I just got back from H&H Americas, the yarn industry's largest (possibly only) trade show in the United States. It's a huge event, and seems to get larger every year. Imagine an entire convention center with giant event halls and dozens of event rooms the size of houses, all booked for the yarn and fabric industries. It's a big deal when you're a little yarn shop.
I got to meet with suppliers and buy yarn and other things, and I'll share more about that later. But what I also got to do was TALK to people on all the sides of the industry about the state of the yarn business. It was really fascinating, and I think it helps a lot to speak to the people who aren't in your same position to get some perspective on the big picture. It's always great to gather with other yarn shop owners and share tips, triumphs, and frustrations but it's really the only opportunity I get to speak to suppliers, trade groups, designers, and other people in the industry.
At the forefront of everybody's list of concerns is tariffs. We knew it was coming, but almost every supplier in the industry is raising prices 10%-30%, depending on their part of the business and where they do most of their production. The biggest frustration is that nobody in the industry knows what tariffs will be next week, next month, or next year. It's hard to make a business plan, no matter how large or small your business is, when you simply cannot predict costs. For now, I know that everything will cost more in the short term. I also know that prices, once raised, almost never go down. Remember the "fuel surcharges" that were temporarily put on everything back in 2007? None of those prices ever came down, and a lot of companies still have fuel surcharges on their bills.
Another major concern within the industry is consolidation. Back when I started in the yarn business, almost 20 years ago, almost every company we dealt with was a small, family owned business. Now, almost all of those companies have been bought up by big investment groups, giant corporations, or private equity firms. There are so few family businesses anymore, and the ones that try to stay privately owned have a hard time staying in business. My concern is that all of the things that made those companies unique will be homogenized, that prices will get pushed up as quality goes down, that more and more production will be forced into the huge factory complexes in Asia, and that the yarn we use will be produced in inhumane factories at horribly unfair wages. Dealing with a patchwork of small, family businesses has its challenges, but the quirkiness of each company adds so much to the uniqueness of the yarn they make.
Of course the overall consumer economy is always an issue. We want a booming economy so that our customers have plenty of spending money, less stress, and can cheerfully afford to buy our lovely yarns. I'm no economist, and there's not a thing in the world I can do about the overall economy, unemployment, inflation, tariffs, or consolidation and homogenization in the yarn market.
So I do what I can do on my microeconomic level, since I can't do anything about the macroeconomics.
Here's what I did.
My trip to H&H was essentially a buying trip. I thought long and hard about my purchasing plan and how I can help my shop weather all these storms, and I purchased accordingly.
First, I limited my purchases. I don't want to blow my entire Fall yarn budget now, without knowing what's coming up as far as pricing and availability. I need financial flexibility to help the shop react to the situation on the ground as it arises. I need to be able to pivot my inventory to tailor it to what my customers need. I purchased about half of what I purchased last year at market so that I can have more capital on hand to react to the situation as it changes.
Second, I sought out family-owned companies. I bought much less from the "big guys" and focused my purchasing on things that were interesting, unique, and came from small businesses, not giant hedge funds. (some of these yarns are already here! and I've got samples of others to show you -- just ask!)
Most importantly, I sought out American products. I have SEVERAL new lines coming into the shop that are made from wool and cotton grown in the United States, milled in the United States, dyed in the United States, and packaged, marketed, and sold in the United States. Many of these yarns even one year ago would have been much more expensive than their foreign made counterparts, but with the price increases across the board, these products are now the same price as foreign yarns -- or at least within a few dollars per skein. Just as important, these are small companies, owned by individuals, couples, or families and they support American workers and American industries.
As for you, my beloved Chattanooga Yarn Co community, all I can do is be very honest with you about what I know about the future. Right now, everything in my shop is priced pre-tariff, so you can still buy yarn here at lower prices than you'll see going forward. As yarns are restocked, their prices will go up. I've ordered as much as possible for restock before the prices increase, but it's impossible to stock enough yarn to completely avoid raising prices. My business isn't large enough to put that kind of money into inventory or to store enough yarn to stay at pre-tariff pricing. You will see prices going up.
I hope that you all know me well enough by now to know that I will only raise prices enough to reflect my actual cost increases. This isn't a revenue enhancement event for me. It's an existential threat. If the community doesn't support this yarn store, there is no yarn store to support.
But here's the thing: I trust my community. From Day One here at Chattanooga Yarn Co, I've been supported and uplifted by the amazing community that has surrounded this shop. It is so much more than a retail store with customers. This entire enterprise is a family of diverse individuals who share the love of yarn and craft, and support each other in ways I never could have dreamed on October 1, 2022. I trust that you will all tell me what you think, what you want, what you need, and what your challenges are. You always have. And I'll keep telling you what I know and what my plan is.
Stay with me, friends, and we'll get through all this together.
