Beach Towels Strong Seller in Short Season
May 4, 2009,
Beach towel suppliers feel retailers too often undervalue the catory.
And yet, suppliers believe retailers are missing out on potentially higher sales.
"This category is purely seasonal, though a major category," argued PK Markandy, chief executive of Trident Group, the home textiles division of Abhishek Industries Ltd. "[And] we have seen now retailers putting up more in-store promotion for the product and more point-of-purchase attention."
Less convinced is Salo Grosfeld, president and ceo of Miami-based J.R. United: "I think a lot of retailers aren't paying attention to the beach towel category. Buyers stop in for three minutes to choose their beach towels for next season, and then they are done with it. It shouldn't be like that." Even so, J.R. United "picked up some nice solid colored beach business" at the specialty store level, he said, for this season.
On a similar page is Gretchen Dale, coo, New York-based Loftex USA: "No one pays attention to it. I joke that for retailers it's a 'Gotta and don't wanna item' They've got to have it, but they don't want it. And even so, it's amazing we do the business in beach towels that we do."
Dale said that, had the economy not fallen apart over the past year, 2009 would have been the company's fifth consecutive year of upward sales in the beach towel category. Loftex produces all of its beach towels at its own facilities in China.
"But to be honest, it's not that beach is so dreadful, but rather it's that there's a lot of inventory sitting out there," she said.
Late last summer, when the economy had not yet plunged, retailers uncharacteristically bought more heavily than usual for what they hoped would satisfy strong sell-throughs this summer.
But the beach towel category is now taking a hit of slow sales at retail, making suppliers nervous about buyers' shopping habits later this year for 2010's season.
"We don't foresee many novelties in the coming season because many retailers will bring back what they had in their inventories," warned Felipi Lorenzoni, sales manager for Brazil-based Buettner Home Textile, which has been manufacturing beach towels for the past 30 years.
Last August, retailers bought "a lot" of beach styles from Loftex USA for this summer. "But [beach towels overall] are just not selling to expectation," Dale said.
That could create a challenge for a company like New York-based Welspun USA, which said it is hopeful to gain new business very soon for its recently developed Amy Butler-branded beach towels. "We received a remarkable reception by key retailers, with several planning to pick it up for late summer/cruise season selling," said Bob Hamilton, managing director. The company unveiled the organic cotton designer line, which includes large-scale brightly-colored damask looks, in March, admittedly "late by traditional calendars."
Still, there have been bright spots this year, such as bath sheets in solid colors and fiber reactive prints.
Over the past two years, solid-colored bath sheets have become an off-shoot of the category that can straddle what Dale describes as beach towels that "take the inside outdoors, and take the outdoors back inside."
Atlanta-based Home Source International is "offering the best of both worlds," Keith Sorgeloos, president and ceo, said, by having designed its Vera-branded line as reversible.
Licensed with The Vera Company, the beach towels in this program feature one of 12 beach-related or contemporary brightly colored patterns from the late designer's archives on one side; the other side of the towel is solid colored using a hue from the pattern's palette. Set to retail for $19.99, these designer-branded fiber reactive pieces target specialty and department stores.
Jacquards for several years played the dominant role in the beach towel category. But as shoppers' spending has waned, there has been a shift to more affordable fiber reactive styles.
"This is the second year that we're seeing this trend become very strong for us," said Larry Price, director of U.S. sales for El Salvador-based towel manufacturer Hilasal. "Jacquards took over in the early 2000s, but they've run their course, and now the business is about fiber reactive printed beach towels."
Hilasal, which produces all of its beach towels in-house, has been further building the category business by increasing the size and adding weight to its fiber reactive printed assortments, Price said. The company still offers 30-by-60s, "because you still always have to have the popular $9.99 price available for the market," he explained.
But Hilasal's newer 38-by-68 and 55-by-70 dimensions, priced to retail for $14.99 and $19.99 respectively, "are helping to continue to increase our business with [mid-tier and better] department stores."
But as long as the economy poses a challenge to retailers, the $19.99 and higher price brackets will struggle to keep their place and relevance in category sales.
"Prices are going lower and lower. In beach, there's always a price proposition," said Rae Ellen Blum, vp, national sales manager, New York-based Esplama/Cobra, a longtime beach towel supplier which sources its higher-end assortments mainly from Brazil but also from India and other countries. "Our main volume is at the $19.99 and up for a 40-by-70, with our highest retail at $39.99. But we do offer promotions for $7.99."
As this year's overstocks roll over to next year's beach season, price will take a more prominent role, said Rolf Buddemeyer of Buddemeyer SA, which has been manufacturing and exporting beach towel since 1972 from Brazil to the United States — Espalma/Cobra being one of its longest and largest suppliers here.
"The next season will be very interesting to observe the end results. As never before, price will be the decisive issue," he said. "The consumer will not buy something just because it is cheap. New products will have to exceed consumers' design and quality expectations.'
Aiding retailers to reach these lower price brackets is stepped-up direct importing activity, particularly in Asia.
"Retailers are more and more going to China, India, Bangladesh and Vietnam, for example, to get a cheaper price. They don't care as much anymore as they used to about beach towels," said Eric Vergucht, who develops private label beach towel collections and represents Brazilian beach towel manufacturers here in the United States.
India-based Trident Group, which has been exporting beach towels to the U.S. since 2000, has for the past three years concentrated heavily its business on working directly with retailers.
"Over the years, retails have gone down with better value products hitting the shelves," Markandy said. "The focus has shifted more on the design aspect. Manufacturers are challenged to tailor products at specific retails. We have seen improvements in packaging of the product."
He said the business was once dominated by U.S.-based importers, "due to the designing strength they possessed." But that has changed as overseas manufacturers like Trident "have come up on their offerings," allowing them to "grab a chunk of this business."
SaraMax is focusing on beach towels with a difference, like this pocketed beach chair cover with a hidden pouch for valuables.
Hilasal's fiber reactive printed beach towels since last summer have been gaining sales strength at retail. Flip-flops, seen here, is the company's top-selling design.
Buddemeyer's colorful monochromes and awning stripes are positioned as fashion that meets prevailing price points.
Trident Group's beach towel line is broad, comprising traditional seasonal patterns as well as more contemporary styles like these animal skins.
Espalma/Cobra described this collection of cotton-and-modal blended beach towels from Brazil as "towels with attitude."
Welspun USA has expanded its licensed Amy Bulter collection into beach as well as bath. The initial bedding collection debuts this summer at Bed Bath & Beyond.
Buettner Home Textile's Butterflies is one of 50 new mosaic-like patterns interpreted on fiber reactive printed beach towels. The Brazilian company manufacturers all of its beach towels.
Dohler USA's Multi-Paisley beach towel is one of several new fiber reactive prints made of 100% cotton. The company produces all of its beach towels in Brazil.
Home Source International is moving into the beach towel category through a recent licensing partnership with The Vera Co., the owner of designer Vera Neumann's archives and designs. The collection comprises 12 patterns — including this one of beach chairs — that reverse to solid colors.
In Sunham's licensed Lacoste collection, beach towels proved an early hit. The company introduced several newer looks this spring.
J.R. United's "Sailor Blue!" beach towel is one of many new graphic patterns the company rolled out this year. But solid-colored styles are also proving strong seller for the company this summer.