Makers Optimistic Through Window Woes
August 1, 2013,
NEW YORK - A peek at soft window in HTT's latest research shows the category only slightly down for the year. The category was down 0.4% to $2.68 billion.
Suppliers are reporting a slew of macro-economic issues as well as a changing demographic that is looking at soft window very differently from their mothers and grandmothers.
Function is still trending with energy efficiency and blackout styles. But styling has evolved from solid basics to offerings with more color, texture and prints.
Looming large over the fortunes of the window category is the sharp decline in sales at JCPenney during its ill-fated year of transition. At its peak, Penney claimed to own third of the country's window business (including custom). That changed a few years ago, as it drastically pared down its custom window departments, followed by the well-reported JCP woes of the last year. The question remains: Where did all that window business go?
Suppliers are hopeful that the newly unveiled JCPenney home department reset will help, but it will not necessarily drive window business, according to some. Some suppliers note that many customers walked into BBB with their 20% coupons in hand. And others contend that e-commerce sites got a boost.
"JCP was a big destination," said Debra Mednick, executive director and home industry analyst, NPD Group. "But nobody has really taken that on. Retailers such as Home Depot and Lowe's have some business, but do better in hardware and blinds than in soft window. It's an opportunity."
"I think a lot of business went to e-commerce sites," offered Barry Goodman, vp, Commonwealth Home Fashions. "Though each site may be taking a small piece of the pie, it can add up."
"We definitely see e-commerce growing through our customer's sites, but it's additional business, we don't see it replacing business," said Scott Goldstein, president, S. Lichtenberg & Co.
Budd Goldman, ceo, Ellery Homestyles, agreed. "The business scattered over a few retailers. And we're doing tremendous business online through our customer sites," he said. "Overall business is status quo, but it's trending up."
Rex Dyer, president, Lorraine Home Fashions, has also seen sales increase in a surprising area: catalogs. "It seems counter-intuitive, but print catalogs are doing better. What we surmise is that there's still an older Penney customer out there that still wants to flip through a paper catalog; and many have financing options that make it an attractive way to shop," he said.
According to Dyer, Amazon is one of the companies poised to capture a bigger part of the e-commerce slice for windows, but the key for doing well online is managing the web business well. "The sites doing well have deep customer service and manage returns well. Some even have informational videos," he said. Lorraine has seen resurgence in lace and layered ruffled looks. The company has also expanded into shower curtains, and will soon be introducing product that coordinates with its curtains. "We had to change the scale on some of the designs, but it's a great new category for us," said Dyer
|2012 total retail sales: $2,685 million
down 0.4% from $2,695 million in 2011|
Discount department stores
Home textiles specialty chains
Home improvement centers
Single-unit specialty stores
*Other includes warehouse clubs and military exchanges.
Figures have been rounded.
Source for all tables and charts: Home Textiles Today market research
Though far being the largest players on the scene, some of the websites suppliers named most often included bed bath store. com, swagsgalore.com and hayneedle.com. They were mentioned for their functionality, customer service and, the equivalent of retail 101, having the right inventory at the right time.
As the retail portion is sorted out, there are lingering economic issues that may be keeping consumers from spending money in stores or online.
"The category has been down for first part of the year, with the payroll tax one of the things impacting income," said Goldstein. "But I'm optimistic for the second half; it will pick up."
According to Goldstein, energy- efficient products are still important, but now that category has added fashion features for greater appeal. Lichtenberg is offering energy products with more texture, brighter, upbeat colors and prints.
"Prints continue to grow," he noted.
What haven't grown are price points, which have remained stable.
"Customers have had a honeymoon with low priced goods and a sometimes distorted expectation of price," noted Dyer.
"Pricing is holding and the margin squeeze is continuing. It's steady as she goes," said Goldman.
Another macro issue impacting this category: housing.
"The housing market has somewhat stabilized, but lending requirements are still strict," noted Louis Hornick II, ceo, Louis Hornick & Co. "Millennials are going to be renting longer than their parents did."
Hornick is doing well with its Firefend product, a US-manufactured product that he is proud of. "The future is ‘made in America,' he said.
In fact, Millenials and the changing customer are top of mind for many suppliers, who acknowledge that younger shoppers look at window coverings in a totally different way.
"There is a younger guest that just doesn't believe they need to cover their windows in the same way," said Sean Frankel, evp, Arlee Home Fashion. "We all have to find a way to talk to that customer."
For Arlee, successes have included its range of offerings, including linen-like poly blends. According to Frankel, blackouts continue to be a strong and are now offered with more fashion and design elements.
"Blackouts don't have to be drab," he noted. "Functionality is an important part of windows." According to the company, its shades have also been a growing category for the company.
"We were one of the first to do grommets, which is one way we're attracting a younger customer," said Goodman. "They are looking at framing a window, and more decorative hardware and lighter weight goods."
For Commonwealth, it is still about function. "We're doing great with our outdoor/indoor selections. People are really into the ‘fifth' room in their yard," he said.
"You don't see opulent, embellished swags and layers," said Goldman. "Grommets are the trend du jour. Everything is cleaner, simpler and more modern looking."
For Ellery, its Eclipse energy efficiency products continue to do well.
"Our opening price point is very strong; and on the other side, our higher end options are doing nicely," he said.
Ellery is also growing its bedding business. "I think we'll be talking more about our bedding next year as well, not just because we're in the category, but because we'll have good penetration for our products," he said.