Question-and-Answer Session
Operator
(Operator instructions). And our first question come from Arnie Ursaner with CJS Securities.
Arnie Ursaner – CJS Securities
Hi, gentlemen. Good morning.
Marc Giles
Good morning, Arnie.
Arnie Ursaner – CJS Securities
I guess the question I am trying to get a little better feel for is obviously the world has slowed down quite dramatically in a lot of your product areas, and many distribution companies are seeing either people not taking on inventory or seeing their customers aggressively reduce inventory. I guess I'm trying to get a feel for how much of your customer inventory – are your customers reducing their inventories at an even greater pace than the slowdown in sales in this current environment?
Marc Giles
I think we saw – I can't say for sure – but based anecdotally, I would say we clearly saw that in the third quarter. We saw a substantial slowdown in our aftermarkets business, even to a certain degree in our spare parts business. Now, spare parts I would attribute to extended factory shutdowns. But the consumables business decline reflected at least domestically a significant burn-off of inventory in our customers.
So whether – how far down that is, whether they burn it down to where they need to be, would be – I would be speculating right now. I will say that it is interesting on the apparel side that Chinese imports – or exports to the US of apparel dropped considerably in November, the November/December time frame, but picked up. We've seen orders pick up at least in January. And I think that our end-users' inventories of apparel have been slashed and burned down to extremely low levels. So that when things do start to move, I would expect we will start to see some business again.
Arnie Ursaner – CJS Securities
And can you – again, one of the broader questions – a lot of the equipment that you sell requires a consumer or your customer to either have financing in place or make some type of capital decision. I am wondering if you have any feel or sense for what percent of your revenues are tied to what I would call a capital decision, where the client might need financing. Do you have any feel for that?
Marc Giles
Yes, I mean our – typically, about a little less than a third of our business is capital equipment systems and software. And at least on the capital equipment systems, probably at least half of that is done through financing, and the other requires some significant capital investment decisions. So that is the part on the increment that has declined so dramatically and is so sensitive to the availability of credit, as well as how the end-users' outlook is.
Arnie Ursaner – CJS Securities
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