1 Feb 2013

Demand for wool carpet collapsing

12:43 pm on 1 February 2013

A collapse in demand for woollen carpet, both in New Zealand and abroad, is one of the main reasons the country's only independent yarn spinner decided to get out of the business.

Summit Wool Spinners, cited the lack of demand for good wool yarn for carpets and the high kiwi, when it announced on Thursday it is selling the plant to Godfrey Hirst Carpets with more than 190 employees to be made redundant.

Godfrey Hirst managing director Tania Pauling said that if the sale goes through, the company will use the plant to regain the capacity it lost when the Bromley plant of a subsidary was lost in the 2011 Christchurch earthquake.

She said it is possible up to 50 employees being made redundant, may be re-hired.

However, Ms Pauling said times are tough in the industry with demand for wool carpet shrinking.

''The demand for woollen carpet has dropped significantly as a result of a number of sythetic importers and the New Zealand consumer has become more accepting of (synethetic) carpets,'' she said.

''We have seen a real change in the market here ... in particular warranties that offer the moon and the stars.''

Textiles New Zealand chairman Stephen Fooks, said the industry is paying the price for not investing in marketing and promotional activities for the last decade.

He said that gap has allowed its competitors to promote their synthetic goods.

''We decided as an industry to stop funding promotion activies and when you do that, you reduce the demand for wool ... not only in New Zealand, but also globally.''