Bath sales slip slightly in 2001
June 10, 2002,
It's no surprise that the bath products industry experienced a slight decline in sales volume over the past year, slumping by 3.4 percent to $2.8 billion.
And Record isn't getting arguments from many of his competitors within the bath industry.
"2001 certainly was not a real good year in textiles overall," said Dan Harris, vp of marketing and product development for Niles, IL-based Revere Mills, who added that, ironically, his company experienced its most successful year in 2001. "We're well aware it wasn't good for retailing in general, but we continued to grow predominantly because of growth from our bath towel business."
Jack Bray, senior vp of sales and marketing, for Griffin, GA-based 1888 Mills, noted that the bath category "suffered last year, and it all started before Sept. 11. But once that happened, the impact was even harder. There was a slowdown in the economy in general."
Added Kathy Fowlkes, bath business manager for High Point, NC-based The Bacova Guild, which recently purchased Burlington Industries' Burlington House bath division: "My business has grown, but I can understand the total industry suffering. Let's face it — business was affected last year by many factors, such as Sept. 11 and the many retail closings. With the amount of stores that went out of business, how much bath business was lost had to be significant. And I don't think many other retailers that sustained picked up the mass amount of that lost business."
Of the distribution channels that fared best last year, discount department stores continued their growth, raking in 47 percent, or $1.13 billion, of the total share of the bath business. In second place, home textiles specialty chains continued their steady growth pattern by growing 1 percent to 22 percent, or $616.0 million, of the category. And neck and neck in third and fourth places, respectively, were general merchandisers, who grabbed 10 percent, or $280.0 million, and department stores, which occupied 9 percent, or $252.0 million, of the total share.
Those numbers proved consistent with New York-based Ex-Cell Home Fashions' estimations.
"Regarding distribution, we expect to see continued growth in the mass and specialty store segments of our bath industry," John Fraley, executive vp, told HTT.
Fowlkes said that from her observations, it was the major "big-box" discounters and some general merchandisers that weathered the storm most successfully in bath.
Bray agreed, citing that discounters offered the "right" price points sought by value-oriented consumers
"They promoted heavily and gave customers very competitive pricing on the goods," he said. "It's a combination of reasonable prices and stronger selection on the floor. They have the space the category needs. Just look at the square footage dedicated to towels alone vs. other categories in these stores. They definitely give us more space."
Maybe it's due to generous placements that towels continue to make up more than half — 55 percent — of the total merchandise mix.
But more growth is expected by suppliers for bath accessories, which last year comprised 12 percent, or $336.0 million — the third-highest sales generator in bath last year after rugs.
"We expect to see growth continuing in the accessory portion of our bath business, as in coordinating rugs and toothbrush holders as both coordinates and freestanding patterns," Fraley said.
Added Nancy Webster, senior vp of creative development, Springs Industries, Fort Mill, SC: "Our greatest growth has come from shower curtain hooks, which we now coordinate with every shower curtain we design and also offer in freestanding designs."
Importing, too, has continued its slow but steady climb as the way of the future for bath products supplying. Last year it rose by 3 percent to 38 percent of all bath products at the expense of domestically made goods, which now make up 62 percent, down slightly.
"There will be continued growth in the import category of the bath industry as price and margin pressures continue," Fraley noted.
Bray said that production costs less and the product itself is less expensive to procure from offshore sources. And "there doesn't seem to be a big tradeoff in quality of imported goods vs. domestic goods — just some, but nothing significant."
While Record insists that, given all the reasons importing is increasing are valid, "it's still not necessary for some bath goods," such as certain bath rug constructions.
Still, he admits retailers are taking a stance that if they can buy it cheaper from overseas sources, they will do so at the expense of the middleman, or suppliers.
"Buyers are looking for the very best value, and oftentimes it's from overseas," Record added. "They don't care if they buy from U.S. companies or from China; it's all the same to them as long as it helps their bottom line."
Harris expects importing to continue its growth, with a big spurt in 2005 when quotas are diminished.
"Worldwide there is such an overcapacity for terry production that with quotas lifting in 2005 most countries are now working very hard to upgrade the quality of their looms and finishing equipment and improve the quality to make it better and better," he said.