Ellery Retuning Waverly Strategy

Carole Sloan, March 20, 2006

With the acquisition of the Waverly Lifestyles home textiles license, Budd Goldman, ceo of Ellery Homestyles, expects to expand the product mix, develop new base cloths and broaden its look.

Calling Waverly “the best known home furnishings brand,” Goldman said, “We want it, in look and feel, to hang together. It has been lots of items.”

One of the first things on the agenda is developing a range of base cloths beyond duck, like sheers, to broaden the look, Goldman said in an exclusive conversation with Home Textiles Today. “It needs dusting off and fluffing up.”

While some new product will be introduced in the Waverly brand for this market, “the August market will reflect the Ellery influence on the line.” The March market will feature a group of beds and windows, “but we won't have the diversity of fabrics until August. There's an essence to the look and feel of Waverly, and there's nothing else like it. We haven't scratched the surface yet.”

To support the Waverly effort, Goldman noted, “We brought the whole Waverly product design and sales team here, and there will be a 7,000-sq.-ft. showroom dedicated to the line.” But the back ends of the business, he emphasized, “is Ellery.” Waverly, he noted, “has design approval, and we have full use of the library as well as new designs. It's an ongoing relationship.”

The Waverly program is creating some changes in the way Ellery works with its customers. “We have 15 customers and we don't stock an open line — but Waverly may change that,” said Goldman. And while some may believe that showrooms and markets are unnecessary, he asserted, “I do believe in showrooms; we see upper management here; we're expanding ours to 17,000 square feet.”

Although the trend is for retailers to go direct to sources, Goldman is emphatic in his contention that “there will be a group of survivors who will prosper in this environment. There's a value in design, styling and the whole process.”

At present, there are three groups of Waverly customers: the four majors, then 11 other key customers and then independent retailers. The four majors — JCPenney, Linens'n Things, Lowe's and Belk — each have their own programs, he said. For the next tier of 11 retailers, “we will develop a wonderful open line for them to select from — but they can't change colors or styles. We chose not to include the small independent retailers because we couldn't service them. But Waverly may allow the expansion of our customer base.”

The Waverly business model is very different from the Ellery one, itself a plan that developed over the five years that Goldman has owned the company, and built it to more than $100 million in sales. “Today, it's all about scale, not gross profit percentages, but gross margin dollars. We are private label, high volume.”

But Waverly is not the first licensing program for the company. “Kas of Australia is a very strategic license. It's a wonderful Australian design firm with a European look, and it's brought us a lot of notoriety.”

All together, Goldman related, “we have Waverly as the brand; Kas for design, and Ellery for window design plus pillows and throws. We're looking at table linens and kitchen textiles, but we want to do it right.”

Goldman's background is far from the typical one in home textiles. A CPA graduate of City College here, he became a senior partner at 28 and then traveled overseas a great deal. While traveling, he found a Japanese product that wasn't in the United States that everyone wanted, grew that business and sold it. In 1985, he developed a business of proprietary consumer products “but never a category of product — it was item driven.” His acquisition of Ellery was “by accident. Now we're making a quality product on time and at the right price.”

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