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Cecile Corral

Function Keeps Kitchen, Table Goods from Fading

Somewhere between the kitchen and the dining room, two emerging trends collided in 2007 — the start midyear of the economy's steady downward spiral, set against the booming popularity of cooking TV shows encouraging more at-home entertaining.

Together, these two forces concocted mediocre — yet surprisingly palatable — sales for kitchen textiles and table linens in a year that suppliers had forecast far less appetizing results.

While the 2% sales decline in kitchen textiles and 4% volume drop in table linens are not much to boast about, suppliers nonetheless agreed business was better than expected in some respects. In 2007, kitchen textiles rang up $597.4 million at retail, down from $609.9 million the year prior, and table linens posted $820.5 million, off from $854.9 million in 2006.

As the economy started its swoon in the second half of the year, budget-conscious consumers restricted their spending on discretionary items, and this trend is still ongoing, especially for the low- to middle-income segments of the population.

Mom's meatloaf was surely on many at-home menus. But a growing interest in nouveau but simple-to-prepare recipes and global flavors began brewing as a result of the popularity avoiding outside-the-home expenditures.

"Just look at The Food Network and Martha Stewart, for example," said Nancy Kristoff, president of sales and marketing, New York-based Bardwil Industries. "Everyone has been keying in to these food celebrity programs."

With retail prices still sharply competitive, consumers seem willing to spice up their kitchens with new looks. Functional cooking aids, innovative kitchen textiles, and new table linens in basic solid colors are keeping the retail pipeline moving. Suppliers like Kristoff said the fresh perspective has been obvious on store shelves.

"Where kitchen a few years ago was a sea of prints, the print business has now scaled back and there is this whole new functional side to kitchen," she said. "The whole utility side — the pieces that have more function — has been a bright spot."

Bardwil last year was the U.S.'s third largest table linens supplier with $60 million in category sales — a 2% increase from the prior year. Century-old Bardwil, traditionally a table linens company, added kitchen textiles to its roster in October 2001 and since then has steadily grown this newer business to include licensed and private label assortments.

Kristoff explained micro-fiber-made pieces, bar mops, flour sacks, dual-purpose reversible terry/pique kitchen towels and other "functional, not fashionable" items drove Bardwil's kitchen textiles business to healthy levels in 2007. Similarly, its solid-colored "core" table linens were the strength vs. the more fashion-minded seasonal assortments in the category.

"Speaking to my business, our solid-colored continues to be strong in microfiber," she said, noting Bardwil launched that concept two years ago. "We've been adding new programs to it, and it's definitely been a good thing for us."

West Conshohocken, Pa.-based The John Ritzenthaler Co., a longtime kitchen textiles player which last year posted $64 million in category sales representing a 2% increase over the prior year, has noticed a surge in demand for its pot holder and oven mitt offerings because of enhancements the company has made in product functionality, said Elissa Vogt, vp marketing.

"This category has seen an increase in penetration due to new performance features offered in our product," she asserted.

New York-based Arlee Home Fashions said chair pads — which fall under the kitchen textiles category — are also interpreted by consumers as smart buys, creating "still some growth potential in the category because it has strong practical function besides being decorative," said David Frankel, president.

As kitchen textiles became more utilitarian, table lines too, turned to practicality.

New York-based Ex-Cell Home Fashions gained most of its category sales from "casual, less dressy styles," said Erin Gallagher, merchandise manager for the company's table linens division. "We're seeing less damasks and basic weaves and a surge in less conventional constructions and substrates," she explained.

Four-generation, family-owned-and-operated Elrene Home Fashions, based here, saw much success stem from its "low-priced vinyl goods," said Bryan Siegel, chairman of the board and ceo.

"We have high-priced damasks and low priced vinyls, and our volume went to our lower-priced goods — more vinyl, lower-priced disposable items instead of the high-end fabrics," he said.

This shift explains why Elrene — a top-five player in both segments and which last year reported $72 million in table linens and $24 million in kitchen textiles sales — saw its ratio of table linen sales at discount department stores grow from 33% of its company sales in the first half of 2007 to 37% during the second half of the year.

"That's a big shift for us," he said," and it reflects what is going on with the economy."

Distribution channel volumes remained generally unchanged in 2007 over the previous year. That means discounters stood firm as the dominant player of both categories. Specifically, mass merchants occupy almost one third — 32%, or $262.6 million — of total table linens sales, and well over half — 58%, or $346.7 million — of kitchen textiles sales.

Home textiles specialty chains remained the second-largest channel for kitchen textiles and table linens — 15% or $89.7 million and 25% or $205.2 million, respectively.

Across the two categories, price points were an issue.

Ex-Cell has not noticed retail pricing increases yet in table linens, "but we expect it to do so, as manufacturers can no longer absorb the high cost of raw materials and labor," Gallagher said.

To justify higher retails for its offerings, Bardwil and Elrene said they've turned to more pre-packaged sets and multi-packs.

"We're definitely doing more and more sets now in kitchen, and all of our utility product is being [packaged in] sets, which is driving retail prices up," Kristoff said. "It speaks to the value and functional, less decorative, approach."

Elrene said it came up with a dining-room-in-a-box program and offered "tremendous value."

While retailer requests for sets were primarily seasonal-driven at first, Siegel said at least one major discount merchant has requested more such programs for this year.

Long Beach, Calif.-based Foreston trends — sister company to decorative pillow leader Brentwood Originals — has already successfully begun passing along some of its production price increases to retail customers, said Dick Gould, vp, sales.

"For the most part, the retailers have accepted them," he said. "They fight us on it, but usually they accept. And in many cases, they're adjusting their retails. If not, they aren't going to make their margins."

Made-in-the-U.S.A. manufacturer Anchor Home Products, based in Wyckoff, N.J., is "working close on margin and offering quality product," said Frank Petronzio, president and owner.

"Retailers are looking for more made-in-America products, we've noticed," he said. His company produces all of its kitchen textiles and table linens domestically. "We've kept our prices competitive, and we're seeing [the buyers we work with] being more realistic, so we've been able to pass along reasonable increases."

Still some of those price hike requests are behind the times, Petronzio said.

"We've seen such a race to the bottom in pricing that the small increases we're getting really should not affect the overall retails that much," he said. "Retails are for the most part still between $3.99 and $5.99. It's a price bracket that has not changed in years, which means price points are now going to where they should have been — not where should be."

Table Linens
Distribution Channels ($millions)
2007 total retail sales: $820.5 million down 4% from $854.9 million in 2006

2007 2006 % change
* Other includes home improvement centers, military exchanges and gift/home accent stores.
Discount department stores $262.6 $273.6 -4.0%
Home textiles specialty chains 205.2 213.7 -4.0
Mid-price chains 164.1 171.0 -4.0
Off-price chains 57.4 59.8 -4.0
Department stores 49.2 51.3 -4.1
Direct-to-consumer 32.8 34.2 -4.1
Single unit specialty stores 16.4 17.1 -4.1
Variety/closeout 16.4 17.1 -4.1
Warehouse clubs 8.2 8.5 -3.5
Other* 8.2 8.6 -4.7
Total $820.5 $854.9 -4.0%

Merchandise Mix ($millions)

2007 2006 % change
Placemats $348.8 $359.1 -2.9%
Tablecloths 213.4 230.8 -7.5
Napkins 172.3 179.5 -4.0
Runners 61.5 59.8 2.8
Napkin rings 24.7 25.7 -3.9

Kitchen Textiles
Distribution Channels ($millions)
2007 total retail sales: $597.4 million down 2% from $609.9 million in 2006

2007 2006 % change
* Other includes home improvement centers, military exchanges and gift/home accent stores.
Discount department stores $346.7 $353.7 -2.0%
Home textiles specialty chains 89.7 91.5 -2.0
Mid-price chains 89.7 91.5 -2.0
Off-price chains 17.9 18.3 -2.0
Variety/closeout 17.9 18.3 -2.0
Warehouse clubs 11.9 12.2 -2.0
Single unit specialty stores 5.9 6.1 -3.0
Department stores 5.9 6.1 -3.0
Direct-to-consumer 5.9 6.1 -3.0
Other* 5.9 6.1 -3.0
Total $597.4 $609.9 -2.0%

Merchandise Mix ($millions)

2007 2006 % change
Kitchen towels $310.6 $317.1 -2.0%
Potholders/mitts 131.4 134.2 -2.0
Dishcloths 107.5 109.8 -2.0
Chair pads 41.8 42.7 -2.0
Other 6.1 6.1 0.0

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