Story URL: http://news.medill.northwestern.edu/chicago/news.aspx?id=118027
Story Retrieval Date: 5/18/2013 6:41:42 AM CST
Chicago screen-printers typically struggle through the winter months, waiting for summer’s softball leagues and special events to boost business, and this year, amidst the recession, they’re feeling the winter freeze even more.
Some are trying to lure customers in with discounts: A “Beat the Recession Deal” at Propaganda Inc. offers custom-printed shirts at cost, as low as $2.25, if bought in bulk.
“We don’t make anything when you factor in labor and ink costs, but it’s basically keeping the lights on, giving us something to do,” said Mike Timble, president of the 18-year-old screen-printing business with locations in Lakeview, Hyde Park and Wicker Park.
“I don’t remember it ever being this slow, this painfully slow,” he said, adding that orders are down 30 percent from last year.
In an increasingly global downturn, what’s hurting local businesses is also hitting growers in Texas and manufacturers in China.
Items such as company T-shirts are extras, not essentials, and during a tight economy, customers are likely to limit their spending to items they really need.
Demand for clothing overall has fallen along with most consumer goods. U.S. retail sales saw a 1 percent increase in January, after six months of decline. Clothing sales were down 10 percent compared with the January before, according to the Commerce Dept.
When shoppers in the U.S. buy less clothing, manufacturers in China, the world’s biggest importer of cotton, cut back. China grows 32.5 million bales and imports an additional 16 million bales of cotton each year, according to the Cordova, Tenn.-based National Cotton Council of America.
In turn, U.S. cotton exports are expected to fall by half a million bales in the year ending July 31, according to the Dept. of Agriculture. That’s sent cotton for May delivery down 10 percent so far this year on the Intercontinental Futures Exchange in New York, to 43.9 cents a pound.
At some point, the downdraft in prices should inspire bargain-hunting, both by Chinese manufacturers and Chicago-area consumers. But it isn’t happening yet.
The cotton industry, like so many others, is waiting for consumer confidence to return.
“This is the biggest concern we’ve had about demand in some time,” said Gary Adams, economist at the National Cotton Council. He added that the Asian financial crisis in 1998 softened demand for cotton products, but that this recession has hit the industry, from growers to millers to retailers, even harder.
Here in Chicago, T-shirt makers are simply trying to hold on by cutting costs where they can.
Propaganda Inc. has been forced to cut hours and lay off employees. Another printer, Windy City Silkscreening Inc. in Bridgeport has cut 10 employees on declining business and may have to make further cuts.
“The whole industry is down,” said owner Ron Szczesniak, who has been in the business for 30 years. “There’s been a downturn and customers are shopping around more,” he said, adding that once-loyal customers are increasingly going out-of-state for customized products, rather than buying from local makers.
Timble acknowledges the discretionary nature of his business and that he’s not the only one going through hard times.
“Do you really need a custom printed T-shirt? No, you don’t,” he said. “So we’ll suffer while we wait it out.”