Winter Markets Help to Set Tone for Small Upscale Stores' 2011 Business

Winter MarketsEarly To Bed in Omaha is focusing on offering its customers more value for a better price.
NEW YORK - As the winter markets for independent retailers wrapped up last month, upscale specialty stores across the county are getting a good idea about what they can expect for business in 2011 - both in fashion trends and price points.
     When high-end specialty boutique linen store Classic Home started to feel the pinch from higher cotton and raw material prices from its vendors and elsewhere, the single-unit retailer made headlines.
     This beachside store in Lake Como, N.J., published an advertisement in its local newspaper in February to warn its customers about looming price hikes for its new assortments while promoting discounts on older merchandise.
     As owner Pearl Fitzgerald described it, the ad was in newspaper style with a headline that read, "News alert: Rising cotton prices," which was followed by a message that said "Now is the time to enjoy our luxurious sheets and towels as we hold off price increases. Take advantage of sales on our discontinued items throughout the store as we make room for new spring arrivals."
     The ad also featured a photograph of some of Classic Home's sheets and towels in stacks.
     "Now, as we're seeing prices go up across the board, we're wondering, ‘Holy cow, is this sustainable?'" Fitzgerald told HTT. "It will be interesting to see what is going to happen. [With the ad], we wanted to let our customers know about [the rising prices]. Many have been telling us that they've heard about it. So they know."
     Classic Home, which very recently redressed seven beds on its selling floor with new products from John Matouk, Sferra, Peacock Alley, Home Treasures and others, has just begun to raise prices on some of its new linens, "but we're not doing the markups like we did before because it's too much of a shock on the customer. When a washcloth is costing as much as a bath towel did, it can cause sticker shock." It's cashmere no-more, at least for now, for Scarsdale, N.Y.-based La Dentelliere At Home, said co-owner Charelle Anderson-Grgas.
     "The trend is more basic, and the reason is because in this economy, the customer doesn't want something for their bedroom that is too fussy looking," she said, citing instead a broader natural color story that included more taupe and cream hues among new products she saw at the recent markets. "My customers are still looking for something that is easy on the eyes, something very inviting and clean."
     Not to mention, the price of cotton has kept her assortment somewhat more modest in terms of retail tickets.
    "The price of cotton has gone up, so people think the economy is getting better because prices are higher," Anderson-Grgas continued.
     "The economy is getting better little by little. But I can't sell cashmere in my store anymore. Over the past two years, the price of cashmere throws and blankets has gone up 20% each year, so I cannot afford to keep them in store anymore."
     She added that while her cost of doing business is higher, "I have not raised the prices because I want to sell. I would rather sell more quantity."
     Omaha-based Early To Bed's owner, Joan Miller, was pleased to fi nd price-sensitive, more practical product alternatives at the winter markets.
     "We found some wonderful price points coming through from our vendors that are a little bit lower than some of the high, high things we used to see more of," Miller explained.
     "For example, some of our vendors who used to show us fabulous silk coverlets that retail over $1,000 now came back with similar coverlets made of cotton that can retail for $500 ... We are stressing in our store [machine] wash-ability and comfort as well as elegance and good taste, and that is where vendors are going, too, now."
     And like some of her counterparts, Miller said her focus as of late has been "defi nitely, to give more value for a better price. I have cut my margins as far down as I can. My markup is less than in the past, and I do more promotion than I used to."
     Successfully passing along low double-digit price increases on cotton and other natural fi ber luxury linens to its customer is Pittsburgh-based Feathers, said owner Jeff Mulert.
     "We're seeing on average about a 15% price increase from our suppliers, but we're still committed - as our suppliers are - to selling natural fibers of 100% cotton and linen," Mulert told HTT.
     "Prices are higher for these goods, but we see other stores in the marketplace bringing in some polyester and we are staying away from that. Our consumer is ready and willing to pay more for the product. So fortunately, our business has not been affected. Our consumer is not price sensitive, so we are able to increase our prices."
     As proof, Mulert said his business in January and February was "basically even to last year." But his outlook for the rest of the year is brighter - a 10% to 12% increase over 2010 - supported by an expanded marketing effort and soonto- come enhancements to its social media and high-tech strategies to reach more customers, more often.
    "My goal is by this summer to have my customers fi nd out about new products at my store and then buy them, all from their phones while they are at a party," Mulert said, hypothetically speaking. "I feel that if I don't do that, I am in trouble."
     Hestia Linens in Covington, La., is currently revamping its sales strategy to include not just high-end bedding and bath linens but also special services to help the business more adeptly attack outside hurdles this year, like cotton price hikes.
     Owner Jenny Mutter said her aim is to make her fiveyear- old store "become more of a fashion house and design service provider where we can in one place totally help you redecorate your home."
     New in-house services include monogramming, custom draperies, interior design consulting, and of course, all of the high-end linens to match. Having walked the winter markets with optimism for the New Year, Mutter said she got the same sense from her suppliers, who include Peacock Alley and Sferra many many others.
     "I think this year is starting our kind of slow, but I expect business to be as good as or better than last year," she went on. "I am starting to see more traffi c in the store, and I think it will get even better as my customers start receiving their tax refunds from the government."
     Richard Smith-Allen, who established and owns 38-yearold Warm Things in San Francisco, is visiting his first and only winter market - the New York Home Fashions - in March, explaining that it is the most relevant to his needs.
     Coming off a "very good Christmas, as I geared it around value for my customers," he said to HTT, he saw his store traffic drop off after the holidays and senses possibly some more hesitance from shoppers this year as they will be challenged more by rising oil/gasoline prices.
     "It's putting some uncertainty back in the marketplace, so that puts consumers on hold with their spending," Smith- Allen warned. "And in our industry, that makes the suppliers tend to get put on hold, too, because they don't know where to step out and be bold with new designs and styles when they know the consumer isn't stepping out to buy them."
     In sum, he expects "a curious" market atmosphere in New York but still "a lot more successful it was this same time last year for both suppliers and retailers."
     He expects to see a bevy of fresh looks and color stories - all of which he will be seeking in rounding out his new programs for the second half.
     "I think that is what people are going to need for next fall," he said. "Price will be an issue. And I would have said units would slow but dollar sales would get better or expand. But because the cost of cotton and down and polyester have gone up from a year ago by so much, it has got to have an impact on the total units sold in the industry on a unit basis. I think the units will be less, but dollars could be more."

Home & Textiles Today Staff | News & Commentary

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