Growing sales grace table linens as retail market share shifts
March 3, 2003,
Sales of table linens last year grew 5.8 percent, to $603 million, driven largely by continued strength in licensing, design innovation and aggressive retail pricing, according to exclusive market research by Home Textiles Today.
Shifts in market share were considerably less than seismic. Among all trade channels, home textiles specialty chains, mid-priced chains and off-price stores gained market share at the expense of department stores, discount stores and variety/closeout stores.
However, because of the category's overall sales growth, market share winners won bigger and losers lost less.
For example, discount department stores dipped slightly in market share year over year, from 37 percent to 36 percent, yet the channel's sales increased from $211 million to $217 million, according to the survey.
Discount stores commanded about one-third of the category's total retail sales.
Off-price chains took a 5 percent share, or $30 million, representing a one percentage point gain. And suppliers believe those stores, which include Marshall's, TJMaxx and Ross Stores, will continue growing in table linens for a number of reasons.
"The department stores would rather focus on the larger-volume businesses like bedding and bath, with only a few important brands like Ralph Lauren in table linens," said Frank Scalice, executive vp of New York-based Town & Country, the licensee for Ralph Lauren Home. "[Off-price chains] are more aggressive in pursing the table category now, and they offer opening price points."
Kurt Hamburger, president and managing director of New York-based Lintex Linens, described the off-price chains as "the retailer of yesteryear," which he said is a good thing.
"It's nice for people like us to do business with them because they do business the old-fashioned way," Hamburger said. "They pay well and on time, and they don't give us chargebacks. It's a clean deal. They order the goods, and we get paid. Then you go on to the next deal. Period.
"For department stores, the table linens category is like a stepchild. They've lost their edge and their advantage."
While success was seen at home textiles specialty stores, which amassed 21 percent, or $127 million, of the business last year, department stores declined to 11 percent, or $66 million, the survey found. Mid-price chains gained 1 percentage point in market share, last year, taking 16 percent, or $96 million, of table linens sales.
"Department stores are losing because customers rather start out shopping where they know they can find a bargain," said Janet Sokolsky, account manager for the table linens division, New York-based Terrisol Corp.
Mark Siegel, president and ceo, New York-based Elrene Home Fashions, noted that the mid-price and specialty stores gained in dollars because "they are the ones pushing the reorder business and driving it up."
In Elrene's case, the reorder business includes several licensed programs, including Wolfgang Puck, Nautica and Villeroy & Boch.
"I think specialty and mid-price stores are gaining because they will allow you [the supplier] to tweak — you must be competitively priced but they are willing to jump at retail," Siegel said. "They are looking for the good/ better/best products as long as there's a perceived value. They challenge [the supplier] to upscale the product and still maintain a competitive retail structure. Discounters just want that price war, but it's a system that works very well for them."
Added David North, vp of marketing development, New York-based Ex-Cell Home Fashions: "The specialty stores just offer a broader breadth of assortment for this category, they give more value to the consumer and also stock a wider range of merchandise from the middle to high-end prices."
Sokolsky said she has noticed buyers leaning more and more toward cotton-dominant blends and regular blends "because of the variety in looks — damasks, sheers, the ability to give an added plus like [metallic accents] and embellishments." While she admitted these added trimmings bring up the price of the product, "they still spark interest, especially for the specialty chains," where a broader price point range is accommodated.
Bart Hill, general manager for textiles, Sugar Valley, GA-based Mohawk Home, said specialty stores have gotten more aggressive on pricing of products that offer perceived value to the customer.
"The specialty stores offer a value at the right price," he said. "The customer is now getting more value on a fashionable embellished place mat that goes for $3 to $4 at a specialty store but used to sell for as much as $7 or $8 at a department store. It's more bang for your buck."
Enter licensed programs. Just as more fashionable merchandise at the perfect price point has proved appealing to the consumer, so have licensed goods that offer brand recognition, whether it be at the department store or the discount channel. Licensed goods made up almost one-fifth, or 19 percent, of the total 2002 table linens revenue vs. non-licensed products.
Being the licensee for the Lenox brand has been a strong advantage for New York- based Bardwil Linens.
"It's been really great for us — way beyond bridal," said Nancy Kristoff, president, sales and marketing. "It's been strong year-round."
In October 2002 at the previous market in New York, Ex-Cell introduced several new licensed programs, including designs by artists Alma Lee, Sara Frederking and David Carter Brown. "Customers like to identify with a name or look they've seen in other mediums, like greeting cards or other product categories," North said.
Elrene will be launching its newest licensed program with designer Jonathan Adler at the September/October New York Home Textiles market.
sales in $millions
|2002 %||2002 $|
|* home improvement centers, military exchanges and gift/home accent stores.
|1. Discount department stores||36%||$217|
|2. Home textiles specialty chains||21||127|
|3. Mid-price chains||16||96|
|4. Department stores||11||66|
|5. Off-price chains||5||30|
|7. Single unit specialty stores||3||18|
|9. Warehouse clubs||1||6|