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Window Treatment Makers Rally With Style

James Mammarella -- Home Textiles Today, March 20, 2006

Manufacturers of window treatments are fighting the price-deflation tide by emphasizing fashion, and are hoping that retailers will join them in their quest for higher margins.

Sheers are still the leading panelww, but 2006 will see this trend give up some ground to medium- to heavier-weight fabrications. By construction, synthetics are the rule, moving past three-fourths of total units.

Above all, embellishment is in demand by the consumer, even as fashion mavens trumpet the triumph of casual, refined styles. Depending upon the particular expert, this supposed triumph has either just passed or is about to occur. Most suppliers and store operators, however, agree that shoppers are seeking fancy extras in everything from ribbons to sequins as they lay out their credit cards to dress up their windows.

Comparing 2005 activity to the year prior, unit volume was flat, while dollar volume was slightly down in the category, which includes curtains, draperies and associated hardware.

The business contracted by 3.8% from $2.6 billion in 2004 to $2.5 billion in 2005, Home Textiles Today research revealed.

Is price deflation over?

Topic A remains price — and specifically the squeeze on margins in recent years.

“I think it has bottomed out,” said Carl Goldberg, senior vp at S. Lichtenberg, basing his thought on “the pricing I’m receiving from off-shore and from retailers.” Goldberg confirms the general take on 2005 — unit volume flat, prices down — but he projects that business will be up in both units and dollars in 2006.

Another optimistic voice was Barry Goodman, vp national accounts at Commonwealth Home Fashions, whose strategy is to carve out a niche in higher-end merchandise. “The last six months business has been up, a nice surprise, since the economy overall could be better,” he said.

Others disagreed.

Bud Frankel, chairman and ceo of Arlee Home, said the business remains tough, and disputes the idea that deflation has reached bottom. “For example,” he said, “from our own factory in China, the price keeps dipping to stay competitive, but I can’t sell 50% more window treatments” to attain the same volume.

“I don’t think we’re done” with price deflation, said Jerry Pittman, vp merchandising for window, Ex-Cell Home Fashions, which is now in its third year in the window treatment category. He said his company’s typical 84-inch panel, mainly carried by the big-box specialty stores and the mid-tier chains, retails for $29.99 to $99.99.

Arlee, with its focus on the major discount chains, offers the 84-inch panel at the retail range of $15 to $20. “Our sets business is nice,” said Frankel: “A topper and two panels for $19.99.”

Fast-growing retailer Anna’s Linens, which reports a $100 million business in curtains and hardware, clearly stakes out the price-sensitive segment of consumers. “We do not want to exceed $20 at retail,” said ceo Alan Goldstone.

As if reading his mind, Frankel asserted, “Value is all the buyer understands today!”

Pittman, too, emphasized that the real equation is built not upon price, but on value. “Price is not the main factor,” he stated.

Goldberg agreed that the consumer is responding to a fashion-value equation. “We are now offering fashion goods but at popular prices,” he said. “Through importing we are able to take custom looks that were unavailable in readymade, and now offer them to the consumer at readymade prices.”

Show me the sizzle!

S. Lichtenberg has invested not only in offshore facilities and quality control expertise, but also in graduates of the Fashion Institute of Technology in New York. “We have expanded our design area dramatically,” Goldberg said.

Design is what consumers want to see — and typically not in subtle ways.

“The fancier the top treatment and embellishment the better,” said Gladstone of Anna’s Linens. “Our customers want to see pizzazz. They want to see a fabric that’s going to make a statement on the window!”

Goodman of Commonwealth Home concurred, “Consumers want surface interest: pintucks, embroideries, sequins.” And as for toppers, Goodman pointed to “rouging, shearing tapes, pleating tape, the Euro influence, plenty of faux silks.”

Arlee’s Frankel agreed. “Silk-look polyesters are very good, especially those that are a little dressier,” he remarked.

Jack Mahon, recently installed as vp, product manager of the window division at Croscill, made the case for simpler styles.

“Casual continues to be very good for us,” he noted, pointing to “tab tops, fold-overs, and generally more casual” finishes. Mahon conjectured that this vein of demand among his customers “might give more opening to cotton” goods.

Ex-Cell is happy to work both areas of fashion, the casual and the fancy, said Pittman. “We like to offer a mixture of naturals and different fabrics, different cut-and-sew ideas, fancies, artisan looks. We get inspired by what apparel people are doing.”

“I don’t have a crystal ball,” ventured Pittman, “but I think we need more kinds of sheers; I see it as stale. Everybody has basic voiles; they sell like crazy, but it’s like having all your eggs in one basket. We are developing things — not to replace the core — but to broaden the market.”

Brands and bandwidth

Broadening has to come in the look and feel of the product itself — not in packaging. In contrast to other home textiles categories, window treatments has been largely resistant to branding and licensing.

“We do exclusives based on style,” said Mahon of Croscill. “We sell as Croscill; there are really no brands.”

Pittman generally concurred, “You may sell a Springs or a Burlington. As a brand name you see a Park B. Smith. But these do not make the sale — they may enhance it a bit.”

Nevertheless, that does not stop companies from trying. Ex-Cell, which features the Sango designer license in its core tabletop business, also has a window fashion line that coordinates.

Gladstone said Anna’s Linens, which has a limited exclusive on some bed and bath goods under the revived Cannon brand, is “working to get it into window coverings during 2006.”

And the leading window treatment retailer, JCPenney, markets some of its lines under the Croscill Classics and Waverly brands. Meanwhile, it is creating as much buzz as possible with its Chris Madden for JCPenney Home Collection as the key component in window among its self-branded offerings.

Still, the JCPenney consumer is guided into her window selections primarily by product silhouette, color, print, and one of three general style groupings: casual, country and traditional.

One fast-growing method to get the product to the final customer is the non-store route. Goodman said of 2005, “Catalog was up, and the Internet is coming on strong.”

Mahon, who directed Croscill’s launch of decorative hardware for drapery at JCPenney, said his perspective on Internet-based sales is that window treatments have a ways to go to approach the success of online bedding sales, which he considers well developed.

If the Web-based sales segment is of growing importance, it is coming at the expense of the small independent specialty stores. The discount channel has had its contraction problems as well, largely due to its position at the epicenter of price deflation.

Online sales, no matter how robust, will not be a panacea to manufacturers’ or retailers’ concerns about the category, not the least of which is in-store housekeeping.

The window-treatment business, said Anna’s Linens’ Gladstone, “takes a lot of labor at the store level, and a lot of room to display properly. It is a slower-turn department than towels or pillowcases.”

Still, he said, with sharp buying of well-developed product, along with disciplined marketing, it can be “a high-profit margin” enterprise.

Distribution Channels ($ millions)
Total: $2.5 billion down 3.8% from 2004

% of total 2005 sales
**Other includes warehouse clubs and military exchanges.
Mid-Price Chains 41 $1,025
Discount Dept. Stores 31 775
Home Textiles Specialty Chains 18 450
Direct-to-Consumer 3 75
Home Improvement Centers 2 50
Department Stores 1 25
Single Unit Specialty Stores 1 25
Off-Price Chains 1 25
Variety/Closeout 1 25
Other* 1 25


Pattern

Sheers 31%
Solids 28
Jacquards 22
Prints 14
Lace 5


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