Specialty Stores Increase Share of Home

Carole Sloan, July 17, 2006

New York — Specialty stores and home improvement centers were the only channels of distribution gaining share in home textiles in 2005 compared with 2004, with a scant one-percentage-point-each increase to 24.0% and 2.0% of the business, respectively.

Specialty stores, second in the distribution channels among the Top 50 home textiles retailers, increased market share to 24.0% from 23.0%, bringing sales to $5.81 billion, up from $5.42 billion in 2004, a 7.2% sales increase.

New to the list of Top 5 specialty retailers is Anna's Linens, which replaced Pier 1 Imports in the Top 5.

Home improvement centers, buoyed by the addition of Home Depot, saw a sales increase of 8.3% to $380 million, up from $351 million in 2004.

The direct-to-consumer business held even with an 11.0% share of the business. Total sales were $2.6 billion, up 2.7% from the '04 sales of $2.54 billion. The leaders was still JCPenney, with $1.22 billion in direct sales, up 2.0% from 2004. Joining the Top 5 direct-to-consumer retailers was Cornerstone Brands in fourth position with sales of $175 million. Brylane Home dropped off the Top 5 rankings.

While maintaining its position as the dominant channel for home textiles, the discount store/supercenter segment lost ground in 2005. This sector slid from a 42% share of the business in 2004 to 41% in 2005.

Despite the turmoil within its ranks from consolidation, store closings and sales, department stores held their own. The Top 5, with $4.08 billion, had a 3% sales increase for 2005 and held even with a 19% share. The ranks changed as a result of the Federated acquisition of May Department Stores. Macy's Home Store and the former May Department Stores made the Top 5 in this category joining JCPenney, Kohl's and Mervyns.

Warehouse clubs dropped 3.1% to $311 million, but maintained a 1.0% channel share of the business.

The “other” category that includes Sears and Army & Air Force Exchange Service dropped to a 2.0% share of the Top 50 from a 3.0% share, largely because of the sales decline at Sears.

Sales for the two companies in the sector dropped 12.4% to $537 million.

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