Discount, specialty widen gap
June 18, 2001,
In the $4 billion soft window coverings industry, discount stores and specialty chains continue to capture the lion's share of distribution, according to The Facts: Window Coverings, Home Textiles Today's exclusive statistical survey of the window market.
Discount stores and specialty chains together grabbed more than half of the distribution of the soft window coverings market for 2000. The responses of 18 different companies showed that discounters, such as the powerful trio of Wal-Mart, Target and Kmart, tallied a whopping 36 percent of the total distribution, while specialty chains, such as Linens 'N Things and Bed Bath and Beyond, totaled 13 percent. It was a significant increase from the last time The Facts: Window Coverings survey was conducted in 1999, when discounters accounted for 31 percent of distribution and specialty chains only 10 percent.
"It had to happen," said Carl Goldstein, senior vp of S. Lichtenberg & Co. Inc., based here. "If Wal-Mart keeps opening up 200 stores a year, it will generate those kinds of numbers by itself. Specialty chains will probably double in size within the next five to 10 years, so it just stands to reason that their percentage of the business will grow also."
In sharp contrast to discount store distribution levels, department stores have taken the proverbial nose dive. The category, which includes J.C. Penney, has fallen steadily in its numbers since 1997, when department stores accounted for 27 percent of the overall distribution. This year, department stores could only muster 16 percent of the business, a decline of 4 percent from 1999 alone and a result, said Herb Briggs, president of the New York-based Guilford Home Fashions, of the ongoing price wars between the two channels. As long as discounters continue to lower their prices, he said, department stores will suffer.
Citing the closure of several major retailers over the last two years, Goldstein said, "The reality is that Penney's, Sears and Boscovs are the only three left still doing business in window. The opportunity for department stores to get a bigger market share doesn't exist."
Goldstein felt that retailers, many of whom already carry extensive lines of home textiles, would not only better serve consumers but help their bottom line.
Included in the survey for the first time was the question of how much manufacturers produce domestically or source from overseas. Although domestic production leads the way with 64 percent, imported products make up 36 percent of U.S. soft window coverings.
"As suppliers, we're forced to go worldwide to stay in business," Goldstein said. "We have to go offshore for styling, for price and for certain types of goods that aren't produced here anymore, like sheer organzas."
Goldstein and Briggs also felt the domestic sourcing numbers would decrease significantly over the next several years, as China gradually becomes a major player and Turkey and India become more significant players than they are already.
Still at the forefront for the majority of soft window coverings are synthetic constructions, which amounted to more than five times the amount of cotton constructions and three times the amount of blends.
"Synthetics play more to the fashion end than pure cotton because of the characteristics of the yarns," Briggs said. "The synthetics are good for the window because of the tremendous number of effects you can get using them."
Total Window Coverings Sales
|2000 - $4 billion|
|1998 - $3.7 billion|
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