Cold cheers up, but the price of wool scares knitters after the sale of Cisne’s owner

Daniela da Rocha Zaneto Rech, 52, has been knitting since she was 9. She learned from her mother, Erodi, and what was once a hobby became a business: for 13 years, she has owned Trichê, in Torres, on the coast of Rio Grande do Sul, 192 kilometers from Porto. Alegre, where it sells wool, cotton threads, threads, zippers and all kinds of supplies for knitters, crocheters and embroiderers, in addition to handicraft material.

With the temperature below 10º C in Torres on Tuesday night (17), amid the arrival of the extratropical cyclone Yakecan, the knitter is excited about winter sales, but is worried about the price of yarn – especially those from Coats, owner of the Cisne brand, of wool yarn, and the traditional Linhas Corrente.

“The prices of yarn in general have increased by 30%. But Coats’ prices have grown a lot, from 40% to 60%, depending on the product”, she says, who reduced the size of the last order for the British manufacturer, because she considers it impossible to make a pass it on in the same proportion to the clientele. “I ordered around R$ 9 thousand in wool imported from Cisne, and I bought much more from rival Círculo, R$ 35 thousand”, says the trader.

Daniela did not know about the sale of Coats, owner of the traditional brand Linhas Corrente, to the unknown investment fund Reelpar, announced on the 10th. Coats, in fact, will pay US$ 10 million to Reelpar, based in São Paulo, restructure the business in Brazil and Argentina, another operation that was also passed on.

Textile industry sources told the Sheet that the British giant – founded in 1755 in the United Kingdom, and since 1907 in Brazil – became too heavy to compete in the thread, yarn and trim market which, according to Coats itself, moves around US$ 4 billion worldwide.

The sector suffers largely from informality, in addition to being made up of an infinity of small local competitors, specialized in niches, which have become more agile than Coats itself. THE Sheet found that the group tried to sell the business as a whole – there are more than 50 operations worldwide, most of them in Europe and Asia. But found no buyer. The way was to start falling apart in parts.

Coats, which also has brands such as Drima, Anchor, Camila and Sylko in its portfolio, has always been recognized for presenting an extensive portfolio of wools and colors, which has decreased in size since last year, according to Daniela. Meanwhile, other local suppliers, such as Círculo, from Gaspar (SC), and Pingouin, from Paramont Têxteis, from São Paulo (SP), gained space.

“I was even surprised when Vitória Quintal [uma das artesãs mais famosas nas redes sociais] stopped being a poster girl for Coats and became a poster girl for Círculo”, she says.

The embroiderer Telma Costa Souza, 41, from Marília (SP), has always preferred the Drima line, by Coats, for its competitive price and quality. “But in recent times the price has skyrocketed: the small retro went from R$1 to R$2.50 and the medium one from R$4.90 to R$9.90”, she says. “It’s an exorbitant difference, I need to look for another brand to replace Drima,” she says, who runs the store @telmacostabrand.store on Instagram.​

Crochet maker Roseli Mellaci Bergamascki, 63, from São Paulo (SP), works mainly with Círculo knitted yarn to make handmade amigurumi dolls. But she will buy again the wool yarn from Cisne now, in the winter, for orders as a baby trousseau. She was very scared by the prices.

“Everything went up a lot, but the skein of Cisne increased by 33%, to R$ 17.99! Just in a maternity game I spend eight skeins”, she says, owner of the store @criativanocroche, on Instagram. “It became more difficult to work. But I have to buy, I’m already behind in the production of caps, scarves and blouses.”

Coats’ lines range from footwear to sanitary pads, through fiber optics

According to Marcelo Prado, director of Iemi – Market Intelligence, a consultancy specializing in the textile sector, the increase in the price of threads is related to the rise in commodities. “More specifically cotton and polyester, the latter being a derivative of the price of oil”, he says.

The consumption of yarns and threads for crafts has increased a lot in the pandemic, but the segment represents a very small part of the textile industry, says Prado. “The apparel industry has not yet recovered pre-pandemic sales, nor is it expected to recover this year.”

In Brazil, the trim market is around R$ 600 million a year and represents just over 1% of the textile market in volume, according to Iemi.

Coats was once the biggest in crafts but lost share to regional competitors. “In the segment of lines for the industry it is still among the leaders, but in zippers, no, it lost to the YKK”, says Prado, referring to the Japanese rival, which has a factory in Brazil.

In the world, Coats earned US$ 1.5 billion in 2021. It has among its main clients big names in the industry and global retail, such as Adidas, Nike, Swarovski, Gap, H&M, Walmat and Kiabi.

But its performance goes far beyond the footwear and clothing market: it is possible to find its lines from tampons and sutures used by surgeons, through firefighter uniforms and police bulletproof vests, to lines that run through fiber cables. optics.

Sought by the report, Coats declined to comment on the sale of operations in Brazil and Argentina. In the statement announcing the sale of operations in Brazil and Argentina, the company says the move is in line “with Coats’ strategic initiatives, announced in March, to accelerate profitable sales growth and transform the company.”

In the text, the president of the Coats group, Rajiv Sharma, stated that, for the business in Brazil and Argentina to prosper, it was necessary to “reinvent itself”. “We felt that the best decision to safeguard the future of the organization was to sell the business to new owners who will be focused exclusively on local markets.”