Beach towel makers seek shift in season
July 29, 2002,
It is not uncommon for retailers to start selling beach towels as early as February, in some cases as early as January, only to begin slashing price points just two to three months later when the sun has barely had a chance to toast the sand and surf.
"We're trying to convince retailers they should wait until right after Easter to be able to give the beach towels a good run through the first week of August — then start cutting prices," said Rae Ellen Blum, vp and national sales manager, New York-based Cobra/Espalma. "In my world, that's when consumers start thinking about going away on vacations … Some retailers are driving this business to the dogs because they aren't promoting it correctly. Promotional prices should not come in until Memorial Day."
Before that, the stuff was just sitting there, and it's a waste for everyone."
Acknowledging this trend, but hoping to combat it through product innovation, is New York-based Teka USA, the American arm of the 75-year-old Brazilian manufacturer Teka.
Richard Rosenblum, Teka USA's vp of sales, said that beach towel promotions appearing as early as April is an accepted norm that "has been going on for years" but one that hurts all those involved. "The earlier the sales, the lower the maintained margin the stores will have on the towels and therefore the higher the pressure on the manufacturers to lower their prices," he explained.
But Teka USA expects to help reduce those risks through some new product "by creating towels that will generate sales at regular price points but provide the consumer with an added value," he added. "We're doing it through new techniques with viscose to bring a new look to our towels and making more intricate double jacquard towels where the dobby borders feature more design elements. Also we're working with embroideries and appliques and some hidden border designs, which are essentially dobbys that blend into woven towels."
New York-based Haywin Textile Products has been urging retailers to save the better-quality towels for debut on the sales floor later in the summer season.
"Maybe retailers could bring in the higher-quality products like jacquards later in the season, say April, so that those better goods will get marked down later in the season," said Bryan Parker, senior product manager. "In exchange, they could bring in earlier the velour fiber reactives in February as usual and make those goods promotional first."
For domestic manufacturer Santens, based in Anderson, SC, its department and specialty store customers earn the largest share of the business despite offering the product to shoppers while winter still lingers and the beach is the farthest thing from their minds.
The reason: "They advertise," said Jennifer Buffalo, vp of merchandising. "They have a better customer who is looking for better-quality product. And they advertise. Specialty does a lot of advertising for beach towels. So do department stores, but not as much."
That might be one of the explanations for the fact that specialty and department stores and some warehouse clubs are the retail channels grabbing the lion's share of the beach towel business, according to suppliers. And they're doing it within a fair price point range — $14.99 to $24.99, with the target price tag being $19.99.
New York-based Terrisol Corp. said even some of its discount store customers have been able to hit that $14.99 price point — typically too high for that retail channel shopper — for a 40" x 70" 100 percent cotton yard dyed or printed beach towel. Some of its higher-end retail customers sell the same towel by Terrisol for $24.99.
"It's the perfect price point range for a good size, good-quality towel, and it caters to several retail channels" said Eric Vergucht, executive vp and general manager. "But if the store wants the prices lower, that's their problem. As a supplier I don't want to interfere with their business. The supplier is not in a position to tell the retailers when they can start marking down."
Warehouse clubs are the biggest customers of WestPoint Stevens' beach towel business, which is limited to its juvenile Disney licensed line and some solid-color towels, said Steve Hoffman, vp of marketing services and licensing.
"It's a very nice size business for us," Hoffman said. "We see it primarily as a license business for the most part, and the only license we have viable for the moment is Disney, which this year we will have for the second year. So we're sticking to just that for now. It's mostly a mass product. We also do a nice business with [a major national warehouse club]."
WestPoint Stevens' Disney line, which is entirely imported, is made of all-cotton terry loop pigment velour and fiber-reactive beach towels.
For Haywin Textile, many of the beach towels that fall within that popular price point are its branded, licensed goods, including Nautica and Fubu.
"Branded product hits that $19.99 price point all retailers want to hit," Parker said. "Those are the nicer products. Branded stuff gets marked down last. It's a good business for beach towels."
Salo Grosfeld, president of Miami-based JR United, admittedly isn't entirely sure what it is about these retail channels that attract beach towel shoppers willing to spend up to $24.99, "but for us the specialty stores and warehouse clubs do a huge volume."
In the case of JR United, department stores are less of a player.
"People don't go to the mall for beach towels. So as we see it department stores have lost some of that business," Grosfeld said. "They sell branded towels, and branded beach towels don't really sell well these days."
Citing an example, Grosfeld explained that his company recently forged a licensing partnership with Izod for a line of beach towels. He said it had drawn a "great reaction from buyers." But, he acknowledged, "I know the numbers aren't really there. It's good, but a marginal business."
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