Pillowtex demise shook bath
June 14, 2004-- Home Textiles Today,
In a year that saw the demise of one major mill and the bankruptcy of another, compounded with increased direct importing by retailers and deepened price deflation in bath towels and bath/scatter rugs, the bath products industry struggled to stay flat. It nearly pulled it off — with a modest 1.4 percent decline in total retail sales to $3.45 billion in 2003.
HTT's annual bath report found that in 2003, total retail sales dipped for bath towels and bath rugs. Bath towels dropped four percentage points in terms of its overall contribution to total bath sales. Bath/scatter rugs also represented a smaller portion of the overall sales mix.
Some stood to gain at Pillowtex's expense. In towels, Springs was the biggest winner, having grabbed the largest pieces of the defunct company's business. Similarly in bath rugs, Pillowtex's exit freed up enough business to plump sales at Springs and Mohawk. It also made room for Lacey Mills, last year's Top Five list's newcomer in fifth place with $24 million.
But with the disappearance of Pillowtex from the supplier landscape came some important repercussions.
According to research by WestPoint Stevens, in 2003, "A worldwide capacity reduction in towels due to Pillowtex's demise resulted in major shifts in sources of supply, especially in the fourth quarter."
As Pillowtex's prominent brands — Royal Velvet, Charisma, Fieldcrest and Cannon — began disappearing from shelves, dozens of suppliers scrambled to fill those gaps with look-alike and new product. Many retailers tried their hand at going directly overseas, especially for bath towels.
This, combined with other issues, resulted in further price deflation of product, particularly in bath and bedding goods. While the number of units sold remained unchanged or increased, price points declined.
Distribution Channels (in $billions)
2003: $3.45 billion
-1.4% Decrease over 2002
|2003 %||2003 $|
|1. Discount department stores||48%||$1.656|
|2. Home textiles specialty chains||18||0.621|
|3. Mid-price chains||16||0.552|
|4. Department stores||6||0.207|
|5. Off-price chains||3||0.104|
|8. Warehouse clubs||2||0.069|
|9. Single-unit specialty stores||1||0.035|
|10. Home improvement centers||1||0.035|
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