In bath, it's not easy being (solid) green, or blue, or red
May 26, 2003-- Home Textiles Today,
Industry bath sales dipped 2.8 percent last year to $3.5 billion. Yet to achieve even that modest decline, makers had to jump through hoops — on the one hand gently nuancing their products, on the other, constantly churning their markets and pumping out volume.
Bath towels continued to dominate the segment, accounting for more than half of all sales by product — 53 percent — but to a slightly smaller scale than 2001's 55 percent.
The results were contained in The Facts: Bath Products, the annual exclusive market study conducted by Home Textiles Today (See Methodology).
At retail, discounters retained the largest market share by far, continuing to dominate at an unchanged 45 percent. Still, share increased for home textiles specialty chains, which gained 2 percent, to $630 million; and, equally, mid-price chains went up 2 percent in share to $595 million. Lesser progress was seen at warehouse clubs, which still managed to eke out a 1 percent pick-up — to 2 percent — and nearly doubling sales to $70 million.
Those gains were at the expense of department stores, which declined in market share 1 percent, to $288 million from $245 million. Additionally, off-price, variety/closeout and direct-to-consumer each lost 1 percent in market share.
It hasn't been an easy marketplace.
"Gone are the days of [suppliers] being everything to everyone," said Kathy Fowlkes, bath business manager, High Point, NC-based The Bacova Guild.
Fowlkes added that times have been tough because of slouching retail sales and comparable-store sales that are "really struggling."
"It seems if sales dollars declined, it is probably because prices declined," said Frank Scalice, executive vp, Town & Country Living, based in New York.
Moreover, Rick Lipton, the national sales manager for Central Islip, NY-based Creative Bath Products, suggested the market began to polarize at the same time outlets contracted.
"Two things happened. We saw, and continue to see, a contraction of retailers, and the consumer seems to want to buy either very, very high end or very, very cheap," Lipton argued. "The problem is that bath vendors made too much middle-of-the-road-type product, and right now you can't give away a solid-color towel that's somewhere between $7.99 and $9.99. Consumers have gotten very smart, and what we need to do is react and respond better. We're in catch up mode right now. It's flat because the manufacturer is having a difficult time figuring out the fickle mind of the consumer."
For some bath rug suppliers, problems stemmed from slow sales for basic bath towels — which most of the time are considered the driving force of the bath industry.
"The largest dollars in the bath rug business are wall programs that coordinate back to solid-color towel programs. But with the uncertainty of the solid-color towel business, retailers didn't want to change any major programs," said Merle Johnson, vp, marketing, Mohawk Home, Sugar Valley, GA. "They wanted to remain status quo, and it's a trickle-down effect. As a result, we are directly affected."
The experience has been far from universal, however. Veratex only entered the bath business three years ago and, as a result is still feeling its oats, suggested Dale Talbert, vp, sales and merchandising. Coming from a base of zero, the company has experienced considerable growth in the category and expects to continue to do so for the foreseeable future before beginning to mature.
Veratex made a strategic decision that the higher-end segment of the business was being dominated essentially by just one company, which created a competitive opportunity.
"After that, it's product, product, product, and you just try to keep up with the train and do the right things for the bath," Talbert stated.
The company positioned at the higher end, making some fashion product but also exploiting a solid-color towel line that won a key placement, Talbert said.
"We got into the towel business with a partner, Christy Towels," he explained. "They, too, were working at the higher end, and it was the perfect marriage. It's difficult to win a solid placement almost everywhere, yet the Christy towels made under the Veratex label,got that placement with ease."
More broadly, Talbert offered that the bath business is a "fun" business, permitting a multitude of influences not commonly seen on the bedding side.
"For example, art deco is back in vogue. And it translates to bath quickly," he noted. "We're also seeing a lot of jewelry-inspired influences. And, [products] turn much quicker than in the bedding business."
John Hale, vp, sales for Lacey Mills in Cartersville, GA, agreed that many core rug programs are affected by towel sales. But while he noticed basic solid-color towel program were soft, his company's high-end and fashion-oriented programs were successful, especially when positioned alongside fashion towels and licensed programs. "Our Medici Stripe rug [for our licensed program with Veratex for its bath collection by the same name] has been very strong," he said. "We're seeing a lot of growth in fashion, and coordinates for that are big with rugs tying back to these types of towels," Hale said.
Ex-Cell Home Fashions, based in New York, has "spent a lot of effort" focusing on fashion for its fully-coordinate bath programs — a strategy that has gained the company strong placement at home textiles specialty chains and mass merchants, said Barry Leonard, president.
"Our business is good because we've continued to pick up market share," Leonard said. "Ex-Cell is more and more becoming known as a fashion house for the coordinate business. We're also gaining share in the basic business, especially with hooks and liners."
Embellished towel manufacturer Avanti Linens was no different, said Michael Tauber, president of sales, marketing and design for the Moonachie, NJ-based firm.
"Solid-color bath towels were down, but embellished towels were thriving," he said. "Towels are a discretionary purchase in these difficult times. When [a consumer] goes out to buy a towel, unless it jumps out, she isn't going to have a reason to buy it."
For many supplier, sourcing is at the core of higher fashion and better quality goods. For Lacey Mills, imports from India, in particular, have proven a success. And bath towels at Revere Mills — brought in from Turkey, Pakistan, India and China — have swelled to 75 percent of the company's total sales, growing from 20 percent five years ago. The remaining 25 percent of total sales are generated from kitchen textiles and seasonal goods.
"Our business is doing very nicely, and it proves that the American consumer is willing to buy better towels from these countries," said Dan Harris, vp of marketing and product development for Revere Mills, Niles, IL. "The quality there has really improved. Decorative towels like embellished and embroidered have increased significantly in popularity, and that's where our offshore producers are very strong. These towels carry a higher price, but the customer is willing to pay it as long as the quality continues to be as good as it's become."
Added Hale: "With importing, even on a solid-color [bath rug] program you are able to offer more value, either with heavier weights, more colors or better patterns."
sales in $billions
|Share 2002 %||Sales 2002 $|
|1. Discount department stores||45%||$1,575|
|2. Home textile specialty chains||18||630|
|3. Mid-price chains||17||595|
|4. Department stores||7||245|
|5. Off-price chains||4||140|
|8. Warehouse clubs||2||70|
|9. Single unit specialty stores||1||35|
|10. Home improvement centers||&1||0|
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