushing many into additional retail venues to keep their sales levels up.
Others have chosen to increase their wholesaling efforts, preferring to attend
wholesale events resulting in orders and a production schedule rather than building
inventory and attending retail events. As the market varies, so too will the marketing
method choices made by the knitwear producers.


•    Wholesale venues


Wholesale venues include Edmonton, Calgary, Vancouver, Halifax, St. John’s and
Toronto. The Atlantic Craft Trade Show (ACTS) is an important event for most who



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wholesale. ACTS is well attended by Newfoundland knitwear producers and may
provide additional opportunities to seek retailer feedback about provincial knitwear
products.


•    Retail venues


Retail venues include producer owned shops, the One-of-a-kind Show in Toronto,
the Ottawa Xmas Craft Sale, St. John’s craft sales, and other smaller retail
opportunities.


•    Consignment venues


Consignment knitwear is primarily sold through the network of community Craft
Shops open during the summer to service the tourist trade. Some knitwear
producers work almost exclusively with specific shops, gearing their entire
production to these operations.


•    Marketing reps/other marketing approaches


One company uses reps for its products. Some have tried reps for very short times
in the past, but have not pursued these relationships. There is little expressed
interest in this form of product marketing. The few that did express an interest in
agents stated that it had to be someone familiar with the production process used
and the craft industry in general.


Other marketing approaches currently being used include individual corporate
catalogues. These catalogues feature the company products only, and are generally
developed and designed as a company initiative. Brochures fall into the same
category, with product photos and pricing structures presented in a brochure format.
Over 50% of the knitwear producers who currently have catalogues/brochures
expressed concern that these need to be updated and remodelled to meet a
changing marketplace.


•    Commentary




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Knitwear producers find that the bulk of their market is Ontario and East, with a few
buyers in the West. At the same time, the Edmonton show appears to be good
business for most and received favourable reviews. Repeat show attendance year
after year is required to “crack the market” in most locations: the buyers are more
comfortable with the product when they know that it has staying power in terms of
presence and quality. They will generally try a small order or smaller items for first
orders, increasing their purchases depending on their satisfaction with the initial
sales.


These marketing patterns – wholesale and retail venues, virtually no reps - mean that
most of the knitwear producers in the province have real contact with their buyer –
whether that be a retail store owner or an individual consumer purchasing product at
a retail event. This creates currently underutilized opportunities for eliciting buyer
feedback on established products, prices, new product ideas, trends, consumer
demands and changing buyer demands.


3.2.7 Changes in Products/Prices


Most of the essential product lines of established Newfoundland and Labrador
knitwear producers have changed little over time. New product lines have been
added, lines that are not selling have been dropped or re-designed. Individual
knitwear producers who produce fashion items do track yarn and colour trends, but
for the most part the core products of most producers have remained firmly rooted in
their traditional base. The fashion market is fast moving and ever changing, with the
result that it is exceedingly difficult to anticipate or predict. For these reasons, it is
not a suitable market for traditional knitwear producers.


Prices for retail and wholesale products have also changed little over time. Knitwear
producers state that the market will not pay higher prices. Small increases to reflect
increased price of yarn have been added, but these are very insubstantial. There
appears as well to be little differentiation in the consumer’s mind between handknit
products and machine crafted products, with the result that there is also little price
variation between the two.


Special orders form an important part of over 50% of the knitwear operations.
These orders not only allow them to offer additional customer service, but can also
act as a form of product development. Some requested changes for special orders
are an improvement over the existing product, and these changes are then
incorporated to produce a better modified product.




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Regardless of changes to basic product design, it is essential that something “new”
be introduced each season – whether an embellishment to an already existing
design, a new accessory or a new colour – allowing buyers to add to their previous
purchases, and to feel that the line is current.


3.2.8 Competitors


Over 50% of the knitwear producers interviewed stated that they had no in-province
competitors: their products were sufficiently distinctive in terms of quality, design or
materials to be in a niche to themselves. The other 50% stated that their competition
came from other in-province producers. 100% stated that they had no competitors
out-of-province. Some members of the IAS committee found these results
astounding, having assumed that competition from outside knitwear industries such
as those in Scotland, Shetland and Iceland would be top of mind – but the results
reflect the fact that Newfoundland and Labrador knitwear producers for the most part
attend retail events that highlight Canadian products, and generally deal with
retailers who wish to stock Canadian products. The larger market picture is not of
relevance at this particular time. These other products will assume importance in a
different type of aggressive marketplace.


In the absence of perceived competition, some provincial producers felt that they
had a competitive advantage based on the quality of their product and their ability to
meet the needs of their buyer. An important financial aspect of their competitive
advantage was the DDRR support for attendance at retail and wholesale events.
The responses dealing with this issue will be discussed in Section 5.0 under Policy
Issues and in Section 6.0 Conclusions and Recommendations.


3.2.8 Promotional material


Most knitwear producers have their own hang tags with logo and product
descriptions. One pre-advertises their presence at certain shows to previous
buyers. One has a brochure with a map which fits into the promotional material
racks in tourism chalets. Another advertises through the Yellow Pages, the Tourism
Guide and St. John’s “What’s Happening”. One has tried a shared web site with
another local company, but it appeared to be ineffective. Another concentrates on
personal contacts and continuing market follow-ups.


Unsolicited comments were received about the “Crafts of Character” catalogue.
Except for one knitwear producer, all offering comment stated that they had received



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very little business as a result of this catalogue and felt that it was perhaps not an
effective marketing tool. The one knitwear producer in support of the catalogue felt
that even though no direct order were received, it acted as an awareness raising
promotional tool, resulting in retailers seeking out her products as a direct result of
seeing the catalogue. This aspect of marketing will be more fully discussed in
Section 5.0 under “Branding”.


3.2.9 Publications/Sector Specific Information


A variety of magazines, supplier catalogues, pattern books were named as being of
interest, but approximately 50% of knitwear producers felt that fashion publications
were not useful to them in their business. Other avenues for information about
fashion trends included TV programs, especially those geared to younger (18 – 25
year old) viewers.


In general, many of the traditional knitwear producers received very little information
about current apparel trends, yarn types or demographic buying patterns. Most are
also not connected to the internet due to distance from a service provider as well as
having no immediate access to a computer, so this source of information is not
available to them at the current time.


3.2.10 Comments from Individual Knitwear Producers


The following comments were received by the research team from the majority of
knitwear producers interviewed during the course of the study. These are reflected
in Section 6.0 Conclusions and Recommendations.




•    Consultations between government and knitwear producers concerning funding
     support issues should be initiated in order to solicit industry input into policy
     decisions and develop appropriate strategies.
•    Changes in funding support through the Craft Industry Development Program will
     damage many knitwear producers and may lead to their demise.


Each of the following comments represents an individual viewpoint received by the
consultants during the study. These are referenced here in order to fully represent
the range of views received during the course of our research.



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•    Interested in increasing production, but would need new knitters and the time to
     ensure quality products.
•    Interested in increasing production, particularly because the shoulder tourist
     season is extending into both the spring and fall seasons, but limited by ability to
     generate more product.
•    Interested in designing for machine knitwear companies, with a particular
     emphasis on Newfoundland designs.
•    Concerned about Special Event promotions (such as the Viking Millenium) which
     attract tourists away from her retail outlets on the East Coast.
•    Stuck with Briggs and Little as a supplier – limited colour range and yarn variety.


•    All members of the knitwear sector contribute to the economy – the older
     established companies as well as the independents who only retail. They all
     need recognition of their role and support in a variety of areas.
•    Suggestion to those in the sector: either stay small and keep costs down, or grow
     large and diversify.
•    Government should stay out of the business altogether: the red tape required for
     show attendance is more work than the return in sales.


4.0 Retailer Perspectives

At the outset of the study, it was hoped that sufficient information could be gathered
through retailers of Newfoundland and Labrador knitwear to be able to analyze the
competitive environment and opportunities/constraints for provincial knit products. In
some small measure this was accomplished, but not to the depth desired. For the
most part, the retailers interviewed did not appear to have a strong sense of
consumer preferences or buying patterns, but could identify products which sold well.
At the same time, there were a number of interesting observations related to
provincial knitwear and niche markets. The following comments are taken directly
from the research material and as such represent the views of retailers interviewed
for the study.


Product origins


The importance of product origin depended on the predominant market:




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•    “Made in Canada” is a big seller in Canadian tourism markets, particularly
     targetted at Asian visitors. Newfoundland products with the Canadian flag sell
     well in these markets.
•    AMade in Newfoundland” is a big selling point to tourists visiting the island. Even
     though no Labrador knitwear producers were identified as part of the survey, it
     can be assumed that a “Made in Labrador” label would also be important. If
     products made in the province are not available, retailers indicated that a “Made
     in Canada” preference was evident.
•    “Made in the Maritimes” suits shops selling Newfoundland products in the region.
     There was no direct link from these retailers perspective to an identifiable
     Newfoundland product in terms of customer demand.
•    In some tourist locations “iconic” patterns sell well (whales, puffins). Others have
     had to get rid of these at a discount.


Consumer trends


Consumers buying knitwear in the region are generally looking for a “traditional “
style. Designer knits can also fit into this category. Traditional knitwear seems to be
defined by an apparent handknit quality and cable/Aran styles. Customers prefer the
‘plain cable knit’ sweaters.


Customers prefer hand knit sweaters, but don’t seem to grasp the concept of
inconsistencies in a hand knit sweater. For example, one size medium Fisherman’s
knit sweater can fit entirely different from another sweater in the same style and size.



Sometimes customers ask specifically for a handknit garment, but if time is taken to
explain the hand worked nature of machine knits the consumer will accept a machine
knit product.


Typically, the pricing for sweaters in the local market is considered to be too high.
The customer doesn’t usually have a lot of cash and is looking for smaller items that
are easy to pack. A reasonable (retail) price for a sweater is considered to be
about $100.


Customers generally don’t care what type of yarn is used in knitwear, but ‘easy-care’
does sell better.



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There has been a slump in the knit industry across Europe as well as Canada over
the last few years, but the industry appears to be picking up again.


No foreseeable future trends. However, it is expected that ‘Newfoundland and
Labrador iconography’ (i.e. products with designs that show animals, birds or
cultural trappings such as houses, communities, boats, etc.) will continue to be of
interest. Perhaps more attention will be given to products that are clearly marketed
based on the functionality of design and material.


Fit, style, and quality are the major concerns for the consumer.


Product Presentation/Design


Products have always been required to include tags that specify company name,
garment size, material content, washing instructions, and priced. Several producers
neglect to adhere to this policy. Occasionally goods are received in a state of
having been thrown in a box (not even folded) and without any of the required label
information.


Producers could give more attention to marketing details/ploys through proper
product labels. It might be good to have some information on the Fisherman’s knit,
such as a story.


Customers are more concerned about fit than design.


Marketing Approaches


Electronic commerce will only affect sales of knitwear if the site can educate the
customer. The site designer has to compensate for the inability to touch a tangible
item. Ideally, this could be done by making the site as ‘3-D’ as possible. This can
be accomplished by providing adequate information about the traditional uses of a
‘knit’ garment, and the functionality of wool as the composite fibre.


Service of account - It would benefit the producer to schedule their production to
accommodate peak periods of shop sales. Low stocks/display/presentation implies



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a thin product line, whereas adequate quantities of well displayed product allude to a
higher value product.


Changes to suit consumer demand – It is very time consuming for retailers to take
responsibility for extracting this kind of information. The onus should be on the
producer. At present there is nothing in place to inform producers of changing
demands or provide feedback on their products. Something should be in place, but
it has to be initiated by the producers as retailers don’t have the necessary time to
commit to this.


Direct marketing is the best method of determining consumer demand.


A good packaging process helps to prevent a shop worn look.


Attributes of provincial knitwear


Quality is rarely questioned, but it is generally appreciated.


In terms of competitive pricing, Newfoundlanders and Americans have an underlying
notion that our knitwear should be priced for ‘next to nothing’.
Typically, the pricing for sweaters is too high. The customer doesn’t usually have a
lot of cash and is looking for smaller items that are easy to pack. A reasonable
(retail) price for a sweater is considered to be about $100.


Competition


Producers shouldn’t try to undercut each other.


Producers should also pay appropriately for outsourced works.


Biggest in-store competition for knitwear could be any of the other products in the
store. Consumers generally spend according to an ‘expendable dollar amount’,
therefore it is just a matter of deciding which product to spend that money on.




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First, a lot of floor space is required to properly display the product. This means
space has to be given up when it could otherwise display smaller items that will sell
both faster and in greater quantities. Second, knitwear is too expensive to carry. A
number of retailers can't afford to purchase out right from the producer, and the
typical consumer/tourist just can't afford to buy it anyway.




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5.0 Issue Framework


The following section identifies issues resulting from the analysis of knitwear
producer information and retailer perspectives. Each issue is briefly described, with
commentary on suggested actions. The issues are then set into a “framework”
comprised of:
•    The issue statement
•    The objective of addressing the issue
•    Examples of actions suggested to address the issue
•    Stakeholders responsible to initiate the actions


This is not intended to be a generic approach – a “one size fits all” – action plan.
Many of the issues identified are fundamental to building good business practices
within any modern progressive industry. The issues are central themes around
which a cluster of activities can take place. The intent of this scoping study is not to
exhaustively define each issue for each individual product - but to alert those
involved to the issues raised during the course of the study that are deemed to have
an impact on the economic future of the knitwear industry. Appropriate activities
will be determined at times in consultation with individual knitwear
producers or at other times in collaboration with all members of the knitwear
sector.


Section 6.0 Conclusions and Recommendations outlines those priority actions
required to begin to address the framework issues.


Issues


•        Newfoundland and Labrador “Brand Symbol”


Times have changed. Newfoundland and Labrador is currently enjoying a
heightened profile as a unique and interesting tourism destination of choice, with an
emphasis on outdoor experiences and cultural heritage. This is due in large part to
strategic market planning and promotional efforts undertaken by the provincial Dept.




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of Tourism, Recreation and Culture. Other initiatives through agencies and
departments such as Operation Online, the Newfoundland Ocean Industry
Association, the DITT Ambassador Program, “Doing it. Right Here” promotional
campaign, etc. are heralding the province’s modern IT capabilities and leading edge
technologies. The range of images underpinning all of these promotions spans the
spectrum - from quaint to hip - having been carefully designed to compete
internationally for business and economic growth.


These promotional messages/images - be they traditional, modern or a
combination - create a climate of opportunity for recognition of other provincial
products, including traditional and non-traditional knitwear and other niche apparel.
The assumption is that increased product recognition in the right context increases
consumer demand, especially if associated with other important factors such as
quality and customer service.


An example of this is the Woolmark symbol. The Woolmark symbol is the world’s
best known textile symbol and also one of the most recognized trademarks. The
Woolmark, launched in 1965, was designed to identify quality products of pure new
wool. It has been extensively promoted for 35 years and appears on over 200
million garments produced each year in more than 65 countries. As wool blends
have become widely used, other Woolmark symbols have been developed.
Research conducted in 1993 showed that consumers recognize the symbol, and
many are prepared to pay extra for a Woolmark garment. (See
http://www.wool.com.au/global/woolmark for additional information).


In terms of knitwear, the bugaboo for many years has been the lack of a
“Newfoundland Sweater” recognized on a global scale similar to the knitted
sweaters of Shetland, Norway and Iceland. It is time to move past the need for a
distinctive, clearly recognizable design associated with Newfoundland and Labrador
and begin to create an association in the buyer’s (retailers as well as consumers)
mind between the products and the place. A symbol which denotes place of origin,
linked with perceptions of quality and consumer satisfaction, is a base from which to
build. The images associated with a symbol can be many and varied, meeting the
needs of various knitwear/apparel producers who wish to be associated with such
an effort - but the underlying message must always be the same.


DDRR currently uses a symbol - the “Crafts of Character” logo - developed in the late
‘70s which has been associated with products from this province. The “Crafts of
Character” logo is a trade mark and trade name representing all the craft producers
in various mediums who have been screened to participate in the DDRR
marketing/promotion program. This logo or another newly designed symbol could


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become the visual “brand symbol”, appearing in all apparel/knitwear linked
advertising, etc. The precise term for this identifying symbol can be defined by the
knitwear producers/apparel industry itself: words such as “Trade Mark”, “Trade
Name”, “Brand Identification”, “Branding”, etc. have meanings which may or may not
apply to this particular situation. The important point is not what the symbol is
called, but that efforts be made to link this symbol in the consumer’s mind with
distinctive quality products made in a unique setting: Newfoundland and Labrador.


This concept is not new, and forms the basis for most brand advertising campaigns.
Without action in this area, provincial knitwear products are essentially left to sell
themselves as they have been doing for the past 10 years. The market has
changed, is changing, and will change. It is necessary to market our
apparel/knitwear products from the basis of a conscious strategy focused at a
specific market segment which has been determined through market research
efforts.


• Product Diversity


The range of products offered by knitwear producers is fairly representative of
traditional, classic and fashion items, with the bulk of products fitting into traditional
and classic. Diversity has been limited in some cases by yarns available as well as
opportunities to explore new yarn types.


Total Easy Care (i.e. products that can be cleaned and cared for with minimum effort
at home) has become a consumer mantra, with interest in wool blends and cotton
yarn shoulder season products. 100% wool at the same time has stood the test of
time, and marketing messages which slot into consumer trends (such as the interest
in classic designs and versatility) can be promoted.


It has been assumed for quite some time that one of the primary reasons for
decreasing sales of some product lines has been the lack of new designs. From the
research, the integration of new designs into a product line is not an easy task.
Designs which use yarns of different weights and sizes than those familiar to the
client group require that knitters be found and trained, yarns purchased and new
marketing efforts considered. Along the same line, from information obtained during
the Apparel Training Needs Assessment survey, many of the knitwear entrepreneurs
do not know where to find the resources to have their product design ideas
translated into sample swatches or sample products. This issue relates to money,
time and know-how. Perhaps the CIDP Product Research and Development




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Program which provides 75% grant funding to producers wanting to introduce new
products is suitable, and needs to be more widely promoted/facilitated to assist
producers to reduce the high costs associated with “design experimentation”.


The issue of product diversity is most importantly linked to the need for each
knitwear producer to showcase something “new” at each buyer contact: as stated
previously, this can be as simple as an embellishment of an existing product, a new
colour – or as complex as a new line. With better trend analysis information, and a
better understanding of the target market, improved returns on diversified products
may be a future opportunity.


There is an opportunity for both fashion and traditional products. Involve designers
as entrepreneurs rather than as technical specialists. Encourage designers through
specific programs to become entrepreneurs and utilize existing knitwear producers
for their production. Assist in training knitwear producers how to make required
samples, how to cost products, how to deal with special requests, contracting
issues, etc. Start small and niche – the effort may grow into larger industries.


• Marketing Practices


Marketing practices for most knitwear producers have lagged behind the current
market environment. There is limited or non-existent customer satisfaction follow up,
primarily due to lack of knowledge how to initiate and maintain these contacts.
Conscious marketing strategies based on previous wholesale or retail performance
linked to market intelligence are lacking. The context within which products are
presented to the market (logos, product information, story presentations, provincial
“branding”) is generally without pizzaz. At the same time, there are those who in fact
do follow up with their buyers, having past buyer records at hand during wholesale
shows in order to compare current order levels and ask follow up questions when the
buyer is in the booth. One producer does most marketing through individual retailer
contacts and call backs, spending a time engaged in marketing trips.


E-tailing (i.e. retailing through the Internet) is surrounded by a great deal of hype and
promotion. Using the Internet as a marketing tool to showcase products and provide
contact information is not the same as actual Internet retailing. Detailed discussion
of these practices is outside the scope of this study, but needs to be understood by
marketing professionals. Workshops through agencies such as Operation Online
may be one avenue to explore these approaches further.




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Marketing practices in general need to be upgraded, with workshop input from
specialists in the field. This activity should be tied in to “brand identification”
strategies and business planning support. Once producers work to understand their
markets, they can then determine who their competitors are, and begin to design
products and marketing approaches with a true competitive edge.


• Competition


One important aspect of strategic business planning is detailed description and
analysis of the competitive environment, both from the industry segment level as well
as the corporate level. It is difficult to position your product if your stance vis-à-vis
your competitors is not clear. Even though at the present time the knitwear
producers definition of competitors is limited to other provincial producers, retailers
indicated that competition may in fact be primarily non-knitted products.


Competition from the other “northern knitters” (i.e. Shetlands, Norway, Scotland,
Iceland, Guernsey, etc) was not referenced during the study, which leads to the
conclusion that Newfoundland knits are for the most part not found in the same
marketplaces as these others. The marketplace distinction probably lies in the fact
that Newfoundland knits are for the most part ordered by companies who sell
Canadian products for a local or tourist market, rather than ordered by apparel
companies that sell sweaters. The apparel market for Newfoundland knits needs to
be better understood and analyzed through attending specialized apparel shows (ski
wear, leisure wear, outdoor wear, etc.)to get a first hand look at other competitors,
their prices and their product presentation.


A business case analysis of the competitive environment for knitwear is required,
with a view to identifying potential cooperative approaches either among knitwear
producers or between knitwear and other apparel manufacturers. An analysis of this
sort may facilitate increased information sharing and joint market approaches to
enhance “brand identification” efforts and present critical mass for larger market
opportunities.


• Information Base


As the word “connectivity” is increasingly used, it is apparent that those who remain
“unconnected” will gradually lose the benefits of easily available useful information.
At the present time, due to technological difficulties, Internet connections are not
feasible for rural areas of the province. This shortcoming can be mitigated by



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providing pertinent apparel/knitwear information (statistics, analysis, trends, show
reports, supplier requests, workshop opportunities, training seminars, etc.) via fax.
The apparel industry/knitwear segment will begin driving its own agenda from the
foundation of a focused information base.


• Organization and Decision Making


An issue for some involved in knitwear production as well as other apparel
production is the education of a governing Board of Directors. It is virtually
impossible for a manager to be treated as “staff” while at the same time being
responsible for the general shape, direction and success of the enterprise. The lack
of specialized knowledge or perhaps even lack of interest in the apparel/knitwear
sector by Board members is difficult to address by those employed to run the
apparel/knitwear operation. Lack of important information and sector specific
understandings leads inevitably to poor decision making concerning future plans and
product positioning.


There are a number of Board of Directors educational formats which could be
delivered by outside consultants, or perhaps by DDRR EDOs. At the same time, it
is sometimes difficult to sway a Board with a fixed opinion about their position. This
issue needs to be recognized and opportunities sought to educate not only Board
members but also other community economic development agencies concerning the
economic potential of the knitwear/apparel sector and its future investment
opportunities.


• Policy Changes


Policy changes that have affected funding programs are an issue of concern
presently, but policy changes should be anticipated as the apparel sector begins to
organize itself and seek various forms of support. Policies having to do with existing
programs and funding access that are relevant to the apparel sector will require
review, with appropriate frameworks put in place which will serve apparel industry
participants.


This applies to the knitwear producers in particular as they orient themselves within
the apparel context. Craft and other industry policies should be reviewed in
consultation with knitwear producers as the apparel group proceeds through the next
year.




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• Promotional Materials


Promotional materials are often an enterprise’s worst nightmare: nothing seems
exactly right, but it is difficult to determine exactly what is wrong. This issue dovetails
into “branding identification” initiatives, and will require professional perspectives to
increase promotional awareness and implementation.


A marketing workshop with presenters well versed in marketing strategies and
approaches would assist knitwear producers/apparel manufacturers to identify their
target markets, design a marketing plan and link a promotional plan with appropriate
images and written materials to their marketing objectives. Following that, a focus
group representing the industry, with an industry facilitator engaged, needs to work
out the options for “industry promotion” vs. individual company promotion, and
endorse a clear strategy, with costs attached. There may be those who opt out of
such a program. It is not possible to please all.


• Business Skills and Knowledge about Market Planning


Knitwear producers in many cases do not perceive of themselves as small business
owners, but have tended to place themselves in the craft producer context of informal
business practices. This is changing for craft producers, and should be bolstered for
knitwear producers to prepare them to move into different ways of doing business.
Business plans are a tool to achieve an end and to keep enterprises on track. More
important is the business planning process which involves a producer/Board/group
in the identification of vision statements, strategic objectives, market definitions,
competitive environment, strengths, weaknesses, opportunities and threats. This
process can rebuild in some cases and strategically focus efforts in others to meet
producer visions of their business.


All interested knitwear producers should not only have a business plan, but should go
through the process for the sake of taking ownership of future plans and present
conditions. Funding for needs analysis consultancies for knitwear producer
enterprises and those interested in undertaking work in the sector may be available.


• Access to Technology


Access to technology in terms of Internet connectivity has been previously described,
but access to appropriate technologies of the required scale and utility are issues for



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many of the knitwear producers. The technology conference recently held in St.
John’s amply demonstrated this point with new technologies related to product
design, testing, sizing, care, etc. brought to the attention of the group.


Information about appropriate technologies can provide a good research area, with
updates provided to all in the knitwear sector. Initiating this entry point may give rise
to future interests in other types of production methods.


• Client Feedback Mechanisms


The lack of structured client feedback mechanisms was identified as an issue from
both the knitwear producers and the product retailers. Information received directly
from the market place is the best market planning/product development tool there is.
Mechanisms to assist knitwear producers to receive, process and implement this
feedback are essential. The need for this has been stated over the years, but it
seems that a comfortable and appropriate way to go about it has not been found.


Group collaboration on this issue may uncover methods for creating client/producer
dialogue or may at least identify the barriers currently preventing this from taking
place. One option may be to build in technical assistance aspects for show
attendance – one day of the trip will be subsidized to visit factories, see other
operations, visit retailers, talk to customers (in Halifax, Edmonton, Ottawa,
Vancouver,etc).


• Performance Analysis Tools


In his presentation to the Technology Workshop April 15, 2000, Donald Tham from
Ryerson emphasized one of the major points he makes to clients requiring industrial
engineering assistance. This is: “You can only manage that which you measure”.
Performance analysis requires that each element which leads to success is
identified along with a means by which to measure its progress. Only through
tracking these success elements can an enterprise determine whether it is going in
the direction defined in its business plan. Too often, the only measure of success
that is tracked are sales figures – yet sales figures may actually be symptomatic of
other elements that are off track.




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The identification of performance analysis tools, while not overly complex, generally
requires the guidance of someone experienced in monitoring and evaluation
activities.


• Future Forecasting and Determining Required Actions


Future forecasting is an area fraught with myths and verbiage. For those producers
of traditional and classic style knitwear, the requirement to future forecast may not
appear to be great. At the same time, a sense of trends and an information base
about activities in the sector in various parts of the globe would be important should
product changes or variations be desired, or should new technologies be
introduced. With a sense of what’s happening, knitwear producers would less likely
be victims of isolation and lack of information resources.


From a knowledge base, required actions are easier to identify and implement, even
though future forecasting is certainly an inexact science.


Issue Framework


The Issue Framework on the following page summarizes the above discussions, and
identifies the objective of addressing each issue, suggested actions which might be
taken, and the suggested time frame. The time frame for all activities is ongoing –
this can be refined as activities are initiated and move into later phases.


The actions suggested require assignment of a lead agency/department/group
responsibility, to ensure that recommendations are acted upon. The suggested lead
agency is indicated in the Issue Framework. The Apparel Sub-committee of the
Manufacturer’s and Exporter’s Association of Newfoundland and Labrador is at this
time being newly formed, but will have a major role to play in moving the knitwear
industry component as well as other apparel sectors forward. It is assumed that
knitwear producers will be members of this sub-committee.



Issue Framework
       Issue               Objective              Action Required                 Lead
                                                                               Responsibility
“Brand Symbol”      Maximize returns for   Place of origin labels linked to   DDRR
                    producers              promotional plan




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Product Diversity    Add to product lines,       Market research, information       DDRR, knitwear
                     shoulder season             dissemination                      producers
                     products
Marketing            Improve market              Develop marketing plans with       DDRR, Apparel
Practices            segment targeting,          producers,                         Sub-committee
                     business practices
                                                 Promote business practices
Competition          Define what it is and       Examine internal and external      DDRR, Apparel
                     what it means               competition, develop               Sub-committee
                                                 approaches
Information Base     Overcome geographic         Develop use of Internet as         Apparel Sub-
                     and sector isolation        information source                 committee
Organization and     Educate Boards and          Present seminars about the         Apparel Sub-
Decision Making      potential knitwear          industry to REDBs,                 committee,
                     producers                   community groups and               Board training
                                                 producer boards.                   consultants
Policy Changes       Involve producers in        Organize collective meetings       DDRR, Apparel
                     policy decisions            for policy discussions             sub-committee
Promotional          Enhance product             Organize workshops with            DDRR, Apparel
Materials            attractiveness and build    promotional specialists for a      sub-committee
                     on “Brand identification”   variety of entrepreneurs
Business Skills      Improve knitwear            Promote appropriate business       DDRR
                     producer efficiency         tools
Access to            Create momentum for         Continue to seek leading edge      Apparel sub-
Technology           change                      and appropriate knitwear           committee,
                                                 technologies                       knitwear
                                                                                    producers
Client Feedback      Build increased             Initiate “Tips of the Trade” and   DDRR, Apparel
Mechanisms           communication               other workshops,                   sub-committee
                     channels
Performance          Build sound enterprises     Organize performance               DDRR, Apparel
Analysis Tools                                   measurement workshops              sub-committee
Future Forecasting   Build modern                Track trends, disseminate          DDRR, Apparel
                     enterprises                 information                        sub-committee
Determine Actions    Grow the knitwear           Undertake Business                 DDRR, Apparel
Required             industry                    Planning/mentoring programs        sub-committee


Consultant’s comments: an issue not defined during this study but critical just the
same is the need for apparel industry training within the province, either through an
institution such as the Anna Templeton Centre or through distance education means.
This issue was addressed in the initial study “Training Needs of the Newfoundland
and Labrador Apparel Industry” completed by Management by Design. Research
conducted for this current knitwear study brought this issue to the fore once again. A
variety of training programs in apparel are offered in every location where there is a
knitwear industry. The investments made by the UK in such facilities are evidence of
the importance of the knitwear industry, based not only on knitwear product sales,
but also based on the need to promote national wool industries. Australia and New
Zealand invest heavily in R&D conducted by UK technical universities. For




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information on one such institution, see Appendix B Heriot-Watt University Scottish
Borders Campus, School of Textiles.


Ways should be sought to ensure that apparel industry training recommendations
are implemented, particularly the apparel industry overview segment. This segment
tells people what the apparel industry is all about: its definitions, players, technical
requirements, opportunities and risks. Responsibility for implementation of these
recommendations should be spearheaded by the Apparel Industry sub-committee of
the Association of Manufacturers and Exporters of Newfoundland and Labrador,
involving government and appropriate Canadian training institutions.




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6.0 Conclusions and Recommendations

The knitwear segment of the provincial craft industry at the present time does not
recognize its economic significance. With the IAS initiative and the definition of a
provincial apparel industry, knitwear in Newfoundland and Labrador has been given
the opportunity to reflect not only on its past but on its future orientation. As a
component of an apparel industry it can remain true to its traditional, classic roots,
bridging between time honoured methods as well as entertaining new technology.


The time is right to revitalize the vision. Many of the established knitwear producers
will at some time over the next decade be looking at retirement options or lifestyle
changes. This is the time to implement business planning principles which will
enhance and maintain enterprise productivity and future attractiveness. This is also
the time to encourage young entrepreneurs to consider business developments in
this sector.


Recommendations


• The major and primary recommendation is that the DDRR marketing
  specialist who has been working with the Apparel IAS Committee be
  “seconded” to the Apparel Industry sub-committee of the Association of
  Manufacturers and Exporters to bring some focus on the issues
  framework.


The knitwear producers have recognized the value of remaining with the apparel
manufacturers as the group sets out to organize a sub-committee within the
Newfoundland Association of Manufacturers and Exporters. The knitwear producers
can continue to work towards a stronger network among themselves within the
apparel industry context, while at the same time exploring potential future products
and technologies. In order to begin to address those items identified in the
foregoing issue framework, it is essential to have a dedicated resource to begin to
put the pieces in place to increase investments to and raise returns from the apparel
industry.


• An ongoing series of targeted workshops such as the technology
  workshop be scheduled for apparel industry participants/knitwear
  producers.



  Management by Design                                                    Page 51
Newfoundland and Labrador Knitwear Industry Scoping Study
April 2000




Workshops would include market specialist presentations, business planning and
trend analysis, as well as technical workshops with industrial engineers, knitting
specialists, hardware and software specialists. At the present time, the apparel
subcommittee through its DDRR specialist will be required to develop knowledge
about industry attributes and bring in specialists to work with established knitwear
producers on product improvements such as labeling, potential new materials which
have the same attributes as their current ones as well as working with new entrants
on quality issues and product testing.


Specific workshops should include a 4 day technical workshop with Asha Ruperelia
for knitwear producers. Paula Cornec of Winterhouses should be invited to present a
seminar on Tips of the Trade, lessons learned during her 20+ years as a knitwear
producer, retailer and craft shop owner. Other workshops should be identified
during consultations with industry participants.


• A series of consultations with apparel industry/knitwear producers be
  scheduled to discuss policy issues and the other issues described in this
  report.


The knitwear producers at the present time do not see themselves as a potential
marketing network or collaborative industry sub-sector. Meetings which bring
knitwear producers together to discuss issues of common concern will continue to
consolidate their position within the apparel industry and contribute to sectoral
thinking.


• Address the issues of industry support. Review the present support
  mechanisms and other existing programs which may in fact be available
  to and suitable for apparel manufacturers/knitwear producers. Revise
  policies as required and inform sector participants of appropriate
  programs.


The current policies and programs available to craft producers may not be entirely
suitable for apparel manufacturers. An entire review of existing support programs
should be undertaken with a view to addressing specific needs and interests of the
apparel industry group in the province. This will require consulting with other craft
and industrial stakeholders, and identifying already existing programs which are
most suitable to small scale manufacturers.




  Management by Design                                                    Page 52
Newfoundland and Labrador Knitwear Industry Scoping Study
April 2000




 Management by Design                                       Page 53
Newfoundland and Labrador Knitwear Industry Scoping Study
April 2000


Appendix A Interview List

Baynoddy
Distinctive Knitting
Eastern Quality Apparel
Exploits Oilskins Originals
Harpur’s Knitting
Jane McGrath
Anne Marie Knight
NONIA
Pools Cove Crafts
Southwest Arm Knitters
The Sea Urchin
Trinity Knitwear
Winterhouses
Woof Design
Woolen Wonders
Yarn Point Knit


The following were not available for interviews


Diane Meservey
Stitches from Salmonier
Aunt Maggie’s Handknits




  Management by Design                                      Page 54
Newfoundland and Labrador Knitwear Industry Scoping Study
April 2000


Appendix B Heriot-Watt University School of Textiles

http://www.hw/ac.uk/sotWWW




  Management by Design                                      Page 55

				
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