Vendors Offer Fashion to Turn Around Top of Bed

Jill Rowen, February 23, 2009

Filling the half-full — or half-empty — glass in 2009 is going to take some bold fashion steps, as well as an ample dose of value-engineering, say suppliers of bedding.

The first of HTT's reports on bedding, specifically the top of bed category, isn't much of a page-turner. The figures for 2008 are down as expected, in line with what the economy has recently doled out, and reflects a difficult year for retailers.

However, the results have the added effect of quickly dividing the industry into those who see their part as a glass half full and those who see it half empty.

The market seems to be diverging into vying for the consumer haves and have-nots. While prices are coming down to attract a bargain shopper, vendors are also tweaking high-end collections to catch the eye of the buyer with an affluent consumer in mind.

For 2008 overall, top of bed accounted for approximately $2.67 billion in sales, down more than 13% from $3.09 billion in 2007. No product category avoided the downward plunge, HTT research shows, though bedspreads and coverlets took less of a lashing, thanks to a still relatively strong fashion shift toward simpler beds.

The biggest loss was in comforter sets. Inventory, or oversupply, was a major issue in this subcategory, as chain store closings left many vendors with more product than retail doors available. And the heyday of mega-piece comforter sets seems to be waning from the point of view of consumer preference, suppliers said.

Vendors resigned to the new economic reality have one thing in minds going forward — getting a customer's attention. Bright colors and bold looks are the key to getting out of the doldrums, they note.

"If something with great texture and color catches your eye, you may buy it," noted Carol Antone, creative director, Peking Handicraft. She said of the consumer mindset, "If you already have a basic, you're going to use it until it falls apart."

At the last market, Peking Handicraft showcased new techniques with lots of novelty looks and color, though they are admittedly "sharpening our costs," said Antone.

The company is also looking at quilts, a category which was down significantly in 2007 as that trend cycle sputtered. This time around, the quilt trend is taking new shape. Modern "flea-market" looks that appeal to high-end buyers and to trendy upscale stores like Anthropologie are showing some resurgence. It's not your grandmother's quilt anymore. "Traditional patchwork quilts are only a small part of the market," she noted.

"People still have some money, but they are being particular," said Jesse Galili, vp sales, Hallmart Collectibles. Noting that passing off "50-piece comforter sets for a song" doesn't attract customers as reliably as it used to, Galili said fashion and color have to be added to the mix to get people shopping. For Hallmart, high-end looks featuring unique embroidery details in its Kathy Ireland line are doing well, he said.

Hallmart is paying attention to its value pricing, but Galili warned, "Retailers shouldn't fall into the trap of selling more of what they sold before. There needs to be better fashion and color in the stores."

David Greenstein, president, Homestead, reported that the company's turnkey approach has helped it weather the current storm. "We provide all-home solutions to our customers in design, development, market sourcing," he said. "It sets us apart and I think we have many clients who are looking to us for that reason, especially in these difficult times."

Scott Howard, vp sales, JLA, stated the strategy going forward simply: "To get the consumer to move forward, you've got to catch their attention." The company is doing that fully on the high-end side with its Natori brand, which he said is performing very well in spite of economic forecasts. Howard observed that the retail pie has shrunk, which is all the more reason vendors have to turn toward fashion to stand out from the crowd.

"When times are difficult, you need people focused and watching," concurred Dean Davaros, vp sales, Sunham. "You have to have the goods and the price points and strike a good balance. We are consistently good in our designs and colorations across all categories. It looks great and it sells. Ultimately, we're partners and if retailers don't do well, we don't do well," said Davaros.

That may never have been truer than in 2008, when the bad news from retailers kept coming. Home textile specialty chains, department stores and even closeout chains took hits with the demise of Linens 'n Things, a staggering Fortunoff, the exit of Mervyns, and troubled National Wholesale Liquidators and Filene's Basement.

Still, the half-full folks don't see it all as doom and gloom.

"Yes, all those retail doors closed," said Galili, "But, the customers haven't disappeared. The economy will certainly keep some customers away, but most will find new ways to shop."

Larry Queen, president, AQ Textiles, predicts a significant strategy shift — and new opportunities — for a range of retailers. "I think you'll see department stores trying to lower their prices to reach more consumers," he said. On the other hand, Queen sees potential for off-pricers such as Ross Stores and T.J. Maxx to gain new ground. "I think they'll be able to raise their prices, and take on some of the higher-end goods that others will be leaving behind."

HTT research revealed sales growth in top of bed products for just two channels of distribution: off-price chains, gaining by a convincing 29.2%, and warehouse clubs, inching up by 2.1%.

Online retailing is also still showing strength, vendors say, although total direct-to-consumer volume, which include catalog merchants, was down 6.7% in 2008. "If you're really price conscious, you'd rather sit at a computer looking up what you want, rather than driving around to gather that information — it's all in front of you," said Sunham's Davaros.

Calling himself an optimist, Davaros sees a turnaround coming soon. "I think we'll turn a corner in the first quarter. But, the fear factor could take a while for the turnaround to show up on spreadsheets," he said.

No doubt the entire industry is looking for a quick, and positive, a resolution.

Categories 2008 2007 CHANGE % OF TOTAL 2008 % OF TOTAL 2007
Comforter sets/bedding sets $1,575.30 $1,860 -15.3% 59.0% 60.1%
Comforters $491.28 $565 -13.0% 18.4% 18.3
Bedspreads/coverlets $176.22 $185 -4.7% 6.6% 6.0
Duvet covers $64.08 $74 -13.4% 2.4% 2.4
Quilts $363.12 $410 -11.4% 13.6% 13.3
Total $2,670.0 $3,094.0 -13.7% 100.0% 100.0%

Distribution Channels 2008 2007 CHANGE 2008 2007
Source: HTT research
Home textiles specialty chains $320.4 $498.0 -35.7% 12.0% 16.1%
Single-unit home textiles specialty stores $66.7 $83.0 -19.6% 2.5% 2.7
Department stores $154.9 $185.0 -16.3% 5.8% 6.0
Mid-price chains $520.6 $619.0 -15.9% 19.5% 20.0
Discount dept. stores $1,121.4 $1,207.0 -7.1% 42.0% 39.0
Off-price chains $120.2 $93.0 29.2% 4.5% 3.0
Variety/closeout $96.1 $124.0 -22.5% 3.6% 4.0
Direct-to-consumer $173.6 $186.0 -6.7% 6.5% 6.0
Warehouse clubs $69.4 $68.0 2.1% 2.6% 2.2
Other $26.7 $31.0 -13.9% 1.0% 1.0
Total $2,670.0 $3,094.0 -13.7% 100.0% 100.0%

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