Berkshire Blanket Gets New Investor, Adds Lines
April 17, 2006,
New York — After flying solo for 12 years of rapid growth and constant reinvention, Berkshire Blanket is getting ready to leapfrog past the $100 million milestone, selling a 70% stake in the company, taking on a new deep-pockets partner, and launching into a handful of new product categories, including sheets, comforters, baby and bath.
Now stepping into the limelight at this month's market, a poised and confident looking Rick Lotuff, the company's founder and ceo, said he has sold a majority stake in his company to a private equity firm, Cordova, Smart & Williams of New York City, for an undisclosed sum.
“As we kept growing from a simple, entrepreneurial company, we could see the future was for faster and constant growth, and we wanted to find a partner who could help us to get to the next level. And after years of exploring opportunities, we found the partner we were looking for in CSW,” said Lottuf.
“What we really liked about them is that they have a considerable expertise in branded products and brand management,” he stressed, “and that's what Berkshire is all about.”
“In a commodity-driven business, we've created a brand by developing successful product and putting it in packaging that really differentiates the product.”
Berkshire, much like the larger Croscill Home, is a nimble, customer-driven company, and one of the few in the business that has successfully managed to create a brand franchise out of its name. Having built the Berkshire nameplate in blankets and throws, and established it at retail accounts like Costco, Bed Bath & Beyond, TJX, Kmart and Linens 'n Things, Lotuff and his marketing and merchandising partner at Berkshire, Ellen McNulty, have quietly launched their first-ever line of sheet sets and comforters under the Berkshire Bedding marquee, shipping last month.
And they're not stopping there. This summer look for more Berkshire Bedding, and the launch of Berkshire Baby. “Those are in motion right now,” said McNulty, and we'll be ready by August.”
Coming some time next year, she said, is the more problematic, and fiercely competitive, bath category, including towels. And on a back burner may be windows. “We've been asked by some of our customers to make draperies,” said Lotuff.
But, McNulty emphasized, “We will not enter a classification if we cannot innovate. Right now we're focusing on Berkshire Bedding and Berkshire Baby.”
The reality, she said, “is that we're trying to maximize the shelf space we have, and to get even more.”
To that end, said McNulty, Berkshire quietly, as it likes to, started shipping sheet sets and comforters in March. The Berkshire Bedding sheet set, a microfiber polyester, is essentially a thinner, lighter coordinate to a blanket Berkshire now sells. But in its new configuration it's aiming squarely at the warmth market now occupied by flannel sheets.
Berkshire makes no bones about whose shelf space it wants to take with these sheets, and the tag line on the package reads: “The new alternative to flannel. Softer, warmer, more breathable, never pill.” That last is a big selling point, said Lotuff. “The minute you start to use it, flannel begins to pill.”
Berkshire is setting its sights high with the product, and Lotuff asserted, “We hope to be able to take 50% of the warmth sheet market with this.” In other words — stealing away about 50% of the flannel-sheet business.
The new Berkshire sheet set — fitted sheet, top sheet and cases — is priced to hit a retail of $29 for the twin, $49 for the full, $59 for the queen and $69 for the king. “We're not trying to out-price the market,” said Lotuff. “Our brand stands for the best value for the best price.”
Taking aim at the top of the bed, Berkshire Bedding has launched a reversible, solid-color comforter, featuring Berkshire's Serasoft plush polyester microfiber fleece on one side, and a breathable blend of polyester/nylon on the reverse.
With typical attention to detail in packaging, the vinyl bag is open at the top so the customer can reach in to touch the product. The comforter is priced at $79 for the twin, climbing to $99 and $119.
“We went this way because the consumer told us they want a reversible,” said McNulty. “We do extensive testing with consumers. It's always a risk when you move into a new market, so we always question what we're doing and we make sure the product meets the three customer triggers.” Extensive market research has shown the customer wants three things in a product, she explained. “They want softness, warmth, and ease of use. We found out that customers don't care so much about weight or construction or a lot of the other things the industry has taken for granted.”
Berkshire has built its brand by focusing on a balance between quality and price. And that won't change, she said. “The quality will always come first, and we will never compromise on that. Once that's gone you have nothing left.”
“But we are very focused on delivering value to our customers and letting them make money. And that's one of the reasons we've been successful. Our core customer is not afraid to look down the barrel at Wal-Mart and say, 'The heck with it, it's quality the customer wants and comes back to,' and the retailer accepts the higher price if he sees the value in the product.”
“In a commodity market,” she concluded, “that formula has worked for us, and we're counting on that to take this brand and extend its reach.”