Pillows are Bright Spot in Utility Bedding

Suppliers Add Features to Upgrade Value

Jill Rowen, April 7, 2008

The litany of economic problems — fuel and material costs, a weak dollar, a housing crisis — continue to plague home textiles suppliers overall, but interestingly they may also account for the increase in sales for utility bedding.

Consumers who may have spent less in 2007 on fashion, seemed to have made up for it by choosing function. Such decisions probably helped them sleep better at night — as sleep pillows, especially those touting comfort and a host of health benefits, shined in this category, with an increase of 11.7% in sales, to volume of $900 million. This came on top of a 2006 gain of 7.5% for sleep pillows, also the leading gainer in utility bedding that year.

The marked success in the sleep pillows category helped the overall utility segment make up for a drop-off in volume in the throws category and a stymied mattress pad category.

Overall, utility bedding gained $94 million in revenues year-to-year, ending 2007 with $2.362 billion in sales, up 4.1% from volume of $2.268 billion in 2006.

Blankets saw an uptick, although not as robust as the gains in sleep pillows. The increase in blankets mirrored a downturn in comforters and duvets as consumers chose warmth over fashion as a way to dress their beds (as noted in our recent report on top of bed, HTT, March 10, 2008, page 8). For much the same reason, sales of throws were down as well, and that category suffered as well from increases in material costs, which ultimately drove up price points.

Mattress pad sales, somewhat flat for the year overall, presented a mixed picture. Lower sales in traditional quilted mattress pads were offset by new products and innovations, many of which appealed to consumers with health claims similar to sleep pillows, thereby helping the category gain sales traction for the year.

Still, even in the utility category, the general economy looms large as a problem for suppliers.

"Traditionally, when the economy slows, basic bedding is successful. This was not the case in the back half of 2007," said Beth Mack, chief merchandising officer, Hollander Home Fashions. "Business was promising in the first half of 2007, but the bottom fell out of home in the back half of the year. We believe that the cost of gas has impacted the dispensable income of the public."

"Opening price points were tough," noted Robert Christnacht, division manager, home and blanket for Pendleton Woolen Mills. "Luxury price points increased but not enough to offset the shortfall in opening price points. Plus, price increases in wool [of 35% to 45%] had the most dramatic effect on the sales of opening price throws."

For those products that did well, "benefits" were high on the list of criteria. Christnacht termed it "UFD" — the "unique defining feature" of a product. For Pendleton, he noted that "luxurious and high design resonated with consumers."

"The demand for solution-based products continues to increase with the biggest growth in waterproof and allergen reduction products," said Mandy Talbert, product development manager, Louisville Bedding." According to Talbert, Louisville's business in mattress pads was up about 3%, while its sleep pillow trade climbed about 10% for the year.

"Health and wellness and eco-friendly are driving new sales, as long as the value and price equation is there," agreed Mack, who was emphatic on the issue of value: "Opening price point goods are still leading the pack in a tough economy."

Carpenter's pillow business also gained ground as consumers searched for a better night's sleep. "We really benefitted from all the news reports that pointed out the benefits of getting enough sleep. And we have the facts to back our claims; too many companies are making unsubstantiated claims," said Dan Schecter, vp sales and marketing, Carpenter. "Performance will continue to be a focus as we go forward."

In mattress pads, high end Tencel goods, as well as performance and protection products, were highlights for Down Lite, according to Jyl Davis, marketing director.

Key in both pads and pillows is Down Lite's utilization of Primaloft down alternative fill, offered in an exclusive partnership with the fill developer Albany Industries.

"Primaloft is able to provide the closest thing to down in a down alternative," Davis noted, "so consumers that have allergy concerns or are sensitive sleepers do not have to compromise product quality, softness or warmth."

According to Rick Loutoff, ceo, Berkshire Blanket, the company has improved the way it markets and showcases the bells and whistles of its products. "We wanted to do a better job in differentiating ourselves and making it clear to consumers what the benefits of our products were," he said. For Berkshire, its Serasoft polyester line has been expanding, with an up trend in other polyester and synthetic fabrics.

The other piece of the value puzzle is brands, with most suppliers agreeing that familiar, trusted names counted for more in times of economic distress. "The consumer in uncertain times looks for the brands that convey assurance of quality," offered Christnacht.

Examining the overall shift in retail distribution of utility bedding products suggests two ways to expansion: offering consumers more choices in the brands they know — the raison d'etre of specialty stores — or providing broad low-price assortments, the core competency of mass merchants.

Home specialty chains and discount department stores showed the biggest gains in utility bedding during 2007, up 8.9% and 8.1% respectively, while closeout chains and warehouse clubs also held their own, not surprising given the state of the economy.

Department stores and mid-tier retailers continue to shed share in utility bedding, as consumers bend more toward everyday value and the convenience of shopping the big-box specialty merchants, and even toward the independent small operators.

Off-price chains, meanwhile, have experienced a few bumps in the road while they attempt to balance the considerable floor space demands of the utility side of soft home merchandising, as against their spotty gains on the fashion side of home and most relevant, the impressive opportunities they are currently tapping in the apparel segment of their business model.

In a trend that is less advanced here than in some other home textiles categories — such as window treatments and top of bed — the direct-to-consumer venues are on the verge of amounting to something in utility bedding sales. With the price of transportation at an all-time high, look for mail order catalogs, TV shopping channels, and online retailers to gain more share, even in the touchy-feely world of mattress pads, blankets and sleep pillows.

Utility Bedding ($millions)
2007 total retail sales: $2.36 billion
Up 4.1% from $2.27 billion in 2005

2007 2006 % change
Blankets $561 $535 4.9%
Mattress pads $446 $442 0.9%
Sleep pillows $900 $806 11.7%
Throws $455 $485 -6.2%
Total $2,362 $2,268 4.1%
2007 2006 % change
Home textiles specialty chains $543 $499 8.9%
Single-unit home textiles specialty stores $47 $45 4.1%
Department stores $118 $136 -13.2%
Mid-price chains $188 $227 -16.7%
Discount dept. stores $1,299 $1,202 8.1%
Off-price chains $23 $45 -47.9%
Variety/closeout $23 $23 4.1%
Direct-to-consumer $47 $23 108.3%
Warehouse clubs $47 $45 4.1%
Other $24 $23 4.1%
Total $2,362 $2,268

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