Window Vendors Get Inventive

Despite Market Volatility, Suppliers Stepping Up

James Mammarella, October 15, 2007

Challenged by the usual array of market pressures — from retail consolidation and consumer woes to price deflation and cost creep — suppliers of soft window treatments are responding in a variety of positive ways.

Here and there, evidence of advancement can be found. Among the leading indicators are: a flair by buyers for fashionable statements and contemporary styles, energy-saving constructions, and even some willingness by retailers to test higher prices.

Supplier comments on both 2007 performance and in crystal-ball statements about 2008 varied widely.

"We were up 50% in 2007 — my biggest year!" said Bud Frankel, president and ceo at Arlee Home Fashion, New York, predicting that there will be another 20% or better upswing in 2008. The leading reason: the ramp-up of the Arlee joint venture production facility in China, which means, as Frankel emphasized, "We weave our own fabric, cut and sew our own fabric. We make our own tapestry fabrics. It's a tremendous advantage as a company."

S. Lichtenberg, New York, had a very satisfactory 2006-07 increase, and in light of that Carl Goldstein, svp, did not foresee the 2007-08 growth to come in quite as robust.

"We did a bit better this year," said Jack Mahon, window division chief at New York-based Croscill Home, "and we could start 2008 with some exciting placements."

Barry Goodman, vp national accounts, Commonwealth Home Fashions, Montreal, said the second half of 2007 was rescuing the first half, but the outlook for 2008 was uncertain. "There's a lot of volatility in the U.S.: the housing market, the election year, the stock market up and down like a yo-yo, energy costs — so many negatives — but we are seeing good placements."

While characterizing 2007 as a trying year, Jason Carr, founder, Softline Home Fashions, Gardena, Calif., said the up-and-coming company gained market share — "the majority is in really fashion-forward product" — and is open to various ways to build partnerships. "We're having tremendous success with direct f.o.b from China — as a service for the retailers," he said.

Carr emphasized that the August market was an energetic, appointment-based event that yielded warm response both to product and to the company's knack for advertising and marketing sizzle. "Our photographs are key for Softline — and we aim at a taste level and a somewhat younger demographic target" than many in the industry, he asserted. "We think that our presentation and our product provides the confidence for the 35- or 40-year-old consumer walking in to make that switch from blinds to curtains for the first time."

The best way to achieve higher retails, said John Witkowsky, evp at New York-based CHF Industries, is to introduce new products. "You bring in a new style — even though retailers are not taking price increases, you peg it at a certain price, and make it at a certain cost," to improve the supplier margin picture.

While acknowledging that retailers generally don't accept the price-increase pass-along, Carr said there is the occasional exception. "We've been asked by several retailers to increase their price on a barcode by either $1 or $2 — in a current sku — go up a dollar. So it's not major, but I do think marginal increases are out there. I think supplier and retailer understand one another."

Goldstein maintained that the best way to make more margin is to sell more product — and the route there is via design and building in more fashion. "A panel is a panel, whether it's at $9.99 or $19.99 or $24.99. We offer customized goods at those retails; we make the best quality available for a $4.99 as for a $19.99 retail. We don't sacrifice quality because of price."

Goldstein noted that the total sale to a consumer is always more than the product price point, so up-selling or accessorizing a coordinated line must be kept in mind: "In our industry, people don't buy one panel — the average unit sale is a minimum of two. At the $19.99 price you're really making a $40 sale — and a top treatment sends the average ticket up higher."

Frankel, excited about expansion, nonetheless was less sanguine on profitability: "Promotions are the name of the game, sad as it may sound. Nobody likes it."

Styles in the merchandise itself can shape a marketplace, and there are several trends now influencing the window-treatment fashion cycle.

"There is more interest level right now in what we call a metro look — upscale transitional — maybe considered masculine," said Croscill's Mahon. "We make it in a stripe, or give it a texture; the top treatment may be tabs or casual pleats depending on the fabric — we offer a more tailored look — and some valances may be a little simpler."

Along similar lines, Goodman said Commonwealth is doing "very well" with grommet panels. "We have an expanded offering, probably about 18 different styles, each from a single sku to six or seven, in different lengths. Retails are from $9.99 to as high as $29.99."

He called the contemporary grommet style "the new tab — an alternate look that works well with decorative hardware; it's easy to install, no fuss. It's an updated look."

Another small niche that Commonwealth is exploiting: the move outdoors. "It's a bright spot," said Goodman. "Outdoor curtains people put on patios or gazebos — water repellent, in grommet styles in stripes and solids." Home centers and specialty catalogs are the typical customers for this line.

Goldstein, for one, thinks the blackout theme will peak by the end of 2008. More action, he believes will come in the form of "bright colors, fun things" that originated in juvenile and now "will become a crossover from a trend and become a basic look" appealing to the 30-and-under demographic.

"What started as a back-to-school look, and then became a tweener-back-to-school trend, is now a very acceptable look, getting a certain amount of square footage devoted to it today — and with a lot of fabrics today available in those looks."

Witkowsky, of CHF, said lace has become a valuable part of the offering over the past several seasons, another indication that classic fashion and embellishments are alive and well in this turbulent marketplace.

One of the newest suppliers in soft window is also one of the oldest home textiles vendors: Elrene Home Fashions New York, which showed its first full line of window during the August market. The company felt it had to offer its longtime customers a new category of goods and, drawing upon its fabric design strength in the table linens area, Elrene has made an opening statement in fashion window looks.

"We went after fashion — luxury base cloth fabrications in 100% silk, silk jacquards, woven polyesters, linen-rayon blends, taffetas, and embroidery," said Shari Feinstein, vp of sales and marketing, a veteran window treatments buyer with Linens 'n Things who joined Elrene in February 2007 and is leading the new initiative.

"We're getting placement our first time out with major retailers," Feinstein said, noting that the company intends to provide extra value. "We have oversized and overspecced everything in our line; we offer 52 inches-plus in width, we make lined or interlined panels, we give interesting cut-and-sew details like inverted pleats, elaborate trim décor on valences and panels."

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