Pricing Weighs Heavily on Top of Bed

Jill Rowen, February 22, 2010

In the year that just passed, many may have wanted to just pull a cover over their heads, including suppliers in the top of bed (TOB) category. As the first of HTT’s bedding reports, (basics and sheets and pillowcases will follow) the results were predictable and were right in line given the circumstances.

Two of the bellwether events — the demise of Linens & Things and the economic meltdown of 2008/2009 — can be seen in the numbers. An economic turnaround will help, but pricing issues, both at retail and at the manufacturing site looms large as a concern for 2010.

Results show that the overall category was down about 6.4% to $2.5 billion for 2009.

No sector within the category was spared. Bedspreads and coverlets fared better than other items, but still declined by 3.5% for the year, to $170 million. Comforter and filled bedding sets took the biggest hit, with a decline of 6.7%, to $1.47 billion for the year. The latter number may reflect the slow, but steady move away from mega-size comforter sets.

The numbers also reflect a dwindling volume overall, as retailers streamlined their offerings and inventory. According to Frank Snow, vp merchandising and operations, Royale Linens, the consolidation is ongoing. “Each retailer has its own strategy of eliminating skus that haven’t been performing and conforming to their needs,” he said.

Comforters, for instance, were one of the product areas that left retailers with excessive inventory when the downturn hit — a scenario few want to repeat.

A few suppliers saw an uptick in online purchases, as well, though that distribution venue suffered along with everyone else. “Top of bed is probably the biggest soft goods category online,” noted Frank Foley, ceo, CHF. “But it has a long way to go to catch up to traditional retail outlets.”

Not surprisingly, single-unit home specialty stores were the hardest hit in the last year, with a decline of 21%. Mom and Pop can’t compete with Walmart. Home textiles specialty chains — LNT’s category — dropped 14.2%; and department stores were down 11.2%. Only two distribution channels managed increases for the year: off-price chains, up 4%; and warehouse clubs, up 0.9%. Consumers may have found bargain luxury goods at both venues at prices they could digest to spark that category.

One of the concerns looming large for TOB going forward is pricing, which Snow believes has yet to reach “critical mass.” The increases in material costs coupled with retailers looking for the sweet spot are at odds and have been for a long while.

“Unit production has stayed the same, but what you’re getting for it is less,” noted Amy Bell, executive vp, HFI. “There is price compression from both ends: raw material costs and what retailers are willing to pay.”

“It’s one thing on everybody’s mind,” agreed Foley. “The price of cotton has been erratic, and rising fuel costs will impact the cost of polyester and other synthetics.”

“From the cotton and fuel costs, which invariably increase the cost of the yarns, the cost of manufacturing and everything else — the consumer has not yet seen these costs passed on to them,” said Snow. “Pricing hasn’t reached the retail counter and average prices are falling while products actually moved up in quality and grade.”

According to many vendors, the challenge will be how retailers will be able to position themselves well and decide what an ever more discerning customer is willing to pay for TOB products.

“It’s all about perceived value right now, and the consumer is savvier than ever,” said Bell. “She knows the max price she’s willing to pay.” While HFI saw a dip in its bedding business during 2009, it is going strong with new introductions for 2010. Bell noted that traditional looks are still strong, with transitional, modern and contemporary also making a splash. “We’re seeing interest in quilts and duvets. We are a jacquard mill, so that’s our strong suit, but we’re seeing embroidery and piecing also on the rise,” she said.

Revman is offering a more modern story as well. “We are seeing increased interest in duvet covers and quilts, more than in previous seasons,” said Diane Piemonte, vp, creative services, Revman. “Consumers seem to be more receptive to using alternative TOB products. I feel this may be because of the very strong trend to more modern looks in bedding. Duvets and quilts have a sleeker, newer look than traditional comforters and their clean lines complement graphic patterns, which continue to be one the strong print trends.”

“There are retailers that only ask for price, but a few of them are pushing the envelope,” said Jessie Galili, vp sales at Hallmart. “They are asking us, 'show me something that we haven’t seen before that will really give us something to showcase.’” While not necessarily redecorating whole rooms, consumers are choosing to add color to their homes, with decorative pillows or TOB as the easiest way to accomplish that. According to Galili, color is making a comeback. “It’s not crazy colors, but really great blues, for instance. There are new designs with bigger medallions and embroidery that you don’t typically see in promotional price points,” he said.

“We’ve had a good year, and that’s because we do a lot of market research into what our customers and their customers really want,” said Carol Antone, vp marketing, PHI. “We focus on design creation and development. We put a lot of energy in packaging, presentation and design. Beyond the pure basics, today at retail there has to be something with a lot of detail that will catch your eye.” Antone noted that having a large part factory ownership has helped the supplier get the best prices it can, an important element in a frugal economy. “We really watch our costs at every step,” she said.

For the upcoming market, PHI is introducing a new brand, the American Authentic Dry Goods Company, which will offer an antiqued and vintage ’30s era feel to quilts. In addition, the company has signed designer Trina Turk and will introduce a line of bedding later in the spring with her signature bright colors and designs.

“We have to remind people that this is ultimately a fashion business, and that’s what we have to be striving for,” explained Snow. At Royale Linens, one of the new looks includes a Tencel fabric duvet with an animal skin design featuring a tone on tone color story that coordinates back to a range of solids.

“Color and layering of patterns continues to be a strong trend direction for 2010,” reported Piemonte. “Graphic patterns, especially overscaled and dramatic reinterpretations of traditional motifs such as damasks as well as stylized patterns inspired by nature are key trends for the season.” She added that the colors of season are clean and clear with black and white, blue-greens and berry tones among the favorites in the category.

While vendors and retailers hash out the pricing, fashion may be the answer, as new offerings give consumers a reason to go shopping again, especially if they are given something new and exciting.

Categories 2009 2008 Change % of total 2009 % of total 2008
Source: HTT research
Comforter sets/bedding sets $1,470.00 $1,575.30 -6.7% 58.8% 59.0%
Comforters 460.00 491.28 -6.4% 18.4% 18.4%
Bedspreads/coverlets 170.00 176.22 -3.5% 6.8% 6.6%
Duvet covers 60.00 64.08 -6.4% 2.4% 2.4%
Quilts 340.00 363.12 -6.4% 13.6% 13.6%
Total $2,500.0 $2,670.0 -6.4% 100.0% 100.0%
Distribution Channels 2009 2008 Change 2009 2008
Home textiles specialty chains $275.0 $320.4 -14.2% 11.0% 12.0%
Single-unit home textiles specialty stores 52.5 66.7 -21.3% 2.1% 2.5%
Department stores 137.5 154.9 -11.2% 5.5% 5.8%
Mid-price chains 475.0 520.6 -8.8% 19.0% 19.5%
Discount dept. stores 1,075.0 1,121.4 -4.1% 43.0% 42.0%
Off-price chains 125.0 120.2 4.0% 5.0% 4.5%
Variety/closeout 95.0 96.1 -1.1% 3.8% 3.6%
Direct-to-consumer 170.0 173.6 -2.1% 6.8% 6.5%
Warehouse clubs 70.0 69.4 0.9% 2.8% 2.6%
Other 25.0 26.7 -6.4% 1.0% 1.0%
Total $2,500.0 $2,670.0 -6.4% 100.0% 100.0%



In determining product category sales figures, as well as determining retail sales for those categories by channel of distribution, the editors and research department of Home Textiles Today used data compiled from a variety of sources, including publicly filed financial reports, vendor sales information compiled by the editors, and information provided by retailers and home fashions suppliers.

Home Textiles Today will produce a series of three reports on bedding, of which this is the first, breaking the overall bedding category into three of its component parts: Top of The Bed; Utility Bedding, Blankets and Throws; and Sheets & Pillowcases.

The research was compiled by editorial contributor Jill Rowen; Dana French, director of market research; and Jennifer Marks, editor-in-chief.

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