Juvenile bedding biz grows with accessories

Suppliers appeal to broader market with add-on goods

Marvin Lazaro, December 2, 2002

Until recently, opportunity in the juvenile market was best represented by looks and ensembles aimed at the burgeoning tweener market. And while tweeners still represent a large part of the business, they are no longer the driving force, suppliers say. Now, the market has become more balanced, and its core younger segment is seemingly taking center stage.

While coordinating sheets and comforters remain the mainstay of the juvenile business, estimated by one manufacturer to be just shy of $1 billion, suppliers are now striving to make entire rooms and environments available. The focus of the juvenile segment has become about offering a whole new level of accessories and add-on goods.

From area rugs and lampshades to door knockers and toy-like plush accessories, manufacturers and retailers are seeing untapped opportunities.

So while most suppliers agree that the growth potential of the category in the near future seems to be somewhat limited, the increased presence of accessories has helped create additional opportunity for suppliers committed to the category.

"What has happened," said Dan Hammer, senior vp, Dan River's Home Fashions for Kids, "is that the believers have been separated from the non-believers. Those who went after it aggressively are being rewarded."

"The business has leveled out somewhat," said Vincent DeRosa, president of Whisper Soft Mills, a New York-based supplier whose entire assortment is geared toward the juvenile market. "While the growth potential is not as explosive as it was two years ago, I think it has leveled out at a much higher point than it was at previously."

DeRosa said he believed that while the "tweener phenomena" is a major force in the market, it now represents just another component in the category's bigger picture. "What's gotten better is the actual juvenile side of things," DeRosa said. "Suppliers and retailers are giving people the chance to buy entire environments, not just a few items."

Joan Karron, executive vp of CHF Industries, discussed the category's retail potential. "It is about accessorization and adding decorative accessories to enhance the whole shopping experience. Retailers that have those accessories are enjoying much higher margin per square foot than even their conventional adult bedding."

Accessories, once thought of as soft window coverings and possibly an area rug, have since expanded to include, but are not limited to, message boards, picture frames, lampshades and plush, stuffed decorative items that double as toys. In fact, according to Sandy McNeil, senior vp of Hollander Home Fashions' New York-based fashion division, the add-on sales of accessories may ramp up a total purchase by as much as 40 percent.

"The accessories are a good thing for retailers because the margins on juvenile bedding aren't great. But on the accessories they can really turn a profit," agreed McNeil.

"Those are the margin getters," said Steve Hoffman, vp of marketing services and licenses for WestPoint Stevens, West Point, GA. "They're definitely helping drive the total cost of a sale up."

Going hand in hand with more decorative items is the introduction of more layers. Perhaps taking a cue from adult bedding manufacturers, juvenile suppliers are adding in more decorative pillows, different comforters that coordinate to the same sheeting and vice versa, as well as a dizzying array of coordinating quilts.

"Quilts are a very hot trending item," said Karron. "It's the ability to do the detail and personalize the bed more satisfactorily that makes them so attractive. They aren't replacements for comforters; they're an addition and a plus sale." She added that quilts' "trans-seasonal" quality made them versatile and that the design limitations were different than that of comforters. "The less traditional they are and the more fun and spontaneous, the more acceptance there's been for them."

Another issue facing juvenile suppliers is the tightening of retail shelf space. In fact, the merchandising challenges facing juvenile suppliers are no different than those encountered in the adult bedding business. The battle for space at the juvenile level may be even more ferocious, however, as a host of popular television cartoons, movies, toys and character licenses vie for children's attention. Catalog merchants, in particular, drew praise from several vendors for their ability to effectively merchandise the category.

"They allow for a lot of the extras," said Maureen Granger, vp of merchandising for the New York-based Haywin Textile Products. "When you can show the entire package — what the entire room should look like — then you get the most bang for your buck.

"Catalogs are currently the one mode that is having a huge fun ride with the whole juvenile business."

Gary Walfish, president of Quebec-based Lawrence Home Fashions, agreed, saying it was the breadth of catalogs' assortments that made their presentations so effective. "With retailers you don't get to see the window, for instance, unless you've got really great packaging."

Department stores and discounters have earned mixed reviews in the category, according to suppliers. Department stores, said McNeil, feel they need to be in the business because of consumer demand. "But throwing it in the corner doesn't do it or them any good." Hammer said they are "missing a big opportunity to connect with more customers."

Discounters, Walfish believes, are "in the price and license game," so they're merchandising could certainly improve. DeRosa added, "The discount players aren't getting any better at it."

Two of the major mills, however, perhaps because of their licensing focus, present a different viewpoint about the discounters. Both Hoffman and Nancie Siegel, director of marketing, licensed juvenile products for Springs Industries, Fort Mill, SC, maintain that discounters are still where consumers go to get licensed bedding for their kids.

"Mass is the destination because of price points and availability," Siegel said. "The mid-tiers and department stores don't want to play that game."

"Mass is the leader. They're still 'it' in the category. There's really no other place," Hoffman said. "They have the characters you're looking for and the licenses you 'must have.'"

Hammer agreed: "They've chased this business a lot longer, and they have a much greater amount of stores."

But, said Karron, "I think everyone will be moving forward in their presentations. The bar has been raised and those savvy retailers that want to grow their business will learn from the success of others."

Even still, Walfish believes there are opportunities that have yet to be addressed at the retail level. "The one thing that I think all these guys can do is step up into better quality juvenile. There's a void for someone who can really merchandise a better quality juvenile at retail," he said.

Is the construction bar ready to be raised, though? Due to increasing price pressures, the identity of the juvenile business has been forged in lower-thread-count goods in muslin or percale in polyester/ cotton blends. There also has been little or no demand among consumers for juvenile bedding that features construction closer to that of adult bedding — but that may be changing. Higher-thread-count goods have emerged recently, as have all-cotton sheeting and top-of-bed items.

Hammer believes there is an opportunity for suppliers to trade up with the objective of broadening their customer base. But on the flip side, he said, you cannot trade up so high that you forget price point is a consideration. Hammer believes the key is in realizing the opportunity to bring back parents as their children grow up and their needs and tastes change. "You might tap the highest end, and maybe you'll grab their repeat business. But you're not going to appeal to a broad customer base who can't afford to repeat that cycle as often. You can't lose touch with the fact that you're serving the broadest majority."

"There's no question that a mother wants the same comfort and quality, if not more, for her child than she does for herself," said Karron. "The trend toward quality and softness and comfort with ease of care is probably very key."

McNeil felt that the proliferation of sourcing goods may change the juvenile picture. "With global sourcing, we don't need to go to muslin blends to have attractively priced product."

But once again, Hoffman and Siegel offered different viewpoints. While Siegel said she would like to see better constructions, such as knits, work at the specialty store level because of their increased exposure to consumers, muslin and percale remain the driving force.

Said Hoffman, "I don't see it unless you go into other channels of distribution. It's playing into that whole price game."

Pressure from retailers for the lowest priced goods remains prevalent. But what may be surprising is some retailers' acceptance of higher-than-normal priced juvenile goods. DeRosa said he had experienced little resistance to some $99 ensembles.

"Under $50 is the average, but that could go up," said Granger. "You've got to be able to get across to the consumer the value of what you're offering. If everything is right, parents will spend as much money as possible. It's important to capture it properly."

Suppliers do differ on whether brands can emerge in juvenile bedding, as they have in the adult business, or if the business will continue to be driven by popular licenses. Walfish believes that, in order to have a successful juvenile brand, the timing must be at or near perfect. However, he also said a license was not necessary in order to build a business.

"If someone put together a four- to six-pattern program with a nice concept behind it, then I think [a retailer] would pick it up," Walfish said.

Hammer agreed, saying that if the industry was healthy "then you'd have as much business in non-licensed as licensed. It's how you reach out to the customer." But, licenses are still the biggest chunk of the business, "by a long shot."

But, said Hoffman, "You've got to have the property of the moment."

Siegel was more succinct. "Without a movie or character tie-in, it doesn't get on the shelf."

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