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Royal Velvet seeks new road

Can the brand that once dominated retail towel walls across the country become the brand that rewrites contemporary rules of price-crushing towel merchandising? Royal Velvet licensee Li & Fung USA believes it can.

When Royal Velvet re-emerges at retail in early 2005, retailers carrying the bath towel will be subject to a pair of restrictions usually reserved for top-tier designer labels: no promotional activity by name and no off-price selling of colors that are rotating out of the palette. How did Li & Fung do it?

"We are building a phenomenal product with a high value proposition," said Rick Darling, president of the global trading company's U.S. division.

Royal Velvet bath is scheduled to begin rolling out at retail in February. Although Kohl's is the only retailer that has publicly announced it will carry the brand, Royal Velvet will launch with "multi-retailer distribution" in the United States and Canada, Darling said. The identities of other retailers launching the brand will be announced later.

Royal Velvet will return to retail first as a bath program, with Li & Fung supplying towels, terry rugs, bath accessories, shower curtains and liners, window treatments, robes and slippers. Group 3 Designs, the brand-management firm that oversees the licensing and development of Royal Velvet in both soft home and hard home categories, has not yet announced the licensee for the non-terry bath rug, although it is reportedly close to finalizing a deal.

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