LNT's big three
April 23, 2001-- Home Textiles Today,
Linens 'N Things' first quarter conference call with analysts last week may not have been the most upbeat for the team at LNT — but what the retailer had to say was even more discomfiting for the textiles industry.
Reviewing the particulars of the first quarter, LNT execs identified the home textiles category as the Achilles' heel in terms of merchandise performance. Typically responsible for 60 percent of sales during the period, textiles faltered, significantly impacting overall sales: an anemic 1.8 percent comp store gain.
It should be noted that LNT did not lay the blame entirely on textiles. Store traffic declined in the face of the slowing economy (although the average ticket rang 1 percent higher — a suggestion that, while LNT's bread and butter customers stayed home, the upper end of its consumer base was still spending). The implementation of a new decorative accessories program did not come off in a timely manner, and unseasonable weather knocked anticipated sales of seasonal merchandise off track.
Clearly, however, LNT is not happy about the direction of its home textiles assortment — the reason it is undertaking three "major programs" to make the business more productive.
First, the retailer is launching a new better-quality solid-color towel program that brings higher perceived value to its assortment. Executives did not go into detail with analysts, but the program seems a likely candidate to aid LNT's push to grow proprietary brands to a $285 million business in 2001 — or 15 percent of total sales.
On the fashion side, LNT will take on the Nautica national brand — not altogether a surprising move. LNT — like rival Bed Bath & Beyond — has long been seeking a label to compete with the department store channels' designer stable. The aborted Ralph Lauren Home line for specialty stores had been intended to fill that void. Whether Nautica will serve the purpose will depend upon whether LNT can effectively communicate the line's better features to its consumers and properly romance the product on the sales floor.
Finally, in a move that few in the textiles industry are likely to relish, LNT is going to become more promotional in bedding. Rather than driving additional store traffic — which executives made plain they don't expect to accomplish so long as the economy dawdles — LNT's strategy is to boost its average transaction.
And as LNT noted that it has already taken most of markdowns that it intends to, one can surmise that vendors will be paying the freight for this initiative — literally. Anybody interested in buying out their rival's excess inventory?
The revitalization of LNT's textiles business will not come without pain — neither for the retailer nor for the vendors that help turn its flagging strategy.
The silver lining is that despite all the attention it pays to boosting the "things" side of its business, LNT absolutely must find a way to make its textiles offerings more productive for itself and more attractive to its consumers. And in this regard it carries an even greater onus than its competitor. Linens, after all, is the foundation of its name.
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