P'Tex: Clock ticks for retail picks
August 11, 2003-- Home Textiles Today,
Kannapolis — While many retailers would like to see Pillowtex's brands survive, they acknowledge the denouement of the company's liquidation needs to take place swiftly.
Shelf space for the nearly $1 billion in private label and branded programs once supplied by Pillowtex is rapidly shifting to other vendors. Some retailers plan to look overseas for product and/or expand their own private brand offerings to fill the slots once occupied by Royal Velvet, Cannon, Fieldcrest and Charisma.
"Every dollar will be re-allocated by the end of the year," noted Charles Chinni, executive vp, gmm, home, fine jewelry and family footwear, JCPenney.
At Wal-Mart, the transition from Pillowtex to other sources is nearly complete. The retailer — Pillowtex's largest customer — has already sent a majority of its outstanding Pillowtex orders to other U.S. suppliers, said Lois Mikita, gmm.
"We had a solid relationship with Pillowtex, purchasing almost $200 million in goods last year, and we had several outstanding orders with them at the time of their announcement."
JCPenney, another big Pillowtex account, is now transitioning its critical house brand towel to Springs Industries, said Chinni. It plans to replicate a Royal Velvet sheet program elsewhere in a similar thread count and fabric because the program fit well into its assortment. Fieldcrest white goods have already been replaced by existing pillows and pads suppliers, he added.
"It's especially hard to replace a brand name," he added, and if another company picks up Pillowtex's brands, it will have to vie for new position because the open-to-buy will be gone.
As for Federated, the "big question" for Macy's West is the Tommy Hilfiger basic bedding, "which has been doing great for us," said Paul Fitzpatrick, senior vp. In addition, "Charisma has been a most important towel brand for us, but the success of our private label Hotel towel had already impacted it as well as our Charter Club brand," he said.
Bloomingdale's Joe Laneve, senior vp, said, "We have been working on plans for months to replace Charisma, and we think we are in a position to offset any volume and margin liability."
At Hanover Direct, the Charisma and Royal Velvet labels were "both good programs for us" at The Company Store and Domestications, respectively, said John DiFrancesco, president, The Company Store Group. "It's difficult to replace them per se."
In case no one picks them up, The Company Store catalog will push more of its existing proprietary products. Domestications is still working on its succession plan, though its only exposure was with towels.
In addition, DiFrancesco was sure TCS customers will miss Charisma, especially during its January White Sale. "Charisma is one of the few brands we run in The Company Store, which is mainly proprietary product," he said. "We'd be particularly sad to see that brand go. It was one brand that really works for us."
For Anna's Linens, Pillowtex was a much bigger supplier two years ago, said Alan Gladstone, president, but once it started having problems, Anna's began cutting back and now only carries a sleep pillow program. Hollander and Carpenter have been the biggest beneficiaries of replaced Pillowtex basic bedding programs, while in towels it has been Springs, he said.
However, a name like Cannon will be hard to replace. "I've been buying the basic Cannon, Made in the USA label product for 30 years now — it still has magic to our customers," Gladstone said. And Anna's sole Pillowtex program is still the second biggest seller of its current assortment. "It's the most recognizable name in the industry."
Pillowtex really devalued the name with its lack of shipping and promotion, Gladstone added, and he hoped someone else would scoop it up, preferably one of his existing vendors.
Tuesday Morning would be interested in procuring finished inventory, said Bill Kendall, vp, merchandise manager, home textiles, though he was under the assumption that most of the inventory is unfinished. "I don't know what to expect" overall, he added. "My understanding is that everything is up for grabs."
Tuesday Morning has carried all of Pillowtex's brands at one time or another, including Royal Velvet sheets and towels in last year's fourth quarter.
"People have said for a long time that the most valuable asset Pillowtex owns is its brands," Kendall added. "I hope they continue." And if someone does pick them up, he hoped that they would market the brands correctly.
Department stores have also been working on new strategies post-Pillowtex. Saks' Proffitt's and Carson Pirie Scott had programs with the company, said Julia Bentley, spokeswoman, and though the replacement process is still in the works, the retailer sees this as an opportunity for private brands.
Pillowtex "is a very important vendor" to Gottschalks, said Tom Fraser, dmm, textiles. Its assortment included the Fieldcrest, Royal Velvet and Charisma brands, he said, in such categories as bedding, bath, white goods and table linens. The "minor" products have already been replaced, he said, including the Fieldcrest and some of the Royal Velvet brands. However, he was holding out to see if anyone picked up the brands before replacing the Royal Velvet sheets and towels. He has to make a decision "within the week" about replacing the brands, though "there's no time to source overseas" at this point.
Royal Velvet is one of "the most important names in towel history," Fraser said, adding that someone needs "to step in quickly or the business will be gone.
"I hate to give it up, but you have to do business."
"In a sense we've been preparing for this for many years, considering the direction the mills were taking," said Bart Litzin, senior vp, gmm, home. Its Pillowtex products of Royal Velvet towels and rugs, Fieldcrest sheets and a small amount of pillows and pads have already been replaced or are being replaced, both with private label programs sourced overseas and with U.S. manufacturers.
"There's a certain demographic" that is devoted to the Pillowtex brands — "an older customer who grew up with the towel that set the standard. But that's diminished over the years," he said.
Rod Altmeyer, president, Altmeyer Home Stores, remembers when he bought striped towels from Pillowtex in the 1950s, selling them at two for $1 — and making money on it. Now he has Fieldcrest towels, which he expects will be replaced by Springmaid, an existing line, because he hasn't had good luck with imports, he said. He also has a Fieldcrest bed pillow, which he likes because it is manufactured near him, and "the freight factor is very important in bed pillows...You have to have a vendor close by to fill the pillows."
Pillowtex did fill Altmeyer's orders for his Back-to-School sale — albeit late.
Elder-Beerman has been phasing out its brands and now carries only the Royal Velvet towel, according to the company.
Stein Mart had dabbled in Pillowtex products, and the one recent program it had with Pillowtex has already been given to a domestic supplier, said Pat Stagner, gmm. Still, "I'm so disappointed that this happened...I hope whoever buys the brands treats them well, and not like a football that's passed around. There's nothing like sleeping on a Charisma sheet."
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