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March 20, 2014
There is an astonishing lack of transparency in cycling. For instance, the equipment and apparel we use as cyclists is seldom made by the companies that put their names on it. Likewise, it is a challenge to find out where and under what environmental or social conditions these products have been manufactured.
In the world of cycling apparel there’s a company you’ve likely never heard of that dominates the industry: TEXmarket. Corey Sar Fox investigates.
The great majority of the Italian cycling industry, from Atala to Zullo, is based in two regions: Lombardia (Milan) and Veneto (Verona). So, it is a bit surprising to find such a big fish like TEXmarket in my hometown of Bolzano, in the semi-autonomous region of South Tirol, or Alto Adige in Italian. Or so I thought before spending the morning with their co-CEO, Dr. Christoph Widmann.
The industry’s lack of transparency even obstructs those within it, as Dr Widmann explained:
“I cannot say for certain that we are the biggest cycling apparel company in the world — there might be someone larger, but I don’t think so. It is such a niche and we make 3.5 million pieces a year. We must be the largest in Europe, but again, I cannot say for sure.”
While you mightn’t have heard of TEXmarket, the company has made some forays into the public arena, taking a sponsorship role with the Merida Multivan professional mountain biking team which includes world champions like Gunn-Rita Dahle and Jose Antonio Hermida. But this arrangement was more for product development than it was for raising awareness about the brand. TEXmarket also works with former road world champion and local hero, Maurizio Fondriest, in designing new products.
TEXmarket does not openly promote itself, nor do those within the company have much experience talking with journalists. Widmann often ended a particularly revealing statement with a pause and then a “you probably shouldn’t publish that”.
While unmasking the company’s past, present and future shed some light on an often hidden side of the industry, a lot of what I learned must remain secret. Unfortunately, that includes the identity of the companies that use their services and the many famous athletes that get TEXmarket’s custom tailored kit.
While TEXmarket’s headquarters and one CEO are located in Bolzano, Christoph’s brother, Heinrich, is based in Romania where TEXmarket has four factories and around 1,200 employees. There is also a new “experiment” in India staffed by 40.
Despite the ongoing economic crisis, 2012 saw an increase of 25% in production and a record turnover of 30 million euros.
The company also obtained SA9000:2008 certification for social accountability and for good reason: of the 3.5 million pieces of apparel manufactured annually, a million goes directly to one client, a large sporting goods department store which only buys from factories that meet regulated standards.
In this case, the department store provides all of the materials and designs and TEXmarket acts as the finisher. Widmann explains:
“[This department store] gives customers excellent value in terms of quality and price. They charge about two and a half times the products’ costs, and they are continuously sending their efficiency experts to our factories to find areas where we can further reduce costs.”
With a quarter of production going to the department store mentioned above, 35% is allocated to collections or clothing lines sold by well-known brands. Some of this kit is probably in your closet, but thanks to non-disclosure statements between TEXmarket and those brands, we cannot reveal which ones.
In most cases, TEXmarket and these brands collaborate on product designs, as Widmann noted.
“You can find lots of places to sew, from Morocco to Bangladesh, but what we offer our clients is know-how. We are recognised as a higher-quality, higher-price manufacturer. It makes no sense to focus on price — there will always be someone cheaper.”
A quick research trip to a well-stocked cycling store showed that brands used suppliers from multiple countries to fill out their catalogues. Inevitably, the high-end pieces, especially bib shorts, were all made in Romania by TEXmarket.
“The bibs are the most complicated and the most important piece of clothing to get right,” confirmed Widmann. Perhaps this explains why TEXmarket makes 12 different chamois pads, in addition to using those from market leader, CyTech.
“Our clients can choose whichever they want — actually we’re content when they pick CyTech because pads are a difficult thing and if their customers aren’t happy, then it’s not our fault,” Widmann continued.
Between 40% and 50% of TEXmarket’s production is team kit. Since demand for collections is declining and team kit is growing, Widmann predicted that brands will soon start to offer kit customisation to customers.
Of the 18 WorldTour teams, five teams’ kit are handled by TEXmarket. And of all the time trial skinsuits in the WorldTour — including those regularly seen on the podium (this is as much of a hint as I can give) — TEXmarket produces more than half. That’s more than 200 suits every season.
“We send our tailors to their winter training camps to take lots of measurements, then the suits are made and when the season begins, we take new measurements and alter the suits again. It is a precise type of work that very few can offer.”
Replica jerseys come in varying degrees of quality; the highest one is nearly the same as the pro version, though it is not tailor-made. Any group or squad can also order directly from TEXmarket with a minimum order of 30 pieces.
All of TEXmarket’s textiles are woven according to their own designs in Italy from Italian- or Swiss-sourced threads. With names like Nortex Interlock or Nortex Coolmax or Superroubaix, their 24 different fabrics offer unique weaves and weights and percentages of other materials like polyurethane, elastane, acrylic and so on added to the polyester and polyamide.
“We are looking at the effects of body heat and how that changes the properties of the materials.” Widmann told me. “Another advantage we have over smaller competitors is that innovation is brought to us by our clients. [Other companies] might have a couple of researchers and designers, and they make excellent products, but we have substantially more designers that are constantly bringing new ideas to us.”
Clearly, team kit is the part of the business that excites Widmann the most.
“Our 30 graphic designers completed over 4,000 custom contracts [in 2013]. This is very demanding work, coordinating all of the sponsors and their logos and specific measurements over a variety of sizes, colour corrections, then the proofs and so on. It requires outstanding organisational skills.”
A peak into the company’s history reveals why this idea of offering what others cannot, whether from an organisational or technical perspective, is important to TEXmarket.
The lightbulb moment occurred in 1988 while traveling through Germany when the Widmann brothers noticed shoppers using cotton tote bags.
“Usually trends that start in Germany spread to Italy and then the rest of Europe”, Christoph Widmann told me. “So we found a factory in China that supplied us the bags and we established TEXmarket to silkscreen them here in Bolzano. At the height of our success, TEXmarket was selling over 10 million bags a year all over Europe and we had 45 full-time silkscreeners.”
When the Chinese began to sell their own silkscreened bags, it forced the brothers to move their production to Romania to reduce labor costs. Romania is just an 1,100km trot from Bolzano, so the logistics were favorable, and even more so today with Romania’s inclusion in the EU.
By 1994, silkscreened cotton bag prices collapsed due to Chinese dumping (where products are sold at a loss, supported by the state-run economy, to undercut competition). The Widmanns decided to focus on a higher-margin business that would utilise their skilled Romanian factory, namely underwear.
After more Chinese dumping underwear prices also collapsed. Though TEXmarket still does some underwear contracts for very exclusive brands, this is a small fraction of their business today.
After underwear, TEXmarket moved into football (soccer) kit, licensing the name Valsport. A fortuitous break happened in 2001: they bought a bankrupt company called Seritransfer that specialised in making transfer papers — the custom printed graphics that get sublimated into jerseys.
While the football jerseys did not take off, the cycling ones did, and the rest is history. Yet, if the past is any indication of the future, TEXmarket could very well shift into another business at some point.
Some indicators are already on the horizon, as they have recently introduced a full line of running wear and are trying to get back into football. However, it’s the dynamic that matters.
“Each set-back forced us to reinvent TEXmarket. We would not be the success in cycling apparel today, if it weren’t for these challenges.”
Dr. Widmann is an interesting man with quiet confidence – though he’s not a cyclist, he’s a runner (Heinrich is an accomplished mountain biker). Our conversation easily jumped between multiple languages, using the most appropriate terms from each; business concepts in English, cycling jargon in Italian and the rest glued together in German.
“Being in South Tirol is a clear advantage for us, it is easier for Germans and other international customers to do business with us than with Italians that have trouble with other languages.”
At this point it started to make sense why this big fish was in Bolzano. In cycling apparel alone, there are still between 80 to 90 companies in Italy. The great majority are small, family-run subcontractors or “terzisti” and are therefore grouped together for logistical and cultural reasons.
They started out as cycling apparel companies, enjoyed the ’90s boom years and have remained cycling apparel companies by simply scaling back their operations. Very few of them would be capable of completely changing their business model in response to competition, as TEXmarket has repeatedly done over the past 25 years.
Through risk-taking, flexibility, quality and a bit of luck, the Widmanns have gained the necessary experience to succeed in the globalised cycling industry.
So, if there are Made in Romania labels on your cycling kit, there’s a good chance that a publicity-shy company based in the German-speaking part of Italy made them. In an industry famed for its lack of transparency, that much, at least, you kinda maybe know for sure.