High Point — With a one-world economy approaching, upholstery fabric manufacturers can no longer afford to ignore export, according to Quaker president and CEO Larry Liebenow. He was the keynote speaker at the Summer 2002 Breakfast at Showtime. The annual event, sponsored by F&FI, drew about 100 guests.

Liebenow also called the textile industry "super.

''It's exciting, it's filled with potential — here and abroad — and it's fun. Our plan at Quaker Fabric is to continue to substantially grow both our U.S. and global business. Because we know it's out there and because we know it can be done. You can, too."

Below is an abridged version of Liebenow's speech. Fact one — 96 percent of the world's population lives outside the U.S. It is true that not all of those people have the means and the inclination to buy the home furnishings products our companies manufacture. But even if only 5 percent of them do, we're talking about a market that is easily at least twice the size of the U.S. market — and that represents a huge opportunity for all of us — if we dedicate the time and resources required to figure out how to take advantage of it.

We live and work in a global marketplace and we have been doing so for quite some time. The advent of the electronic age has served to accelerate this trend, and we must all learn how to survive and prosper in this global marketplace — that's our job — that's our future.

In my view, we shouldn't be dedicating any of our time or energy pursuing protectionist strategies — because building a wall around the U.S. market is not going to help us. Even if it were politically possible — and I very much doubt that it is — it's a false objective. More importantly, it's not good for our companies, our industry or our country.

I start with that as my basic premise because everything I know about economics, business and our industry tells me that globalization is good for the world community because it enhances economic interdependence — linking nations more closely as each seeks to further its own individual economic interest. It's also how we build wealth and justice for all people, including this nation and each of us in this room. I am absolutely convinced that the best way to build bridges is to tear down walls — not build them.

Quaker has been working on that for about twelve years now. And, with about 15 percent to 20 percent of our fabric sales made outside the U.S., we're making steady progress. All of us in this room are involved in businesses that are driven by fashion — and I believe that's true whether our business is upholstery fabric, furniture, window treatments, bedding, or any other item for the home.

We have to start by thinking carefully about what it really means to be in a fashion business. Or, put differently, if we're playing a fashion game — what does it take to play to win?

First, I think it takes a company — the whole company — organized around product. Because in a fashion business, product is a threshold issue. Without it, you can't play at all. So, you start with the absolute best design team you can field — you bring them in, you invest in them — then you appreciate them and you get out of their way. If you do those things, it's been my experience that your design staff will consistently turn out new products that are far more creative and far more innovative than you could have imagined.

Next, position your organization to provide your designers with all the support you can afford to throw at them. That includes technological support for the design team; state-of-the-art manufacturing equipment to keep the cost of your products down and your quality, productivity and profit levels up; the fastest delivery lead times and; sales and marketing support, to ensure that you are able to tell the world about the great products you make and why they should buy them.

When we excel in these areas, we can compete anywhere. Ours is not a labor—intensive business — it is capital, technology, IT, and design intensive. It should not be organized around the cheapest labor.

We should the power of the electronic age when it comes to connecting people, cultures and businesses around the world. Wherever there are computers, satellite dishes and T-1 lines, there are people viewing American movies, watching American television shows and reading American books and magazines. The electronic age has allowed literally billions of people outside of America to see the products our companies make being used in American homes. Those homes look warm, inviting, welcoming and, most of all in today's world, safe. And when people outside the U.S. buy home furnishing products that are designed and manufactured in the U.S., they bring a little bit of that into their own homes.

The electronic age also works both ways in the sense that it is now easier for Americans, including our design staff, to appreciate the designs and colors popular in other countries by merely selecting one of the 400 channels on their satellite TVs, featuring foreign films or foreign programming. We encourage them to do that because our objective is to ensure that all of our products are responsive to the specific needs of our clients — whether they are in the U.S. or in New Zealand, Japan or Peru. We can't do that, however, unless we are just as close to those markets as we are to the domestic market. We have to figure out how they use the products we make, how they live and what colors they like. We have to know who they are — and we have to focus on giving them what they want to buy instead of focusing on selling them what we make. That's a critical mindset to have if you're serious about building a real presence in the global market.

Another thing to keep in mind is being sensitive, not only to what your customers want to buy, but also how they want to buy. Business people in each country have different ways of doing things. Today's most successful multi-national firms know how important it is to staff their overseas operations with management and marketing talent with roots in that culture. It solves the language problem, guarantees that no one will show up at noon for lunch in a Latin American country and generally just smoothes the way for a mutually rewarding business relationship. We've done that in all of our non-U.S. operations and it works. It's also helped avoid the perception that the American mindset is: You people who have been living in this country for centuries are sure lucky that we Americans have arrived — just in time to sell you the only products in the world that are any good — so that your homes can look just like ours.

While there is clearly a right way and a wrong way to approach the international market, there is a demand for fashion and quality in home furnishings products in every country. People all over the world want our products — all we have to do is make that possible for them —and do it in a way that is respectful of who they are, what they want and how to do business.

And at Quaker, for quite some time now we have been consistently committed to the global market. We have added the capacity to service the additional sales, which have resulted from our international initiatives; we have the products to meet the needs of our non-U.S. customers. We have staffed every key area of the company — sales, design, customer service, with individuals with the special international expertise and experience required to support and build our export program.

To ensure that our designers understand precisely what our international customers are looking for, our international design team attends key industry trade shows around the world and gathers market data about home decoration in Africa, Europe, Asia, Australia and Latin America. Our international marketing staff does the same.

In addition, one of the keys to success in the international market is setting your back office operations up to make it just as easy for your international customers to buy product from you as it is for them to buy product from one of their local suppliers. You have to either handle the additional customs and other importation documentation for them — or you have to make it simple enough for them to handle it themselves. These documents can be confusing to the uninitiated — and they have to be letter perfect or bad things happen — so, special expertise is required. We also decided early on to build and develop a strong presence in certain key areas where we believed the market potential represented by a large and growing "middle class" was greatest. We started with Mexico and Canada, our two NAFTA trading partners, and last year our sales into those two countries alone topped $27 million, suggesting that as decisions go in the business world, this one was pretty good. We service our Canadian accounts through our Chicago and West Coast offices. We have showrooms in Mexico City and Guadalajara — as well as a warehouse distribution center just outside of Mexico City. We also have a showroom and distribution center in Brazil, showrooms in the U.K. and the U.A.E. and our own people and agents responsible for marketing our products in about forty other countries.

As an aside, and I realize that I was not invited to speak on America's trade policy this morning, however, I can't help but express that I would be strongly in favor if America cut NAFTA-like deals with every other country in the world. On a level playing field, Quaker's products and services would allow us to compete successfully virtually anywhere in the world. Your products and services could compete, too. We just need some help.

The expertise we have gained from our experiences in the international market has also made a big difference to our U.S. customers as well. We're a much savvier and more sophisticated player in the U.S. market now than we would have been if we had focused our design, marketing and distribution efforts on the U.S. market alone. And, it is clear to me that every trip outside the U.S. offers a host of learning opportunities for those who are open to them. Whether we're talking about cutting edge technology in development by textile equipment manufacturers located outside the U.S., trends emerging in the fashion capitals of the world, new raw materials or superior ways of doing the same thing. So, when I head out on these trips, I don't always know what I'm going to find, but I almost always come across some new development or concept that makes the experience worthwhile.

Taken together, everything we've learned from our active participation in the global market has resulted in a significant increase in Quaker's intellectual capital — providing us with the ability to supply all of our customers — here and abroad — with the best in product, quality, and reliability. And, because the best in product, quality and reliability is already sitting in their own backyard, our U.S. customers don't have to jeopardize their hard earned reputations by attempting to rely on risky import strategies that can only come back to haunt them.

Despite its ups and downs, I truly believe the business we are in is a super one — and I wouldn't want to be in any other. It's exciting, it's filled with potential — here and abroad — and it's fun. Ninety-six percent of the world's population is waiting — and thanks to the electronic age, ninety-six percent of the world's population is ready. That's our future. F&FI