Filling the Pillowtex void
February 14, 2005-- Home Textiles Today,
New York — When textiles giant Pillowtex Corp. rolled over and finally expired, the effects were felt throughout the industry, perhaps most keenly in smaller, more sensitive product categories such as blankets. In that business, the Pillowtex demise created an opening for smaller niche players, but at the same time sent retailers scurrying abroad in search of product, cutting out U.S. suppliers.
Indeed, over the five-year period from 2000 to 2004, jolted by the seismic shift created by the collapse of Pillowtex, sales of the nation’s five largest blanket suppliers subsided by 14.4 percent, to $381 million from $445 million — aloss of $64 million in sales, some of it stemming from price deflation, but much of it lost to offshore suppliers.
On the plus side, the disappearance of Pillowtex has created an opening for such nimble niche players as fleece supplier Berkshire Blankets, and Pendleton Woolen Mills, which is translating its rich archives of Native American looks into a rapidly expanding home fashions business.
And it’s paving the way for another new generation of blanket players that are trying to fill some of the product space once occupied by Pillowtex and its various brands.
Cumberland, Md.-based Biederlack of America, a long-time throw producer, got into blankets as a hedge six years ago, and developed it into a $6.5 million business by 2004, said Peter McCabe, executive vice president.
Now, in a post-Pillowtex era, he said, “There’s no reason why it can’t increase by two to three times in the next five years.” But, McCabe added, “We’re not going to try to be all things to all people. We’re filling a product niche by focusing on better goods. We’re after a better margin and a better price and look to those to take our total higher.”
To that end, Biederlack is now actively scouting out brands and licenses to beef up its business. “Brands are important. We need that to grow to a certain point. We’re negotiating for several brands now, and hopefully by the end of this year we’ll have more than one,” he said.
McCabe said Pillowtex, at one time, “was the 800-pound gorilla, but now the business is more fragmented. You have more players, smaller players, getting a piece of it.”
Among them is The Northwest Company, based in New York City, another throw supplier now diversifying into blankets. Northwest got its foot in the door a year ago with a micro-fiber raschel blanket, and is now looking to expand its line even further, said Shay Auerbach, chairman.
“We thought a vacuum was created by the demise of Pillowtex, and we jumped in. And it’s not just the demise of Pillowtex that creates the opportunity,” said Auerbach, “it’s the inability of the remaining players to deliver product on time.”
But that void left by Pillowtex won’t entirely be filled by U.S. suppliers, he acknowledged.
“When Pillowtex died, it created a mad rush on the part of retailers to find other suppliers. Initially, they were looking at domestic suppliers, because they needed a resource fast. But then they started looking offshore. And they have to, because now there’s just not enough blanket manufacturing left in the U.S., and what there is is inefficient. The remaining suppliers here just aren’t cost-effective,” Auerbach said.
With its first foray into blankets a success, “We’re now looking at where we want to be in the business, and we’re going to get there,” he added. “We’re looking to add new fabrications to our blanket assortment. But this is a new area for us, and we’re going to tread very lightly.”
The potential, Auerbach said, is substantial. “We may be small right now, but I don’t think we feel we will have been successful unless the volume in two years is in the $8 to $10 million range.”
Also scrambling to fill the void is Berkshire Blankets, based in Ware, Mass., which pioneered and developed the fleece blanket category, and is now diversifying into cottons and luxury fibers.
For years Pillowtex’s blanket business, once flourishing, lost ground and had dropped by more than two-thirds to less than $30 million before the company’s ultimate collapse. And Berkshire offers a relatively sympathetic take on what happened to the Pillowtex blanket business. Said Ellen McNulty, director of marketing: “The blanket market had slowed down, and the retailers reacted by taking down the price. That put tremendous pressure on Pillowtex, and they reacted by de-specing the product. Ultimately, they couldn’t deliver to the customer the product the consumer had come to expect.”
Moving to fill the breach, and reacting to an increasingly price-sensitive fleece business, Berkshire expanded its cotton assortment and developed new products to bring to market. But at the same time, said McNulty, Berkshire is careful to avoid the problems that helped bring down the Pillowtex blanket business.
“Our niche is to deliver a quality product at every level. We’re not going to cave in and take the quality down. That would be the beginning of the end for us,” she said. Refusing to knuckle under on price “has meant that we haven’t been able to take advantage of every opportunity out there, but it has enabled us to stay the course.”
Indeed, said McNulty, rather than bow to pricing pressures, Berkshire is consciously trying to raise its price points, and has successfully introduced a top-of-the-line silk blanket retailing at $170 to $190 at big-box specialty stores. “Who would have thought the market could support a product that expensive? And it’s doing well.”
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