Bedding (2003): Sourcing grows, price deflation continues in '03

Michele SanFilippo, January 25, 2005

NEW YORK — The biggest trends taking place in the bedding category in 2003 have been the continuation of price deflation, the increasing pace of globalization in the supply chain, and a larger percentage of retail businesses going directly overseas for manufacturing.

The industry has also seen a shrinking number of retail customers and more suppliers with financial issues, ultimately leading to their bankruptcies.

Based on market research from WestPoint Stevens, there is an increased focus on profits for both retailers and suppliers, from individual products to logistics to productivity analysis. They also noted declining bed-in-a-bag sales, a new focus on the juvenile segment (especially tweens and back-to-school), and an influence from HGTV and television shows such as "Trading Spaces" or "Extreme Home Makeover."

"One of the biggest things to happen in the last year in fashion bedding is that most goods coming in from overseas are much better in design and quality, at a lower cost," said Theresa O'Keeffe, vice president of fashion bedding at Hollander. "Many retailers are going direct and importing themselves, which makes it hard to compete price-wise. It used to be (that) if you had a great design, the customer would pay the cost, but now they'll find someone to make a variation for them at a better price."

In addition, designer bedding is still very important to many customers to foster lifestyle merchandising.

"Ralph, Tommy and Calvin continue to have strong placements as well as the re-emergence of Liz Claiborne in fashion and Laura Ashley at Kohl's," said O'Keeffe, adding that many customers are also bringing on exclusive designers. For example, Saks has had success with Jane Seymour, Luxury Linens with Christopher Lowell, JCPenney is launching Chris Madden and BBB has Nicole Miller.

Another trend that many retailers are talking about is Latin-influenced bedding, which they are interested in testing in a smaller number of doors.

According to Frank Foley, president and CEO of CHF Industries, more color, prints, embroidery and top-of-bed engineering have come back into bedding, while less natural fiber is being used. A more immediate interpretation of apparel into bedding has also been taking place.

Jeff Jacobs, executive vice president of sales and marketing at Keeco, has witnessed the continued impact of imported bedding on the market. "Embellishment and piecing, formerly the exclusive domain of quilts, have crossed into comforters, duvets and bedspreads," he said. "The emerging business trend today is embellished bed coverings and the beginning of a noticeable uptrend in demand for bedspreads as a functional and viable bedding choice." He added that retailers are focusing on regional needs and customizing a portion of their assortments to fill this need.

According to Lonnie Scheps, vice president at Hudson Industries, the specialty or niche arena was the only growth area with innovation, especially in functional/solutions-oriented bedding accessories.

He pointed to items appealing to baby boomers, who seek better sleep conditions, with improved products addressing their needs at virtually any price. Another trend has been the success in online marketing of these products as customers seek more convenience, less time spent and easy comparisons.

The biggest trend in basic bedding is the idea of hotel collections. "Hotel conveys quality, comfort and luxury, reinforcing the consumers' buying decision," explained Beth Mack, senior vice president of basic bedding at Hollander.

"As far as what has happened in the past year in basic bedding, the Pillowtex filing has opened the eyes of many buyers to view other resources. There is no longer one vendor who will own total businesses."

Distribution Channels (in $millions)
2003: $6.8 billion 3% increase over 2002

2003 % 2003 $
1. Discount department stores 36% $2,448
2. Mid-price chains 22 1,496
3. Home textiles specialty stores 16 1,088
4. Department stores 12 816
5. Off-price chains 5 340
6. Other 3 204
7. Variety/closeout 2 136
8. Direct-to-consumer 2 136
9. Single unit specialty stores 1 68
8. Warehouse clubs 1 68
Other includes interior designers, military exchanges and warehouse clubs.

Methodology Home Textiles Today in 2004 has adopted a new methodology for determining product-category universe figures and breakouts.
Previous studies combined suppliers' wholesale results with additional information from a wide variety of sources, including Personal Consumption Expenditures from the U.S. Department of Commerce, data from the Claritas Consumer Clout database, sales figures from Home Textiles Today's Top 50 Retailers, and public filings with the Securities and Exchange Commission.
In response to industry suggestions, retail sales information now makes up the foundation of the report. HTT editors and researchers also discussed the category extensively with retailers and vendors before developing the final figures.
Due to the shift, results in 2004 may vary significantly from prior year estimates. However, HTT believes the current methodology yields cleaner numbers.
The research was compiled by product editor Michele SanFilippo, senior research specialist Janice Chamberlain, director of market research Kay Anderson, database coordinator Cynthia Myers and editor-in-chief Jennifer Marks.

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