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Dressing Up Dec Pillows

Cecile Corral, Joan Gunin -- Home Textiles Today, September 8, 2008

It is a cliché by now to say decorative pillows are recession-proof.

Everyone knows, suppliers say, that the cheapest way to give a facelift to a saggy, seven-year-old sofa is to Botox it with new, trendy decorative pillows.

More cleverly put, "Dec pillows are lipstick for the sofa," quipped Nancy Spencer, owner of Spencer N. Enterprises, El Monte, Calif.

And since American consumers are in what many would call a recession, decorative pillows are proving to be something of a lifeline in an otherwise slumped home textiles period.

That's not to say incremental business comes easily. Stunting big growth in the category this time around are both the inventory-conscious retailers leery of dampening their chance to maximize upcoming holiday assortments, and cash-strapped shoppers afraid of doling out too many dollars on discretionary fashion purchases.

"As resilient as this business is right now, it would be much better if people carried inventory — because the customers are spending on it," asserted Loren Sweet, president, Carson, Calif.-based Brentwood Originals. "Some retailers are throwing the baby out with the bath water. In case after case, we are seeing [point of sale] sales stronger than re-orders."

Corey Faul, president of Portland, Ore.-based Newport/Layton Home Fashions, was more specific. "We can't say they aren't re-ordering. They are, but if they were putting six pillows in a store, now they are putting four. There is pressure for us to reduce case-packs. Retailers want more flexibility on replenishing their stores more precisely and exactly, and that ultimately means they order less."

New York-based Arlee Home Fashions, the second-largest dec pillow supplier last year with $45 million in category sales, has also "noticed retailers are definitely getting a little more cautious with their replenishment inventory, so they don't end up with those goods and their new holiday goods all together," said David Frankel, president. "They'd rather go light on replenishment goods than not move the holiday goods."

Another issue related to retailers' apprehensive approach on re-orders that has Frankel concerned is retailers' over-prudence on testing new looks, especially patterns.

"The frustration we still have is that everyone is still looking for chenille," he said. "This business is still solid-color and texture-driven. Stores don't want to try anything new, and I think it's because people don't want to be caught with the wrong inventory. It's better to be safe than wrong."

Higher production and raw material costs, which Arlee and others are passing on to retail customers, are also enforcing this cautious approach to product assortments, Frankel added.

"They are seeing their prices have to go up, so they are being that much more careful about what they bring in," he said. "That's why no one wants to be wrong — or can afford to be wrong — right now."

Brentwood, the top-selling supplier in 2007 with $145 million in category sales — an 11% increase from its prior year — might not agree, insisting that its retail customers are indeed requesting "more pattern — prints, embellishments, texture," Sweet said. Still, its increasingly popular styles seem as palatable to retailers' cautious demands as those that Frankel has observed.

"We're emphasizing a lot more surface interest and texture this market," Sweet said. "We have a whole collection of pleated fabrics, some stitched and some with machine pleats, and solid-colored looks with textures."

Trading up is not necessarily the path forward. Opening price point offerings are a strongpoint these days for Brentwood, Sweet added, stressing that there is at least a bit of room on shelves for some bigger ticket items. "A lot of our retail customers are committed to trying to develop higher price points with larger sizes, trims, fills, that sort of thing."

Such pillows are among Spencer N. Enterprises' top sellers, said Nancy Spencer. The company's hottest selling looks include geometrics, updated chenilles and family room/den looks, "along with an ever-increasing formal market of more embellished styles. Animal looks in all categories are also strong."

"Our company is experiencing tremendous growth in the dec pillow business due to the recession," she continued, "and we are extremely happy."

Larger sizes, like elongated 22-inch pillows and the 14-by-27 size — are also popular lately. "We are experiencing that lower prices are not doing nearly as well as middle to upper range prices, and by that we're talking $17.99 to $19.99," Spencer said.

Westgate/HFI's $15 to $30 price bracket — which falls into its middle range — is its hot spot right now, explained evp Neil Zuber. Product-wise, that translates to the company's new matelasse collection, which comes in a broad assortment of patterns and colors.

Pacific Coast Home Furnishings (PCHF), based in City of Commerce, Calif., has seen its decorative pillow business grow by more than 35%, and the company attributes that spurt to its new more aggressively priced assortment of designer pillows donning the Austin Horn label.

Sam Samani, evp marketing at PCHF, said "We took our designer looks and re-created them at lower prices, taking them, for example, from $100 to $80, to offer customers a more affordable version of our Austin Horn designer line."

And it has worked. This U.S.-made program keeps retailers — department store chains, in this case — from "breaking their backs" on inventories, Samani said, "and allows us to be able to sell pillows at higher retail prices while helping the retailer avoid making a big investment. They can replenish at their own pace because we make the pillows here."

Newport/Layton's indoor/outdoor cushions buoyed its decorative pillow business this year — taking the segment 5% to 6% ahead of plan in sales.

"It has been very good," said Faul of the line. "We are very pleased with that business and it has been a real plus for us."

These larger-sizes carry higher price points than Newport's average dec pillow, aiding the company's category growth. Nonetheless, Faul spoke of price compression in the industry.

"There is definitely still price compression, but we are trying to push the envelope and certainly getting a response for our efforts," he said. "But again there is more value in it. We're pushing price points with more values."

Those values include "cleaner looks, more causal styles, larger sizes and new fills," Faul said.

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