Sheets and Pillowcases Show Wrinkle in Sales

Jill Rowen, May 4, 2009

Sheets and pillowcases — the last category in Home Textiles Today's trio of bedding reports — showed a significant drop in revenue for 2008. Sales for the year were $1.8 billion, down from $2.1 billion in 2007. It has become a familiar litany: the tanking economy and the plummet in consumer confidence that ultimately resulted in the more than 15 percent drop.

That confidence is not back yet. The customers that once shopped Linens 'N Things and Mervyn's have not magically appeared at other retail doors. In fact, many consumers are just staying away, with every retail sector showing a decline in this category on HTT's chart.

As mostly a basic commodity, sheets don't deliver the "must have" fashion urgency even in the best of times. And the sea of solid color off-white sheets can be a challenge for retailers. Vendors and retailers are rethinking their assortments, looking for opportunities going forward with a more streamlined and systematic approach.

"Its back to Retailing 101," said Bob Hamilton, marketing director, Welspun USA. "There was too much over assortment, and now stores are looking to the basics. Do they have a good sustainability story on shelf? A good 'easy care' story?"

Business has been good for Welspun, according to Hamilton. Some of the bright spots in an otherwise tough market have been an expansion of a damask stripe story and a renewed interest in percale fabrics, where sateen was once king.

"We have seen sudden urgent inventory amongst our customer base, who felt they tightened inventory a little to much and might start effecting their sales.," said Aruyn Agarwal, ceo, Alok Industries. "Product innovation is constant at Alok and we feel even more important during slow times, since consumers need something to be excited about in order to turn that excitement into dollars for the retailer. We have expanded greatly in new categories — top of bed, blankets and continuing innovations in the sheets category."

Shay Zamir, vp, Divatex, noted that there is careful optimism in the market. "After running out of goods, many retailers are just starting to replace their stock and changing their offerings to attract consumers," he said. "They don't want to buy into anything that would be too much of a stretch for them or the consumer."

Blissliving Home is also working to liven up the category. "It's such a static market with white, ivory and simple trims," noted Arthur Viente, business manager, Blissliving Home. The company is combating that with new products that add a pop of color and fashion. "We are working on subtle trims that separate us from the crowd," he noted. According to Viente, small graphic prints that can coordinate with a range of products and new stitch designs that venture beyond the simple satin stitch are among its offerings. Blissliving itself is growing into new areas, with an expanded program in shower curtains, for instance, and even small furniture pieces.

"Sheets and pillowcases is not as complicated a market as some other textile areas. It's still a price point and thread count proposition," noted David Kaliski, president, Royale Linens, a division of Yunus. The company is "bullish going forward," he said, due partly to a significant program at Wal-Mart, despite the loss of Linens 'N Things as one of its larger customers. According to Kaliski, retailers that have a good promotional product are faring well and keeping volumes up when they are promoted well.

Jeffrey Tauber, ceo Royal Heritage Home, agrees that thread counts matter, but adds that consumers are more savvy about that topic than in the past. "Our T1000 single ply and T800 single ply were huge sellers. The key was unique offerings at great prices," he said. In addition, Tauber reports that for his customers, "Any thread count lower than 300 was a failure. The consumer is not interested in inferior product any more. With the global recession in place, the consumer is spending more time at home and investing in the bedroom."

Vendors for the most part are staying the course, and looking to ride this difficult wave until the tide turns. "Whatever the economy, our strategy has always been quality, service and innovation," noted Zamir. "We're not changing it."

"It's about pricing, being flexible, well-stocked and a mix of creative marketing and cross marketing opportunities," said Viente.

"Our mantra has been "best product with value pricing", noted Alok's Agarwal. "This strategy never goes wrong and helped up grow our business in 2008. It was a difficult year for profitability, but we grew our sales."

Distribution Channels
($ millions)
2008 total retail sales: $1.810 billion down 15.2% from $2.135 billion in 2007

2008 2007 % CHANGE
* Other includes interior designers, military exchanges and other channels
Discount department stores 923.10 1,024.8 -9.9%
Home textiles specialty chains 271.50 405.7 -33.1%
Mid-price chains 343.90 384.3 -10.5%
Department stores 45.25 64.1 -29.4%
Off-price chains 63.35 64.1 -1.1%
Variety/closeout 54.30 64.1 -15.2%
Other* 36.20 42.7 -15.2%
Direct-to-consumer 36.20 42.7 -15.2%
Single-unit specialty stores 18.10 21.4 -15.2%
Warehouse clubs 18.10 21.4 -15.2%
$2,135.00 $2,324.00 -8.1%

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