Into the Breach
Jennifer Marks -- Home Textiles Today, September 1, 2008
Another moment of reckoning has arrived in the over-stored U.S. market. How many stores will we lose before the downturn is over?
Linens 'n Things is shedding 205. Mervyn's will shutter 26. Boscov's is closing 10. In the furniture world — which does sell some home textiles, folks — they're dropping like flies.
Are we done yet? Probably not. Has Sears/Kmart pulled the plug on all the stores it possibly could? I wouldn't bet on it. Will we wind through the down cycle without another retailer or two retreating into Chapter 11 bankruptcy protection?
This spells trouble for all suppliers, but it poses a special challenge for manufacturers that scaled up to service the big guys. (History repeats itself.) Suddenly, to be really big is looking risky.
I once worked with a long-time retail journalist who predicted back in the 1980s that at some point in the future there would be only one retailer: Wal-Mart. I think that overstates the case, but I do think it is possible that one day we might have just two or three really big retailers of a certain type and a lot of small, specialized merchandisers filling in the cracks.
I had an interesting conversation during the recent New York International Gift Fair/New York Home Textiles Market at the Javits Center with a supplier who is convinced that the future will belong to the West Elm or H&M model of retailers. They're largely self-contained operations fielding their own designs, dealing direct with factories, and turning fashion goods quickly.
He might be right. We see Target, Wal-Mart and JCPenney working to emulate the model to varying degrees. That has already forced a shift in the complexion of the larger supplier base — from joint ventures to U.S. companies buying manufacturing operations off-shore.
As we witness some old-line retailers close up shop in the coming months, it will be worth watching to see who comes bubbling up to fill the space. There are far more small suppliers and small manufacturers around than big ones. Now's the time for the small outfits to get themselves ready for the shift.
Industry Related Content
Mednick Talks to HTT about Online Trends for Textiles